FARADAY FUTURE INTELLIGENT ELECTRIC INC. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information under this Item as we qualify as a “smaller reporting company.” 106 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 324 ) 108 Report of Predecessor Independent Registered Public Accounting Firm (PCAOB Firm ID 339) 109 Consolidated Balance Sheets as of December 31, 2024, and 2023 110 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, and 2023 111 Consolidated Statements of Stockholders’ Equity for the years ended f December 31, 2024, and 2023 112 Consolidated Statements of Cash Flows for the years ended December 31, 2024, and 2023 114 Notes to Consolidated Financial Statements 116 107 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Faraday Future Intelligent Electric Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Faraday Future Intelligent Electric Inc. and subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows, for the year then ended, and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. We have also audited the adjustments to the 2023 financial statements to retrospectively apply the effects of the 1-for-40 reverse stock split discussed in Notes 1 and 12 and to apply the change in accounting for ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures discussed in Note 1, and the effects of the reclassifications described in Note 1. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2023 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole. Explanatory Paragraph Regarding Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations since inception, has continued net cash outflows from operating activities, and has an accumulated deficit. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Macias Gini & O’Connell LLP We have served as the Company’s auditor since 2024. Melville, New York March 31, 2025 108 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Faraday Future Intelligent Electric Inc. Opinion on the Financial Statements We have audited before the effects of the adjustments to retrospectively apply the effects of the 1-for-40 reverse stock split discussed in Note 1 and to retrospectively apply the change in accounting for ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures described in Note 1 and the effects of the reclassifications described in Note _ 1, the accompanying consolidated balance sheet of Faraday Future Intelligent Electric Inc. and subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the consolidated financial statements). The 2023 financial statements before the effects of the adjustments discussed in Note 1 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the 1-for-40 reverse stock split described in Note 1, and to retrospectively app ly the change in accounting for ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures described in Note 1 present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the effects of the 1-for-40 reverse stock split described in Note 1 and the effects of the reclassifications described in Note _ 1, and to retrospectively apply the change in accounting for ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures described in Note 1 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Macias Gini & O’Connell LLP. Explanatory Paragraph Regarding Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 in the consolidated financial statements, the Company has incurred operating losses since inception, has continued cash outflows from operating activities, and has an accumulated deficit. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Mazars USA LLP We served as the Company’s auditor from 2022 to 2024. New York, NY May 28, 2024 109 Table of Contents Faraday Future Intelligent Electric Inc. Consolidated Balance Sheets Years Ended December 31, 2024 and December 31, 2023 (in thousands, except share and per share data) December 31, 2024 December 31, 2023 Assets Current assets Cash $ 7,144 $ 1,898 Restricted cash 30 2,127 Accounts receivable — 7 Inventory, net 27,486 34,229 Deposits 31,094 31,382 Other current assets 6,127 21,721 Total current assets 71,881 91,364 Property, plant and equipment, net 348,587 417,812 Operating lease right-of-use assets, net 1,761 16,486 Other non-current assets 3,171 4,877 Total assets $ 425,400 $ 530,539 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 71,414 $ 93,170 Accrued expenses and other current liabilities 45,677 55,109 Related party accrued expenses and other current liabilities 11,077 7,282 Warrant liabilities 28,864 285 Related party warrant liabilities — 21 Accrued interest 25 25 Related party accrued interest 23,227 753 Other financing liabilities, current portion 761 — Operating lease liabilities, current portion 2,128 3,621 Notes payable 4,224 91,150 Related party notes payable 5,310 9,760 Total current liabilities 192,707 261,176 Other financing liabilities, long term portion 38,698 25,483 Operating lease liabilities, long term portion 14 14,306 Notes payable, long term portion 45,264 — Related party notes payable, long term portion 2,754 — Derivative call options 29,709 — Other liabilities 1,287 1,338 Total liabilities 310,433 302,303 Stockholders’ equity Class A Common Stock, 0.0001 par value; 99,815,625 and 1,232,292 shares authorized; 65,919,127 and 1,060,833 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 6 — Class B Common Stock, 0.0001 par value; 4,429,688 and 54,688 shares authorized; 6,667 and 6,667 shares issued and outstanding as of December 31, 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 December 31, 2024 and December 31, 2023, respectively — — Additional paid-in capital 4,421,563 4,180,873 Accumulated other comprehensive income 7,744 5,862 Accumulated deficit ( 4,314,346 ) ( 3,958,499 ) Total stockholders’ equity 114,967 228,236 Total liabilities and stockholders’ equity $ 425,400 $ 530,539 The accompanying notes are an integral part of these consolidated financial statements. 110 Table of Contents Faraday Future Intelligent Electric Inc. Consolidated Statements of Operations and Comprehensive Loss Years Ended December 31, 2024 and 2023 (in thousands, except share and per share data) 2024 2023 Revenue $ 539 $ 784 Cost of revenue 84,029 42,607 Gross profit ( 83,490 ) ( 41,823 ) Operating expenses Research and development 25,227 132,021 Sales and marketing 9,278 22,836 General and administrative 43,164 82,888 Settlement on accrued research and development expenses ( 14,935 ) — Lease impairment, net 1,847 — Loss on disposal on property, plant, and equipment 1,667 4,453 Change in fair value of earnout liability — 2,033 Total operating expenses 66,248 244,231 Loss from operations ( 149,738 ) ( 286,054 ) Change in fair value of notes payable, warrant liabilities, and derivative call options ( 12,556 ) 89,860 Change in fair value of related party notes payable and related party warrant liabilities 253 7,101 Loss on settlement of notes payable ( 161,725 ) ( 217,019 ) Loss on settlement of related party notes payable ( 14,295 ) ( 20,045 ) Interest expense ( 7,895 ) ( 2,288 ) Related party interest expense ( 8,710 ) ( 753 ) Other expense, net ( 1,448 ) ( 2,437 ) Loss before income taxes ( 356,114 ) ( 431,635 ) Income tax benefit (expense) 267 ( 109 ) Net loss $ ( 355,847 ) $ ( 431,744 ) Per share information (See Note 16): Net loss per share of Class A and B Common Stock attributable to common stockholders: Basic ( 19.61 ) $ ( 1,792.44 ) Diluted ( 19.61 ) $ ( 1,792.44 ) Weighted average common shares used in computing net loss per share of Class A and Class B Common Stock: Basic 18,529,525 240,869 Diluted 18,529,525 240,869 Total comprehensive loss Net loss $ ( 355,847 ) $ ( 431,744 ) Foreign currency translation adjustment 1,882 2,357 Total comprehensive loss $ ( 353,965 ) $ ( 429,387 ) The accompanying notes are an integral part of these consolidated financial statements. 111 Table of Contents Faraday Future Intelligent Electric Inc. Consolidated Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholder’s Equity Class A Class B Shares Amount Shares Amount Balance as of December 31, 2022 (as restated) 58,682 $ — 6,667 $ — $ 3,724,242 $ 3,505 $ ( 3,526,755 ) $ 200,992 Conversion of notes payable and accrued interest into Class A Common Stock (see Note 7) 625,650 — — — 360,668 — — 360,668 Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange (see Note 7) — — — — ( 6,811 ) — — ( 6,811 ) Reclassification of February 28, 2023 earnout shares liability to equity due to authorized share increase (see Note 11) — — — — 5,014 — — 5,014 Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase (see Note 11) — — — — 8,978 — — 8,978 Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares (see Note 11) — — — — ( 2,112 ) — — ( 2,112 ) Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares (see Note 11) — — — — ( 2,979 ) — — ( 2,979 ) Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase — — — — 1,381 — — 1,381 Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase — — — — 2,043 — — 2,043 Issuance of common stock 368,803 — — — 34,492 — — 34,492 Reverse stock split round up share issuances 2,040 — — — — — — — Stock-based compensation — — — — 5,101 — — 5,101 Exercise of warrants 5,326 — — — 51,276 — — 51,276 Exercise of stock options 6 — — — 44 — — 44 Issuance of shares for RSU vesting net of tax withholdings 352 — — — ( 464 ) — — ( 464 ) Cancellations ( 26 ) — — — — — — — Foreign currency translation adjustment — — — — — 2,357 — 2,357 Net loss — — — — — — ( 431,744 ) ( 431,744 ) Balance as of December 31, 2023 1,060,833 $ — 6,667 $ — $ 4,180,873 $ 5,862 $ ( 3,958,499 ) $ 228,236 The accompanying notes are an integral part of these consolidated financial statements. 112 Table of Contents Faraday Faraday Future Intelligent Electric Inc. Consolidated Statements of Stockholders’ Equity — (Continued) (in thousands, except share data) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Class A Class B Shares Amount Shares Amount Balance as of December 31, 2023 1,060,833 $ — 6,667 $ — $ 4,180,873 $ 5,862 $ ( 3,958,499 ) $ 228,236 Conversion of notes payable and accrued interest into Class A Common Stock (see Note 7) 62,101,798 6 — — 226,335 — — 226,341 Reclassification of SPA Warrants from liability to equity — — — — 160 — — 160 Issuance of common stock and warrants — — — — 10 — — 10 Settlement of Palantir dispute with issuance of Class A Common Stock (see Note 10) 1,080,294 — — — 4,800 — — 4,800 Purchase of Class A Common Stock under Salary Deduction and Stock Purchase Agreements (see Note 11) 49,659 — — — 102 — — 102 Grow Fandor Contribution — — — — 250 — — 250 Chongqing related party debt restructuring (see Note 8) — — — — 661 — — 661 Reverse stock split related round up share issuances 306,779 — — — — — — — Stock-based compensation — — — — 8,382 — — 8,382 Issuance of shares for RSU vesting net of tax withholdings 1,319,764 — — — ( 10 ) — — ( 10 ) Foreign currency translation adjustment — — — — — 1,882 — 1,882 Net loss — — — — — — ( 355,847 ) ( 355,847 ) Balance as of December 31, 2024 65,919,127 $ 6 6,667 $ — $ 4,421,563 $ 7,744 $ ( 4,314,346 ) $ 114,967 The accompanying notes are an integral part of these consolidated financial statements. 113 Table of Contents Faraday Future Intelligent Electric Inc. Consolidated Statements of Cash Flows (in thousands) 2024 2023 Cash flows from operating activities Net loss $ ( 355,847 ) $ ( 431,744 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 71,442 42,473 Amortization of operating lease right-of-use assets and intangible assets 2,588 2,992 Non-cash interest expense 1,929 — Stock-based compensation 8,382 9,167 Reserve on inventory 476 — Loss on disposal on property, plant, and equipment 1,667 4,453 Loss from failed sale leaseback arrangement — 5,173 Loss on lease impairment 1,847 — Loss on settlement of notes payable 161,725 217,019 Loss on settlement of related party notes payable 14,295 20,045 Gain on foreign exchange — ( 2,068 ) Gain on settlement on accrued research and development expenses ( 14,935 ) — Change in fair value of notes payable, warrant liabilities, and derivative call options 15,058 ( 90,518 ) Change in fair value of related party notes payable and related party warrant liabilities ( 253 ) ( 7,101 ) Other 963 1,075 Changes in operating assets and liabilities: Deposits ( 706 ) 14,337 Inventory 6,267 ( 29,772 ) Other current and non-current assets 16,907 ( 2,884 ) Accounts payable ( 8,804 ) 13,785 Accrued expenses and other current and non-current liabilities ( 1,573 ) ( 42,481 ) Accrued interest expense — 588 Accrued related party interest expense 8,710 — Financial obligations on lease back transaction 2,876 — Operating lease liabilities ( 3,200 ) ( 2,717 ) Net cash used in operating activities ( 70,186 ) ( 278,178 ) Cash flows from investing activities Proceeds from the sale of equipment 198 — Payments for property and equipment ( 7,580 ) ( 31,109 ) Net cash used in investing activities ( 7,382 ) ( 31,109 ) Cash flows from financing activities Proceeds from notes payable, net of original issuance discount 68,111 210,450 Payments of notes payable and other financing obligations ( 428 ) — Payments of notes payable issuance costs ( 2,087 ) ( 2,503 ) Proceeds from related party notes payable 3,075 21,008 Capital contributions 250 — Proceeds from other financial obligations 11,812 24,897 Payments of finance lease obligations — ( 1,016 ) Proceeds from exercise of stock options — 44 Proceeds from exercise of warrants — 4,074 Proceeds from issuance of Class A Common Stock — 34,492 Net cash (used in) provided by financing activities 80,733 291,446 Effect of exchange rate changes on cash and restricted cash ( 16 ) 3,352 Net (decrease) increase in cash and restricted cash 3,149 ( 14,489 ) Cash and restricted cash, beginning of period 4,025 18,514 Cash and restricted cash, end of period $ 7,174 $ 4,025 114 Table of Contents Faraday Future Intelligent Electric Inc. Consolidated Statements of Cash Flows — (Continued) (in thousands) The following table provides a reconciliation of cash and restricted cash reported within the Consolidated Balance Sheets that aggregate to the total of the same such amounts shown in the Consolidated Statements of Cash Flows: 2024 2023 Cash and restricted cash Cash $ 7,144 $ 1,898 Restricted cash 30 2,127 $ 7,174 $ 4,025 Supplemental disclosure of cash flow information Cash paid for interest $ 4,865 $ 465 Supplemental disclosure of noncash investing and financing activities Additions of property and equipment included in accounts payable and accrued expenses $ 44,540 $ 48,037 Write off of a finance lease pursuant to lease back transaction $ — $ 6,917 Obtaining right-of-use asset in exchange for operating lease liabilities $ 30 $ — Issuance of Class A Common Stock under the Salary Deduction and Stock Purchase Agreements $ 102 $ — Shares Withheld for RSU tax obligations $ 10 $ — Issuance of Exchange Note $ — $ 16,500 Conversion of notes payable, related party notes payable and accrued interest into Class A Common Stock $ 67,113 $ 123,460 Conversion of related party notes payable and related party accrued interest into Class A Common Stock $ — $ 12,662 Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase $ — $ 2,043 Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares $ — $ 2,979 Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase $ — $ 8,978 Issuance of warrants with the SPA Portfolio Notes $ 34,440 $ 34,269 Reduction in warrants pursuant to the Exchange Agreement $ — $ 16,506 Reclassification of warrants from equity to liability $ — $ 6,811 Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase $ — $ 1,381 Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares $ — $ 2,112 Reclassification of February 28, 2023 earnout shares liability to equity due to authorized share increase $ — $ 5,014 De-recognition of right-of-use assets and lease liabilities due to lease modifications $ 3,394 $ — Supplemental disclosure of noncash operating activities Settlement of Palantir dispute with issuance of Class A Common Stock $ 4,800 $ — The accompanying notes are an integral part of these consolidated financial statements. 115 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 1. Nature of Business and Organization, Basis of Presentation, and Summary of Significant Accounting Policies Nature of Business and Organization Unless otherwise stated or the context requires otherwise, references herein to the “Company,” “FFIE,” “FFAI,” “Faraday” “we,” “us,” and “our” mean Faraday Future Intelligent Electric Inc. and its wholly-owned subsidiaries, and controlled and managed entities. The Company is a holding company incorporated in the State of Delaware on February 11, 2020, conducts its operations through its subsidiaries and is headquartered in 18455 S. Figueroa Street, Gardena, CA 90248. The Company operates in a single operating segment and designs and engineers next-generation, intelligent, electric vehicles. The Company manufactures its vehicles at its production facility in Hanford, California, known as “FF ieFactory California” and has additional engineering, sales, and operations capabilities in China. The Company has created innovations in technology, products, and a user-centered business model that are being incorporated into its planned electric vehicle platform. Principles of Consolidation The Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and include the accounts of the Company, its wholly-owned subsidiaries and all other entities in which the Company has a controlling financial interest, including the accounts of any variable interest entity, in which the Company has a controlling financial interest and for which it is the primary beneficiary in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). All intercompany transactions and balances have been eliminated upon consolidation. Basis of Presentation Use of Estimates The preparation of the Consolidated Financial Statements in conformity with GAAP and in accordance with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions which affect the reported amounts in the Consolidated Financial Statements. Estimates are based on historical experience, where applicable, and other assumptions which management believes are reasonable under the circumstances. On an ongoing basis management evaluates its estimates, including those related to the: (i) recognition and disclosure of contingent liabilities, including litigation reserves; (ii) fair value of related party notes payable and notes payable; (iii) calculations for evaluating potential long-term asset impairment; and (iv) valuation of warrants and other derivative instruments. 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 the Company’s Consolidated Financial Statements were issued, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or to revise 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 Consolidated Financial Statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the Company’s Consolidated Financial Statements. Foreign Currency The Company determines the functional and reporting currency of each of its international subsidiaries based on the primary currency in which they operate. The functional currency of the Company’s foreign subsidiaries in China is their local currency, Chinese Yuan (“CNY”). For foreign subsidiaries where the functional currency is their local currency, assets and liabilities are translated into U.S. Dollars at exchange rates in effect at the balance sheet date, stockholders’ equity (deficit) is translated at the applicable historical exchange rate, and expenses are translated using the average exchange rates during the period. The effect of exchange rate changes resulting from the translation of the foreign subsidiary financial statements is accounted for as a component of accumulated other comprehensive income in the Consolidated Balance Sheets. 116 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Concentration of Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash, restricted cash, and deposits. Substantially all of the Company’s cash and restricted cash is held at financial institutions located in the United States of America and in the People’s Republic of China. The Company maintains its cash and restricted cash with major financial institutions. At times, cash and restricted cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits ($ 250 thousand per depositor per institution) and China Deposit Insurance Regulations limits (CNY ¥ 500 thousand per depositor per institution). Management believes the financial institutions that hold the Company’s cash and restricted cash are financially sound and, accordingly, minimal credit risk exists with respect to cash and restricted cash. Cash and restricted cash held by the Company’s non-U.S. subsidiaries is subject to foreign currency fluctuations against the U.S. Dollar. If, however, the U.S. Dollar is devalued significantly against the Chinese Yuan, the Company’s cost to develop its business in China could exceed original estimates. The Company receives certain components from sole suppliers. The inability of a supplier to fulfill the Company’s supply requirements could materially impact future operating results. Fair Value Measurements The Company applies the provisions of ASC 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. 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 at the measurement date. 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. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which the Company would transact and assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds. Level 2 Valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 instruments typically include U.S. government and agency debt securities, and corporate obligations. Valuations are usually obtained through market data of the investment itself as well as market transactions involving comparable assets, liabilities or funds. Level 3 Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial or nonfinancial asset or liability. 117 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements ASC 825-10, Financial Instruments , allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (“fair value option”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument are reported in earnings at each subsequent reporting date. The Company has elected to apply the fair value option to certain related party notes payable and notes payable with conversion features as discussed in Note 14, Fair Value of Financial Instruments. The Company did not separately report interest expense attributable to the notes payable accounted for pursuant to the fair value option in the Consolidated Statements of Operations and Comprehensive Loss because such interest was included in the determination of the fair value of the notes payable and changes thereto. Reverse Stock Splits and Recasting of Per-Share Amounts On August 22, 2023, the Company's Board of Directors (the “Board”) approved the implementation of a 1-for-80 reverse stock split (the “Reverse Stock Split”) of the Common Stock and set the number of authorized shares of Common Stock to 3,860,938 (which is 308,875,000 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. 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 the State of Delaware to effect an increase in the number of authorized shares of Common Stock from 3,860,938 to 34,748,438 . 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 11,582,813 (which is 34,748,438 divided by 3). The Second Reverse Stock Split was effected after market close on March 1, 2024, and shares of the Class A Common Stock par value $ 0.0001 per share and the Public Warrants began trading on a split-adjusted basis as of market open on July 31, 2024. On August 4, 2024, the Board approved the implementation of a 1-for-40 reverse stock split (the “Third Reverse Stock Split”) of the Common Stock and set the number of authorized shares of Common Stock to 104,245,313 . The Third Reverse Stock Split was effected after market close on August 16, 2024, and shares of the Class A Common Stock par value $ 0.0001 per share and the Public Warrants began trading on a split-adjusted basis as of market open on August 19, 2024. All shares of Common Stock, Public Warrants, stock-based compensation awards, earnout shares and per share amounts contained in the Consolidated Financial Statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split, Second Reverse Stock Split and the Third Reverse Stock Split. 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 12, Stockholders’ Equity , and Note 13, Stock-Based Compensation , for further discussion regarding the Reverse Stock Split, the Second Reverse Stock Split, and the Third Reverse Stock Split. Segments The Company operates in one operating segment and one reportable segment. T he Company’s Global CEO and Chief Product and User Ecosystem Officer, acting jointly serving as co-Chief Operating Decision Makers (“CODMs”), regularly evaluate the Company’s financial performance using consolidated financial information at the total-company level. The CODMs receive regular financial and operational reporting that focuses primarily on the Company's consolidated loss from operations, overall cash flows, liquidity, and strategic initiatives. For 2024, the Company adopted ASU 2023‑07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. Management has identified Loss from operations, as presented in the Company's Consolidated Statements of Operations and Comprehensive Loss, as the primary measure used by the CODMs to evaluate the performance of the business and allocate resources. This measure is critical for a going concern that must carefully manage its cash outflows, particularly given that the timing of its cash inflows is influenced by external investor decisions. The Company defines “significant segment expense” as controllable operating costs that are regularly provided to and reviewed by management, which include the expenses presented in the Consolidated Statements of Operations and Comprehensive Loss as Cost of revenue, Research and development, Sales and marketing, and General and administrative. 118 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Management closely tracks its expenditure on these key expense categories through regular reviews of cash balances, near‑term cash flow projections, monthly management reports, and project management reports. The CODMs, work in close collaboration with the Company’s business leaders to establish critical operational targets, set project timelines, and adjust spending plans. These leaders are responsible for implementing its strategic plans and revising targets and deadlines based on continuous internal communications and review meetings, thereby ensuring that any deviations from target spending or project timelines are promptly addressed. This rigorous oversight supports the Company’s strategic objectives to focus business activities the on the production, sales, and leasing of its FF 91 vehicles, and the planned launch of the FX Series vehicles. In addition, the Company defines “other segment items” as other operating expense adjustments that arise from lease or other impairments, gains and losses on the sale or disposition of its fixed assets, or other market‑driven factors that impact Loss from operations presented in the Consolidated Statements of Operations and Comprehensive Loss and are not part of the Company’s recurring and controllable operating costs . By segregating these “Other Segment Items” from “loss from operations,” the Company provides investors with a clear view of the expenses that management can directly influence versus those driven by external factors. Other potentially reportable items, such as separate automotive sales and leasing revenues (currently immaterial), geographic information, depreciation expense, interest expense, or other segment-specific activities, are not separately reviewed by the CODMs. Accordingly, these detailed segment components do not influence the CODMs’ decision-making or resource allocation processes and thus are not separately disclosed. Reclassifications In 2024, the Company reclassified $ 237.1 million of Loss on extinguishment of related party notes payable and notes payable into separate line items on the Consolidated Statements of Cash Flows to enhance financial reporting clarity. As a result, f or the year ended December 31, 2023, this amount was reclassified as $ 217.0 million in Loss on settlement of notes payable and $ 20.0 million in Loss on settlement of related party notes payable. In 2024, the Company reclassified $ 0.4 million from Loss (gain) on forgiveness of accounts payable and deposits, net to Other within the Consolidated Statements of Cash Flows for the year ended December 31, 2023. This reclassification increased the Other line item total from $ 0.7 million to $ 1.1 million in 2023. These reclassifications on the Consolidated Statements of Cash Flows had no impact on the Company's net cash provided by operating activities, investing activities, or financing activities. The previously reported 2023 amounts have been adjusted to conform to the 2024 presentation. Also in 2024, the Company reclassified $ 7.3 million of 2023 amounts from Accrued expenses and other current liabilities into Related party accrued expenses and other current liabilities to separately present the related party component within accrued expenses on the Consolidated Balance Sheets. 119 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Summary of Significant Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of 90 days or less from the date of purchase to be cash equivalents. The Company holds cash balances and does not have any instruments classified as cash equivalents as of the reporting dates presented. Inventory Inventory is stated at the lower of cost or net realizable value and consists of raw materials, work in progress, and finished goods. The Company primarily computes cost using standard cost, which approximates cost on the first-in, first-out basis. Net realizable value is the estimated selling price of inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company assesses the valuation of inventory and periodically adjusts its value for estimated excess and obsolete inventory based upon expectations of future demand and market conditions, as well as damaged or otherwise impaired goods. Property, Plant and Equipment, Net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance and repairs, which do not extend the assets lives, are charged to operating expense as incurred. Upon sale or disposition, the cost and related accumulated depreciation or amortization are removed from the Consolidated Balance Sheets and any gain or loss is included in the Consolidated Statements of Operations and Comprehensive Loss. Depreciation and amortization on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and for leasehold improvements, over the term of the lease, if shorter. Useful Life (in years) Buildings 39 Building improvements 15 Computer hardware 5 Tooling, machinery, and equipment 5 to 10 Vehicles 5 Lease vehicles 7 Computer software 3 Leasehold improvements Shorter of 15 years or term of the lease Construction in process (“CIP”) consists of the construction activities related to the FF ieFactory California production facility in plant and tooling, machinery and equipment being built to serve the manufacturing of production vehicles. These assets are depreciated once put into service. The amounts capitalized in CIP that are held at vendor sites relate to the completed portion of work-in-progress of tooling, machinery and equipment built based on the Company’s specific needs. The Company may incur storage fees or interest fees related to CIP which are expensed as incurred. CIP is presented within Property, Plant, and Equipment, Net in the Consolidated Balance Sheets. 120 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment and right-of-use assets (“ROU”), for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset groups) may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets, including any cash flows upon their eventual disposition, to the assets carrying values. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. 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. During 2024, the Company recorded an impairment charge related to its right-of-use assets. See Note 10, Leases for further details. No other impairment charges for long-lived assets were recorded during the years ended December 31, 2024, and 2023. Accumulated Other Comprehensive Income Accumulated other comprehensive income (loss) consists solely of foreign currency translation adjustments resulting from translating the financial statements of the Company’s foreign subsidiaries into U.S. dollars. These translation adjustments occur due to fluctuations in exchange rates between the subsidiaries' local currencies, primarily the Chinese Yuan . Revenue Recognition The following table disaggregates our revenue by major source: (in thousands) 2024 2023 Automotive sales $ 495 $ 771 Automotive leasing 44 13 $ 539 $ 784 Automotive Sales Revenue The Company began the production of its first vehicle the FF 91 Futurist (the “FF 91,” “FF 91 Futurist”, or “FF 91 2.0 Futurist Alliance”) in March 2023 and started making deliveries to customers in August 2023. The Company recognizes automotive sales revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Automotive sales revenue includes cash deliveries of new vehicles, and specific other features and services including home charger, charger installation, twenty-four-seven roadside assistance, over-the-air (“OTA”) software updates, internet connectivity and destination fees that meet the definition of a performance obligation under ASC 606. Revenue is recognized when control of the vehicle transfers upon delivery to the customer. Payments are typically received at the point control transfers or according to payment terms customary to the business as specified in the sales contract. Vehicle contracts do not contain a significant financing component. For obligations related to automotive sales, transaction prices are allocated among performance obligations based on relative standalone selling prices, determined using market prices, estimated internal costs, and comparable third-party offerings. The transaction price is allocated among the performance obligations in proportion to the standalone selling price of its performance obligations. Other features and services as discussed above are provisioned upon transfer of control of the vehicle and are required to be recognized on a straight-line basis over the performance period, as the Company has a stand-ready obligation to deliver such services to the customer. However, due to immateriality, revenue from other features and services are combined with the vehicle performance obligation and recognized upon the transfer of the vehicle. The Company provides certain customers with a residual value guarantee which may or may not be exercised in the future. Residual value guarantees provided to customers had an immaterial impact on revenue for the years ended December 31, 2024, and 2023. 121 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Automotive Leasing Revenue The Company accounts for its automotive leasing revenue program under ASC 606 and ASC Topic 842, Leases (“ASC 842”). Operating Leasing Program : The Company offers a vehicle operating leasing program in the U.S., allowing qualifying customers to lease a vehicle directly from the Company for a lease term of up to 36 months. At the end of the lease term, customers are generally required to return the vehicle to the Company, at which point the Company may either sell or re-lease the returned vehicle. Leasing revenue from operating leases is recognized on a straight-line basis over the lease term, as long as collectability is probable in accordance with ASC 842. If collectability of lease payments is not probable at lease commencement, lease income is recognized on a cash basis, meaning payments received are recorded as revenue only when collected. Depreciation expense related to leased vehicles is recorded in cost of automotive leasing revenue on a straight-line basis over the lease term, reflecting the expected residual value of the vehicles at lease termination. Upfront payments related to lease agreements are deferred and recognized as revenue on a straight-line basis over the respective lease term. Taxes collected from customers in connection with automotive leasing transactions are excluded from the transaction price and reported separately in accordance with ASC 606. Sales-Type Leasing Program : The Company enters into sales-type leases under ASC 842, in which customers have the right to purchase the leased vehicle at the end of the lease term, typically 36 months. A lease qualifies as a sales-type lease when the Company determines that the customer is reasonably certain to exercise the purchase option, and the Company therefore expects the customer to take title to the vehicle upon completion of all contractual payments. At lease commencement, if collectability of lease payments is probable, the Company derecognizes the leased vehicle and recognizes: • Automotive leasing revenue for the present value of lease payments and any guaranteed residual value. • Automotive leasing cost of revenue for the carrying value of the leased vehicle. If collectability is not probable at lease commencement, the Company defers revenue recognition and records lease payments received as a deposit liability. The leased vehicle remains on the Company's balance sheet until collectability becomes probable, at which point revenue is recognized. For the years ended December 31, 2024, and 2023, revenue recorded under this program was immaterial to the Company’s consolidated financial statements. Co-creation Arrangements As part of the Company’s Futurist Product Officers (“FPO”) Co-Creation Delivery program, which began in August 2023, the Company has entered into co-creation agreements with certain customers. This arrangement leverages select sales and leasing customers to provide valuable driving data, insights, marketing, and brand awareness for the FF 91 vehicle. In exchange for these services, the Company compensates customers through either a monthly consulting fee or a discount on their lease payments. The services provided are considered distinct and could be purchased separately from a third party. Management conducted a detailed evaluation of each customer’s services under the co-creation agreement, established relevant data points, and assigned a fair value to the services provided. Any payments exceeding the fair value of these services are treated as consideration paid to the customer and recorded as a reduction of revenue. For the years ended December 31, 2024, and 2023, the Company recognized $ 0.3 million and $ 0.4 million, respectively, in co-creation fees as a reduction of revenue in the Consolidated Statements of Operations and Comprehensive Loss. Additionally, the Company recorded $ 0.6 million and $ 0.4 million in co-creation fees as marketing expenses for the same periods. Co-creation fees related to R&D were considered immaterial and were included in Sales and marketing expenses in the Consolidated Statements of Operations and Comprehensive Loss. Customer Deposits The Company’s customers may reserve a vehicl e and preorder certain services by making a customer deposit, which is fully refundable at any time. Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets. Customer deposits were $ 3.0 million and $ 3.2 million as of December 31, 2024, and 2023, respectively. 122 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Deferred Revenue When vehicle purchase agreements are executed, the consideration for the vehicle and any accompanying products and services must be paid in advance before the transfer of products or se rvices by the Company. Unlike customer deposits, which are refundable, these advance payments are non-refundable. The Company recognizes revenue when control of the vehicle or related services transfers to the customer and defers revenue only when payments are received for undelivered products or services. Deferred revenue represents the total transaction price allocated to performance obligations that remain unsatisfied or partially unsatisfied as of the balance sheet date. As of December 31, 2024, and 2023 d eferred revenue related to products and services w as immaterial . Cost of Revenue Automotive Sales Revenue Cost of automotive sales revenue includes direct and indirect materials, labor costs, manufacturing overhead, including depreciation costs of tooling and machinery, shipping and logistic costs, vehicle connectivity costs, and reserves for estimated warranty expenses. Cost of automotive sales revenues also includes adjustments to warranty expense. Cost of services and other revenue includes costs associated with providing non-warranty after-sales services, costs for retail merchandise, and costs to provide vehicle insurance. Cost of services and other revenue also includes direct parts and material. Cost of services and other revenue was immaterial for the years ended December 31, 2024, and 2023. Automotive Leasing Program Cost of automotive leasing revenue includes the depreciation of operating lease vehicles, cost of goods sold associated with direct sales-type leases and warranty expenses related to leased vehicles. Warranties The Company provides a manufacturer’s warranty on all vehicles sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item that fails due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the vehicle. Management tracks warranty claims by vehicle ID, owner, and date. 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) 2024 2023 Accrued warranty- beginning of period $ 684 $ — Provision for warranty 34 731 Warranty costs incurred ( 173 ) ( 47 ) Accrued warranty- end of period $ 545 $ 684 Research and Development Research and Development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, license fees, and depreciation and amortization. The Company’s R&D efforts are focused on design and development of the Company’s electric vehicles and continuing to prepare the Company’s prototype electric vehicle to achieve industry standards. Advanced payments for items and services related to R&D activities have been classified as Deposits in the Consolidated Balance Sheets and are included in operating activities on the Company’s Consolidated Statements of Cash Flows. The Company expenses deposits as the services are provided and prototype parts are received. Sales and Marketing Sales and marketing expenses primarily consist of personnel-related costs, including salaries, bonuses, benefits, and stock-based compensation for employees engaged in sales and marketing activities. Additionally, these expenses include direct costs associated with promotional and marketing efforts. The Company’s marketing initiatives focus on increasing brand awareness for the FF Series and FX Series, with a particular emphasis on introducing the FF 91 to the market. Advertising costs—including media payments for ad placements in print, digital, TV, radio, and other channels, as well as production costs for creating ads (such as fees for hiring creative agencies, production crews, or purchasing creative services)—were immaterial for the years ended December 31, 2024 and 2023. 123 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Stock-Based Compensation The Company’s stock-based compensation awards consist of stock options and restricted stock units (“RSUs”) granted to employees, directors and non-employees for the purchase of Common Stock. The Company recognizes stock-based compensation expense in accordance with the provisions of ASC 718, Compensation — Stock Compensation (“ASC 718”) . ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards based on the grant date fair values of the awards. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. For options with service conditions, the value of the award is recognized as expense over the requisite service period on a straight-line basis. For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. Determining the grant date fair value of the awards using the Black-Scholes option pricing model requires management to make assumptions and judgments, including, but not limited to the following: • Expected term: The estimate of the expected term of awards was determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant for employee awards. The Company uses the contractual term for non-employee awards. • Expected volatility: The Company determines the expected volatility by weighing the historical average volatilities of publicly traded industry peers and its own trading history. The Company intends to continue to consistently apply this methodology using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own Class A Common Stock price becomes available, unless circumstances change such that the identified companies are no longer similar to FF, in which case more suitable companies whose stock prices are publicly available would be utilized in the calculation. • Risk-free interest rate: The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. • Dividend yield: The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends for the foreseeable future. • Forfeiture rate: 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 Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2023. • Fair value of Common Stock: The closing price of the Company’s Class A Common Stock on Nasdaq is used as the fair value of the Common Stock. Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize those tax assets through future operations. The carrying value of deferred tax assets reflects an amount that is more likely than not to be realized. As of December 31, 2024, and 2023, the Company had recorded a full valuation allowance on net deferred tax assets because the Company expects it is more likely than not that the net deferred tax assets will not be realized. The Company utilizes the guidance in ASC 740-10, Income Taxes , to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more likely than not of being realized and effectively settled. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual outcomes. The Company recognizes interest and penalties on unrecognized tax benefits as a component of income tax expense. There were no material interest or penalties for the years ended December 31, 2024 and 2023. 124 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Recent Accounting Pronouncements In early 2025, the Financial Accounting Standards Board (“FASB”) issued several ASUs to enhance financial reporting and provide clearer guidance on various accounting topics. As a December 31 year-end filer and a Smaller Reporting Company (“SRC”), the Company is required to adopt these ASUs in accordance with the effective dates applicable to SRCs. The Company is currently evaluating the impact of these ASUs on the Company’s financial statements and related disclosures. Below is a summary of these ASUs: Recently issued accounting pronouncements not yet adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU enhances the transparency of income tax disclosures by requiring more detailed information about the rate reconciliation and income taxes paid, disaggregated by jurisdiction. This update is effective for the Company beginning January 1, 2026, and will first apply to the Company’s December 31, 2026, Form 10-K, with early adoption permitted. In December 2024, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40 ). This ASU requires public business entities to disclose additional details about certain expenses in the notes to financial statements, such as inventory purchases, employee compensation, depreciation, and intangible asset amortization. This standard is effective for the Company beginning January 1, 2027, and will first apply to the Company’s December 31, 2027, Form 10-K, with early adoption permitted. In January 2025, the FASB issued ASU 2025-04, Leases (Topic 842): Common Control Arrangements . This ASU provides new guidance on lease arrangements between entities under common control, clarifying the criteria for determining whether a lease exists and how to account for such transactions. This update is effective for the Company beginning January 1, 2026, and will first apply to the Company’s December 31, 2026, Form 10-K, with early adoption permitted. 2. Liquidity and Capital Resources and Going Concern The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued. Based on its recurring losses from operations since inception and continued cash outflows from operating activities (all as described below), the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these Consolidated Financial Statements were issued. Preparation of Financial statements The Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the Consolidated Financial Statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Capital Investment, SPA Portfolio Debt, and Future Equity Plans The Company has and will continue to devote subs tantial 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 $ 4,314.3 million, an unrestricted cash balance of $ 7.1 million and a negative working capital position of $ 120.9 million as of December 31, 2024. The Company delivered its first vehicles during 2023 and plans to launch its FX Series of vehicles, but expects to continue to generate significant operating losses for the foreseeable future. The Company has funded its operations and capital needs primarily through the issuance of notes payable and related party notes payable convertible notes (see Note 7, Notes Payable and Note 8, Related Party Transactions ), and the sale of common stock. 125 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Debt Commitments under SPA Portfolio Notes and Other Notes SPA Portfolio Notes: The Company has issued various financing arrangements collectively known as the SPA Portfolio Notes. These are categorized as follows: (i) Secured SPA Notes; (ii) 2023 Unsecured SPA Notes; (iii) Junior Secured SPA Notes; (iv) and 2024 Unsecured SPA Notes. As of December 31, 2024, the SPA Portfolio Notes were in good standing. Pursuant to the SPA Portfolio Notes commitments (collectively the “SPA Commitments”) (see Note 7, Notes Payable and Note 8, Related Party Transactions ), the Company obtained commitments from several investors. As of December 31, 2024, the SPA Commitments totaled $ 614.5 million, of which $ 405.3 million was funded, $ 209.2 million remained to be funded, and $ 46.4 million in principal was outstanding. On December 31, 2024, Optional Commitments under the SPA Commitments totaled $ 426.0 million, of which $ 50.9 million was funded, $ 375.1 million remained to be funded, and $ 3.1 million was outstanding. The remaining amounts to be funded as of December 31, 2024, are subject to the achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of other conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes. Other Financing Arrangements and Related Party Notes: Additional financing is provided via convertible debt instruments, equipment financing arrangements, and related party notes that support the Company’s operations and capital expenditures. As of December 31, 2024, the Company was in good standing on all of its other financing arrangements and Related Party Notes. The Company may be unable to satisfy the closing conditions under the SPA Commitments or obt ain additional incremental investors under the SPA Commitments or other debt or equity financing in a timely manner, on acceptable terms, or at all. Standby Equity Purchase Agreement, At-The-Market Offerin g , and Equity Issuance Constraints The Company has implemented a series of financing arrangements, including a Standby Equity Purchase Agreement with Yorkville and an At-The-Market offering. These initiatives are accompanied by equity issuance constraints, such as limitations imposed by authorized share counts and the impact of convertible securities and related provisions. Together, these elements define the Company’s approach to capital raising and its management of associated regulatory and contractual obligations . Standby Equity Purchase Agreement (“SEPA”) On November 11, 2022, the Company entered into the SEPA, which expires in November 2025. Under the 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 YA II PN Ltd. (“Yorkville”) , subject to certain limitations. As of December 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. At-The-Market Offerin g On September 26, 2023, the Company entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC, as sales agents, to sell shares of Class A Common Stock, from time to time, with aggregate gross sales proceeds of up to $ 90.0 million pursuant to the Registration Statement as an “at-the-market” offering under the Securities Act (the “ATM Program”). Under applicable SEC rules and regulations, because the Company failed to timely file its Form 10-K for the year ended December 31, 2023, as well as its Form 10-Q for the quarter ended March 31, 2024, the Company will not be eligible to access the ATM Program until August 1, 2025, at the earliest. Equity Issuance Constraints The Company’s ability to issue and sell additional shares of Common Stock or warrants to support ongoing capital needs is further constrained by the number of authorized shares. In addition to outstanding shares, the Company must also consider shares reserved for issuance under convertible debt, warrants or other obligations with equity rights. In addition, equity issuances can potentially trigger various anti-dilution features in the Company’s debt and equity instruments that increase the number of shares to be issued and/or reduce the exercise price. This could result in the Company having inadequate authorized shares to meet its outstanding commitments. 126 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Capital Needs, FX Series Production, and Bankruptcy Risk The Company projects that it will require substantial additional funds to continue operations and support production of the FF 91, and it also plans to initiate production of its FX Series of vehicles. If additional capital is not secured, it will not have sufficient resources to meet its obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery. The anticipated start of FX Series production is expected to generate new revenue streams and enhance operational performance, partially mitigating near-term cash flow pressures; however, if additional capital is not secured, the Company will not have sufficient resources to meet its obligations or continue operations, potentially resulting in bankruptcy protection, asset liquidation, and minimal or no recovery for equity holders. Funding Alternatives and Risks The Company continues to explore various funding and financing alternatives to fund its ongoing operations and to ramp up production. The particular funding and financing mechanisms, terms, timing, and amounts depend on the Company’s assessment of opportunities available in the marketplace and the circumstances of the business at the relevant time. However, there have been delays in securing additional funding commitments, which have exacerbated supply chain pressures, among other things. If the Company’s ongoing capital raising efforts are unsuccessful or significantly delayed, or if the Company experiences prolonged material adverse trends in its business, production will be delayed or decreased, and actual use of cash, production volume and revenue for 2025 will vary from the Company’s previously disclosed forecasts, and such variances may be material. While the Company is actively engaged in negotiations with potential financing sources, it may be unable to raise additional capital on terms acceptable to it or at all. In addition to the risk that the Company’s assumptions and analyses may prove incorrect, the projections may underestimate the professional fees and other costs to be incurred related to the pursuit of various financing options currently being considered and ongoing legal risks. Capital needed to fund the development of the Company’s remaining product portfolio will largely depend on market success and profitability of the FF 91 and the launch of the FX series, and the Company’s ability to accurately estimate and control costs. Apart from the FF 91 series and FX series, substantial additional capital would be required to fund operations, research, development, and design efforts for future vehicles. Going Concern and Future Capital Strategy Despite the Company’s diversified financing structure – including its SPA Portfolio Notes, convertible debt instruments, and equipment financing, and targeted inflows from new debt, and anticipated equity, the Company’s recurring operating losses and continuing negative cash flows from operations continue to raise substantial doubt about the Company’s ability to continue as a going concern. 127 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 3. Inventory, net Inventory, net, consists of the following as of: (in thousands) December 31, 2024 December 31, 2023 Raw materials (net of reserves) $ 27,440 $ 33,345 Work in progress 46 572 Finished goods — 312 $ 27,486 $ 34,229 The inventory reserve was $ 3.3 million and $ 2.8 million as of December 31, 2024, and 2023, respectively. 4. Deposits and Other Current Assets Deposits and other current assets consists of the following as of: (in thousands) December 31, 2024 December 31, 2023 Deposits Deposits for research and development, prototype and production parts, and other $ 29,318 $ 28,609 Deposits for goods and services yet to be received (“Future Work”) 1,776 2,773 $ 31,094 $ 31,382 Other current assets December 31, 2024 December 31, 2023 Prepaid expenses $ 4,832 $ 13,309 Other current assets 1,295 $ 8,412 $ 6,127 $ 21,721 Deposits for R&D, prototype and production parts, and other are recognized and reported as R&D expenses in the Consolidated Statements of Operations and Comprehensive Loss when services are provided or as prototype parts are received. In addition, during the years ended December 31, 2024 and 2023, the Company made deposits for inventory and property and equipment items which are classified as Deposits for goods and services yet to be received (“Future Work”). Prepaid expenses primarily consist of software subscriptions and insurance, and Other current assets includes certain deferred expenses. As of December 31, 2024, and 2023, 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. 128 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 5. Property, Plant, and Equipment, Net Property, plant, and equipment, net, consists of the following as of : (in thousands) December 31, 2024 December 31, 2023 Land, buildings and leasehold improvements $ 111,443 $ 103,522 Computer hardware 2,397 2,195 Tooling, machinery and equipment 319,313 318,301 Vehicles 245 669 Lease vehicles 3,121 1,873 Computer software 4,339 4,301 Construction in process 27,563 36,491 468,421 467,352 Less: Accumulated depreciation ( 119,834 ) ( 49,540 ) $ 348,587 $ 417,812 The Company’s CIP is primarily related to the construction of tooling, machinery and equipment for the FF ieFactory California. Tooling, machinery, and equi pment are either held at Company facilities, primarily the FF ieFactory California, or at the vendor’s location until the tooling, machinery and equipment is completed. The Company recognized Loss on disposal on property, plant, and equipment of $ 1.7 million, which included the derecognition of approximately $ 1.0 million in accumulated depreciation, and $ 4.5 million for the years ended December 31, 2024, and 2023, respectively. Depreciation and amortization expe nse totale d $ 71.4 million and $ 42.5 million for the years ended December 31, 2024, and 2023, respectively. During 2024 and 2023, the Company disposed of $ 5.3 million and $ 9.6 million, respectively, of CIP relating to the abandonment of certain FF 91 program assets, including vendor tooling, machinery, and equipment. These disposals were primarily driven by the redesign of FF 91 components and the implementation of the Company’s cost reduction program. In addition, the Company wrote off costs with the construction of a sales office and warehousing equipment as part of its operational restructuring. Disposals of CIP of $ 5.3 million and $ 3.7 million were charged to operating expenses in the Consolidated Statements of Operations and Comprehensive Loss during the years ended December 31, 2024, and 2023, respectively. Asset Retirement Obligation Due to the build out of the FF ieFactory California, the Company has an asset retirement obligation (“ARO”) totaling $ 0.8 million and $ 0.7 million for the years ended December 31, 2024, and 2023, respectively. The ARO is recorded to Other liabilities 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. 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities—which include both third-party and related-party balances—comprise the following items as of: (in thousands) December 31, 2024 December 31, 2023 Accrued payroll and benefits $ 27,713 $ 28,037 Accrued legal contingencies 9,091 21,590 Customer deposits 3,027 3,246 Other current liabilities 16,923 9,518 $ 56,754 $ 62,391 129 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 7. Notes Payable The Company has entered into notes payable agreements with third parties. The tables below summarize these agreements as of December 31, 2024, and 2023, providing details on contractual maturity dates, contractual interest rates, unpaid principal balances, fair value adjustments, original issue discounts, including proceeds allocated to warrants, and net carrying values. December 31, 2024 (in thousands) Contractual Maturity Date Contractual Interest Rates Unpaid Principal Balance Fair Value Measurement Adjustments Original Issue Discount and Proceeds Allocated to Warrants Net Carrying Value Secured SPA Notes Various 10 % - 15 % $ 3,118 $ 2,651 $ ( 312 ) $ 5,457 2023 Unsecured SPA Notes Various dates in 2029 10 % - 15 % 4,380 2,844 ( 508 ) 6,716 Junior Secured SPA Notes September 2029 10 % 28,840 13,163 ( 15,944 ) 26,059 2024 Unsecured SPA Notes December 2029 10 % 10,015 8,741 ( 11,724 ) 7,032 Notes payable – China other Due on Demand — % 4,173 — — 4,173 Auto loans October 2026 7 % 51 — — 51 $ 50,577 $ 27,399 $ ( 28,488 ) $ 49,488 Notes payable, current portion $ 4,224 Notes payable, long-term portion $ 45,264 December 31, 2023 (in thousands) Contractual Maturity Date Contractual Interest Rates Unpaid Principal Balance Fair Value Measurement Adjustments Original Issue Discount and Proceeds Allocated to Warrants Net Carrying Value Secured SPA Notes Various 10 % - 15 % $ 100,052 $ ( 15,501 ) $ ( 10,319 ) $ 74,232 2023 Unsecured SPA Notes Various dates in 2029 10 % - 15 % 13,219 1,262 ( 2,543 ) 11,938 (1) Notes payable – China other Due on Demand — % 4,898 — — 4,898 Auto loans October 2026 7 % 82 — — 82 $ 118,251 $ ( 14,239 ) $ ( 12,862 ) $ 91,150 Notes payable, current portion $ 91,150 Notes payable, long-term portion $ — _____________________ (1) The 2023 Unsecured SPA Notes line item values above were updated to exclude related party balance of $ 542 thousand for comparability of the presentation with the current year. (See Note 8, Related Party Transactions. ) 130 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Roll Forward of the Fair Value of Notes payable by Transaction Type The following table presents a roll forward of the Company’s Notes payable balances from December 31, 2023 to December 31, 2024. The table summarizes beginning and ending balances by debt category and details changes during the period, including repayments, conversions, reclassifications, fair value adjustments, and other significant transactions. Categories of Debt (in thousands) Secured SPA Notes 2023 Unsecured SPA Notes Unsecured Convertible Notes Junior Secured SPA Notes 2024 Unsecured SPA Notes Notes payable – China other Auto loans Total Balance as of December 31, 2023 (a) $ 74,232 $ 11,938 $ — $ — $ — $ 4,898 $ 82 $ 91,150 New Issuances (b) 10,701 — 34,885 9,950 1,755 — 57,291 Repayment of Debt (c) — — — — — — ( 31 ) ( 31 ) Conversion of Debt to Equity (d) ( 50,691 ) ( 14,931 ) — ( 1,056 ) — — — ( 66,678 ) Extinguishments of Debt (e) 5,158 ( 2,394 ) ( 65 ) — — — — 2,699 Fair Value Adjustments of Debt (f) ( 33,943 ) ( 10,268 ) 328 9,665 — — — ( 34,218 ) Reclassification of Debt Between Debt Categories (g) — 22,371 ( 35,148 ) 7,500 5,277 — — — Other Adjustments (h) — — — — — ( 725 ) — ( 725 ) Balance as of December 31, 2024 (i) $ 5,457 $ 6,716 $ — $ 26,059 $ 7,032 $ 4,173 $ 51 $ 49,488 (a) The carrying value for each note category, fair value or amortized cost depending on the election, as of December 31, 2023. (b) Debt instruments issued during the period, recorded at fair value upon issuance if the fair value option is elected, or at principal balance net of discounts. (c) Cash repayments of principal amounts during the period. (d) Fair value of debt converted into equity during the period. (e) Adjustments from amendments, modifications, or extinguishment of existing debt, in accordance with ASC 470-50, and presented as a component of 'Loss on settlement of notes payable' in the Consolidated Statements of Operations. (f) Adjustments to debt fair value due to the fair value option election, embedded derivatives, or anti-dilution provisions. These adjustments are presented as a component of 'Change in fair value of notes payable, warrant liabilities, and call option derivatives' in the Consolidated Statements of Operations. (g) Transfers of amounts between debt categories, such as from secured to unsecured classifications. (h) Miscellaneous changes not captured in other columns, such as currency adjustments and reclassification to accrued expenses. (i) The carrying value for each note category, fair value or amortized cost depending on the election, as of December 31, 2024. 131 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The following table presents a roll forward of the Company’s Notes payable balances from December 31, 2022 to December 31, 2023 with third parties. The table summarizes beginning and ending balances by debt category and details changes during the period, including repayments, conversions, reclassifications, fair value adjustments, and other significant transactions. Categories of Debt (in thousands) Secured SPA Notes 2023 Unsecured SPA Notes Notes payable – China other Auto loans Total Balance as of December 31, 2022 (a) $ 26,008 $ — $ 4,997 $ 100 $ 31,105 New Issuances (b) 173,730 20,936 — ( 18 ) 194,648 Repayment of Debt, including periodic interest on debt carried at fair value (c) ( 1,167 ) — — — ( 1,167 ) Conversion of Debt to Equity (d) ( 114,252 ) ( 9,135 ) — — ( 123,387 ) Extinguishments of Debt (e) 13,078 — — — 13,078 Fair Value Adjustments of Debt (f) ( 23,165 ) 137 — — ( 23,028 ) Other Adjustments (g) — — ( 99 ) — ( 99 ) Balance as of December 31, 2023 (h) $ 74,232 $ 11,938 $ 4,898 $ 82 $ 91,150 (a) The carrying value for each note category, fair value or amortized cost depending on the election, as of December 31, 2022. (b) Debt instruments issued during the period, recorded at fair value upon issuance if the fair value option is elected, or at principal balance net of discounts. (c) Cash repayments of principal amount and periodic interest, where fair value option is elected, during the period. (d) Fair value of debt converted into equity during the period. (e) Adjustments from amendments, modifications, or extinguishment of existing debt, in accordance with ASC 470-50, and presented as a component of Loss on settlement of notes payable in the Consolidated Statements of Operations. (f) Adjustments to debt fair value due to the fair value option election, embedded derivatives, or anti-dilution provisions. These adjustments are presented as a component of Change in fair value of notes payable, warrant liabilities, and call option derivatives' in the Consolidated Statements of Operations. (g) Miscellaneous changes not captured in other columns, such as currency adjustments. (h) The carrying value for each note category, fair value or amortized cost depending on the election, as of December 31, 2023. Schedule of Principal Maturities of Notes Payable The future scheduled principal maturities of Notes payable as of December 31, 2024, are as follows: (in thousands) Due on demand $ 4,173 2025 — 2026 51 2027 — 2028 — 2029 39,546 Thereafter 6,807 $ 50,577 132 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The Company has issued various financing arrangements, including secured and unsecured notes, convertible notes, and loans. These are categorized as follows: (i) Secured SPA Notes; (ii) 2023 Unsecured SPA Notes; (iii) Unsecured Convertible Notes; (iv) Junior Secured SPA Notes; (v) 2024 Unsecured SPA Notes; (vi) Collateralized loan; (vii) Notes payable – China other; and (viii) Auto loans. Below is a discussion of the terms, amendments, and financial impacts for each category of debt. Secured SPA Notes Overview and Terms Th e Secured SPA Notes were issued under the Secured SPA Agreement dated August 14, 2022, with FF Simplicity Ventures LLC (“FFSV”) acting as administrative agent, collateral agent, and purchaser, along with additional purchasers. These senior secured convertible notes are supported by a second lien on substantially all of the Company’s assets and are guaranteed by the Company’s domestic subsidiaries. The Secured SPA Notes bear an annual interest rate of 10 %, increasing to 15 % if interest is paid in shares of Class A Common Stock. Principal and interest are due at maturity, unless converted earlier pursuant to the Secured SPA Notes’ conversion privileges. Issued at a 10 % original issue discount, these notes are convertible into Class A Common Stock at the lesser of a fixed conversion price or 90 % of the VWAP for the trading day immediately prior to the conversion date. The Secured SPA Notes are subject to full ratchet anti-dilution price protection and as of December 31, 2024 the fixed price conversion price was $ 1.16 . The Secured SPA Notes mature six -years from each date of issuance. The outstanding Secured SPA Notes, as of December 31, 2024, are scheduled to mature on various dates in 2029 and 2030. In connection with the issuance of the Secured SPA Notes, the Company also granted to each purchaser a warrant (the “Secured SPA Warrants”) to purchase shares of Class A Common Stock equal to 33 % of the shares issuable upon conversion of the aggregate principal amount under the Secured SPA Notes funded. The Secured SPA Warrants are subject to the same full ratchet anti-dilution price protection as the Secured SPA Notes. The Secured SPA Warrants are indexed to the Company’s Class A Common Stock and, as such, meet the scope exception in ASC 815-40 to be classified within equity. The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to the Secured 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 Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable and related party warrant liabilities, as applicable, in the Consolidated Statements of Operations and Comprehensive Loss. The Company also elected to apply the fair value option for other SPA Portfolio Notes. Amendments and Modifications The Secured SPA Notes have undergone several amendments: • Sixth Amendment (February 3, 2023): This amendment introduced Tranche C Notes with an aggregate principal of up to $ 135.0 million at an original base conversion price of $ 10,080.00 , subject to anti-dilution adjustments. Certain outstanding Secured SPA Notes totaling $ 31.0 million in principal were replaced with notes carrying a conversion price of $ 8,568.00 . The change to the conversion price triggered accounting treatment under ASC 470-50, Debt—Modifications and Extinguishments (“ASC 470-50”) and the Company recognized a Loss on settlement of notes payable because the change in fair value of the conversion feature was substantial. • Seventh Amendment (March 23, 2023): Accelerated funding timelines for $ 40.0 million of committed Tranche C Notes and $ 5.0 million of optional Tranche B Notes. Original issuance discounts for $ 25.0 million of Tranche C Notes and $ 5.0 million of Tranche B Notes were increased to 14 % and 16 % , respectively. • Eighth Amendment (May 8, 2023): Reduced the floor price for conversion from $ 2,016.00 to $ 960.00 and lowered exercise prices for the remaining Secured SPA Notes and related warrants from $ 10,080.00 to $ 8,568.00 . The change to the conversion price triggered accounting treatment under ASC 470-50, Debt—Modifications and Extinguishments (“ASC 470-50”) and the Company recognized a Loss on settlement of notes payable because the change in fair value of the conversion feature was substantial. 133 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements • Unanimous Written Consents: During the six months ended June 30, 2024, the Company’s Board of Directors exercised its authority via a series of written consents (the “Unanimous Written Consents”) to adjust the principal conversion price of the Secured SPA Notes as it considered desirable. The Board chose to reduce the principal conversion price from $ 29.33 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 actions of the Board in the Unanimous Written Consents did not trigger any full ratchet anti-dilution price protection in the Company’s debt and equity securities. • Eleventh and Twelfth Amendments (July 11, 2024): Permitted entry into the Collateralized Loan by subordinating liens securing the Secured SPA Notes to liens under the Collateralized Loan (See Collateralized Loan below). Waiver Agreemen t The Waiver Agreement dated August 2, 2024, revised key financial terms of the Secured SPA Notes and 2023 Unsecured SPA Notes, including elimination of the Make-Whole Amount. The Make-Whole Amount was a provision that entitled noteholders to compensation for the interest they would have received had the notes been held to maturity. Additionally, pursuant to the Waiver Agreement, the holders agreed that accrued interest shall be due at maturity or conversion. Further, the conversion price was reduced to the lesser of (1) the conversion price then in effect, $ 29.33 , subject to full ratchet anti-dilution price protection (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter) or (2) 90 % of the VWAP of the Company’s Common Stock as of the trading day ended immediately prior to the time the conversion notice is delivered to the Company. The provisions of the Waiver Agreement will apply to all Secured SPA Notes and 2023 Unsecured SPA Notes currently issued or issuable in the future pursuant to the Secured SPA Agreement and 2023 Unsecured SPA Agreement. In accordance with ASC 470-50, Debt—Modifications and Extinguishments, the changes pursuant to the Waiver Agreement 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 for the year ended December 31, 2024, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes. Anti-Dilution Adjustments During the year ended December 31, 2023, the Company entered into multiple dilutive stock sale and purchase transactions, that triggered the full ratchet anti-dilution price protections embedded in the Secured SPA Notes and Secured SPA Warrants. As a result, the fixed-price conversion price of the Secured SPA Notes and exercise price of the Secured SPA Warrants outstanding prior to such financings was reduced to a price equal to the price per share paid in the dilutive financings. On September 5, 2024, the Company entered into the Junior Secured SPA Agreement, which triggered the full ratchet anti-dilution price protection in the Secured SPA Notes and Secured SPA Warrants. The issuance of the Junior Secured SPA Notes constituted a dilutive issuance, as the stated conversion price of $ 5.24 was less than the Secured SPA Notes and Secured SPA Warrant exercise price. On December 21, 2024, the Company entered into the 2024 Unsecured SPA Notes, which triggered the full ratchet anti-dilution price protection in the Secured SPA Notes and Secured SPA Warrant. The issuance of the 2024 Unsecured SPA Notes constituted a dilutive issuance, as the stated conversion price of $ 1.16 was less than the Secured SPA Notes conversion price and Secured SPA Warrant exercise price. 134 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Summary of Secured SPA Notes Activity As of December 31, 2024, the fair value of the Secured SPA Notes was $ 5.5 million, compared to $ 74.2 million as of December 31, 2023. During the year ended December 31, 2024, the Company received cash proceeds, net of original issue discounts of $ 10.7 million in exchange for the issuance of the SPA Notes and incurred approximately $ 0.2 million in transaction costs. The Company converted debt with a principal amount of $ 108.8 million into 41,727,089 shares of the Company’s Class A Common Stock. The conversion of Secured SPA Notes into Class A Common Stock resulted in a Loss on extinguishment of $ 126.1 million. For the year ended December 31, 2024, the Company recognized $ 33.9 million gain from fair value remeasurement of Secured SPA Notes under ASC 825, recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options and $ 5.2 million loss on extinguishment triggered by the Waiver Agreement recorded in Loss on settlement of notes payable in the Consolidated Statements of Operations and Comprehensive Loss. During the year ended December 31, 2023, the Company received cash proceeds, net of original issue discounts of $ 187.2 million in exchange for the issuance of the SPA Notes and incurred approximately $ 1.9 million in transaction costs. The Company converted debt with a principal amount of $ 188.1 million into 419,646 shares of the Company’s Class A Common Stock. The conversion of Secured SPA Notes into Class A Common Stock resulted in a Loss on extinguishment of $ 193.5 million. For the year ended December 31, 2023, the Company recognized $ 23.2 million gain from fair value remeasurement of Secured SPA Notes under ASC 825, recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options and $ 13.1 million loss on extinguishment triggered by the Sixth and Eighth Amendments recorded in Loss on settlement of notes payable in the Consolidated Statements of Operations and Comprehensive Loss. 2023 Unsecured SPA Notes Overview and Terms The 2023 Unsecured SPA Notes were issued under the Unsecured SPA Agreement dated May 8, 2023, with various investors including Metaverse Horizon Limited (“MHL”), a related party. These notes are unsecured and have terms similar to the Secured SPA Notes, except they lack collateral backing. The 2023 Unsecured SPA Notes bear an annual interest rate of 10 %, increasing to 15 %, if interest is paid in shares of Class A Common Stock. Principal and interest are due at maturity, unless converted earlier pursuant to the 2023 Unsecured SPA Notes’ conversion privileges. Issued at a 10 % original issue discount, these notes are convertible into the Company’s Class A Common Stock at a lesser of a fixed conversion price or 90 % of the VWAP for the trading day immediately prior to the conversion date. The 2023 Unsecured SPA Notes are subject to full ratchet anti-dilution price protection and as of December 31, 2024 the fixed price conversion price was $ 1.16 . The 2023 Unsecured SPA Notes mature primarily six -years from each date of issuance. The outstanding 2023 Unsecured SPA Notes, as of December 31, 2024, are scheduled to mature on various dates in 2029 and 2030. In connection with the issuance of the 2023 Unsecured SPA Notes, the Company also granted to each purchaser a warrant (the “2023 Unsecured SPA Warrants”) to purchase shares of Class A Common Stock equal to 33 % of the shares issuable upon conversion of the aggregate principal amount under the Secured SPA Notes funded. The 2023 Unsecured SPA Warrants are subject to the same full ratchet anti-dilution price protection as the 2023 Unsecured SPA Notes. The 2023 Unsecured SPA Warrants are indexed to the Company’s Class A Common Stock and, as such, meet the scope exception in ASC 815-40 to be classified within equity. The activity below does not include related party transactions, which are discussed separately in Note 8, Related Party Transactions . Amendments and Modifications • First Amendment (June 26, 2023): Allowed purchasers to defer commitments if operational milestones were unmet. This amendment did not alter cash flows and resulted in no gain or loss. Waiver Agreement The Waiver Agreement dated August 2, 2024, revised the terms of the Secured SPA Notes and 2023 Unsecured SPA Notes. The terms of the 2023 Unsecured SPA Notes are substantially similar to those of the Secured SPA Notes and were similarly impacted by the Waiver Agreements. Details of the Waiver Agreements and their effects on the Secured SPA Notes and 2023 Unsecured SPA Notes are discussed in the section on Secured SPA Notes. 135 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Anti-Dilution Adjustments During the year ended December 31, 2023, the Company entered into multiple dilutive stock sale and purchase transactions, that triggered the full ratchet anti-dilution price protections embedded in the 2023 Unsecured SPA Notes and 2023 Unsecured SPA Warrants. As a result, the fixed-price conversion price of the 2023 Unsecured SPA Notes and exercise price of the 2023 Unsecured SPA Warrants outstanding prior to such financings was reduced to a price equal to the price per share paid in the dilutive financings. On September 5, 2024, the Company entered into the Junior Secured SPA, which triggered the full ratchet anti-dilution price protection in the 2023 Unsecured SPA Notes and 2023 Unsecured SPA Warrants. The issuance of the Junior Secured SPA Notes constituted a dilutive issuance, as the stated conversion price of $ 5.24 was less than the 2023 Unsecured SPA Notes and 2023 Unsecured SPA Warrant exercise price. On December 21, 2024, the Company entered into the 2024 Unsecured SPA Notes, which triggered the full ratchet anti-dilution price protection in the 2023 Unsecured SPA Notes and 2023 Unsecured SPA Warrant. The issuance of the 2024 Unsecured SPA Notes constituted a dilutive issuance, as the stated conversion price of $ 1.16 was less than the 2023 Unsecured SPA Notes conversion and Secured SPA Warrant exercise price. Summary of 2023 Unsecured SPA Notes Activity As of December 31, 2024, the fair value of the 2023 Unsecured SPA Notes was $ 6.7 million, compared to $ 11.9 million as of December 31, 2023. During the year ended December 31, 2024, the Company did not receive cash proceeds or incur transaction costs, in exchange for the issuance of the 2023 Unsecured SPA Notes. Instead, the Company exchanged Unsecured Convertible Notes with a principal balance of $ 19.9 million for 2023 Unsecured SPA Notes with a principal of $ 22.1 million and fair value of $ 22.4 million. The Company converted debt with a principal amount of $ 31.0 million into 19,368,059 shares of the Company’s Class A Common Stock. The conversion of 2023 Unsecured SPA Notes into Class A Common Stock resulted in a Loss on extinguishment of $ 31.5 million. During the year ended December 31, 2023, the Company received cash proceeds, net of original issue discounts of $ 23.3 million in exchange for the issuance of the SPA Notes and incurred approximately $ 0.2 million in transaction costs. The Company converted debt with a principal amount of $ 12.5 million into 85,830 shares of the Company’s Class A Common Stock. The conversion of Secured SPA Notes into Class A Common Stock resulted in a Loss on extinguishment of $ 9.2 million. For the year ended December 31, 2023, the Company recognized a net gain of $ 0.1 million, due to favorable fair value adjustments under ASC 825. Unsecured Convertible Notes Overview and Terms In 2024, the Company issued unsecured convertible note (the “ Unsecured Convertible Notes”). These Unsecured Convertible Notes, maturing three months from issuance, accrued interest at 4.27 % and were convertible at issuance into Class A Common Stock, 2023 Unsecured SPA Notes, or a future security purchase agreement issued by the Company, which became the 2024 Unsecured SPA Notes. The activity below does not include related parties activity, discussed separately in Note 8, Related Party Transactions . Summary of 2024 Unsecured Convertible Notes Activity There were no outstanding Unsecured Convertible Notes as of December 31, 2024, following their conversion into other SPA Portfolio Notes. During the year ended December 31, 2024, the Company issued Unsecured Convertible Notes with a principal value of $ 34.9 million and exchanged the balance for Unsecured Convertible Notes for 2023 Unsecured SPA Notes, Junior Secured SPA Notes, and 2024 Unsecured SPA Notes. Junior Secured SPA Notes Overview and Terms The Junior Secured SPA Notes were i ssued under the Junior Secured SPA dated September 5, 2024. These notes are secured by a second-priority lien on certain assets and bear an annual interest rate of 10 %. Principal and interest are payable at maturity or at each conversion date. The notes are convertible along with accrued interest into Class A Common Stock at the lesser of (a) a fixed conversion price or (b) the greater of (1) the floor price, $ 1.05 , or (2) the average VWAP of the common stock for the five previous trading days. Junior Secured SPA Notes are subject to full ratchet anti-dilution price protection and as of December 31, 2024 the fixed price conversion price was $ 1.16 . These notes mature in September 2029. 136 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The Junior Secured SPA Investors were given warrants (the “Junior SPA Warrants”) equal to 100 % of the shares issuable upon conversion of the aggregate principal amount under the Junior Secured SPA Note funded. The Junior SPA Warrants are exercisable immediately with a term of five years . The Company issued to the placement agent for the transaction a warrant (the “Placement Agent Warrant”) identical to that of the Junior Secured SPA Investors for 202,768 shares of Common Stock, exercisable immediately. These warrants are subject to the same full ratchet anti-dilution price protection as the Junior Secured SPA Notes. The Company’s Junior SPA Warrants meet the requirements for liability classification pursuant to ASC 480-10, Distinguishing Liabilities from Equity. The Junior SPA Warrants could require cash settlement upon events that are considered outside of the control of the Company. The Junior Secured SPA Investors were issued incremental warrants (the “Incremental Warrants”) to purchase additional Junior Secured SPA Notes up to the amounts originally funded under their original Junior Secured SPA Note commitments. The Incremental Warrants, presented in the Consolidated Balance Sheets as Derivative call options, are exercisable immediately upon issuance and have a one -year term. They allow the purchase of the respective notes at an exercise price equal to the principal amount of the notes issued to the investor, subject to full ratchet anti-dilution price protection, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations, or similar transactions. See Note 14, Fair Value of Financial Instruments for further details on the Incremental Warrants. Anti-Dilution Adjustments On December 21, 2024, the Company entered into the 2024 Unsecured SPA Notes, which triggered the full ratchet anti-dilution price protection in the Junior Secured SPA Notes and Junior Secured SPA Warrants. The issuance of the 2024 Unsecured SPA Notes constituted a dilutive issuance, as the stated conversion price of $ 1.16 was less than the Junior Secured SPA Notes conversion and Junior Secured SPA Warrant exercise price. Summary of Junior Secured SPA Notes Activity During the year ended December 31, 2024, the Company received cash proceeds, net of original issue discounts of $ 22.5 million in exchange for the issuance of the SPA Notes and incurred approximately $ 1.3 million in transaction costs. The Company also exchanged Unsecured Convertible Notes with a principal balance of $ 7.5 million for Junior Secured SPA Notes with the same principal amount. The Company converted debt with a principal amount $ 1.1 million into 1,046,651 shares of the Company’s Class A Common Stock. The conversion of Junior Secured SPA Notes into Class A Common Stock resulted in a Loss on extinguishment of $ 1.4 million. 2024 Unsecured SPA Notes Overview and Terms The 2024 Unsecured SPA Notes were issued under the Unsecured SPA Agreement dated December 21, 2024. These notes bear an annual interest rate of 10 %. Principal and interest are payable at maturity or at each conversion date. The notes are convertible along with accrued interest into Class A Common Stock at the lesser of (a) a fixed conversion price, which was $ 1.16 at issuance, or (b) the greater of (1) the floor price, $ 1.05 , or (2) the lowest one -day VWAP of the common stock for the five previous trading days. 2024 Unsecured SPA Notes are subject to full ratchet anti-dilution price protection. These notes mature in December 2029. The 2024 Unsecured SPA Investors were given warrants (the “2024 Unsecured SPA Warrants”) equal to 100 % of the shares issuable upon conversion of the aggregate principal amount under the 2024 Unsecured SPA Notes funded. The 2024 Unsecured SPA Warrants are exercisable immediately with a term of five years . 2024 Unsecured SPA Warrants are subject to the same full ratchet anti-dilution price protection as the 2024 Unsecured SPA Notes . The Company’s 2024 Unsecured SPA Warrants meet the requirements for liability classification pursuant to ASC 480-10, Distinguishing Liabilities from Equity. The Junior SPA Warrants could require cash settlement upon events that are considered outside of the control of the Company in a manner that is not consistent with the holders of the Company’s Common Stock The 2024 Unsecured SPA Investors were issued incremental warrants to purchase additional 2024 Unsecured SPA Notes up to the amounts originally funded under their original 2024 Unsecured SPA Note commitments. The Incremental Warrants, presented in the Consolidated Balance Sheets as Derivative call options, are exercisable immediately upon issuance and have a one -year term. They allow the purchase of the respective notes at an exercise price equal to the principal amount of the notes issued to the investor, subject to full ratchet anti-dilution price protection, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations, or similar transactions. See Note 14, Fair Value of Financial Instruments for further details on the Incremental Warrants. 137 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Summary of 2024 Unsecured SPA Notes Activity During the year ended December 31, 2024, the Company received cash proceeds, net of original issue discounts of $ 2.5 million in exchange for the issuance of the SPA Notes and incurred approximately zero in transaction costs. The Company also exchanged Unsecured Convertible Notes with a principal balance of $ 7.5 million for 2024 Unsecured SPA Notes with the same principal amount. Notes Payable – China Other The Notes Payable – China Other are demand notes issued in prior periods, which are unsecured and carry no interest. These notes remain outstanding as of December 31, 2024. Auto Loans Overview and Terms The Auto Loans finance the purchase of vehicles used by the Company. These loans are secured by the financed vehicles, bear an annual interest rate of 7 %, and mature in October 2026. Summary of Auto Loans Activity For the year ended December 31, 2024, the Company repaid $ 31.0 thousand of debt. 138 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 8. Related Party Transactions The Company has entered into notes payable agreements with related parties. The Company receives funding via notes payable from various parties, including related parties. 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. The tables below summarize the related party note payable agreements as of December 31, 2024 and December 31, 2023, providing details on contractual maturity dates, contractual interest rates, and net carrying values. December 31, 2024 (in thousands) Contractual Maturity Date Contractual Interest Rates Net Carrying Value Unsecured Convertible Note April 2024 (1) 4.27 % $ 1,364 Notes Payable — China April 2027 18.0 % 4,382 Notes Payable on Demand — China Due on Demand — % 417 FFGP Note Various 2024 (1) 4.27 % 1,576 Convertible FFGP Note 'May 2024 (1) 4.27 % 250 Other Notes Due on Demand 12.0 % 75 $ 8,064 Related party notes payable, current $ 5,310 Related party notes payable, long-term $ 2,754 _______________ (1) The term was extended upon receipt of waivers of enforcement rights and remedies under the loan agreements, as described below, with the expected settlement in 2025. December 31, 2023 (in thousands) Contractual Maturity Date Contractual Interest Rates Net Carrying Value 2023 Unsecured SPA Notes August 2029 10 % - 15 % $ 542 Notes Payable — China December 2023 18.0 % 5,103 Notes Payable on Demand — China Due on Demand — % 3,789 FFGP Note Various 5.27 % 326 $ 9,760 Related party notes payable, current $ 9,760 Related party notes payable, long-term $ — 139 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Schedule of Principal Maturities of Related Party Notes Payable The future scheduled principal maturities of Related party notes payable as of December 31, 2024, are as follows: (in thousands) Due on demand $ 492 2025 4,954 2026 2,003 2027 751 Thereafter — $ 8,200 The Company has issued various financing arrangements with related parties, categorized as follows: (i) 2023 Unsecured SPA Notes ; (ii) Unsecured Convertible Note ; (iii) Notes Payable — China ; (iv) Notes Payable on Demand — China ; (v) FFGP Note ; and (vi) Convertible FFGP Note . 2023 Unsecured SPA Notes In May 2023, June 2023, and October 2023, the Company issued unsecured convertible notes to MHL, a related party, under the 2023 Unsecured SPA Notes as the anchor investor. (For information on the terms of this note, see Note 7, Notes Payable 2023 Unsecured SPA Notes issued to third-parties.) The Company elected the fair value o ption under ASC 825, Financial Instruments , for the 2023 Unsecured SPA Notes because the notes include features such as a contingently exercisable put option, which meets the definition of an embedded derivative. Transaction costs were expensed under “Change in fair value of related party notes payable and related party warrant liabilities” in the Consolidated Statements of Operations and Comprehensive Loss. MHL converted $ 0.7 million and $ 22.3 million of gross principal balances in exchange for 33,107 and 125,267 Class A Common Stock shares during years ended December 31, 2024, and 2023, respectively. During the years ended December 31, 2024, and 2023, the Company recognized losses of $ 0.2 million and $ 20.0 million on the settlement (conversion) of related party notes payable into shares of Class A Common stock and losses of $ 0.1 million and $ 5.9 million , due to fair value adjustments under ASC 825. As of December 31, 2024, there were no related party notes payable outstanding pursuant to the 2023 Unsecured SPA Notes, compared to $ 0.5 million as of December 31, 2023 . Unsecured Convertible Note In January 2024, the Company issued an unsecured convertible note to MHL, a related party, in a principal amount of $ 1.5 million. The note was due three months from the date of issuance ( April 2024 ), accrues interest at an annual rate of 4.27 % per annum, and is convertible at the option of the holder into either Class A Common Stock or into a 2023 Unsecured SPA Note. If conversion into Class A Common Stock was elected, the conversion price would be based on the latest closing price of the Company’s Class A Common Stock on the conversion date. In April 2024 , the note entered default due to non-payment upon maturity. Subsequent to the reporting date but prior to the issuance of this Form 10-K for the year ended December 31, 2024 , MHL fully waived its enforcement rights and remedies under the loan agreement with respect to the outstanding principal balance until final settlement. As a result, the note was no longer considered in default as of December 31, 2024. The Company settled the note subsequent to December 31, 2024, as described in Note 17, Subsequent Events . The Company elected to apply the fair value option under ASC 825, Financial Instruments , for this note, based on its expectation that the note will be exchanged into SPA Portfolio Notes pursuant to the holder’s conversion rights. SPA Portfolio Notes include features such as a contingently exercisable put option, which meet the definition of an embedded derivative under applicable accounting standards. For the year ended December 31, 2024 the Company recognized a gain in the amount of and $ 0.1 millions in Change in fair value of related party notes payable and related party warrant liabilities within the Consolidated Statements of Operations and Comprehensive Loss. This gain reflects the adjustment to the note’s fair value during the reporting period. 140 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Notes Payable — China The Company has outstanding debt payable to Leshi Small Loan Co., Ltd. (“Chongqing”), a related party, also known as “ Notes Payable — China.” In 2022, Chongqing agreed to modify the debt agreement, contingent on the Company making an initial payment of 10% of the agreed upon discounted principal amount. Under the modified terms, the Company received a waiver of accrued interest, a reduction in the principal balance, and an extended repayment schedule requiring full payment of the discounted principal by December 31, 2023 . However, The Company did not pay the outstanding principal amount in full by the maturity date of December 31, 2023 , and as a result, in January 2024 the Company incurred substantial interest and penalties. Per the terms of the 2022 agreement, in the event of a default at maturity all outstanding interest and penalties since the inception of the original agreement reverted to Chongqing and the discounted principal balance returned to the full unpaid amount. As a result, the Company recognized a loss of $ 14.1 million shown as component of Loss on settlement of related party notes payable in the Consolidated Statements of Operations and Comprehensive Loss. In December 2024, the Company repaid $ 0.1 million an d entered into supplementary agreements with Chongqing, further restructuring its outstanding debt. The December 2024 agreements largely restored the debt to amounts outstanding prior to the default on December 31, 2023. If the Company defaults again on its payment plan with Chongqing the interest and penalties accrued since the inception of the original agreement and the note principal will revert back to Chongqing in proportion to the unpaid portion of the discounted principal balance. The agreements maintain an 18.0 % stated interest rate for the debt and establish a payment plan for periodic principal and interest payments until the revised maturity date of April 2027 . The Company accounted for the restructuring as a troubled debt restructuring under ASC 470-60, Debt – Troubled Debt Restructurings by Debtors . As a result of the restructuring, the Company recognized a gain of $ 0.7 million in additional paid-in capital, reflecting the related party nature of the transaction. Following the restructuring and subsequent principal payments, the Company's Notes Payable—China is in good standing as of December 31, 2024. As of December 31, 2024, the principal value of this note payable was $ 4.4 million, compared to $ 5.1 million as of December 31, 2023 . As of December 31, 2024 and 2023 , the Company had accrued but unpaid interest and penalties of $ 23.1 million and $ 0.7 million recorded in Related party accrued interest on the Consolidated Balance Sheets. Notes Payable on Demand — China The Comp any's notes payable with investors based in China ("Notes Payable on Demand — China") bear a zero percent interest rate. The outstanding balance as of December 31, 2024, and 2023 , was $ 0.4 million and $ 3.8 million, respectively. During the year ended December 31, 2024, the Company converted $ 3.4 million of these notes to Related party accrued expenses and other current liabilities. This conversion was undertaken to streamline the Consolidated Balance Sheets by reclassifying the liability to better reflect its underlying nature, align with agreements with related parties, and enhance clarity regarding the Company’s liquidity and operational obligations. FFGP Note In November 2023 and January 2024, the Company issued unsecured promissory notes to FFGP Investment Holding I, LLC (“FFGP”), a related party, in an aggregate principal amount of $ 1.6 million. These notes, referred to as the “FFGP Note”, was due three months from their respective dates of issuance and accrued interest at either 4.27 % or 5.27 %. In April 2024, the note entered default due to non-payment upon maturity. Subsequent to the reporting date but prior to the issuance of this Form 10-K for the year ended December 31, 2024 , FFGP fully waived its enforcement rights and remedies under the loan agreement with respect to the outstanding principal balance until final settlement. As a result, the FFGP Note is in good standing as of December 31, 2024. The carrying values of the FFGP Note were $ 1.6 million and $ 0.3 million as of December 31, 2024, and 2023, respectively. Convertible FFGP Note In February 2024, th e Company and FFGP entered into an unsecured convertible note in the amount of $ 0.3 million. The note referred to as the “ Convertible FFGP Note”, has a maturity date of May 2024 accrued interest at a rate of 4.27 % per annum, and is convertible into the Company’s Class A Common Stock at the holder’s option. The conversion price is the latest closing price of the Company’s Class A Common Stock on the conversion date. 141 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements In May 2024, the note entered default due to non-payment upon maturity. Subsequent to the reporting date but prior to the issuance of this Form 10-K for the year ended December 31, 2024 , FFGP fully waived its enforcement rights and remedies under the loan agreement with respect to the outstanding principal balance until final settlement. As a result, the Convertible FFGP Note is in good standing as of December 31, 2024. The carrying value of the Convertible FFGP Note was $ 0.3 million as of December 31, 2024. Related Party Accounts Payable, Accrued Liabilities and Other Significant Transactions The Company engages in various related party transactions that do not involve notes payable, including property leases, consulting services, advertising services, and other financial arrangements with entities affiliated with its founder, key executives, and their family members. This section excludes related party notes, which are discussed separately, and focuses on summarizing the nature, terms, and financial impacts of these non-debt-related transactions as of December 31, 2024, and 2023, including payments, outstanding balances, and other key details. X-Butler previously known as Warm Time Inc. (“Warm Time”) and Ocean View Drive Inc. (“Ocean View”) Transactions The Company l eased two real properties, located in Rancho Palos Verdes, California (the “Rancho Palos Verdes Properties”), from X-Butler from January 1, 2018, through March 31, 2022. X-Butler in turn leased the Rancho Palos Verdes Properties from Yueting Jia, the Company’s founder and Chief Product and Ecosystem Officer. The Rancho Palos Verdes Properties were used by the Company to provide long-term or temporary housing to employees of the Company (including a former Global CEO). 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 years ended December 31, 2024, and 2023, the Company paid to X-Butler $ 0.1 million and $ 0.1 million, respectively, for rent and business development services rendered to the Company and its executives. The Company has recorded approximately $ 0.3 million and $ 0.1 million in Accounts Payable as of December 31, 2024, and 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. Ocean View fulfilled its payment obligation under the settlement arrangement of such litigation, but the Company did not make its payment on the outstanding judgment which caused such seizure of funds of Ocean View. FF Global Transactions and Consulting Services FF Global is considered a related party because it exercises significant control over our Board of Directors. Additionally, the Company maintains several key financial and service agreements with FF Global. On July 30, 2022, the Company entered into a preliminary term sheet (the “Preliminary Term Sheet”) with FF Top, a subsidiary of FF Global, setting out a summary of the preliminary terms and conditions for FF Top’s assistance in arranging a proposed convertible term loan facility to the Company. In connection with the Preliminary Term Sheet, the Company agreed to reimburse FF Top for its reasonable and documented out-of-pocket legal and diligence fees and expenses incurred in connection with such financing efforts up to a $ 0.3 million cap (the “Original Cap”). On January 31, 2023, the Company entered into a supplemental agreement to a preliminary term sheet (the “Term Sheet” and with such supplemental agreement, the “Supplemental Agreement”) with FF Global, pursuant to which the parties agreed, due to the high amount of FF Global’s out-of-pocket legal fees and expenses incurred in connection with its financing efforts, to amend the Term Sheet to increase the cap for legal fees and expenses from $ 0.3 million to $ 0.7 million. In early February 2023, FF Global requested from the Company a legal expense reimbursement of $ 6.5 million for costs incurred related to the governance changes at the Company, which has not been approved by the Board. FF Global may in the future continue to request additional expense reimbursements and indemnification from the Company. On March 6, 2023, the Company entered into a consulting service agreement with an effective date of February 1, 2023 with FF Global (the “Consulting Services Agreement”), according to which the Company agreed to pay a monthly consulting fee of $ 0.2 million to FF Global for the following services: • Assistance in developing its funding strategy. • Assistance in developing its value return and management strategy. • Consultation on and integration of stockholder relations and stockholder resources. • Supporting communications regarding stockholders meetings. 142 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements • Developing existing stockholder financing strategy, including with respect to retail investors and others. • Assistance in risk management strategy. • Assistance in capability build up and operation strategy. The Consulting Services Agreement has an initial term of 12 months and automatically renews for successive 12 months periods unless earlier terminated in accordance with the terms thereof. Effective March 6, 2024, the Consulting Agreement renewed automatically. Either party may terminate the Consulting Services Agreement upon one month prior written notice to the other party. Upon any termination of the Consulting Services Agreement, the Company shall promptly pay FF Global any accrued but unpaid fees hereunder and shall reimburse FF Global for any unreimbursed expenses that are reimbursable thereunder. 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 Compan y paid $ 1.0 million and $ 1.8 million to F F Global during the years ended December 31, 2024, and 2023, respectively, pursuant to the Consulting Services Agreement. As of December 31, 2024, and 2023, the Company h as $ 2.0 million and $ 0.6 million, re spectively of amounts payable owed to FF Global recorded in Accounts payable and Accrued expenses and other current liabilities in the Consolidated Balance Sheets. Common Units of FF Global During 2022, certain executives and employees of the Company were granted the opportunity to subscribe to 600,000 common units of FF Global. The subscription price of $ 20.00 per common unit(original price, pre reverse stock splits), payable by the executives and employees of the Company, was financed through non-recourse loans issued by FF Global payable in equal annual installments over ten years . The common units to be purchased with a non-recourse loan are required to be treated for accounting purposes as stock options granted by FF Global to executives and employees of the Legacy FF. 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 years ended December 31, 2024, and 2023. Advertising Services Payable to Leshi Information Technology Co., Ltd. (“LeTV”) The Company has recorded a payable to LeTV within Related party accrued expenses and other current liabilities in the amount of $ 7.7 million and $ 7.5 million as of December 31, 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. Yueting Jia, the Company’s founder and Chief Product and User Ecosystem Officer. Grow Fandor During the year ended December 31, 2024, the Company entered into several related party transactions with Grow Fandor Inc. (“Grow Fandor”). Grow Fandor is considered a related party because it is significantly influenced by Mr. Yueting Jia, who has a financial and operational interest in the entity. Below are summarized the Company's transactions with Grow Fandor and the related accounting treatment: • Promissory Note: In September 2024, the Company executed a promissory note with Grow Fandor in the amount of $ 75,000 . This note has been classified as “Other Notes” in table above that the summarizes the related party note payable agreements as of December 31, 2024. • Share Donation: In October 2024, the Company received a donation of 15,000,000 shares of Class B Common Stock of Grow Fandor from Yueting Jia, which represents an approximately 10 % ownership interest. Because Grow Fandor is in the preliminary stages of development and has not begun commercial operations, management concluded that the shares do not currently have value within the financial statements. • Trademark License Agreement: In October 2024, the Company and Grow Fandor executed the Trademark License Agreement. Under the terms of the licensing agreement, Grow Fandor has exclusive licensing rights as the only third-party allowed to use the FF and FX brands and marks during the contract term. In exchange Grow Fandor will pay to the Company: (1) a royalty fee, payable quarterly, calculated as the greater of: (a) 50 % of the annual net profit from FF and FX ecosystem products, and (b) 5 % of net sales revenue from all relevant brand ecosystem products, payable quarterly (whichever amount is higher will be the final royalty fee for that year); and (2) a $ 250,000 annual base license fee. Grow Fandor paid the initial annual license fee, subsequent annual license fees will be payable within 30 days after each contract year. The Company recorded the initial license fee as a capital contribution due to the related party nature of the relationship with Grow Fandor and Yueting Jia’s public statements that the relationship is designed to provide incremental capital to the Company. 143 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Other Related Party Transactions The Company owes a total of $ 0.3 million and $ 0.2 million to various related other parties as of December 31, 2024, and 2023, respectively, which is included in Accounts payable within the Consolidated Balance Sheets. 9. Other Financing Liabilities FF ieFactory California (“Hanford”) Financing Arrangement On October 19, 2023, the Company entered into a sale leaseback transaction whereby it has exercised its option to purchase its FF ieFactory California manufacturing facility located in Hanford California (the “Property”) and simultaneously completed a sale leaseback to Ocean West Capital Partners (“Landlord”) pursuant to that certain Lease Agreement, dated as of October 19, 2023, by and between the Tenant and 10701 Idaho Owner, LLC (the “Lease Agreement”). This Lease Agreement also allows the Tenant access to up to $ 12.0 million of tenant improvement allowance for the Property. The Lease Agreement is for a term of five years , with a monthly lease rate of $ 355,197 , with a five -year extension option, and the Tenant has an option to purchase the fee interest in the Property at any time after the second year of the lease term. Furthermore, the Tenant has a right of first offer to purchase the Property in the event Landlord desires to sell the Property. The obligations of the Tenant under the lease are guaranteed by the Company pursuant to that certain Guaranty of Lease made by the Company to 10701 Idaho Owner, LLC. Due to the inclusion of the purchase option in the lease agreement, the Company was considered to have continuing involvement and, thus, accounted for the transaction as a failed sale lease back, with the HQ assets subject to the sale leaseback remaining on the balance sheet and the sale proceeds recorded as a liability in accordance with the financing method. The Company recognized a $ 13.1 million financing obligation at the completion of the transaction, which was recorded to the Other financing liabilities, long term portion on its Consolidated Balance Sheets. No gain or loss was record on the failed sale and lease back. On March 14, 2024, the Company entered into the First Amendment to the Lease Agreement (the “First Amendment). The First Amendment established a repayment plan requiring the Company to pay an aggregate amount of $ 1.7 million of past due rent by March 31, 2024. The Company has an original Security Deposit balance of $ 1.5 million. In December 2024, the Landlord applied $ 0.6 million of the original Security Deposit to past due rent. In January 2025, the Company paid the Landlord $ 0.6 million that reinstated the Security Deposit balance. On August 27, 2024, the Company entered into the Second Amendment to the Lease Agreement (the “Second Amendment”). Under the terms of the original lease agreement, the Company expected to receive $ 12.0 million in tenant improvement allowance, the repayment of which was included in the scheduled financing obligation payments. In the Second Amendment, the Landlord agreed to fund up to $ 10.0 million of the costs associated with the replacement of the Property’s roof and the remaining $ 2.0 million for other improvement costs. The $ 2.0 million may be reduced by incremental actual costs incurred for the roof replacement and the remaining amount will be contingent on the Company funding up to 66.67 % of the other improvement costs. As of December 31, 2024, the Company recognized $ 6.9 million of leasehold improvement costs funded through the tenant improvement allowance in Property, plant and equipment, net on the Consolidated Balance Sheets. The repayment of the tenant improvement allowance are included in the scheduled financing obligation payments. For the years ended December 31, 2024, and 2023, the Company recorded interest expense of $ 3.0 million and $ 0.5 million, respectively. The financial liability as of December 31, 2024, and 2023 was $ 35.2 million and $ 25.5 million, respectively. 144 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Collateralized Loan Overview and T erms The Collateralized Loan was entered into on July 11, 2024, with Utica Leaseco, LLC. The loan is secured by machinery and equipment owned by the Company. It bears an effective interest rate of 23 % and requires 51 monthly payments of $ 0.1 million, concluding with a $ 0.5 million balloon payment in October 2028. The loan terms include provisions for adjusting monthly payments based on fluctuations in the prime rate. Summary of Collateralized Loan Activity As of December 31, 2024, the carrying value of the Collateralized Loan was $ 4.3 million, of which $ 0.8 million is included in Other financing liabilities, current portion and $ 3.5 million is included in Other financing liabilities, long term portion in the Consolidated Balance Sheets . For the year ended December 31, 2024, the Company repaid $ 0.3 million of Collateralized Loan principal. The future scheduled principal maturities of financing obligations as of December 31, 2024 are as follows (in thousands): Years Ending December 31, 2025 $ 761 2026 951 2027 1,189 2028 60,455 $ 63,356 10. Leases The Company determines if an arrangement is a lease at its commencement if the Company is both able to identify an asset and conclude the Company has the right to control the identified asset. Leases are classified as finance or operating based on the principle of whether or not the lease is effectively a financed purchase by the lessee. An 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 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 exclude 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 in the 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 Consolidated Statements of Operations and Comprehensive Loss. Interest expense incurred on finance lease liabilities is recorded in Interest expense in the 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 Operating lease right-of-use assets, net, Operating lease liabilities, current portion and Operating lease liabilities, long term portion in the Company's Consolidated Balance Sheets. Finance leases are included in Property, plant and equipment, net, Other financing liabilities, current portion, and Other financing liabilities, long term portion in the Company's Consolidated Balance Sheets. The Company’s lease arrangements primarily consist of corporate office, store, and vehicle lease agreements. The leases expire on various dates through 2032, some of which include options to extend the lease term for additional five -year periods. 145 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements ASC 842 Disclosures During 2024, the Company moved out of its leased facilities and office spaces, resulting in a write-down of right-of-use assets and lease liabilities in an aggregate amount of $ 8.8 million and $ 7.0 million, respectively. The Company also recognized less than $ 0.1 million in lease termination costs during 2024. The net impact of the right-of-use asset write down and lease termination costs of $ 1.8 million is reported in Lease impairment, net on the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2024. There were no lease impairments for the year ended December 31, 2023. Lease cost includes both the fixed and variable expenses recorded for leases. The components of lease cost for the were as follows: Years Ended December 31, (in thousands) 2024 2023 Finance lease cost Amortization of ROU assets $ — $ 273 Interest on lease liabilities — 275 Total finance lease cost — 548 Operating lease cost 4,389 5,915 Variable lease cost 398 257 Total lease cost $ 4,787 $ 6,720 The following table summarizes future lease payments: (in thousands) Years Ending December 31, Operating Leases 2025 $ 2,243 2026 12 2027 2 Total 2,257 Less: Imputed Interest 115 Present value of net lease payments $ 2,142 Lease liability, current portion $ 2,128 Lease liability, net of current portion 14 Total lease liability $ 2,142 Supplemental information and non-cash activities related to operating and finance leases are as follows: Years Ended December 31, (in thousands) 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 3,230 $ 5,709 Operating cash flows from finance leases — 275 Financing cash flows from finance leases — 1,016 $ 3,230 $ 7,000 Lease assets obtained in exchange for operating lease liabilities $ 30 $ — 146 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2024 2023 Weighted average remaining lease term (in years) Operating leases 0.70 5.70 Finance leases 0.00 5.00 Weighted average discount rate Operating leases 16.4 % 15.6 % Finance leases — % 9.2 % 11. Commitments and Contingencies The Company is, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, the outcome of any such claims and disputes cannot be predicted with certainty. Legal Proceedings Against the Company As of December 31, 2024 and December 31, 2023, the Company had accrued legal contingencies of $ 9.1 million and $ 21.6 million, respectively, recorded within Accrued expenses and other current liabilities and Accounts payable 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 Zhou v. Faraday Future Intelligent Electric Inc. f/k/a Property Solutions Acquisition Corp. et al., Case No. 2:21-cv-009914 (U.S. District Court – Central District of California). On December 23, 2021, a putative class action lawsuit alleging violations of 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. (“PSAC”). 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. Following motion to dismiss briefing which resulted in the dismissal of several of the plaintiffs’ claims, answers were filed and the parties agreed to participate in mediation. On April 27, 2023, the court granted the parties’ joint motion for a temporary stay pending mediation. The parties thereafter participated in a private mediation on June 29, 2023. After further discussions and negotiations, the parties reached an agreement-in-principle to settle the Zhou putative class action. Although denying all allegations, the Company nevertheless agreed to settle the Zhou putative class action for a non-reversionary cash payment of $ 7.5 million for the benefit of the settlement class and to be funded entirely by the Company’s insurers, in exchange for the release of all claims asserted against the Company. The court granted preliminary approval of the settlement on November 7, 2023, and scheduled a hearing for final approval of the settlement to take place on March 18, 2024. On January 23, 2024, the ostensible lead plaintiff in the Consolidated Delaware Class Action discussed below, filed an Objection to final approval of the settlement (the “Objection”) to which the Company and the other defendants responded on March 11, 2024. On March 18, 2024, the court overruled the Objection in its entirety and entered an Order finally approving the Zhou putative class action settlement. 147 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Farazmand v. Breitfeld et al. , Case No. 2:22-cv-01570 (U.S. District Court – Central District of California). Zhou v Breitfeld et al. , Case No. 2:22-cv-01852 (U.S. District Court – Central District of California). Moubarak v. Breitfeld et al. , Case No. 1:22-cv-00467 (U.S. District Court – District of Delaware). Wang v. Breitfeld et al. , Case No. 1:22-cv-00525 (U.S. District Court – District of Delaware). Wallace v. Breitfeld et al. , Case No. 2023-0639-KSJM (Delaware Court of Chancery). Ashkan Farazmand and Wangjun Zhou v. Breitfeld, et al., Case No. 2023-1283 (Delaware Court of Chancery). On March 8 (Farazmand) and March 21 (Zhou), 2022, putative stockholder derivative lawsuits were respectively filed in the United States District Court, Central District of California and were subsequently consolidated in an action entitled In re Faraday Future Intelligent Electric Inc. Case No. 2:22-cv-1570 (the “California Federal Derivative Action”). The California Federal Derivative Action was stayed pending resolution of certain proceedings in the Zhou putative class action discussed above, which stay expired in February 2023. Plaintiffs thereafter filed a verified consolidated amended complaint on June 2, 2023, in response to which the Company and the other defendants filed a motion to dismiss. On January 22, 2024, the court granted in part, and denied in part, the motion to dismiss with leave to amend. 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. 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 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”). The parties stipulated to a stay of the Wallace action which was entered by the court on December 29, 2023. Each of the foregoing derivative lawsuits purport to assert claims on behalf of the Company against certain of the Company’s current and former officers and directors for alleged violations of the Exchange Act or for various common law claims based upon those officers’ and directors’ alleged breaches of their purported fiduciary duties owed to the Company and/or for their alleged aiding and abetting of those purported breaches, resulting in unspecified damages to the Company. Although the complaints filed in the foregoing lawsuits vary in detail, they are generally premised upon many of the same underlying allegations made in the Zhou putative class action. The parties to the foregoing derivative lawsuits participated in a mediation on May 13, 2024, following which they reached a settlement in principle. On July 19, 2024, the parties entered into a Stipulation and Agreement of Settlement that was filed in the California Federal Derivative Action, which incorporated all of the foregoing derivative lawsuits. On September 3, 2024, the California Federal Derivative Action Court entered an order preliminarily approving the Stipulation and Agreement of Settlement (the “Preliminary Approval Order”) and providing for notice of the same to be made to Current Stockholders. On October 30, 2024, the California Federal Derivative Action Court approved the Settlement Agreement, resolving all of the foregoing derivative lawsuits. Following the approval of the Settlement Agreement, the California Federal Derivative Action was dismissed on October 30, 2024 and the Delaware Federal Derivative Actions were dismissed on November 15, 2024 (Wang) and November 19, 2024; (Moubarak). On December 31, 2024, the parties in the Farazmand filed a stipulation of dismissal. The Consolidated Delaware Class Action On June 14, 2022, a verified stockholder class action complaint was filed in the Delaware Court of Chancery against, among others, the Company, its former Global CEO and CFO, and its current Chief Product and User Ecosystem Officer alleging breaches of fiduciary duties (the “Yun Class Action”). On September 21, 2022, a second verified stockholder class action complaint was filed in the Delaware Court of Chancery against, among others, the Company, the Co-CEOs and independent directors of PSAC, and certain third-party advisors to PSAC, alleging breaches of fiduciary duties, and aiding and abetting alleged breaches, in connection with disclosures and stockholder voting leading up to the PSAC/Legacy FF merger (the “Cleveland Class Action”), which action subsequently was consolidated with the Yun Class Action with the complaint in the Cleveland Class Action being designated as the operative pleading (collectively, the “Consolidated Delaware Class Action”). In April, 2023, the defendants respectively filed motions to dismiss the complaint. While the defendants’ motions to dismiss were pending, the Central District of California approved the Zhou putative class action settlement. On, May 24, 2024, the defendants in the Consolidated Delaware Class Action filed a motion for summary judgment based on the court-approved settlement agreement in the Central District of California Zhou litigation, arguing, among other things, that the releases of that settlement agreement barred the claims in the Consolidated Delaware Class Action. On February 10, 2025, the Delaware Court of Chancery granted summary judgment and dismissed the Consolidated Delaware Class Action in its entirety, with prejudice. 148 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The Company maintains that the Consolidated Delaware Class Action is without merit and has stated its intention to vigorously defend that action. The Company has not concluded that an adverse outcome in these matters is either “probable” or “remote” within the meaning of the ABA Statement of Policy and, accordingly, declines to express any view as to the possible outcome of these matters. Additionally, on September 19, 2022, FF Global, filed a lawsuit in the Chancery Court of the State of Delaware against the Company, seeking the removal of Ms. Susan Swenson and Mr. Brian Krolicki from the Board. On September 27, 2022, the case was dismissed without prejudice pursuant to an agreement between FF Global and FF Top (the “Heads of Agreement”). Shortly following the execution of the Heads of Agreement, FF Global began making additional demands of the Company which were beyond the scope of the terms contemplated by the Heads of Agreement and pertained to, among other things, the Company’s management reporting lines and certain governance matters. On September 30, 2022, FF Global alleged that the Company was in material breach of the spirit of the Heads of Agreement. The Company believes it has complied with the applicable terms of the Heads of Agreement and disputes any characterization to the contrary. Such disputes divert management and Board resources and are costly. There can be no assurance that this or any other dispute between the Company and FF Global will not result in litigation. On October 3, 2022, Ms. Swenson and Mr. Scott Vogel, a member of the Board, tendered their resignation from the Board effective immediately. On October 3, 2022, Mr. Jordan Vogel also tendered his resignation from the Board effective on October 5, 2022. On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately. Legal Proceedings Initiated by the Company The Company has determined there to be financial exposure related to an ongoing legal matter, primarily arising from the bankruptcy of a key supplier. The exposure involves previously recorded deposits and tooling equipment, which have since become subject to legal contingency considerations due to the supplier’s insolvency. The Company initially recorded $ 1.9 million in deposits and $ 12.9 million in tooling equipment in connection with its contractual relationship with a primary supplier. These amounts were originally recognized as a deposit paid for goods and services and tooling received, respectively, and remain reflected in their originally recorded accounts on the Consolidated Balance Sheets. However, following the primary supplier’s bankruptcy filing, these balances were identified as at risk, creating potential financial exposure for the Company. During the year ended December 31, 2024, the Company recorded a $ 2.7 million charge related to the bankruptcy matter, recorded within General and Administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss The $ 2.7 million charge consists of a $ 1.4 million write-off of deposits and a $ 1.3 million accrual for additional payments the Company expects to have to make to maintain access to its tooling located at vendors of the key supplier (the "secondary suppliers"). The $ 1.4 million write-off of deposits reflects the Company's estimate that recovery of that asset is not probable and leaves a remaining exposure of $ 0.5 million. The Company does not expect any further financial loss related to tooling. The Company has title to the tooling; however, the secondary suppliers have possession of the tooling. The Company anticipates establishing a direct contractual arrangement with the secondary suppliers. Once in place, these agreements are expected to provide the Company with continued access to the tooling without additional financial exposure. Legal Action Against Tesca USA and Tesca ABC On March 6, 2025, Faraday&Future Inc. (“Faraday”) filed a demand for arbitration against Tesca USA, Inc. and Tesca ABC, LLC alleging the breach of an Engineering Services Agreement (“ESA”) between Tesca USA and Faraday&Future Inc., under which Tesca USA was obligated to produce certain items related to automobile seating assembly and frame production. Pursuant to the ESA, Faraday paid Tesca USA approximately $ 36.0 million for certain parts, tooling, engineering design and development, and other items. According to a Verified Petition Regarding Assignment for the Benefit of Creditors filed in May 2024, after failing to deliver any of these products or services to Faraday, Tesca USA, assigned all its assets to Tesca ABC, a Delaware series limited liability company. Faraday has reason to suspect that Tesca USA may have made one or more large cash transfers to Tesca Group before it commenced the Assignment for Benefit of Creditors. Faraday is seeking in excess of $ 36 million in damages through this arbitration. The Company is unable to evaluate the likelihood of a favorable outcome given the early stages of these legal proceedings. 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- 149 Table of Contents Faraday Future Intelligent Electric Inc. Notes to 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. The Company engaged an independent law firm to conduct a thorough independent external investigation with respect to these allegations. The independent investigation found that all such allegations have been without merit. Other Legal Matters On January 30, 2023, Riverside Management Group, LLC (“Riverside”) filed a verified complaint seeking to enforce its alleged contractual right to the advancement of all reasonable costs and expenses, including attorneys’ fees, it has and will incur as a named defendant in the Consolidated Delaware Class Action under its October 13, 2020 Transaction Services Agreement with the Company and Property Solutions Acquisition Sponsor, LLC (the “TSA”), pursuant to which Riverside provided PSAC with advisory services in connection with the PSAC/Legacy FF merger. In addition to seeking the advancement of such costs and expenses, Riverside also sought an award of its attorneys’ fees and costs incurred in enforcing its alleged advancement rights under the TSA, and concurrently filed a Motion for Expedited Proceedings, requesting that trial of the action be conducted on a summary basis and commence within 30 days of the motion’s disposition. The Company subsequently entered into a Stipulation and Order with Riverside under which it would conditionally advance Riverside the reasonable attorneys’ fees and costs it incurs in defense of the Consolidated Delaware Action, subject to, and in express reservation of, the Company’s right to recover all such fees and expenses following disposition of the Consolidated Delaware Class Action which, as noted above, was recently dismissed, with prejudice, on summary judgment by the Delaware Chancery Court. On January 31, 2023, Raymond Handling Solutions, Inc. (“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 . On April 15, 2024, the Company and Raymond executed a Settlement Agreement under which Raymond released all claims in exchange for the return of racks. In July 2021, the Company and Palantir entered into a Master Subscription Agreement (“MSA”) setting forth the terms of the Palantir 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 alleging that the Company had not paid outstanding invoices totaling $ 12.3 million . On July 7, 2023, Palantir filed a Demand for Arbitration against the Company with Judicial Arbitration and Mediation Services, Inc., regarding the parties’ dispute under the MSA in which asserted that the amount in controversy was $ 41.5 million . On August 4, 2023, the Company submitted its response to Palantir’s arbitration demand, which response included both affirmative defenses and a general denial of all allegations of Palantir’s arbitration demand. On March 11, 2024, the Company and Palantir executed a Settlement and Release Agreement terminating the MSA and resolving all of the parties’ disputes in exchange for the Company’s agreement to pay Palantir $ 5.0 million , with a liquidated damages clause of $ 0.3 million for late payments. This settlement includes mutual waivers and releases of claims to avoid future disputes. 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 due under the settlement agreement in cash, the parties agreed that the Company would issue, and Palantir would accept, $ 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. USA (“Envisage”) for unpaid invoices relating to professional engineering services and for design and manufacture of a Master Buck cube seeking alleged damages of $ 1.1 million . At the arbitration hearing, the Company disputed the adequacy of Envisage’s documentation for professional services and contended that no contract exists for Master Buck due to unfulfilled payment conditions. The Company further challenged Envisage’s unilateral alteration of payment terms. In June 2024, the arbitrator issued an award to Envisage totaling $ 1.1 million . Envisage subsequently filed a motion for attorneys’ fees and costs. Envisage was ultimately awarded a total of $ 1.4 million . The parties have reached an agreement to settle their dispute and are in the process of finalizing the settlement agreement. 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. Given the early stages of the legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome. On June 13, 2023, L & W LLC (“Autokiniton”), a provider of tooling for use in the automotive industry, filed an action in State of Michigan 3rd Judicial Circuit County of Wayne Court alleging the Company breached its contract with Autokiniton 150 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements and refused to fulfill its obligations under the applicable Purchase Order. Autokiniton requested a judgment in the amount of at least $ 8.1 million . In discovery, the Company conceded that $ 4.6 million was due and owing under the Purchase Order. 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. In December 2024, the parties reached an agreement to settle their dispute for $ 3.7 million . 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. The plaintiffs filed an appeal on February 12, 2024 as to the dismissal orders but did not timely file their appellate briefs, so their appeal was dismissed. While Plaintiffs have a year to file a motion to vacate the dismissal by showing good cause, Plaintiff Hof recently filed a motion to seal the record and expressed the Plaintiffs’ desire to cease litigating the matter further. 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 allegedly overdue amounts. The parties thereafter entered into 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 $ 0.2 million payment to Landlord in exchange for Landlord deferring further action. 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. The complaint asserted that the Company has failed to pay outstanding rent in the amount of $ 0.9 million , and sought recovery of reasonable attorney’s fees and damages. This action is based on a breach of a Lease Agreement dated March 8, 2019, for the premises located at 18455 S. Figueroa Street, Gardena, California, with Rexford requesting forfeiture of the lease. On April 10, 2024, the court issued a Notice of Dismissal, dismissing the Complaint without prejudice. In February 2024, the Company initiated a lawsuit against Draexlmaier Automotive Technologies of America LLC (“Draexlmaier”) for breach of contract, seeking $ 3.2 million in damages plus legal costs incurred. The dispute involves two Purchase Orders placed by the Company with Draexlmaier in September 2021 for the development and tooling of FF 91 vehicle consoles. The parties’ agreement included a clause allowing Faraday to terminate the Purchase Orders at any time, with the understanding that Draexlmaier would promptly refund any advanced payments for undelivered items or unperformed work. Faraday met its financial obligations under the agreement and in March 2022, terminated the agreement prior to the start of tooling fabrication and requested a refund of $ 3.2 million for the undelivered work, which Draexlmaier refund failed to remit. Faraday thereafter issued a final demand for this refund in August 2023, and subsequently initiated its lawsuit against Draexlmaier. In May 2024, Draexlmaier filed an Answer and Counterclaim alleging fraudulent inducement, breach of contract, violations of South Carolina’s Unfair Trade Practices Act, and unjust enrichment, and seeking $ 5.0 million in damages for breach of contract, as well as unspecified actual, consequential, punitive, and treble damages, and attorneys’ fees and costs. The Company disputes Draexlmaier’s claims and has stated its intention to vigorously defend the action. 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. 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 purportedly in 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. The parties are engaged in settlement negotiations. On March 27 and March 29, 2024, Jose Guerrero and Victoria Xie, the Company’s former Senior Director of Sales and Aftersales, and Go-to-Market Project Manager and Launch Manager, respectively, filed wrongful termination lawsuits against Faraday&Future Inc. and certain of its officers in Superior Court of California, County of Los Angeles, each of which seeks compensatory, general, and special damages in an amount not less than $ 1.0 million . On April 19, 2024, an additional former employee, Karimul Khan, submitted a request for arbitration against the same group of defendants without quantifying the 151 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements alleged damages sought. 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. On August 9, 2024, Jeffrey D. Prol, as trustee of the Founding Future Creditors Trust, filed a lawsuit against the Company seeking to compel the production of certain books and records for inspection and requesting attorney’s fees and costs. The plaintiff is demanding inspection to allegedly value his shares of the Company. Given the early stages of the legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome. On August 1, 2024, Yun Han, former Chief Accounting Officer and Interim Chief Financial Officer, filed an arbitration demand claiming that she is owed certain monetary amounts and restricted stock units, together totaling approximately $ 1.2 million pursuant to various agreements with the company.  Given the early stages of the proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss. Dispute with Noteholders In August 2023, and September 2023, the Company received correspondence from each of Senyun, MHL and V W Investment alleging that the Company had entered into oral agreements to compensate those investors for any losses in connection with converting their notes into shares of the Company in order to support the Company’s proposals at the August 2023 special stockholders meeting. The Company is unaware of any such oral agreements and is contesting these claims on multiple grounds. Other than disclosed herein, as of the date hereof the Company is not a party to any legal proceedings the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on the Company’s business, financial condition, or results of operations. Special Committee Investigation As previously disclosed on November 15, 2021, the Board established a special committee of independent directors (“Special Committee”) to investigate allegations of inaccurate Company disclosures, including those made in an October 2021 short seller report and whistleblower allegations, which resulted in the Company being unable to timely file its third quarter 2021 Quarterly Report on Form 10-Q, Annual Report on Form 10-K for the year ended December 31, 2021, first quarter 2022 Quarterly Report on Form 10-Q and amended Registration Statement on Form S-1 (File No. 333-258993). The Special Committee engaged outside independent legal counsel and a forensic accounting firm to assist with its review. On February 1, 2022, the Company announced that the Special Committee completed its review. On April 14, 2022, the Company announced the completion of additional investigative work based on the Special Committee’s findings which was performed under the direction of the Executive Chairperson, reporting to the Audit Committee. In connection with the Special Committee’s review and subsequent investigative work, the following findings were made: • In connection with the Business Combination, statements made by certain Company employees to certain investors describing the role of Mr. Yueting Jia, within the Company were inaccurate and his involvement in the management of the Company post-Business Combination was more significant than what had been represented to certain investors. • The Company’s statements leading up to the Business Combination that it had received more than 14,000 reservations for the FF 91 vehicle were potentially misleading because only several hundred of those reservations were paid, while the others (totaling 14,000 ) were unpaid indications of interest. • Consistent with the Company’s previous public disclosures regarding identified material weaknesses in its internal control over financial reporting, the Company’s internal control over financial reporting required an upgrade in personnel and systems. • The Company’s corporate culture failed to sufficiently prioritize compliance. • Mr. Jia’s role as an intermediary in leasing certain properties which were subsequently leased to the Company was not disclosed in the Company’s corporate housing disclosures. • In preparing the Company’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 the Company’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 the Company’s former independent registered public accounting firm PricewaterhouseCoopers LLP. 152 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The investigation also found that certain individuals failed to cooperate and withheld potentially relevant information in connection with the Special Committee investigation. Among such individuals were non-executive officers or members of the management team of the Company, and remedial action was taken with respect to such individuals based on the extent of their non-cooperation and/or withholding of information. The failure to cooperate with the investigation was taken into consideration in connection with the remedial actions outlined below with respect to Jerry Wang, and withholding of information also affected the remedial action taken with respect to Matthias Aydt. Based on the results of the investigation, the Special Committee concluded that, except as described above, the other substantive allegations of inaccurate Company disclosures that it evaluated, were not supported by the evidence reviewed. Although the investigation did not change any of the above findings with respect to the substantive allegations of inaccurate Company disclosures, the investigation did confirm the need for remedial actions to help ensure enhanced focus on compliance and disclosure within the Company. Based on the results of the Special Committee investigation and subsequent investigative work described above, the Board approved the following remedial actions designed to enhance oversight and corporate governance of the Company:  • the appointment of Susan Swenson, a former member of the Board, to the then newly created position of Executive Chairperson of the Company. • Dr. Carsten Breitfeld, the Company’s former Global CEO, reporting directly to Ms. Swenson and receiving a 25 % annual base salary reduction; • the removal of Mr. Jia as an executive officer, who would continue in his position as Chief Product & User Ecosystem Officer of the Company. Certain dual-reporting arrangements were eliminated with respect to Mr. Jia, who also was required to report directly to Ms. Swenson, a non-independent director nominated by FF Top. Please see “Risk Factors– Risks Related to our Business and Industry–Yueting Jia and FF Global, over which Mr. Jia exercises significant influence, have control over the Company’s management, business and operations, and may use this control in ways that are not aligned with the Company’s business or financial objectives or strategies or that are otherwise inconsistent with the Company’s interests. 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. ” Mr. 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. On February 26, 2023, after an assessment by the Board of the Company’s management structure, the Board approved Mr. Yueting Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments reporting directly to Mr. Jia. The Board also approved the Company’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Xuefeng processes and controls to be determined by the Board after consultation with the Company’s management. The Company’s remaining departments continue to report to Mr. Xuefeng. Based on the changes to his responsibilities within the Company, the Board determined that Mr. 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 the Company, and currently Global Chief Executive Officer and a director of the Company, 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, and which probationary period has since ended; • the appointment of Jordan Vogel as Lead Independent Director; certain changes to the composition of Board committees, including Brian Krolicki stepping down from his role as Chairman of the Board and Chair of the Nominating and Corporate Governance Committee and becoming a member of the Audit and Compensation Committees of the Board; Jordan Vogel stepping down from the Nominating and Corporate Governance Committee; and Scott Vogel becoming the Chair of the Audit Committee and the Nominating and Corporate Governance Committee of the Board; • the suspension without pay of Jiawei (“Jerry”) Wang, the Company’s former Vice President, Global Capital Markets, who subsequently notified the Board of his decision to resign from the Company on April 10, 2022; • the assessment and enhancement of Company’s policies and procedures regarding financial accounting and reporting and the upgrading of the Company’s internal control over financial accounting and reporting, including by hiring additional financial reporting and accounting support, in each case at the direction of the Audit Committee; 153 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements • the implementation of enhanced controls around the Company’s contracting and related party transactions, including regular attestations by the Company’s employees with authority to bind the Company to contracts and related party transactions, for purposes of enabling the Company to make complete and accurate disclosures regarding related party transactions; • the hiring of a Compliance Officer with the title of Deputy General Counsel (hired in March 2023), to report on a dotted line to the Chair of the Audit committee, and a Director of Risks and Internal Controls; and assessing and enhancing FF’s compliance policies and procedures; • the implementation of a comprehensive training program for all directors and officers regarding, among other things, internal Company policies; • the separation of Jarret Johnson, FF’s Vice President, General Counsel and Secretary; and • certain other disciplinary actions and terminations of employment with respect to other Company employees (none of whom is an executive officer). As of March 3, 2025, the Company 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. Please see “ Risk Factors – Risks Related to our Business and Industry – We have taken remedial measures in response to the Special Committee findings, which may be unsuccessful ”. 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, the Company has implemented certain governance changes that impact certain of the above-discussed remedial actions. On October 3, 2022, Ms. Swenson tendered her resignation from her role as both Executive Chairperson and member of the Board effective immediately. In addition, on October 3, 2022, Mr. Scott Vogel resigned from the Board effective immediately and Mr. Jordan Vogel resigned effective on October 5, 2022. On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately. On December 15, 2022, Mr. Lee Liu tendered his resignation from the Board, which resignation was effective on December 18, 2022. On December 18, 2022, Mr. Jie Sheng was appointed to the Board, effective immediately, following the resignation of Mr. Liu. On December 25, 2022, Mr. Edwin Goh tendered his resignation from the Board, which resignation was effective on December 26, 2022. On December 27, 2022, Ms. Ke Sun was appointed to the Board, effective immediately, following the resignation of Mr. Goh. Mr. Sheng and Ms. Sun are designees of FF Top pursuant to the Amended Shareholder Agreement. On December 26, 2022, Dr. Carsten Breitfeld tendered his resignation from the Board, which resignation was effective immediately. On December 27, 2022, Mr. Xuefeng Chen was appointed to the Board, effective immediately, following the resignation of Dr. Breitfeld. On January 20, 2023, Mr. Qing Ye tendered his resignation from the Board, which resignation was effective immediately. Mr. Ye remained a consultant of the Company as an independent contractor until November 18, 2023. On January 25, 2023, Mr. Chui Tin Mok was appointed to the Board, effective immediately, following the resignation of Mr. Ye. Each of Ms. Ke Sun and Mr. Xuefeng Chen have subsequently resigned from the Board. See “Management – Governance Agreement with FF Top and FF Global” for more information. Subsequent to the Company announcing the completion of the Special Committee investigation on February 1, 2022, certain members of the management team and employees of the Company received a notice of preservation and subpoena from the staff of the SEC stating that the SEC had commenced a formal investigation relating to the matters that were the subject of the Special Committee investigation. The Company, which had previously voluntarily contacted the SEC in connection with the Special Committee investigation in October 2021 and is cooperating fully with the SEC’s investigation. The outcome of such an investigation is difficult to predict. The Company has incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with the SEC investigation. At this stage, the Company is unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss. In addition, in June 2022, the Company received a preliminary request for information from the DOJ in connection with the matters that were the subject of the Special Committee investigation. The Company has responded to that request and intends to fully cooperate with any future requests from the DOJ. 154 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 12. Stockholders’ Equity The number of authorized, issued and outstanding stock, were as follows: December 31, 2024 Authorized Shares Issued Shares Preferred Stock 10,000,000 1 Class A Common Stock 99,815,625 65,919,127 Class B Common Stock 4,429,688 6,667 114,245,313 65,925,795 December 31, 2023 Authorized Shares Issued Shares Preferred Stock 10,000,000 — Class A Common Stock 1,232,292 1,060,833 Class B Common Stock 54,688 6,667 11,286,980 1,067,500 Amendments to the Company’s Certificate of Incorporation On the Closing Date of the Business Combination, the Company’s shareholders adopted the Company’s Second Amended and Restated Certificate of Incorporation. The amendment set forth the rights, privileges, and preferences of the Common Stock. The amendment authorizes the issuance of 10,000,000 shares of Preferred Stock with such designations, rights and preferences as may be determined from time to time by the Board. The Board is empowered, without stockholder approval, to issue the Preferred Stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of Common Stock; provided that any issuance of preferred stock with more than one vote per share will require the prior approval of the holders of a majority of the outstanding shares of Class B Common Stock. Increase in Authorized Shares (February 2023) 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 84,896 to 176,042 , increasing the Company’s total number of authorized shares of Common Stock and preferred stock from 342,709 to 433,855 . 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. Reverse Stock Split (August 2023) 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 1,286,980 . 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 1,286,980 , composed of (i) 1,232,292 shares of Class A Common Stock and (ii) 54,688 shares of Class B Common Stock. No fractional shares of Common Stock were issued as a result of the 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 at the opening of trading on August 28, 2023, under the symbol "FFIE" with a new CUSIP number (307359 505); meanwhile, the Company’s Public Warrants traded under the symbol "FFIEW" with the CUSIP number unchanged. 155 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Increase in Authorized Shares and Reverse Stock Split (February 2024) 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 the State of Delaware to effect an increase in the authorized shares of Common Stock from 3,860,938 to 34,748,438 . At a 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 of the Common Stock by a ratio of 1-for-3 (the “Second Reverse Stock Split”), 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 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 this reverse stock split and to set the number of authorized shares of Common Stock to 11,582,813 (which is 34,748,438 divided by 3). Pursuant to the Certificate of Amendment, effective on February 29, 2024, every three shares of the issued and outstanding Common Stock was 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 11,582,813 . No fractional shares of Common Stock were issued as a result of the Second Reverse Stock Split. Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of such fractional share. Increase in Authorized Shares, Reverse Stock Split, Adjustments to Share Reserves (July/August 2024) At the annual meeting of the Company’s stockholders held on July 31, 2024, the Company’s stockholders approved an increase in the authorized shares of Common Stock from 11,582,813 to 104,245,313 , increasing the total number of authorized shares of the Common Stock and preferred stock from 12,582,813 to 114,245,313 . On August 1, 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 annual meeting of the Company’s stockholders held on July 31, 2024, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended, to effect the reverse stock split of the outstanding Common Stock by a ratio of between 1-for-2 and 1-for-40, with such ratio to be determined in the discretion of the Board and 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 annual meeting, and a corresponding reduction in the total number of shares of Common Stock the Company is authorized to issue. The Board subsequently approved the implementation of the 1-for-40 stock split ratio (the “Third Reverse Stock Split”), and the Company filed an amendment (the “Fourth Certificate of 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 Third Reverse Stock Split and to set the number of authorized shares of Common Stock to 104,245,313 . Pursuant to the Fourth Certificate of Amendment, effective after market close on August 16, 2024 (the “Effective Time”), every 40 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 were reduced to 104,245,313 . The Class A Common Stock began trading on The Nasdaq Capital Market on a split-adjusted basis for the August 2024 Reverse Stock Split at the opening of trading on August 19, 2024, under the symbol "FFIE" with a new CUSIP number (307359 885). The Class B Common Stock also received a new CUSIP number (307359 877). The Company’s Public Warrants continued to trade on The Nasdaq Capital Market under the symbol "FFIEW," with the CUSIP number unchanged. However, under the terms of the applicable warrant agreement, the number of shares of Class A Common Stock issuable upon exercise of each warrant was proportionately decreased, and the exercise price adjusted. Accordingly, for the Company’s warrants trading under the symbol "FFIEW," every 40 warrants became exercisable for one share of Class A Common Stock at an exercise price of $ 110,400.00 per share of Class A Common Stock. At the Effective Time, the number of shares of Common Stock reserved for issuance under the 2021 SI Plan (as defined below), the Company’s Smart King Ltd. Equity Incentive Plan, and the Company’s Smart King Ltd. Special Talent Incentive Plan (collectively, 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-40 ratio, rounded down to the nearest whole share. In addition, the exercise price of the then-outstanding options under each of the Plans was proportionately adjusted, using the 1-for-40 ratio, rounded up to the nearest whole cent. Proportionate adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of the Company’s outstanding warrants and convertible securities, as well as the applicable exercise or conversion prices. 156 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Change in Trading Symbols (March 2025) Effective March 10, 2025, the Class A Common Stock and Public Warrants currently trade under the new ticker symbols "FFAI" and "FFAIW," respectively, on The Nasdaq Capital Market. Increase in Authorized Shares (March 2025) At the special meeting of the Company’s stockholders held on March 7, 2025, the Company’s stockholders approved an increase in the authorized shares of Common Stock from 104,245,313 to 129,245,313 , increasing the total number of authorized shares of the Common Stock and preferred stock from 114,245,313 to 139,245,313 . On March 10, 2025, the Company filed a Fifth Certificate of Amendment (the “Fifth Certificate of Amendment”) to the Company’s Third Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect such increase. Series A Preferred Stock On June 21, 2024, in connection with a purchase agreement entered into with Mr. Aydt, the Company’s Global CEO, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of the Company’s Preferred Stock as Series A preferred stock, par value $ 0.0001 per share (the “First Series A Preferred”) and established the preferences, rights and limitations thereof. On January 28, 2025, in connection with a purchase agreement entered into with Mr. Aydt, the Company’s Global CEO, the Company filed a Series A Certificate of Designation with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of the Company’s Preferred Stock as Series A preferred stock, par value $ 0.0001 per share (the “Second Series A Preferred”) and established the preferences, rights and limitations thereof. The closing of the sale and purchase of the shares of the First Series A Preferred and Second Series A Preferred (collectively known as “Series A Preferred”) were completed on June 21, 2024 and January 28, 2025 for a purchase price of $ 100.00 and $ 100.00 , respectively. Conversion and Dividend Rights The shares of the Series A Preferred were not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The shares of the Series A Preferred were not entitled to receive dividends. Voting Rights of Series A Preferred Stock First Series A Preferred Voting Rights: The holder of the First Series A Preferred was entitled to 16,000,000,000 votes for each share held of record, but had 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 were approved by the stockholders, and had no voting rights except (i) with respect to the Shareholder Proposals, in which its votes were cast for and against such Shareholder Proposal in the same proportion as shares of Common Stock were voted for and against such reverse stock split proposal (with any shares of Common Stock that were 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 (1/3rd) of the outstanding shares of Common Stock were present, in person or by proxy, at the meeting of stockholders at which the Shareholder Proposals were submitted for stockholder approval (or any adjournment thereof). The share of the First Series A Preferred voted together with the Common Stock as a single class on any Shareholder Proposal. The First Series A Preferred had no other voting rights, except as may be required by the General Corporation Law of the State of Delaware. Second Series A Preferred Voting Rights: The holder of the Second Series A Preferred is entitled to 3,000,000 votes for each share held of record, but has the right to vote only on any share authorization proposal (the “Share Authorization Proposal”) and until such time as the Share Authorization Proposal is approved by the stockholders, and will have no voting rights except (i) with respect to the Share Authorization Proposal in which its votes are cast for and against the Share Authorization Proposal in the same proportion as shares of Common Stock are voted for and against the Share Authorization Proposal (without regard to any shares of Common Stock that are not voted, whether due to abstentions, or otherwise not counted as votes for or against the Share Authorization Proposal) and (ii) unless the holders of one-third (1/3rd) of the outstanding shares of Common Stock as of the record date to be set by the Board are present, in person or by proxy, at the meeting of stockholders at which the Share Authorization Proposal is submitted for stockholder approval (or any adjournment thereof). The share of the Second Series A Preferred Stock will vote together with the Common Stock as a single class on the Share Authorization Proposal. The Second Series A Preferred Stock has no other voting rights, except as may be required by the General Corporation Law of the State of Delaware. 157 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Liquidation Preference 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 shares of the Series A Preferred is 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 . Transfer and Redemption Restrictions The shares of the Series A Preferred can not be transferred at any time prior to stockholder approval of the Shareholder Proposals without the prior written consent of the Board. Any outstanding share of Series A Preferred are to 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 the relevant Shareholder Proposals. The First Series A Preferred Stock was redeemed on July 31, 2024, following the annual meeting of stockholders. The Second Series A Preferred Stock was redeemed on March 7, 2025 following the special meeting of stockholders. Common Stock Voting The holders of Class A Common Stock and Class B Common Stock are entitled to one vote for each share held of record on all matters to be voted on by stockholders until the occurrence of a Qualifying Equity Market Capitalization, following which holders of Class B Common Stock shall be entitled to ten votes per share and shall continue to be entitled to ten votes per share regardless of whether the Qualifying Equity Market Capitalization shall continue to exist or not thereafter. Conversion Shares of Class B Common Stock have the right to convert into shares of Class A Common Stock at any time at the rate of one share of Class A Common Stock for each share of Class B Common Stock. Class A Common Stock does not have the right to convert into Class B Common Stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the shares of the Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of the Common Stock held by them. Warrants The number of outstanding warrants to purchase the Company’s Class A Common Stock as of December 31, 2024 were as follows: Number of Warrants Exercise Price Expiration Date Ares Warrants 5,776,657 $ 1.16 August 5, 2027 SPA Warrants 15,238 $ 1.16 Various through November 1, 2031 Junior SPA Warrants 5,931,638 $ 1.16 Various through September 30, 2029 2024 Unsecured SPA Warrants 10,788,746 $ 1.39 December 31, 2029 Public Warrants 2,453 $ 110,400.00 July 21, 2026 Private Warrants 12 $ 110,400.00 July 21, 2026 22,514,744 There were no warrants exercised for the year ended December 31, 2024. 158 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The above Ares warrants and SPA Portfolio Note warrants contain full ratchet anti-dilution price protection that requires the exercise price to be adjusted if the Company sells shares of Common Stock below the current exercise price. On September 5, 2024, the Company issued the Junior Secured SPA Notes with a conversion price of $ 5.24 , which represents a dilutive issuance that triggers the full ratchet anti-dilution price protection. Therefore, the exercise price of the Ares warrants and SPA Portfolio Note warrants was adjusted from $ 29.33 to $ 5.24 . On December 21, 2024, the Company issued the 2024 Unsecured SPA Notes with a conversion price of $ 1.16 , which represents a dilutive issuance that triggers the full ratchet anti-dilution price protection. Therefore, the exercise price of the Ares warrants and SPA Portfolio Note warrants was adjusted from $ 5.24 to $ 1.16 . The Company accounted for the reductions in exercise price of equity classified warrant instruments as a deemed dividend (the “Deemed Dividend”). The total value of the Deemed Dividend to warrant holders during the year ended December 31, 2024 was $ 7.6 million. The Deemed Dividend was calculated as the change in fair value of the Ares warrant and equity classified SPA Portfolio Note warrants immediately before and immediately after the triggering events. The Company recognized the payment of the Deemed Dividend in Additional paid-in capital in the Company’s Consolidated Balance Sheets due to the Company’s accumulated deficit. The Company measures the fair value of the equity-classified SPA Portfolio Note warrants using the Black-Scholes option pricing model. The significant assumptions used in this model include the volatility of the Company’s Class A Common Stock, the expected term of the warrant, the risk-free rate, stock price, expected exercise price and the annual dividend yield. The following table provides the assumptions used in the Black-Scholes option pricing model for equity-classified SPA Portfolio Note warrants granted during the year ended December 31, 2024: 2024 Risk-free interest rate: 3.83 % - 4.35 % Expected term (in years): 7 Expected volatility: 110 % - 115 % Dividend yield: 0 % The number of outstanding warrants to purchase the Company’s Class A Common Stock as of December 31, 2023 were as follows: Number of Warrants Exercise Price Expiration Date Ares warrants 228,482 $ 29.33 August 5, 2027 SPA Warrants 13,906 $ 29.33 Various through November 28, 2030 Public Warrants 2,453 $ 110,400.00 July 21, 2026 Private Warrants 12 $ 110,400.00 July 21, 2026 244,853 During the year ended December 31, 2023, 6,292 warrants were exercised to purchase 5,326 shares of Class A Common Stock for cash proceeds of $ 4.1 million. Certain of the warrants were exercised pursuant to a cashless exercise feature whereby 966 warrant shares were surrendered as the purchase price. 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. In such case, the Company applies a sequencing policy under ASC 815-40, 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. 159 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 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. As of 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. As a result of the Reverse Stock Split and the related increase in the number of available authorized shares of Class A Common Stock, effective August 25, 2023 the Company had sufficient authorized shares of Class A Common Stock to fully settle its equity-linked financial instruments in shares. Accordingly, on August 25, 2023, the Company reclassified the fair value of the Earnout liability of $ 1.4 million and the fair value of the Share-based payment liability of $ 2.0 million into Additional paid-in capital. Refer to the table summarizing the activity of Level 3 fair value measurements in Note 14, Fair Value of Financial Instruments for the changes in fair value of the Earnout liability and the Share-based payment liability recognized in periods when they were thus classified. Salary Deduction and Stock Purchase Agreement On September 21, 2023, certain executive officers of the Company entered into Salary Deduction and Stock Purchase Agreements (collectively, the “SD SPA”) with the Company. Under the SD SPA, on each payroll date after the receipt of stockholder approval of the SD SPA, the officer has agreed to authorize the Company to deduct 50 % of the officer’s after-tax base salary. This deducted amount will be used to purchase a number of shares of Class A Common Stock determined using the VWAP (as defined in the SD SPA) of Class A Common Stock per share on the applicable payroll date. Pursuant to the SD SPA, the officer may decrease the amount of the deduction upon notice to the Board. On September 4, 2024 (the “Effective Date”), the Board approved changes to the compensatory arrangements for the Company’s Global CEO, Matthias Aydt, and the Company’s Founder and Chief Product and User Ecosystem Officer, Yueting Jia. In furtherance of the Board approval, Mr. Aydt and Mr. Jia entered into new SD SPAs to authorize the Company to deduct a portion of the officers’ after-tax base salary (equal to approximately 64 % of his initial pro-rated $ 550,000 base salary for Mr. Aydt and approximately 56 % of his initial pro-rated $ 612,000 base salary for Mr. Jia, in each case after-tax). The September 2024 SDA SPAs will terminate on the three-month anniversary of the Effective Date. For the year ended December 31, 2024, Mr. Aydt and Mr. Jia purchased shares of the Company’s Class A common stock in an aggregate amount of 49,659 shares for a weighted average purchase price of $ 2.06 per share. 13. Stock-Based Compensation 2021 Plan In July 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”). The 2021 Plan allows the Board of Directors to grant up to 5,164 incentive and nonqualified stock options, restricted shares, unrestricted shares, restricted share units, and other stock-based awards for the Class A Common Stock to employees, directors, and non-employees. The number of shares of Class A Common Stock available under the 2021 Plan will increase annually on the first day of each calendar year, beginning with the calendar year ending December 31, 2023, and continuing until (and including) the calendar year ending December 31, 2031. Annual increases are equal to the lesser of (i) 5 percent of the number of shares of Class A Common Stock issued and outstanding on December 31 of the immediately preceding fiscal year and (ii) an amount determined by the Board. As of the effective date of the 2021 Plan, no further stock awards have been or will be granted under the EI Plan or STI Plan (defined below). At the annual meeting of stockholders held on July 31, 2024, the Company’s stockholders approved (among other proposals) an amendment to the 2021 Plan to increase the number of shares of Class A Common Stock available for issuance under the 2021 Plan by an additional 2,206,324 shares, subject to proportionate adjustment for stock splits and similar events as provided in the 2021 Plan. As of December 31, 2024, and 2023 the Company had 530,131 and 2,527 shares of Class A Common Stock available for future issuance under the 2021 SI Plan. 160 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Option Awards A summary of the Company’s stock option activity under the 2021Plan is as follows: (dollars in thousands except weighted average exercise price) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 693 $ 26,496.00 8.97 $ — Granted 313 $ 10,368.00 Exercised ( 6 ) $ 8,544.00 Expired/forfeited ( 202 ) $ 28,020.00 Outstanding as of December 31, 2023 798 $ 19,885.20 8.74 $ 5,351 Expired/forfeited ( 390 ) $ 20,794.36 Outstanding as of December 31, 2024 408 $ 21,156.47 7.59 $ 8,317 Exercisable as of December 31, 2024 286 $ 21,480.84 7.58 $ 5,940 As of December 31, 2024, the total unrecognized stock-based compensation expense for stock options granted under the 2021 Plan was less than $ 0.1 million, which is expected to be recognized over a weighted average period of 2.26 years. There were no options granted under the 2021 Plan during the year ended December 31, 2024. The weighted-average assumptions used in the Black-Scholes option pricing model for awards granted during the year ended December 31, 2023 are as follows: 2023 Risk-free interest rate: 3.53 % Expected term (in years): 8.71 Expected volatility: 89.62 % Dividend yield: 0 % The total grant date fair value of options vested during the years ended December 31, 2024 and 2023 was $ 2.0 million and $ 2.5 million, respectively. Restricted Stock Units A summary of the Company’s RSU activity under the 2021 Plan is as follows: (dollars in thousands except weighted average fair value) Shares Weighted Average Fair Value Outstanding as of December 31, 2022 (1) 1,862 $ 10,464.00 Granted 2,551 $ 2,702.00 Released ( 650 ) $ 10,329.60 Forfeited ( 878 ) $ 9,817.60 Outstanding as of December 31, 2023 2,885 $ 3,784.80 Granted 1,797,111 $ 3.72 Released ( 1,322,382 ) $ 1.31 Forfeited ( 37,207 ) $ 2.32 Outstanding as of December 31, 2024 440,407 $ 3.61 (1) The Company’s subsidiaries in China have employees who are citizens of the PRC. Pursuant to the regulation Circular 78 and Circular 7 issued by the Central State Administration of Foreign Exchange of PRC (“SAFE”), we cannot release vested RSUs to it’s PRC citizen employees before they have completed the required SAFE registration with a dedicated account set up for each of them to repatriate proceeds back to China under the SAFE. As a result, 151 RSUs of the Company’s PRC citizens employees vested in 2022 were included in the outstanding RSUs at December 31, 2022 as unreleased RSUs because those employees did not complete the SAFE registration process. 161 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements As of December 31, 2024, the total unrecognized stock-based compensation expense for RSUs granted under the 2021 Plan was $ 0.8 million which is expected to be recognized over a weighted average period of 1.71 years. The total fair value of RSUs vested during the years ended December 31, 2024 and 2023 was $ 8.4 million and $ 4.4 million, respectively. EI Plan On February 1, 2018, the Board adopted the Equity Incentive Plan (“EI Plan”), under which the Board authorized the grant of up to 4,416 incentive and nonqualified stock options, restricted stock, unrestricted stock, restricted stock units, and other stock-based awards for Legacy FF’s Class A Ordinary Stock to employees, directors and non-employees. On the closing date and in connection with the Business Combination, each of the Legacy FF’s outstanding options under the EI Plan immediately prior to the closing of the Business Combination remained outstanding and converted into the right to purchase the Company’s Class A Common Stock based on the Exchange Ratio. A summary of the Company’s stock option activity under the EI Plan is as follows: (dollars in thousands except weighted average exercise price) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 2,440 $ 27,168.00 6.92 $ 22 Expired/forfeited ( 409 ) $ 31,130.40 Outstanding as of December 31, 2023 2,031 $ 26,408.80 5.92 $ 31,743 Expired/forfeited ( 82 ) $ 28,973.01 Outstanding as of December 31, 2024 1,949 $ 26,237.95 4.84 $ 50,054 Exercisable as of December 31, 2024 1,931 $ 26,077.74 4.83 $ 49,283 The total grant date fair value of options vested during the years ended December 31, 2024 and 2023 was $ 2.3 million and $ 9.3 million, respectively. As of December 31, 2024, the total unrecognized stock-based compensation expense for stock options granted under the EI Plan was less than $ 0.1 million which is expected to be recognized over a weighted average period of 1.69 years. STI Plan On May 2, 2019, the Company adopted its Special Talent Incentive Plan (“STI Plan”) under which the Board may grant up to 1,472 incentive and nonqualified stock options, restricted shares, unrestricted shares, restricted share units, and other stock-based awards for Legacy FF’s Class A Ordinary Stock to employees, directors, and non-employees. The STI Plan does not specify a limit on the number of stock options that can be issued under the plan. Per the terms of the STI Plan the Company must reserve and keep available a sufficient number of shares to satisfy the requirements of the STI Plan. 162 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements A summary of the Company’s stock option activity under the STI Plan is as follows: (dollars in thousands except weighted average exercise price) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 586 $ 60,864.00 6.94 $ — Expired/forfeited ( 22 ) $ 78,722.80 Outstanding as of December 31, 2023 564 $ 60,169.20 6.64 $ 16,318 Expired/forfeited ( 77 ) $ 95,528.84 Outstanding as of December 31, 2024 487 $ 52,893.32 5.50 $ 25,481 Exercisable as of December 31, 2024 374 $ 41,906.97 5.23 $ 15,448 The total grant date fair value of options vested during the years ended December 31, 2024 and 2023 was $ 7.8 million and $ 1.7 million, respectively. As of December 31, 2024, the total unrecognized stock-based compensation expense for stock options granted under the STI Plan was less than $ 0.1 million, which is expected to be recognized over a weighted average period of approximately 1.78 years. Stock-based compensation expense The following table presents stock-based compensation expense for all of the Company’s 2021 Plan, EI Plan, STI Plan and Common Units of FF Global included in each respective expense category in the Consolidated Statements of Operations and Comprehensive Loss is as follows: Years Ended December 31, (in thousands) 2024 2023 Research and development $ 2,670 $ 6,812 Sales and marketing 915 807 General and administrative 4,797 1,548 $ 8,382 $ 9,167 Included in stock-based compensation expense for the year ended December 31, 2023 is $ 4.1 million related to when the Company’s share-based payment awards were classified as liabilities from time to time during the year ended December 31, 2023. 14. Fair Value of Financial Instruments Cash Equivalents The fair value of the Company’s money market funds is based on the closing price of these assets as of the reporting date, which are included in cash equivalents. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices for identical instruments in active markets. The Company had no cash equivalents on December 31, 2024 and 2023. 163 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Notes Payable & Related Party Notes Payable The Company has elected to measure certain notes payable and related party notes payable at fair value. Specifically, the SPA Portfolio Notes or notes convertible into SPA Portfolio Notes as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 7, Notes Payable and Note 8, Related Party Transactions ). The Company used a binomial lattice model and discounted cash flow methodology to value the notes carried at fair value. The significant assumptions used in the models include the volatility of the Class A Common Stock, the Company’s expectations around the full ratchet anti-dilution trigger, the Company’s debt discount rate based on a CCC rating, annual dividend yield, and the expected life of the instrument. Fair value measurements associated with the notes payable and related party notes payable represent Level 3 valuations under the fair value hierarchy. The fair value adjustments related to notes payables and related party notes payable were recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable and related party warrant liabilities, respectively, in the Consolidated Statements of Operations and Comprehensive Loss. For notes payable and related party notes payable where the Company did not elect the fair value option pursuant to ASC 825, Financial Instruments, the carrying value approximates the fair value of the obligation. SPA Portfolio Note Warrants The Company is required to measure certain SPA Portfolio Note warrants at fair value. The Company uses a Monte Carlo simulation model to measure the fair value of the liability classified SPA Warrants, where the significant assumptions used include the volatility of the Company’s Class A Common Stock, the Company’s expectations around the full ratchet anti-dilution trigger, the contractual term of the warrant, the risk-free rate and annual dividend yield. Fair value measurements associated with the liability-classified warrants represent Level 3 valuations under the fair value hierarchy. The fair value adjustments related to the liability classified warrants were recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options or Change in fair value of related party notes payable and related party warrant liabilities, in the Consolidated Statements of Operations and Comprehensive Loss Public and Private Warrants Upon the closing of the Business Combination, the Company assumed 2,394 Public Warrants and 62 Private Warrants from PSAC. The Company also issued 9 Private Warrants to settle related party notes of PSAC. The Public Warrants are indexed to the Company’s own stock and, as such, meet the scope exception in accordance with ASC 815-40 to be classified in equity. The Private Warrants are classified as liabilities and the fair value is included in Warrant liabilities in the Consolidated Balance Sheets. The Company valued the Private Warrants using a binomial lattice model. 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 zero and $ 0.1 million as of December 31, 2024, and 2023, respectively. Changes in the fair value of the Private Warrants are recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options in the Company’s 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. Derivative Call Options The Junior Secured SPA investors and the 2024 Unsecured SPA investors were issued Incremental Warrants to purchase additional Junior Secured SPA Notes and 2024 Unsecured SPA Notes, respectively, up to the amounts originally funded under their commitments. The Company estimates the fair value of the Incremental Warrants using a Monte Carlo simulation model where the significant assumptions used include the volatility of the Company’s Class A Common Stock, the Company’s expectations around the full ratchet trigger, the contractual term of the Incremental Warrants, the risk-free rate and annual dividend yield. The underlying convertible notes and the warrants issuable upon the exercise of the Incremental Warrant were assumed to be exercisable up to the maximum allowable amount. Additionally, the terms of these instruments were presumed to be consistent with those of the convertible notes and warrants issued in connection with the Incremental Warrants. Fair value measurements associated with the liability-classified derivatives represent Level 3 valuations under the fair value hierarchy. The fair value adjustments related to the Incremental Warrants were recorded in Change in fair value of notes payable, warrant liabilities, and derivative call options in the Consolidated Statements of Operations and Comprehensive Loss 164 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Liabilities due to 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. See Note 12, Stockholders' Equity . As of December 31, 2024, the Company did not have any instruments classified as a liability due to insufficient authorized shares. Recurring Fair Value Measurements Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present financial assets and liabilities remeasured on a recurring basis by level within the fair value hierarchy: December 31, 2024 (in thousands) Level 1 Level 2 Level 3 Liabilities: Warrant liabilities 1 $ — $ — $ 28,864 Derivative call options $ — $ — $ 29,709 Notes payable 1 $ — $ — $ 46,628 1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities. December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Liabilities: Warrant liabilities 1 $ — $ — $ 306 Notes payable 1 — — 86,712 1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities. 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 year ended December 31, 2024. The carrying amounts of the Company’s financial assets and liabilities, including cash, restricted cash, deposits, accounts payable, accrued liabilities and notes payable, other than the SPA Portfolio Notes, approximate fair value because of their short-term nature or contractually defined value. The following table summarizes the activity of Level 3 fair value measurements: (in thousands) Warrant Liabilities 1 Derivative Call Option Notes Payable 1 Balance as of December 31, 2023 $ 306 $ — $ 86,712 Additions 34,441 14,267 58,789 Debt extinguishments — — 2,699 Change in fair value measurements ( 5,723 ) 15,442 ( 34,460 ) Reclassification of liability classified warrants to equity ( 160 ) — — Conversions of notes to Class A Common Stock — — ( 67,112 ) Balance as of December 31, 2024 $ 28,864 $ 29,709 $ 46,628 1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities. 165 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 15. Income Taxes The provision for income tax consisted of the following: (in thousands) 2024 2023 Current: Federal $ — $ — State ( 4 ) 2 Foreign ( 263 ) 107 ( 267 ) 109 Deferred: Federal ( 21,218 ) ( 48,499 ) State ( 10,013 ) ( 22,277 ) Foreign ( 504 ) 6,577 ( 31,735 ) ( 64,199 ) Valuation allowance 31,735 64,199 — — $ ( 267 ) $ 109 The components of losses before income taxes, by taxing jurisdiction, were as follows for the years ended December 31,: (in thousands) 2024 2023 U.S. $ ( 324,929 ) $ ( 411,790 ) Foreign ( 31,185 ) ( 19,845 ) $ ( 356,114 ) $ ( 431,635 ) Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate The provision for income taxes for the years ended December 31, 2024, and 2023 differs from the amount computed by applying the statutory federal corporate income tax rate of 21% to losses before income taxes. The following adjustments account for these differences for the years ended December 31, 2024, and 2023: 2024 2023 Federal income tax expense 21.0 % 21.0 % State income taxes (net of federal benefit) 2.3 % 4.1 % Other permanent differences ( 1.4 ) % ( 0.7 ) % Fair value debt adjustments ( 10.3 ) % ( 5.8 ) % Disallowed interest ( 1.8 ) % ( 1.2 ) % Foreign tax rate difference 0.1 % 0.2 % Prior year true-up on deferred taxes ( 0.2 ) % ( 0.1 ) % Return-to-provision adjustment ( 1.3 ) % — % Uncertain tax benefit 0.8 % ( 1.0 ) % Expiration of tax attributes ( 0.3 ) % ( 1.8 ) % Valuation allowance ( 9.0 ) % ( 14.7 ) % 0.1 % 0.0 % These adjustments result in an effective tax rate of 0.1 % in 2024 compared to 0.0 % in 2023. 166 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements The main changes in permanent differences related to fair value adjustments on convertible related party notes payable and notes payable and disallowed interest expense. The main changes in foreign tax rate difference and valuation allowance related to lower foreign losses incurred in 2024. Deferred Tax Assets & Liabilities and Valuation Allowance The tax effects of temporary differences for the years ended December 31, 2024, and 2023 that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below: (in thousands) 2024 2023 Deferred Tax Assets: Net operating losses (“NOL”) $ 411,244 $ 353,839 Research and development credits 4,239 4,239 Accrued liabilities 25,581 16,646 Capital loss — 3,420 Amortization 8,803 9,921 Capitalized R&D expense 53,125 74,835 Stock-based compensation 450 418 Transaction costs 35 45 Other 379 594 Gross deferred tax assets 503,856 463,957 Valuation allowance ( 457,738 ) ( 426,003 ) Deferred tax assets, net of valuation allowance 46,118 37,954 Deferred Tax Liabilities: Depreciation ( 20,174 ) ( 14,113 ) State taxes ( 25,944 ) ( 23,841 ) Gross deferred tax liabilities ( 46,118 ) ( 37,954 ) Net deferred tax assets (liabilities) $ — $ — The Company has recognized a full valuation allowance as of December 31, 2024, and 2023 since, in the judgment of management given the Company’s history of losses, the realization of these deferred tax assets was not considered more likely than not. The valuation allowance was $ 457.7 million and $ 426.0 million as of December 31, 2024, and 2023, respectively, with increases attributable to the current year’s provision. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. During December 31, 2024 and 2023, the Company evaluated the realizability of its net deferred tax assets based on available positive and negative evidence and concluded that the likelihood of realization of the benefits associated with its net deferred tax assets does not reach the level of more likely than not due to the Company’s history of cumulative pre-tax losses and risks associated with the generation of future income given the current stage of the Company’s business. The following table summarizes the valuation allowance: (in thousands) 2024 2023 Beginning balance $ 426,003 $ 361,804 Increase related to current year tax positions 31,735 64,199 Ending balance $ 457,738 $ 426,003 167 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements Net Operating Loss Carryforwards and R&D tax credit carryforward As of December 31, 2024, the Company has U.S. federal net operating loss carryforwards of $ 1,328.5 million, which will begin to expire in 2034, and foreign net operating loss carryforwards of $ 48.0 million, began expiring in 2024. The U.S. federal net operating loss carryforwards of $ 1,247.5 million generated post the Tax Cuts and Jobs Act may be carried forward indefinitely, subject to the 80% taxable income limitation on the utilization of the carryforwards. The U.S. federal net operating loss carryforwards of $ 80.5 million generated prior to December 31, 2017 may be carried forward for twenty years. As of December 31, 2024, the Company has California net operating loss carryforwards of $ 1,360.2 million, which will begin to expire in 2034. The Company has 2035 U.S. federal R&D tax credit carryforwards and a state R&D tax credit carryforward of $ 4.2 million as of December 31, 2024 which will begin to expire in 2035. The U.S. state tax credits do not expire and can be carried forward indefinitely. In accordance with Internal Revenue Code Section 382 (“Section 382”) and Section 383 (“Section 383”), a corporation that undergoes an “ownership change” (generally defined as a cumulative change (by value) of more than 50% in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change NOLs and R&D tax credits to offset post-change taxable income and post-change tax liabilities, respectively. The Company’s existing NOLs and R&D credits may be subject to limitations arising from previous ownership changes, and the ability to utilize NOLs could be further limited by Section 382 and Section 383 of the Code. In addition, future changes in the Company’s stock ownership, some of which may be outside of the Company’s control, could result in an ownership change under Section 382 and Section 383 of the Code. Reinvestment of Earnings The Company’s intention is to indefinitely reinvest earnings in all jurisdictions outside the United States. As of December 31, 2024, and 2023, there was no material cumulative earnings outside the United States due to net operating losses and the Company has no earnings and profits in any jurisdiction, that if distributed, would give rise to a material unrecorded liability. Tax Jurisdictions The Company is subject to taxation and files income tax returns with the U.S. federal government, the state of California, , as well as under the tax laws of the People’s Republic of China. As of December 31, 2024, the 2020 through 2024 federal income tax returns and 2019 through 2024 state income tax returns are open to exam. Th e Company is not under any income tax audits. All of the prior year income tax returns, from 2018 through 2024, are open under China tax law. Uncertain Income Tax Position The aggregate change in the balance of unrecognized tax benefits for the years ended December 31, 2024, and 2023 is as follows: (in thousands) 2024 2023 Beginning balance $ 12,972 $ 8,807 Increase related to current year tax positions 389 4,165 Decrease related to prior year positions ( 3,274 ) — Ending balance $ 10,087 $ 12,972 In accordance with ASC 740-10, Income Taxes — Overall , the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. No interest and penalties related to the Company’s unrecognized tax benefits was accrued as of December 31, 2024, and 2023, as the uncertain tax benefit only reduced the net operating losses. The Company does not expect its uncertain income tax positions to have a material impact on its consolidated financial statements within the next twelve months. As of December 31, 2024 and 2023, the realization of uncertain tax positions were not expected to impact the effective rate due to a full valuation allowance on federal and state deferred taxes. 168 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 16. Net Loss per Share Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares issued and shares to be issued under the commitment to issue shares, as these shares are issuable for no consideration. 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 and shares to be issued under the commitment to issue shares for potentially dilutive instruments. The following data shows the amounts used in computing net loss per share and the effect on net loss and the weighted-average number of shares for the years ended December 31, 2024, and 2023: (in thousands, except share and per share amounts) 2024 2023 Net loss $ ( 355,847 ) $ ( 431,744 ) Less: Deemed Dividend ( 7,576 ) — Net loss available to common stockholders $ ( 363,423 ) $ ( 431,744 ) Weighted average shares used in computing net loss per share of Class A and B Common Stock: Basic 18,529,525 240,869 Diluted 18,529,525 240,869 Net loss per share of Class A and B Common Stock attributable to common stockholders: Basic $ ( 19.61 ) $ ( 1,792.44 ) Diluted $ ( 19.61 ) $ ( 1,792.44 ) 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 Consolidated Statements of Operations and Comprehensive Loss. Potentially Dilutive Shares The Company reported net losses for all periods presented, resulting in all potentially dilutive Common Stock equivalents being considered antidilutive and excluded from the calculation of net loss per share. The table below 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 due to their antidilutive effect as of December 31,: 2024 2023 Shares issuable upon conversion of SPA Portfolio Notes 41,054,586 1,069,202 Shares issuable upon conversion of Unsecured Convertible Notes 749,866 — Shares issuable upon exercise of equity classified SPA Portfolio Note warrants 15,238 13,906 Shares issuable upon exercise of liability classified SPA Portfolio Note warrants 16,720,384 — Other warrants 5,776,657 228,482 Stock-based compensation awards – Options 2,591 798 Stock-based compensation awards – RSUs 161,225 2,885 Public warrants 2,453 2,453 Private warrants 12 12 64,483,012 1,317,738 169 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements 17. Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that t he Consolidated Financial Statements were issued. Subsequent SPA Portfolio Notes Activity Subsequent to December 31, 2024, the Company issued 2024 Unsecured convertible notes to a third party totaling $ 20.0 million with due dates ranging from December 31, 2029 through January 22, 2030 at 10.00 % interest. Principal and accrued interest are convertible at the option of the holder into Common Stock of the Company at a conversion price per share equal to the lower of a) stated conversion price or b) lowest VWAP of the five trading days immediately prior to the day on which lender provides conversion notice. Additionally, $ 18.6 million of principal and $ 1.1 million of interest of the Company’s SPA Portfolio Notes were conver ted into 17,034,826 shares of the Company’s Class A Common Stock. Related Parties Unsecured Convertible Note On February 11, 2025, $ 1.5 million of principal and $ 0.1 million of interest under Unsecured Convertible Note held by MHL were converted into 1,352,766 shares of Class A Common Stock pursuant to the terms of the agreement. Letter Agreements On January 28, 2025, the Company entered into a letter agreement (“September Letter Agreement”) with certain Junior Secured SPA Investors. Before stockholder approval, these investors agreed not to convert outstanding notes below the initial $ 5.24 conversion price. In return, the Company agreed to issue “True-Up Shares” after approval to adjust for any pre-approval conversions, based on a formula considering accrued interest and market pricing. On the same date, the Company entered into a similar letter agreement (“December Letter Agreement”) with certain 2024 Unsecured SPA Investors, modifying terms related to their previously disclosed investment. These investors agreed not to convert outstanding notes below the initial $ 1.16 conversion price before stockholder approval. The Company agreed to issue True-Up Shares post-approval using a similar adjustment formula. Additionally, if a resale registration statement becomes effective, and the conversion price exceeds the prior day's closing bid price, the conversion price will be adjusted downward. Both Letter Agreements include a provision preventing the issuance of shares if the Company's available authorized stock is insufficient. However, the Company must deliver the shares once sufficient stock becomes available. Settlement and Release Agreement On January 17, 2025, the Company entered into a Settlement and Release Agreement with HSL s.r.l. (“HSL”) to resolve outstanding claims with HSL. As part of the Settlement and Release Agreement, Faraday agreed to issue € 1.15 million (approximately $ 1.185 million) worth of Class A Common Stock (the “Compensated Shares”) to HSL, with the number of shares based on a per share price of $ 1.53 , which was the closing price of the Class A Common Stock on January 16, 2025, the trading day prior to the signing of the Settlement and Release Agreement. On January 17, 2025 the Company issued 774,183 shares of Class A common stock in lieu of the settlement. These shares remain restricted until the Registration Statement becomes effective. The settlement also included the cancellation of purchase orders and the resolution of claims related to item s without associated purchase orders. Additionally, the Company may issue extra shares or provide additional cash to HSL if the market value decreases by more than 5 % between January 17, 2025, the issuance date of the Compensated Shares and the date when the Registration Statement is effective. Second Series A Preferred Stock On January 28, 2025, in connection with a purchase agreement entered into with Mr. Aydt, the Company’s Global CEO, the Company filed a Series A Certificate of Designation with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of the Company’s Preferred Stock as the Second Series A Preferred and established the preferences, rights and limitations thereof. The closing of the sale and purchase of the share of the Second Series A Preferred was completed on January 28, 2025 for a purchase price of $ 100.00 . See Note 12, Stockholders’ Equity. 2025 Senior Unsecured SPA Notes On March 21, 2025, the Company entered into a Securities Purchase Agreement with institutional investors for the sale of $ 41.0 million in senior unsecured convertible notes (“2025 Senior Unsecured SPA Notes”), of which approximately $ 39.5 million will be paid in cash and $ 1.5 million will convert from a prior loan. The financing includes common stock purchase warrants, Series B Preferred Stock, and incremental note purchase warrants, with closings expected to occur in four 170 Table of Contents Faraday Future Intelligent Electric Inc. Notes to Consolidated Financial Statements tranches subject to certain conditions. The Company may issue up to an additional $ 10.0 million in notes if additional investors join before the first closing. Faraday Future also agreed to register for resale the shares underlying the convertible notes and warrants within 45 days and maintain an effective registration. Uni vest Securities, LLC is acting as placement agent and will receive a cash fee of up to 8.0 % of gross proceeds and warrants equal to 7.0 % of the shares underlying the issued notes. The placement agent warrants have a five-year term and exercise prices ranging from $ 1.548 to 120 % of the prior day’s closing stock price, depending on the tranche. The Company agreed to reimburse up to $ 0.2 million in expenses related to the transaction. Increase in Authorized Shares and Elimination of Preferred Stock On March 10, 2025, the Company amended its Certificate of Incorporation to increase authorized shares to 139,245,313 , consisting of 129,245,313 shares of Common Stock and 10,000,000 shares of Preferred Stock. Additionally, the Company eliminated the previously designated Second Series A Preferred Stock following the redemption of its sole outstanding share on March 7, 2025. The eliminated share was returned to authorized but unissued Preferred Stock. See Note 12, Stockholders’ Equity. 171 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.