What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-21 compared with 2025-08-19 · 411 added, 291 removed, 543 unchanged (56% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All references in this report to “FFAI,” the “Company,” “we,” “us,” or “our” mean Faraday Future Intelligent Electric Inc., together with its consolidated subsidiaries.

All references in this report to “FFAI,” the “Company,” “FF,”“we,” “us,” or “our” mean Faraday Future Intelligent Electric Inc., together with its consolidated subsidiaries.

Unless the context suggests otherwise, references to “Faraday Future Intelligent Electric Inc.” mean the parent company without its subsidiaries.

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In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

Company Overview

We are a California-based, global, shared, intelligent mobility ecosystem company founded in 2014 with a vision to disrupt the automotive industry.

Our Class A Common Stock and Public Warrants trade on The Nasdaq Capital Market (“Nasdaq”) under the ticker sym bols “FFAI” and “FFAIW,” respectively.

With headquarters in greater Gardena, California, we design and engineer next-generation intelligent, connected, electric vehicles.

Our Class A Common Stock and Public Warrants trade on The Nasdaq Capital Market (“Nasdaq”) under the ticker symbols “FFAI” and “FFAIW,” respectively.

With headquarters in the greater Gardena, California area, we design and engineer next-generation intelligent, connected electric vehicles.

We manufacture vehicles at the FF ieFactory California production facility in Hanford, California.

We have additional engineering, sales, and operational capabilities in China, and we are exploring opportunities for potential manufacturing capabilities in China through a joint venture or other arrangements.

Additionally, we have established an entity in the UAE to manage the assembly and sales support of FF 91 series vehicles, further expanding our market presence in the region.

We also have additional engineering, sales, and operational capabilities in China and are exploring potential manufacturing opportunities

there through a joint venture or other arrangements.

Additionally, we have established operations in the United Arab Emirates, including an entity to manage assembly and sales support for FF 91 series vehicles and a facility in Ras Al Khaimah intended to support future FX Super One production, further expanding our presence in the Middle East as part of our “third pole” strategy.

Since our founding, we have created major innovations in technology and products and followed a user-centered business model.

We believe these innovations will enable us to set new standards in luxury and performance that will redefine the future of intelligent mobility.

Company Overview & Global Strategy

Our near-term product roadmap builds on the FF 91 platform through the planned FF 92 upgrade program and the FX Super One and reflects an increased focus on reallocating resources, manufacturing capacity, and engineering efforts toward these programs.

The shift in strategy from relying primarily on the FF 91 platform, the elimination of federal tax credits for electric vehicles effective September 30, 2025, and the escalating U.S.

- China trade tensions and potential restrictions on critical materials resulted in the Company recording an asset impairment of $130.0 million during the three months ended September 30, 2025.

We expect our wider product portfolio to better align our product strategy with anticipated demand, improve capital efficiency, and support the next phase of our commercialization efforts.

In September 2025, we consolidated AIXC, a newly acquired entity with operations in the life sciences sector.

AIXC’s common stock is listed on Nasdaq under the ticker symbol “AIXC.” While AIXC is currently immaterial to our operating results, we intend to use it as a platform for future strategic initiatives, including potential blockchain and crypto-related ventures.

Company’s Strategies

• Dual-Home Market Strategy:

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and China market approach.

• Dual-flywheel Strategy:

Product and Ecosystem Flywheel – Focused on driving growth through continuous innovation in intelligent electric vehicle design, user experience, and AI-driven connectivity.

This flywheel leverages technology development, brand influence, and user engagement to expand the Company’s premium mobility ecosystem and strengthen recurring revenue opportunities.

Financial and Capital Efficiency Flywheel – Concentrated on improving liquidity and balance sheet health through disciplined financing, cost control, and operational scalability.

This flywheel supports long-term financial sustainability and reinforces the product-driven growth cycle.

• Dual-bridge Eco Strategy :

Technology and AI Ecosystem Bridge – Integrates the Company’s intelligent mobility technologies, vehicle platforms, and data-driven services to create synergies between product performance and digital ecosystem expansion.

Technology and AI Ecosystem Bridge – Connects the Company’s industrial partnerships, supplier network, and regional collaborations with capital market initiatives to support global growth, funding diversification, and shareholder value creation.

• Stockholder Initiative:

We have implemented an initiative that reinforcing management’s commitment to transparency, accountability, and long-term value creation that includes share purchases by the Company’s leadership.

• EAI + Crypto Strategy:

We have a strategy implemented that integrates its Eco Artificial Intelligence (“EAI”) mobility ecosystem with blockchain-based digital asset initiatives to create a unified platform for intelligent mobility and Web3 innovation.

The strategy is designed to leverage AI-driven vehicle data, user engagement, and decentralized finance tools to build new value channels for users and investors, while enhancing transparency, connectivity, and long-term ecosystem monetization.

Technology & Innovation

• Our Proprietary VPA:

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

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

• Propulsion System:

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• I.A.I Technology:

Our advanced I.A.I technology offers high-performance computing, high-speed internet connectivity, OTA updating, an open ecosystem for third-party application integration, and an advanced autonomous driving-ready system.

Our advanced I.A.I technology offers high-performance computing, high-speed internet connectivity, OTA updating, an open ecosystem for third-party application integration, and an advanced autonomous

driving-ready system.

• Intellectual Property & Supply Chain Development:

Since inception, we have developed a portfolio of intellectual property, established its supply chain, and assembled a global team of automotive and technology experts.

As of June 30, 2025, FF has been granted approxima tely 660 patents global ly.

As of September 30, 2025, FF has been granted approxima tely 660 patents global ly.

Product & Pipeline

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We started production on the first FF 91 Futurist and delivered the first FF 91 2.0 Futurist Alliance in 2023.

As part of our transition plan, we are continuing limited FF 91 deliveries while reallocating resources, manufacturing capacity and engineering efforts toward the planned FF 92 upgrade and the FX Super One.

Our strategy emphasizes FF 91 deliveries alongside development of FF 92 while the FX brand leverages the Super One to enter the U.S.

We are developing the FF 92 as the next-generation ultra-luxury electric vehicle built on the FF 91 platform, designed to maintain our leading edge in product and technology in the ultra-spire segment as part of a planned FF 92 upgrade program.

The FF 92 remains in the research and development stage and has not yet entered commercial production.

• FX Super One :

We are developing the FX Super One as the first “First Class AI‑MPV” under the FX brand, blending luxury and versatility in an AI‑powered multi‑purpose vehicle.

The FX Super One is designed to serve visionaries and families, combining a spacious cabin with flexible four‑, six‑ or seven‑seat configurations and advanced AI features.

It incorporates the world’s first Super EAI F.A.C.E.

system—a customizable front LED display that can serve as an expressive “face” and extend the user’s presence—and is built on FF’s EAI 6×4 technology platform.

The vehicle offers both pure battery‑electric and AI hybrid extended‑range powertrain options, intelligent all‑wheel drive, and an expansive interior with zero‑gravity seats, a multi‑source sensor suite for proactive safety, and an EAI operating system that supports voice, gesture and immersive multimedia interaction.

With a target of delivering “twice the performance at half the price” and creating a new “First Class AI‑MPV” market in the U.S.

and Middle East, the FX Super One is currently in development;

pilot production and regulatory preparations are under way.

• Vehicle Pipeline:

Our planned B2C passenger vehicle pipeline includes the FF 91 series, plus the new FX Series (FX 5, FX 6, and FX Super One).

Besides the FF 91, FF 92, and FX Super One, our planned B2C passenger vehicle lineup includes the FX 5 and FX 6.

The FX 5 is designed as a mainstream, large-space sporty AIEV intended to broaden our reach beyond the ultra-luxury segment, while the FX 6 is planned as a larger, family-oriented AIEV positioned above the FX 5 within the FX lineup.

Both models are expected to offer a mix of battery-electric and range-extended powertrain configurations and are intended to complement the FX Super One by expanding our presence into higher-volume segments of the global EV market.

Manufacturing & Distribution

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• FX Series Manufacturing:

Certain models of FX Series are planned to be manufactured in FF ieFactory California.

Certain FX Series models are planned to be manufactured at FF ieFactory California, and, contingent on adequate funding and local regulatory and operational preparations, FX Super One production is targeted at our Ras Al Khaimah facility in the United Arab Emirates.

• Global Availability:

All of our vehicles are expected to be available for sale in the U.S.

and the Middle East, with potential expansion to China and European markets.

and the Middle East.

Our Ras Al Khaimah facility in the United Arab Emirates integrates offices, production workshops, and operational hubs and is positioned to support sales and service across the Gulf Cooperation Council countries;

this facility has been highlighted as a springboard for the Company’s future expansion into European and North African markets.

In parallel, the FF China team is focused on strengthening global supply‑chain management and pursuing strategic partnerships with intelligent‑driving companies, which could eventually support manufacturing and distribution activities in China.

Recent Developments

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Below is a summary of significant events by category.

Strategic Operations and Product Development

EV - Strategic Operations and Product Development

• In March 2025, we hosted FF Open AI Day and unveiled our Personalized AI and Bespoke AI systems.

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This update highlights management’s intent to leverage the recently secured financing to support production readiness, scale operations for broader market access, and enhance technological differentiation in its intelligent electric vehicle lineup.

• In July 2025, the Company submitted a purchase requisition for promotional merchandise, totaling approximately $0.3 million, to Grow Fandor, a related party.

The related purchase order remained in process as of the date of this filing.

Capital Raising & Financing Agreements

• In August 2025, the Company reaffirmed its focus on expanding its FX and FF 91 model lines, emphasizing broader market reach by introducing luxury technology from the FF 91 into future mass-production FX vehicles.

• In August 2025, the Company appointed George Li, a veteran automotive executive with extensive supply chain and operational experience, as Head of FF and FX Global Supply Chain and China Chief Strategic Cooperation & Business Growth Officer (“CSGO”) to strengthen supplier partnerships, enhance global sourcing and cross-border coordination, and advance the Company’s “Bridge Strategy” between the U.S.

and China in support of long-term growth under the FX and FF vehicle programs.

• In September 2025, the Company advanced its global expansion by preparing its Ras Al Khaimah (U.A.E.) operations to support the FX Super One program under its Global Automotive Bridge Strategy, while further integrating its “EAI + Crypto” ecosystem that connects Eco Artificial Intelligence mobility systems with blockchain-based financial applications to enhance transparency and create new digital value channels.

• In September 2025, the Company announced that its 919 Futurist Day & Stockholders’ Community Day will showcase the unseen interior and product highlights of the FX Super One, provide updates on its U.S.

homologation and Middle East launch plans, and detail deployment of FF’s EAI Vehicle Chain products under its Web2 + Web3 dual-engine strategy.

• In September 2025, the Company hosted its 919 Futurist Day & Stockholders’ Community Day, showcasing the previously unseen interior and product highlights of the FX Super One, providing updates on its U.S.

homologation and Middle East launch plans, and presenting progress on the deployment of FF’s EAI Vehicle Chain products under its Web2 + Web3 dual-engine strategy.

• In November 2025, the Company announced that its future FF and FX battery electric vehicles, beginning with new models from 2026, will adopt the North American Charging System (“NACS”) port, providing future users with direct access to more than 28,000 Tesla Superchargers across the United States, Canada, Japan, and South Korea, while maintaining access to existing CCS fast-charging networks through operators such as ChargePoint and EVgo.

• In November 2025, the Company reported that the FX Super One program has received non-binding pre-orders for more than 11,000 vehicles in the United States and more than 200 vehicles in the United Arab Emirates, including from B2B fleet customers, reflecting continued growth in demand across both its U.S.

and Middle East markets.

• In November 2025, the Company noted that it had successfully completed the first round of safety testing for upper interior occupant impact protection for the FX Super One as part of the broader safety assessment and homologation process for the vehicle.

• In November 2025, the Company outlined its fourth quarter 2025 strategic focus for the FX platform, emphasizing:

(i) accelerating FX Super One channel development and pre-order growth, (ii) deploying advanced AI features, including enhanced voice and gesture interactions, (iii) completing additional safety assessments and manufacturing readiness activities, (iv) advancing international market penetration in the U.S.

and UAE, and (v) strengthening strategic and financial partnerships to support FX commercialization.

Crypto - Strategic Operations and Product Development

▪ In August 2025, the Company introduced the C10 Index and related Crypto + EAI application framework, with real-time index tracking planned on FF.com and the FF App.

▪ In September 2025, the Company reported progress on developing the C10 Crypto Treasury Index, a tokenized asset platform designed to support balance sheet diversification, strengthen ecosystem financing, and advance the Company’s broader “EAI + Crypto” strategy.

▪ In September 2025, the Company announced plans to establish a new crypto-focused spin-off entity as part of its “EAI + Crypto Flywheel Strategy.” This initiative aims to integrate blockchain-based assets into the Company’s intelligent mobility ecosystem, enhancing user engagement, product monetization, and capital flexibility through tokenized value systems linked to FF’s vehicle platform.

▪ In September 2025, the Company completed a strategic $30 million investment in AIXC as the lead investor in a $41 million PIPE transaction to establish a crypto and Web3-related business, through which the Company obtained control of AIXC.

Following stockholder approval, AIXC is expected to rebrand as CXC10 and focus on three growth engines—C10 Treasury and Index, BesTrade DeAI Agent, and ecosystem tokens—to support the Company’s long-term “EAI + Crypto” and “Dual-Flywheel & Dual-Bridge” ecosystem strategies.

EV - Capital Raising & Financing Agreements

• In December 2024, we secured approximately $30.0 million in cash financing commitments for the purchase of unsecured convertible notes (the “ 2024 Unsecured SPA Notes”) .

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These funds are intended to support our core business operations and the ongoing ramp-up of the FX strategy.

On January 28, 2025, we entered into a letter agreement with certain of the 2024 Unsecured SPA Investors.

receipt of such stockholders’ approval, to such investors who convert any U2024 Unsecured SPA Notes at the $1.16 conversion price prior to our receipt of stockholders’ approval, additional shares of Class A Common Stock as a true-up.

On January 28, 2025, we entered into a letter agreement with certain of the 2024

Unsecured SPA Investors.

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

• In January 2025, we received $30 million in previously committed financing to support FF 91 deliveries and FX program development.

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(Futuristic Aesthetic Connected Exterior) LED grille and the FF Super EAI (Extended AI) ecosystem.

The Company reported has secured over 1 0,000 binding deposit commitments to date, reinforcing brand visibility and building momentum as it prepares to transition into production.

The Company has secured over 1 0,000 binding deposit commitments to date, reinforcing brand visibility and building momentum as it prepares to transition into production.

• In July and August 2025 the Company raised gross proceeds of $45.6 million and $0.1 million from third parties and related parties, respectively, in connection with SPA Portfolio Notes.

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• In August 2025, the Company issued one share of Series A Preferred Stock to Matthias Aydt for $100.00.

Stock Exchange Compliance & Stockholder and Corporate Actions

• In August 2025, the Company reported $105 million in new financing commitments from institutional investors to fund FX Super One launch activities and general corporate purposes.

• In August 2025, the Company filed an amendment to the Certificate of Designation for its Series B Preferred Stock

with the Secretary of State of Delaware, confirming 12 million authorized shares at a par value of $0.0001 per share.

The amendment, approved by a majority of Series B holders, did not alter any existing rights, preferences, or limitations established under the Series B designation.

Crypto - Capital Raising & Financing Agreements

• In August 2025, the Company announced plans to use dedicated financing exclusively for crypto-asset purchases, with an initial program targeting up to $500M–$1B (subject to securing funding) and an 80% passive / 20% active allocation approach.

• In August 2025, FF entered a strategic Web3 partnership with HabitTrade, a digital-asset infrastructure firm, to support the blockchain component of its new ecosystem.

• In September 2025, the Company outlined that the spin-off structure is intended to create an independent capital platform capable of attracting specialized crypto and Web3 investors, while preserving Faraday Future’s controlling interest and future participation in related financial upside.

• In September 2025, Faraday Future invested approximately $30 million in AIXC at an effective price of $2.246 per share, representing beneficial ownership of about 55% of AIXC’s common stock, while Global Co-CEO YT Jia invested $4 million (approximately 7% ownership) under a two-year voluntary lock-up.

The financing also included participation from strategic blockchain investors such as SIGN Foundation, backed by Binance Labs, Sequoia Capital, IDG, and Circle.

EV - Stock Exchange Compliance & Stockholder and Corporate Actions

• In January 2025, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware.

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The purpose of these filings was to provide resale registration for existing investors and vendors holding conversion and settlement rights.

• In May 2025, the Company announced that Global Co-CEO YT Jia and President Jerry Wang each adopted SEC Rule 10b5-1 stock purchase plans, with trades expected to begin in August 2025;

Jia plans to purchase $560,000 and Mr.

Wang plans to purchase $50,000 of Class A Common Stock, with both executives committing not to amend or terminate their plans once effective.

Jia completed the purchase of $560,000 worth of Class A common stock shares during the quarter ended September 30, 2025.

Before the plan was cancelled by the broker, Mr.

purchased 10,600 shares of the Company’s Class A common stock under this trading plan.

• In June 2025, Mr.

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

Before the plan was cancelled by the broker, Mr.

Meka purchased no shares of the Company’s Class A common stock under this trading plan.

• In July 2025, the Company and certain executives, including Global Co-CEO Yueting Jia and President Jerry Wang, received Wells Notices from the SEC.

A Wells Notice is a notification from SEC staff that they are considering recommending enforcement action for alleged violations of securities laws;

it is not a formal charge or a final determination.

The SEC’s preliminary findings relate to alleged false or misleading statements during the Company’s 2021 PIPE (Private Investment in Public Equity) and SPAC (Special Purpose Acquisition Company) transactions.

The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted.

• In August 2025, the Company regained eligibility to access its At-The-Market (“ATM”) offering program and file new registration statements on Form S-3, following the timely filing of its Q2 2025 Form 10-Q.

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The reinstatement of Form S-3 eligibility also streamlines the registration process for future equity issuances, reduces regulatory filing complexity, and supports the Company’s strategic capital planning initiatives.

• In August 2025, FF highlighted its continued inclusion in the Russell 3000 Index and growing institutional ownership, with major investors increasing holdings relative to 2024.

• In August 2025, the Company disclosed that Founder and Global Co-CEO Yueting Jia and Global President Jerry Wang executed purchases of Company common stock under pre-established Rule 10b5-1 trading plans, demonstrating alignment with stockholder interests.

• In August 2025, additional share purchases by Company leadership, including CFO Koti Meka and FX CEO Xiao (Max) Ma, were scheduled pursuant to their existing 10b5-1 plans adopted in June 2025.

• In September 2025, the Company announced it successfully completed Nasdaq’s one-year compliance monitoring period and regained full compliance, returning to normal listed-company status.

• In September 2025, all core proposals—other than a pending name change—were approved at the Company’s special meeting of stockholders.

The investment structure allows Faraday Future to focus on advancing its EV business while capturing upside from the new crypto-focused operations without additional dilution to existing stockholders.

Crypto - Stock Exchange Compliance & Stockholder and Corporate Actions

• In August 2025, the Company disclosed it is exploring a C10 ETF concept tied to the newly announced index.

Corporate Governance

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• In May 2025, the Company formalized YT Jia’s appointment as Global Co-CEO under a new “Stockholders First” equity incentive plan, which ties his long-term compensation to improvements in market capitalization and share price performance.

• In May 2025, the Company announced that Global Co-CEO YT Jia and President Jerry Wang each adopted SEC Rule 10b5-1 stock purchase plans, with trades expected to begin in August 2025;

Jia plans to purchase $560,000 and Mr.

Wang plans to purchase $50,000 of Class A Common Stock, with both executives committing not to amend or terminate their plans once effective.

• In June 2025, Mr.

Koti Meka, Chief Financial Officer, adopted a Rule 10b5‑1 trading plan on June 12, 2025,

providing for the purchase of up to $20,000 of the Company’s Class A common stock.

• In July 2025, the Company and certain executives, including Global Co-CEO Yueting Jia and President Jerry Wang, received Wells Notices from the SEC.

A Wells Notice is a notification from SEC staff that they are considering recommending enforcement action for alleged violations of securities laws;

it is not a formal charge or a final determination.

The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted.

• In August 2025, the Board approved compensation adjustments for Chief Financial Officer Koti Meka:

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These responsibilities were consolidated under Global Co-CEO Matthias Aydt until the investigation concludes.

• In August 2025, the Company reported formation of a wholly owned subsidiary (FFAI Crypto Treasury and Bridging Holdings Inc.) for the crypto business and outlined a structure intended to isolate risk and enhance transparency (e.g., third-party custodians, on-chain verification).

• In September 2025, Global Co-CEO Yueting Jia completed the second tranche of stock purchases under his Rule 10b5-1 plan, investing approximately $180,000 of his signing bonus to demonstrate confidence in FF’s long-term strategy and stockholder alignment.

• In September 2025, Global Co-CEO Yueting Jia completed his third common stock purchase under his Rule 10b5-1 trading plan, investing approximately $560,000, representing the after-tax portion of his signing bonus, to demonstrate his confidence in the Company’s long-term strategy and alignment with stockholders.

• In September 2025, the Board approved the foundational steps for the spin-off entity and delegated management authority to oversee its implementation and compliance planning in alignment with U.S.

regulatory standards for digital assets.

• In September 2025, the Company announced that Jerry Wang will serve as Co-CEO of AIXC, Koti Meka as CFO, and YT Jia as Chief Advisor.

Faraday Future will hold nomination rights for two of five directors, which may increase to four of seven seats pending stockholder approval, ensuring strategic alignment and operational oversight within the new spin-off entity.

• In September 2025, the transaction marked a key step in implementing the Company’s integrated strategy to connect its automotive and digital-asset platforms, strengthening alignment between operational leadership and the emerging CXC10 ecosystem.

• In October 2025, Faraday X AIEV Hong Kong Holding Limited (“FXHK”) has completed its name change to GlobeX Al Hong Kong Holding Limited (“GXHK”).

• In November 2025, AIXC held a special meeting of stockholders that approved the Subscription Agreement and related share issuances, enabling the Company to obtain a majority ownership position in AIXC and secure the right to designate a majority of the reconstituted board of directors.

• In November 2025, following this stockholder approval, AIXC filed a Certificate of Amendment to change its corporate name to AIxCrypto Holdings, Inc., formalizing the Company’s controlling interest in the renamed entity as a strategic platform for its AI and crypto ecosystem initiatives.

Earnings Release Correction

• On November 13, 2025, the Company issued an earnings releasethat included certain preliminary financial information for the quarter ended September 30, 2025.

Following issuance of the release, additional adjustments were identified during the completion of the quarter-end close and review process.

As a result, certain amounts in the earnings release (related to our Unaudited Condensed Consolidated Balance Sheet and Statement of Ca sh Flows) differed from the financial information presented in this Form 10-Q.

The financial information contained in this Form 10-Q reflects the Company’s final, reviewed results for the period and should be relied upon as the authoritative presentation of the Company’s financial performance.

Supply Chain Exposure and Tariff Risk

As of June 30, 2025, a significant portion of the Company’s direct material purchases were sourced from suppliers based in China.

This concentration presents an ongoing risk given elevated U.S.

import tariffs on electric vehicle components.

While the Company’s cost of goods sold was not materially affected for the three and six months ended June 30, 2025, due to limited production volume and the use of existing inventory, continued reliance on China-based sourcing may result in higher input costs and materially impact the Company’s cost structure as production scales.

As of September 30, 2025, a significant portion of the Company’s direct materials were sourced from China, exposing the Company to elevated U.S.

import tariffs on electric-vehicle components and related inputs.

While cost of goods sold was not materially affected for the three and nine months ended September 30, 2025, due to limited production and use of existing inventory, management increased the inventory reserve by $ 10.6 million and $ 14.4 million, respectively, including a component for anticipated tariffs.

As production scales or if tariff rates broaden or rise, tariff-driven input costs could materially impact unit economics and may necessitate pricing, sourcing, or additional reserve actions.

Segment Information

We operate in a single operating and reportable segment.

Through August 12, 2025, our two Global Co-Chief Executive Officers (“Global Co-CEOs”) acted jointly as Co-Chief Operating Decision Makers (“CODMs”) and regularly evaluated the our financial performance using consolidated information at the total-company level, including consolidated loss from operations, cash flows, liquidity, and strategic initiatives.

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

Through August 12, 2025, our two Global Co-Chief Executive Officers (“Global Co-CEOs”) acted jointly as Co-Chief Operating Decision Makers (“CODMs”) and regularly evaluated our financial performance using consolidated information at the total-company level, including consolidated loss from operations, cash flows, liquidity, and strategic initiatives.

Effective August 13, 2025, in connection with temporary governance adjustments approved by the Board, Mr.

Matthias Aydt serves as our sole CODM for purposes of ASC 280 (see Note 16).

Management has identified Loss from operations, as presented in the Company's Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the primary measure used by the CODMs to evaluate the performance of the business and allocate resources.

Matthias Aydt serves as our sole CODM for purposes of ASC 280.

Management has identified Loss from operations, as presented in the Company's Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the primary measure used by the CODM to evaluate the performance of the business and allocate resources.

This measure is critical for a going concern that must carefully manage its cash outflows, particularly given that the timing of its cash inflows is influenced by external investor decisions.

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Management closely tracks its expenditure on these key expense categories through regular reviews of cash balances, near‑term cash flow projections, monthly management reports, and project management reports.

The CODMs, work in close collaboration with our business leaders to establish critical operational targets, set project timelines, and adjust spending plans.

The CODM, work in close collaboration with our business leaders to establish critical operational targets, set project timelines, and adjust spending plans.

These leaders are responsible for implementing its strategic plans and revising targets and deadlines based on continuous internal communications and review meetings, thereby ensuring that any deviations from target spending or project timelines are promptly addressed.

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By segregating these “Other Segment Items” from “loss from operations,” we provide investors with a clear view of the expenses that management can directly influence versus those driven by external factors.

During the third quarter of 2025, we consolidated AIXC, a variable interest entity that operates a legacy life-sciences business.

The acquisition closed on September 29, 2025, and AIXC’s operating results were included in our consolidated financial statements for only the final two days of the quarter.

The revenue and operating loss attributable to AIXC were immaterial and did not meet the quantitative thresholds under ASC 280 for separate segment reporting.

In addition, we intend to use AIXC as the platform for our future crypto-related initiatives;

however, no crypto operations were active during the quarter, and our prior crypto assets were liquidated to fund the transaction.

(For further information see Note 3 - Business Acquisition - Consolidation of AIXC , and Note 1 - Nature of Business and Organization ).

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.

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Our ability to become profitable in the future will depend on our ability to successfully market our vehicles and control our costs.

Through June 30, 2025 , we have sold seven and leased eleven vehicles.

Through September 30, 2025 , we have sold eight and leased eleven vehicles.

As a result, we will require substantial additional capital to develop products and fund operations for the foreseeable future.

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Automotive Sales Revenue

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

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

Automotive sales revenue includes revenues related to deliveries of new vehicles, and specific other features and services including home charger, charger installation, twenty-four-seven roadside assistance, OTA software updates, internet connectivity and destination fees.

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For obligations related to automotive sales, we estimate the standalone selling price by considering costs used to develop and deliver the good or service, third-party pricing of similar options and other information that may be available.

The transaction

price is allocated among the performance obligations in proportion to the standalone selling price of our performance obligations.

The transaction price is allocated among the performance obligations in proportion to the standalone selling price of our performance obligations.

Vehicle contracts do not contain a significant financing component.

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In certain circumstances, we provide customers with a residual value guarantee which may or may not be exercised in the future.

The impact of such residual value guarantees was immaterial to our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025 .

The impact of such residual value guarantees was immaterial to our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2025 .

We have entered into, and may continue to enter into, co-creator consulting agreements with our customers under which customers share feedback, driving data, ideas, experiences with our engineers, social media posts, and other promotional activities in exchange for specified fees.

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We record leasing revenues as automotive leasing revenue on a straight-line basis over the contractual term, and we record the depreciation of these vehicles as cost of automotive leasing revenue.

As of June 30, 2025, deferred lease-related upfront payments which will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial.

As of September 30, 2025, deferred lease-related upfront payments which will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial.

Our policy is to exclude taxes collected from a customer from the transaction price of automotive contracts.

9 unchanged sentences

Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits (Accrued expenses and other current liabilities).

Customer deposits were $3.2 million and $3.0 million as of June 30, 2025 and December 31, 2024, respectively.

Customer deposits were $4.1 million and $3.0 million as of September 30, 2025 and December 31, 2024, respectively.

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

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

As of June 30, 2025, the Company had received approximately 4,000 non-binding, non-refundable B2B pre-orders and 292 B2C non-binding refundable reservations, totaling 4,292 reserved vehicles.

As of September 30, 2025, the Company had received approximately 9,900 non-binding, non-refundable B2B pre-orders and 515 B2C non-binding refundable reservations, totaling 10,415 reserved vehicles.

By comparison, as of December 31, 2024, the Company had received 299 B2C reservations.

The increase in total reservations was primarily driven by the launch of the FX SuperOne vehicle and the expansion of co-creator and reservation programs designed to drive early engagement and demand.

The increase in total reservations was primarily driven by the launch of the FX Super One vehicle and the expansion of co-creator and reservation programs designed to drive early engagement and demand.

The co-creator program leverages early supporters, channel partners, and social media influencers to generate awareness, promote product visibility, and build community participation around the brand and its new product offerings with a particular focus on driving B2C orders.

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Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date.

Deferred revenue related to products and services w as $0.3 million a s of June 30, 2025 and December 31, 2024.

Deferred revenue related to products and services w as insignificant a s of September 30, 2025 and December 31, 2024.

Cost of Automotive Sales Revenue

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R&D expenses consist of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our employees focused on R&D activities, other related costs, depreciation, R&D services provided by co-creators, and an allocation of overhead.

We expect R&D expenses to decrease in the near future as we substantially have completed R&D activities related to the FF 91, offset by increases in R&D expenses related to FX Series vehicles.

While we have we substantially have completed R&D activities related to the FF 91, we expect R&D expenses to increase in the near future as we increases in R&D expenses related to FF 92 and FX Series vehicles.

Sales and Marketing

1 unchanged sentence

Marketing activities are those related to introducing our brand, our electric vehicles, and our electric vehicle prototypes to the market.

We expect Sales and marketing expenses to continue to increase as we bring our electric vehicles to market and seek to generate additional sales.

We expect Sales and marketing expenses to continue to increase as we bring our electric vehicles (in particular, FX Super One and FF 92) to market and seek to generate additional sales.

General and Administrative

2 unchanged sentences

We expect our general and administrative expenses to increase as we continue to grow our business.

Asset Impairment

We recorded impairments in operating expenses related to deposits for future goods and services, property, plant, and equipment based on tangible-asset valuations, and lease right-of-use assets associated with facility exits and changes in our long-term operating plans.

Charges associated with impairment of assets are recognized within operating expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

When we identify impairment indicators under ASC 360—such as changes in regulatory incentives, evolving macroeconomic and geopolitical conditions, market-based indicators of our enterprise value, or updates to our product and manufacturing roadmap—we evaluate the recoverability of our long-lived assets and, when necessary, record impairment charges to reduce their carrying values to estimated fair value.

In the third quarter of 2025, this process resulted in impairment charges on certain long-lived assets, including tooling, machinery, equipment and related assets at vendor sites and at the FF ieFactory California facility in Hanford, California.

Loss from Disposal of Property, Plant and Equipment

Loss (gain) on disposal of property, plant, and equipment relates to the abandonment of certain FF 91 Futurist program construction in progress assets, primarily vendor tooling, machinery, and equipment, due to the redesign of the related FF 91 components and implementation of our cost reduction program.

Loss on disposal of property, plant, and equipment relates to the abandonment of certain FF 91 Futurist program construction in progress assets, primarily vendor tooling, machinery, and equipment, due to the redesign of the related FF 91 components and implementation of our cost reduction program.

Charges associated with disposals are recognized within operating expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

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Interest expense primarily consists of interest on outstanding notes payable not marked to fair value, capital leases, certain supplier payables, and vendor payables in trust.

Other Expense, net

Other income (loss), net consists of foreign currency transaction gains and losses and other expenses such as bank fees and late charges.

Other Income / (Expense), net

Other income, net consists of foreign currency transaction gains and losses and other expenses such as bank fees and late charges.

Foreign currency transaction gains and losses are generated by revaluation of debt and the settlements of invoices denominated in currencies other than the functional currency.

We expect other expense to fluctuate as we continue to transact internationally.

In addition, this line item includes realized and unrealized gains or losses related to digital asset transactions, including amounts earned or impaired from crypto digital asset disposals, and any staking income.

While such activity is currently immaterial, we expect to execute our crypto-related strategy through AIXC following the completion of AIXC’s shareholder meeting and once we have established majority control of its board of directors.

At that point, to the extent crypto operations generate revenue and m eet the recognition criteria under ASC 606, such revenue will be reflected in our consolidated results.

If crypto operations subsequently meet the quantitative thresholds under ASC 280, they may be evaluated for separate segment disclosure in future periods.

Results of Operations

Consolidated Statements of Operations

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2025 2024

6 unchanged sentences

General and administrative 19,690 8,278

Lease impairment, net — 7,616

Loss (gain) on disposal of property, plant, and equipment 276 16

Settlement on accrued research and development expenses — (14,935)

Asset impairment 138,483 57

Loss on disposal of property, plant, and equipment 1,395 2,582

Total operating expenses 172,588 3,763

3 unchanged sentences

Loss on settlement of notes payable (46,517) (59,128)

Loss on settlement of related party notes payable (1,860) —

Interest expense (2,244) (1,442)

Related party interest expense — (1,212)

Other income (loss), net (210) (292)

Other (loss) income, net (99) 361

Loss before income taxes (222,182) (77,687)

2 unchanged sentences

Consolidated Statements of Operations

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2025 2024

6 unchanged sentences

General and administrative 47,461 39,327

Lease impairment, net — 7,616

Loss (gain) on disposal of property, plant, and equipment 320 (71)

Settlement on accrued research and development expenses — (14,935)

Asset impairment 138,483 7,673

Loss on disposal of property, plant, and equipment 1,715 2,511

Total operating expenses 216,604 56,618

6 unchanged sentences

Related party interest expense — (7,812)

Other income (loss), net 1,574 238

Other income, net 1,475 599

Loss before income taxes (357,126) (234,585)

2 unchanged sentences

Revenue (3-Month Overview)

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2025 2024 Amount %

Revenue $ 37 $ 9 $ 28 311.1 %

Revenue decreased by $0.2 million for the three months ended June 30, 2025, compared to the same period in 2024.

Automotive sales revenue was zero million for the three months ended June 30, 2025 compared to $0.3 million for the same period in 2024.

Automotive leasing revenue was $0.1 million for the three months ended June 30, 2025 compared to an insignificant amount for the same period in 2024.

Additionally, one vehicle was delivered during the three months ended June 30, 2025, compared to three for the same period in 2024.

The vehicle delivered in the current period was sold under an arrangement that was combined with a co-creation agreement and accounted for as a single arrangement.

As a result, no automotive sales revenue was recognized for this delivery, and the related consideration was presented net of co-creation fees in marketing expense.

Revenue increased by $28 thousand for the three months ended September 30, 2025, compared to the same period in 2024.

The increase primarily reflects higher automotive sales revenue, which was $37 thousand in the current quarter that represents sales price of the vehicle sold in excess of co-creation expenses incurred in accordance with ASC 606 Revenue from Contracts with Customers .

We recognized no automotive leasing revenue in the current quarter compared to $9 thousand in the prior‑year quarter.

One vehicle was sold and delivered under a co‑creation arrangement with a promotional partner during the current quarter.

Revenue (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Revenue $ 407 $ 304 $ 103 33.9 %

Revenue increase d by $0.1 million for the six months ended June 30, 2025, compared to the same period in 2024.

Automotive sales revenue was $0.0 million for the six months ended June 30, 2025 compared to $0.3 million for the same period in 2024.

Automotive leasing revenue was $0.4 million for the six months ended June 30, 2025 compared to an insignificant amount for the same period in 2024.

Additionally, two vehicle was delivered during the six months ended June 30, 2025, compared to three for the same period in 2024.

Additionally, two vehicles were delivered during the six months ended June 30, 2025, compared to three in the same period in 2024.

One of the vehicles delivered in the current period was sold under

an arrangement that was combined with a co-creation agreement and accounted for as a single arrangement.

As a result, no automotive sales revenue was recognized for this delivery, and the related consideration was presented net of co-creation fees in marketing expense.

Revenue increase d by $103 thousand for the nine months ended September 30, 2025, compared to the same period in 2024.

During the current year we recognized $37 thousand in automotive sales and $370 thousand in leasing revenue.

During the comparative prior year we recognized $312 thousand in automotive sales, and adjusted leasing revenue downwards by $8 thousand.

The amount of automotive sales recognized represents sales price of the vehicle sold in excess of co-creation expenses incurred in accordance with ASC 606 Revenue from Contracts with Customers .

Two vehicles were delivered in 2025 versus three in 2024.

Cost of Revenue (3-Month Overview)

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2025 2024 Amount %

Cost of revenue $ 34,256 $ 21,453 $ 12,803 59.7 %

Cost of revenue increased by $5.9 million for the three months ended June 30, 2025, compared to the same period in 2024.

This increase was primarily driven by higher depreciation expenses as equipment, an increase in inventory reserves, and expenses related to FF ieFactory California lease agreement, which commenced in late 2023, and the collateralized loan financing, initiated in 2024.

During the three months ended June 30, 2025, we continued expanding our production capabilities to include both luxury and more affordable electric vehicles.

This strategic shift, aligned with broader market demand, is expected to increase fixed cost allocations to cost of revenues as new equipment is placed into service.

We remain focused on optimizing production efficiencies and preparing the FF ieFactory California facility for planned new product lines.

For the three months ended June 30, 2025, U.S.

tariffs on electric vehicle components imported from China did not have a material impact on the Company’s cost of goods sold.

This was primarily due to the Company’s low production volume and the utilization of existing inventory that was procured prior to recent tariff adjustments.

However, as production scales and the Company sources a greater volume of materials subject to current tariff rates, these duties may increase per-unit build costs in future periods.

Management continues to monitor trade developments and assess sourcing strategies to mitigate potential cost escalation.

Cost of revenue increased by $12.8 million for the three months ended September 30, 2025, compared to the same period in 2024.

The increase reflects higher depreciation as additional tooling, machinery, and equipment were placed into service, along with higher facility lease and equipment-financing costs to support production readiness at our California manufacturing facility and an overseas pilot facility in the UAE.

In addition, the Company recorded a significant increase in inventory reserves to address aging or excess materials and components that no longer align with current build plans.

Changes in tariff rates on certain imported parts also contributed to these reserves by rendering select legacy components uneconomic to use.

For the three months ended September 30, 2025, the Company recorded approximately $7.1 million of additions to the inventory reserve, compared to an immaterial net change in the three months ended September 30, 2024.

The inventory reserve increased from approximately $2.8 million at September 30, 2024 to approximately $14.2 million at September 30, 2025.

Cost of Revenue (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Cost of revenue $ 82,549 $ 63,110 $ 19,439 30.8 %

Cost of revenue increased by $6.6 million for the six months ended June 30, 2025, compared to the same period in 2024.

During the six months ended June 30, 2025, we continued expanding our production capabilities to include both luxury and more affordable electric vehicles.

This strategic shift, aligned with broader market demand, is expected to increase fixed cost allocations to cost of revenues as new equipment is placed into service.

We remain focused on optimizing production efficiencies and preparing the FF ieFactory California facility for planned new product lines.

For the six months ended June 30, 2025, U.S.

tariffs on electric vehicle components imported from China did not have a material impact on the Company’s cost of goods sold.

This was primarily due to the Company’s low production volume and the utilization of existing inventory that was procured prior to recent tariff adjustments.

However, as production scales and the Company sources a greater volume of materials subject to current tariff rates, these duties may increase per-unit build costs in future periods.

Management continues to monitor trade developments and assess sourcing strategies to mitigate potential cost escalation.

Cost of revenue increased by $19.4 million for the nine months ended September 30, 2025, compared to the same period in 2024.

he increase reflects higher depreciation as additional tooling, machinery, and equipment were placed into service, along with higher facility lease and equipment-financing costs to support production readiness at our California manufacturing facility and an overseas pilot facility in the UAE.

In addition, the Company recorded a net increase in inventory reserves to address aging or excess materials and components that no longer align with current build plans.

Changes in tariff rates on certain imported parts contributed to these reserve set-ups by rendering select legacy components uneconomic to use.

Net additions to the inventory reserve totaled approximately $10.9 million for the nine months ended September 30, 2025 (including approximately $7.1 million in the third quarter), compared to an immaterial net change for the nine months ended September 30, 2024.

The inventory reserve increased from approximately $2.8 million at September 30, 2024 to approximately $14.2 million at September 30, 2025.

Research and Development (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Research and development $ 6,640 $ 5,180 $ 1,460 28.2 %

R&D expense increased by $1.7 million for the three months ended June 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $2.8 million increase in salary and headcount costs, as well as a $0.4 million increase in technology infrastructure to support product development and collaboration tools.

These increases were partially offset by a $1.9 million reduction in other R&D-related IT costs as part of cost management initiatives.

Current R&D efforts are primarily focused on supporting the development and production readiness of the SuperOne vehicle.

As the Company transitions from an R&D-intensive phase to one focused on commercialization, resources are being strategically reallocated from R&D to manufacturing.

This includes coordination with the flexible production line at our Hanford facility, which is being configured to support scalable manufacturing across multiple vehicle variants.

While internal R&D activity has begun to normalize, we continue to advance key initiatives through a combination of targeted internal development and expanded collaboration with external technology partners.

In addition, we are broadening our EV technology roadmap to include more affordable platforms, enabling us to address both luxury and accessible segments in line with industry trends.

R&D expense increased by $1.5 million for the three months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $3.3 million rise in operating consumables and equipment rental, including costs related to prototype parts, vehicle purchases for testing, and equipment and services supporting the development of the FX vehicle platform.

These increases were partially offset by a $1.0 million reduction in wages, benefits, and related personnel costs, as well as a $0.6 million decrease in other R&D-related IT expenses.

Current R&D efforts are focused on final validation, homologation, and production readiness of the FX Super One vehicle.

Activities during the quarter included performance testing, engineering refinement, and supplier integration in preparation for initial production.

The Company also supported early technical operations in the United Arab Emirates (UAE) to align engineering standards and tooling for future regional assembly under its global bridge strategy.

As the Company transitions from intensive R&D to commercialization, resources are being allocated toward manufacturing engineering, quality assurance, and process optimization.

Internal R&D activity remains centered on improving vehicle performance, safety systems, and software functionality while maintaining coordination with external technology and supply-chain partners to ensure readiness for scaled production.

Research and Development (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Research and development $ 18,063 $ 15,185 $ 2,878 19.0 %

R&D expense increased by $1.4 million for the six months ended June 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $2.5 million increase in salaries and headcount costs and a $2.4 million increase resulting from lower allocations to cost of revenue in 2025.

These increases were partially offset by a $3.5 million decrease in information technology expenses.

Overall, these shifts resulted in more expenses remaining in the R&D category this year.

Our current R&D activities are heavily focused on supporting the engineering, design, and production readiness of the SuperOne vehicle.

As the Company transitions from a development phase to production, R&D resources are being strategically directed toward finalizing the SuperOne platform and preparing for scalable manufacturing.

This includes coordination with the flexible production line at the Hanford facility, which is designed to accommodate multiple vehicle variants.

While overall R&D spending is beginning to moderate, we continue to leverage a combination of internal capabilities and external partnerships to sustain innovation efficiently.

We are also broadening our technology portfolio to include more accessible EV platforms, allowing us to serve both luxury and broader market segments in alignment with evolving industry demand.

R&D expense increased by $2.9 million for the nine months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $5.8 million rise in operating consumables and equipment rental—reflecting higher costs for prototype parts, vehicle purchases for testing, and services supporting development of the FX vehicle platform—as well as $2.4 million of lower cost allocations to cost of sales in the current period.

These increases were partially offset by a $4.2 million reduction in IT-related R&D expenses and a $0.6 million decrease in wages and related benefits.

Throughout 2025, R&D activities have primarily supported the FX Super One program through final validation, U.S.

homologation testing, and production readiness efforts.

Development work has included vehicle performance and durability testing, integration of Advanced Driver Assistance Systems (ADAS), supplier coordination, and prototype tooling.

The Company also provided engineering support for technical preparations in the United Arab Emirates (UAE) to align manufacturing standards and production planning under its global bridge strategy.

As the Company progresses from an R&D-intensive phase toward commercial production, resources are being strategically allocated to manufacturing engineering, quality validation, and process optimization.

Current R&D initiatives remain focused on vehicle performance, safety system enhancements, and software refinement, in close collaboration with key technology and supply-chain partners to ensure readiness for scalable FX Series production.

Sales and Marketing (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Sales and marketing $ 6,380 $ 2,601 $ 3,779 145.3 %

Sales and marketing expense increased by $0.1 million for the three months ended June 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $1.0 million rise in marketing expenses related to the promotion of the new FX line and a $0.1 million increase in professional service costs.

These increases were partially offset by a $0.8 million reduction in rent and a $0.3 million decrease in compensation costs.

Although headcount in the sales and marketing function has been reduced, the Company continues to scale its outreach through a Co-Creation strategy that engages high-profile influencers, industry pioneers, and social media personalities.

This model allows us to extend brand awareness efficiently by integrating key stakeholders into the vehicle launch process and public-facing campaigns.

We also held VIP experiences and participated in high-impact industry events to generate media coverage and drive customer engagement.

These efforts helped increase brand visibility and contributed to a rise in customer reservations.

This lean, targeted approach has allowed us to maintain a strong marketing presence while optimizing internal cost structure.

Sales and marketing expense increased by $3.8 million for the three months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $2.9 million rise in marketing expenses related to the launch and promotion of the FX Super One, which debuted in July.

This increase was largely attributable to campaign activities executed by our U.S.

marketing team, including expanded influencer and social media initiatives, promotional content development, and digital media placements aimed at building awareness and customer engagement around the new vehicle.

Additionally, marketing costs rose in our Middle East operations due to increased event-based outreach and brand activation efforts designed to support entry into new international markets.

The remaining $0.8 million increase was due to higher wages and benefits, primarily reflecting staffing to support expanded marketing efforts during the launch period.

These investments reflect the Company’s strategic focus on product visibility, brand development, and customer engagement as it transitions further into the commercialization phase of the FX product line.

The marketing strategy emphasizes building awareness and credibility through curated events, limited-scale experiential programs, and earned-media exposure rather than large-scale paid advertising.

Although headcount within the sales and marketing function remains lean, the Company continues to leverage its Co-Creation marketing model, which integrates key opinion leaders, early adopters, and strategic partners into launch activities and promotional campaigns.

This approach has expanded brand visibility and contributed to increased customer reservations while maintaining disciplined spending.

The Company expects to continue utilizing high-impact events and digital platforms to deepen market penetration and strengthen global brand positioning as FX Super One deliveries approach.

Sales and Marketing (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Sales and marketing $ 10,882 $ 6,857 $ 4,025 58.7 %

Sales and marketing expense increased by $0.2 million for the six months ended June 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $1.7 million rise in marketing expenses related to the promotion of the new FX line and a $0.2 million increase in compensation costs, despite a reduction in sales and marketing personnel.

These increases were partially offset by a $1.3 million reduction in rent.

The Company continues to execute an efficient marketing strategy by leveraging its Co-Creation model, which engages industry pioneers, high-profile influencers, and social media personalities to promote the brand.

This collaborative approach enables us to extend our marketing reach and generate visibility across key customer segments with lower internal resources.

In addition, we hosted targeted launch events, VIP showcases, and participated in major automotive industry exhibitions.

These immersive experiences contributed to growing customer interest and increased vehicle reservations, particularly for the FX line.

The combination of external partnerships and digital engagement has allowed us to maintain brand momentum while controlling costs

Sales and marketing expense increased by $4.0 million for the nine months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $4.6 million rise in marketing expenses related to the launch and promotion of the FX Super One, including digital campaigns, content development, influencer engagement, and event activations primarily led by the U.S.

Additional costs were incurred from expanded marketing activities in the Middle East to support brand visibility in international markets.

Compensation costs increased by $0.9 million, reflecting selective additions to sales and marketing personnel and other related payroll costs.

These increases were partially offset by a $1.4 million decrease in rent and related expense.

Throughout 2025, the Company has executed an efficient and event-driven marketing strategy centered on its Co-Creation model, which engages industry leaders, influencers, and early adopters to promote the brand and its vehicles.

Using this approach, the Company expanded its global presence through high-impact events, including the FX Super One global launch in Los Angeles, the Pebble Beach showcase, and the 919 Futurist Day & Stockholders’ Community Day.

These initiatives strengthened brand awareness and customer engagement while maintaining disciplined marketing spend and optimized resource allocation.

The Company also advanced its international marketing footprint, particularly in the Middle East, through localized brand activations, regional events, and customer outreach aligned with future market entry plans.

These activities enhanced global brand recognition and contributed to increased FX Super One reservations.

The combination of targeted experiential events, digital marketing initiatives, and strategic influencer partnerships has enabled the Company to sustain brand momentum and visibility while controlling overall marketing costs.

General and Administrative (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

General and administrative $ 19,690 $ 8,278 $ 11,412 137.9 %

General and administrative expense decreased by $3.1 million for the three months ended June 30, 2025, compared to the same period in 2024.

The decrease was primarily driven by a $2.9 million reduction in insurance costs—mainly due to lower directors and officers’ insurance premiums—a $3.5 million increase in allocation to cost of goods sold, and a $2.5 million decrease in operating consumables.

These reductions were partially offset by a$2.1 million increase in compensation and a $1.7 million increase in general expenses.

This net decrease reflects the impact of our ongoing cost-optimization initiatives aimed at increasing administrative efficiency.

Key measures included renegotiating vendor contracts, consolidating office space to reduce occupancy expenses, and restructuring elements of our workforce.

These actions have allowed us to lower baseline overhead while maintaining necessary investments in personnel, advisors, and infrastructure critical to executing on our operational and strategic priorities.

General and administrative expense decreased by $11.4 million for the three months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $3.7 million rise in wages and benefit costs, due to higher headcount in both the U.S.

and China, as well as a legal bonus paid in accordance with a contractual agreement.

Professional fees increased by $3.1 million, reflecting higher legal expenses and service costs under the FFGP agreement.

In addition, operating consumables and equipment rentals increased by $2.7 million, and a $1.5 million increase in depreciation and amortization.

These increases reflect ongoing support for corporate operations and strategic initiatives during the period.

This net increase primarily reflects higher corporate activity during the period, including expanded legal, Sarbanes-Oxley compliance, and professional service costs.

Throughout the quarter, the Company supported ongoing regulatory and governance matters, including costs related to the SEC and temporary governance adjustments.

In addition, higher staffing levels in both the U.S.

and China contributed to increased wages and benefits, while consulting and operational support costs rose in connection with strategic initiatives and global administrative coordination.

These increases were partially offset by continued efficiency efforts, such as vendor consolidation and administrative process streamlining, which are expected to moderate future expense growth.

General and Administrative (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

General and administrative $ 47,461 $ 39,327 $ 8,134 20.7 %

General and administrative expense decreased by $3.3 million for the six months ended June 30, 2025, compared to the same period in2024.

The decrease was primarily driven by a $5.8 million reduction in insurance costs—mainly due to lower directors and officers’ insurance premiums—a $4.3 million reduction in allocation to cost of goods sold, and a $0.8 million decrease in information technology expenses.

These reductions were partially offset by a $4.8 million increase in compensation and a $1.3 million increase in professional service fees.

This net decrease reflects the continued impact of our cost-optimization initiatives aimed at improving the efficiency of general and administrative operations.

Key actions during the period included renegotiating vendor agreements, consolidating office space to lower occupancy costs, and restructuring portions of our workforce.

These measures have allowed us to reduce overhead in areas such as insurance and IT, while preserving investment capacity for critical personnel and external advisors supporting the Company’s core business objectives.

Lease Impairment, net (3-Month Overview)

Three Months Ended June 30, Change

General and administrative expense increased by $8.1 million for the nine months ended September 30, 2025, compared to the same period in 2024.

The increase was primarily driven by a $8.5 million rise in wages and benefit costs due to increased headcount and a egal bonus paid under a contractual agreement.

Professional fees increased by $4.4 million, reflecting higher legal expenses, audit and advisory fees, SOX compliance support, and services provided under the FFGP agreement.

increases were partially offset by a $4.4 million reduction in insurance costs, primarily due to lower directors and officers (D&O) insurance premiums and other corporate insurance savings.

Throughout 2025, the Company continued to experience elevated general and administrative costs as it managed increased legal, compliance, and governance requirements.

These included expenses related to the SEC investigation, implementation of temporary governance adjustments, and enhanced Sarbanes-Oxley compliance activities.

Additional professional service costs were incurred for legal, audit, and advisory support, as well as consulting fees associated with strategic and operational initiatives.

Staffing levels remained higher year-over-year in both the U.S.

and China to support these functions, contributing to increased wages and benefits.

While efficiency programs such as vendor consolidation, office space optimization, and administrative streamlining helped partially offset these increases, overall G&A expenses remained higher due to the Company’s ongoing regulatory, compliance, and governance commitments.

Asset Impairment (3-Month Overview)

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Lease impairment, net $ — $ 7,616 $ (7,616) NM*

Asset impairment $ 138,483 $ 57 $ 138,426 NM*

NM = not meaningful

During the three months ended June 30, 2024, we recorded a $7.6 million impairment loss related to lease right-of-use (“ROU”) assets.

During the three months ended September 30, 2025, we recorded an $138.5 million impairment loss related to long-lived assets, which based on the findings of an independent third-party tangible asset valuation study, the Company recorded an impairment charge of $8.5 million and $130.0 million, related to Deposits and Other Current Assets and Property, Plant, and Equipment, Net , respectively.

The impairment charge in the current year quarterly period was primarily attributable to certain tooling, machinery, and equipment located at vendor sites and at the Company’s FF ieFactory California production facility in Hanford, California, that are no longer fully supported under updated operational plans and near-term production forecasts, as the Company shifts focus from FF 91 program activities to the planned FF 92 upgrade program and to reorganization and retooling in preparation for the commercial production of the FX Super One.

During the three months ended September 30, 2024, we recorded a $0.1 million impairment loss related to lease right-of-use (“ROU”) assets.

This loss was associated with our decision to exit a leased store facility, a research facility, and an administrative office in China.

These actions were part of broader efforts to negotiate early lease terminations with landlords and streamline our global footprint.

Lease Impairment, net (6-Month Overview)

Six Months Ended June 30, Change

Asset Impairment (9-Month Overview)

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Lease impairment, net $ — $ 7,616 $ (7,616) NM*

Asset impairment $ 138,483 $ 7,673 $ 130,810 NM*

NM = not meaningful

During the six months ended June 30, 2024, we recorded a $7.6 million impairment loss related to lease right-of-use (“ROU”) assets.

During the nine months ended September 30, 2025, we recorded a $138.5 million impairment loss related to long-lived assets, which based on the findings of an independent third-party tangible asset valuation study, the Company recorded an impairment charge of $8.5 million and $130.0 million, related to Deposits and Other Current Assets and Property, Plant, and Equipment, Net , respectively.

The impairment in the current-year period was primarily attributable to certain tooling, machinery, and equipment located at vendor sites and at the Company’s FF ieFactory California production facility in Hanford, California, that are no longer fully supported under updated operational plans and near-term production forecasts, as the Company shifts focus from FF 91 program activities to the planned FF 92 upgrade program and to reorganization and retooling in preparation for the commercial production of the FX Super One.

During the nine months ended September 30, 2024, we recorded a $7.7 million impairment loss related to lease right-of-use (“ROU”) assets.

This loss resulted from moving out of a leased store facility, a leased research facility, and an administrative facility in China, as we worked with landlords to negotiate the related lease terminations.

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

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss (gain) on disposal of property, plant, and equipment $ 276 $ 16 $ 260 1625.0 %

Loss (gain) on disposal of property, plant, and equipment increased by approximately $0.3 million for the three months ended June 30, 2025, compared to the same period in 2024.

Loss on disposal of property, plant, and equipment $ 1,395 $ 2,582 $ (1,187) (46.0) %

Loss on disposal of property, plant, and equipment increased by approximately $1.2 million for the three months ended September 30, 2025, compared to the same period in 2024.

We dispose of equipment when the assets become obsolete, costly to maintain, or are replaced by more efficient technologies.

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

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss (gain) on disposal of property, plant, and equipment $ 320 $ (71) $ 391 (550.7) %

Loss (gain) on disposal of property, plant, and equipment increased by approximately $0.3 million for the six months ended June 30, 2025, compared to the same period in 2024.

Loss on disposal of property, plant, and equipment $ 1,715 $ 2,511 $ (796) (31.7) %

Loss on disposal of property, plant, and equipment increased by approximately $0.8 million for the nine months ended September 30, 2025, compared to the same period in 2024.

We dispose of equipment when the assets become obsolete, costly to maintain, or are replaced by more efficient technologies.

Change in Fair Value of Notes Payable, Warrant Liabilities, and Derivative Call Options (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Change in fair value of notes payable, warrant liabilities, and derivative call options $ 31,341 $ 8,287 $ 23,054 278.2 %

During the three months ended June 30, 2025 we recognized an aggregate day-one loss of $12.5 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants.

By contrast, during the same period in 2024,

these instruments were calibrated to the cash proceeds received and did not result in a day-one loss.

The 2025 loss was further impacted by $31.8 million loss from subsequent fair value remeasurement.

The re-measurement was primarily driven by increases in the Company’s stock price during the period compared to preceding three month.

However, the increase in the total monetary impact was attributable to the following factors.

During the three months ended June 30, 2025 we recognized a $8.7 million loss from the change in fair value of the Incremental Warrants.

There was no comparable instrument outstanding during the three months ended June 30, 2024.

During the three months ended June 30, 2025 we recognized a $14.3 million loss from the change in fair value of the SPA Portfolio warrants compared to a $0.2 million gain during the same period in 2024.

During the three months ended September 30, 2025 we recognized an aggregate day-one loss of $24.4 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants as compared to $9.7 million during the same period in 2024.

The 2025 day-one loss was offset by gain from subsequent fair value remeasurement of $58.8 million and $18.8 million, respectively.

The downward re-measurement was primarily driven by decreases in the Company’s stock price at the end of the period compared to preceding three month.

The increase in gains from re-measurement in the total monetary impact was attributable to the following factors.

During the three months ended September 30, 2025 we recognized a $26.5 million gain from the change in fair value of the Incremental Warrants.

Comparable instrument outstanding during the three months ended September 30, 2024 were assigned a fair value of zero, as their terms and market conditions resulted in no economic value being attributed to them as of the measurement date.

During the three months ended September 30, 2025 we recognized a $14.2 million gain from the change in fair value of the SPA Portfolio warrants compared to a $3.9 million gain during the same period in 2024.

This increase was largely driven by the year-over-year growth in the number of SPA Portfolio warrants outstanding.

Beginning in the second half of 2024, we began issuing SPA Portfolio warrants equal to 100% of the shares issuable upon conversion of the aggregate principal amount of the applicable SPA Portfolio Note, significantly increasing the number of warrants outstanding year over year.

As of June 30, 2025 there were 52,596,811 SPA Portfolio third party warrants outstanding compared to 13,355 outstanding as of June 30, 2024.

During the three months ended June 30, 2024, the fair value of our outstanding notes and warrants were revalued at higher values than in the preceding three month period due to pricing inputs that use the market price of our Common Stock and debt discount rate, which experienced a relative increase.

As of September 30, 2025 there were 54,718,369 SPA Portfolio liability classified third party warrants outstanding compared to 5,931,638 outstanding as of September 30, 2024.

Change in Fair Value of Notes Payable, Warrant Liabilities, and Derivative Call Options (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Change in fair value of notes payable, warrant liabilities, and derivative call options $ 36,721 $ 28,927 $ 7,794 26.9 %

During the six months ended June 30, 2025 we recognized an aggregate day-one loss of $36.1 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants.

By contrast, during the same period in 2024, these instruments were calibrated to the cash proceeds received and did not result in a day-one loss.

This loss was offset by a $43.7 million net gain from subsequent remeasurement.

During the nine months ended September 30, 2025 we recognized an aggregate day-one loss of $60.5 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants, as compared to $8.9 million during the same period in 2024.

This loss was offset by a net gain from subsequent remeasurement of $102.5 million and $39.7 million, respectively.

Our outstanding notes and warrants were remeasured at predominantly lower fair values due to pricing inputs that use the market price of our Common Stock, which experienced a decline during the period.

The fair value of the SPA Portfolio Notes and associated warrants is influenced by the relationship between the Company’s stock price and the applicable conversion or exercise prices.

As of June 30, 2025, the stock price was $1.68, compared to a weighted average conversion price of $1.225 for the SPA Portfolio Notes and warrant exercise prices ranging from $1.16 to $1.464.

While these instruments remained in-the-money, the narrowing spread relative to December 31, 2024—when the stock price was $2.43 — reduced their intrinsic value.

As of September 30,, the stock price was $1.30, compared to a weighted average conversion price of $1.66 for the SPA Portfolio Notes and warrant exercise prices ranging from $1.16 to $2.02.

While some instruments remained in-the-money, the narrowing spread relative to December 31, 2024 — when the stock price was $2.43 — reduced their intrinsic value.

This decline in intrinsic value contributed to the decrease in fair value and the resulting net gains recognized during the period.

Specifically, during the six months ended June 30, 2025 we recognized a $23.6 million net gain from the change in fair value of the Incremental Warrants.

There was no comparable instrument outstanding during the six months ended June 30, 2024.

During the six months ended June 30, 2025 we recognized a $7.1 million net gain from the change in fair value of the SPA Portfolio Note warrants compared to a zero net gain during the same period in 2024.

Specifically, during the nine months ended September 30, 2025 we recognized a $50.1 million net gain from the change in fair value of the Incremental Warrants.

There was no comparable instrument outstanding during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025 we recognized a $21.3 million net gain from the change in fair value of the third party SPA Portfolio Note warrants compared to a $3.9 million net gain during the

same period in 2024.

This increase was largely driven by the year-over-year growth in the number of SPA Portfolio Note warrants outstanding.

Beginning in the second half of 2024, we began issuing SPA Portfolio Note warrants equal to 100% of the shares issuable upon conversion of the aggregate principal amount of the applicable SPA Portfolio Note, significantly increasing the number of warrants outstanding year over year.

As of June 30, 2025 there were 52,596,811 SPA Portfolio third party warrants outstanding compared to 13,355 outstanding as of June 30, 2024.

During the six months ended June 30, 2024, the fair value of our outstanding notes and warrants were revalued at lower values than in the preceding six month periods.

Our outstanding notes and warrants were remeasured at predominantly lower fair values due to pricing inputs that use the market price of our Common Stock and debt discount rate, which have experienced a decline.

As of September 30, 2025 there were 54,718,369 SPA Portfolio third party warrants outstanding compared to 5,931,638 outstanding as of September 30, 2024.

Change in Fair Value of Related Party Notes Payable and Related Party Warrant Liabilities (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Change in fair value of related party notes payable, warrant liabilities, and derivative call options $ 2,144 $ 654 $ 1,490 227.8 %

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $4.8 million for the three months ended June 30, 2025, when compared with the same period in 2024.

Significant driving factors include (1) an increase in related party activity, such as issuance and conversion of the related party 2025 March Unsecured SPA Notes, warrants, and Incremental Warrants and (2) the recognition of day-one losses upon the issuance of related party 2025 March Unsecured SPA Notes and associated instruments.

During the three months ended June 30, 2025 we issued $3.0 million of related party SPA Portfolio Notes.

Upon issuance the Company recognized a day-one loss of $2.3 million, as the combined fair value of the SPA Portfolio Note, SPA Portfolio Note Warrant, and Incremental Warrant exceeded the cash proceeds received.

These issuance-date losses were further increased by a $2.7 million loss from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of June 30, 2025.

The fair value of our related party instruments increased during the period ended June 30, 2025, primarily due to a 48.7% increase in our Class A Common Stock price over the quarter.

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

The gain from Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $1.5 million for the three months ended September 30, 2025, when compared with the same period in 2024.

The increase was primarily driven by a higher volume of related party instruments outstanding during the 2025 period.

During the nine months ended September 30, 2025, we issued to a related party 2025 March Unsecured SPA Notes and associated common stock warrants and Incremental Warrants.

As of September 30, 2025, all of the common stock warrants and Incremental Warrants remained outstanding.

The fair value of our related party instruments decreased during the period ended September 30, 2025, primarily due to a decrease in our Class A Common Stock price over the quarter.

This resulted in recognized gains of approximately $1.0 million related to the common stock warrants and approximately $1.1 million, related to the Incremental Warrants.

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

Change in Fair Value of Related Party Notes Payable and Related Party Warrant Liabilities (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Change in fair value of related party notes payable, warrant liabilities, and derivative call options $ (3,283) $ 315 $ (3,598) (1142.2) %

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $5.1 million for the six months ended June 30, 2025, when compared with the same period in 2024.

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $3.6 million for the nine months ended September 30, 2025, when compared with the same period in 2024.

Significant driving factors include (1) an increase in related party activity, such as issuance and conversion of the related party 2025 March Unsecured SPA Notes, warrants, and Incremental Warrants and (2) the recognition of day-one losses upon issuance of related party 2025 March Unsecured SPA Notes and associated instruments.

We issued $4.6 million of rel ated party SPA Portfolio Notes during the six months ended June 30, 2025.

We issued $4.7 million of rel ated party SPA Portfolio Notes during the nine months ended September 30, 2025.

Upon issuance the Company recognized a day-one loss of $3.6 million, as the combined fair valu e of the SPA Portfolio Note, SPA Portfolio Note Warrant, and Incremental Warrant exceeded the cash proceeds received.

These issuance-date losses were further increased by $1.8 million loss from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of June 30, 2025.

The fair value of our related party instruments increased during the period ended June 30, 2025, primarily due to a 33% in our Class A Common Stock price over the period since the first issuance of 2025 March Unsecured SPA Notes to related parties in March 2025.

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

These issuance-date losses were further offset by net $0.5 million gain from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of September 30, 2025.

The fair value of our related party instruments decreased during the period ended September 30, 2025, primarily due to a decrease in our Class A Common Stock price over the period since the first issuance of 2025 March Unsecured SPA Notes to related parties in March 2025.

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

Loss on Settlement of Notes Payable (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss on settlement of notes payable $ (46,517) $ (59,128) $ 12,611 (21.3) %

The $24.5 million decrease in Loss on settlement of notes payable for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily driven by a lower effective conversion ratio.

The notes converted during the three months ended June 30, 2025 predominantly carried a 10% interest rate and did not include an interest make-whole provision.

In contrast, the notes converted during the same period in 2024 bore a 15% interest rate and included an interest make-whole through maturity.

The interest make-whole provision, which was eliminated pursuant to the Waiver Agreements entered into on August 2, 2024, and higher interest rate resulted in a greater number of shares being issued per dollar of principal converted during the three months ended June 30, 2024.

As a result, the 2024 conversions generated a higher loss on settlement compared to 2025.

The $12.6 million period-over-period decrease in Loss on settlement of notes payable primarily reflects the significantly lower volume of the of debt converted during the 2025 period, partially offset by a higher loss recognized per dollar of principal converted in the 2025 period.

During the three months ended September 30, 2025, the Company converted $34.4 million of SPA Notes into 30,945,927 shares of Class A common stock, compared to $62.0 million converted into $19,112,032 shares during the same period in 2024.

Although more shares were issued per dollar of principal converted during the 2025 period, the average fair value of those shares was substantially lower due to the decline in the Company’s stock price.

More investor-favorable conversion pricing, arising from the December 2024 SPA and the full anti-ratchet provisions in the Company’s convertible instruments, increased the number of shares required to settle each dollar of debt.

During the three months ended September 30, 2025, the Company’s stock price experienced a temporary increase, stimulating the Note conversion at that time.

Consequently, the fair value of equity delivered exceeded the fair value of the notes converted by a greater extent, resulting in a higher loss on extinguishment per dollar of principal the three months ended September 30, 2025.

Loss on Settlement of Notes Payable (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss on settlement of notes payable $ (84,895) $ (117,509) $ 32,614 (27.8) %

The $20.0 million decrease in Loss on settlement of notes payable for the six months ended June 30, 2025, as compared to the same period in 2024, was primarily driven by a lower effective conversion ratio.

The notes converted during the six months ended June 30, 2025 predominantly carried a 10% interest rate and did not include an interest make-whole provision.

In contrast, the notes converted during the same period in 2024 bore a 15% interest rate and included an interest make-whole through maturity.

As a result, the 2024 conversions generated a higher loss on settlement compared to 2025.

The $32.6 million period-over-period decrease in Loss on settlement of notes payable reflects both a lower loss recognized per dollar of principal converted in 2025 and, to a lesser extent, a lower volume of the of debt conversions.

During the nine months of 2025, the Company converted $89.2 million of principal into 82,657,564 shares of Class A common stock, compared to $96.3 million of principal converted into 29,117,806 shares during the nine months of 2024.

Although more shares were issued per dollar of principal converted in 2025, the average fair value of those shares was substantially lower due to the decline in the Company’s stock price.

The nine-month average loss per dollar of principal declined to $0.95 in 2025 from $1.19 in 2024.

This period-over-period improvement was primarily driven by differences in conversion pricing mechanics and the relative timing of stock price movements between the periods.

During the first six months of 2024, conversions occurred at fixed conversion prices in an environment where the Company’s stock price increased prior to settlement, resulting in higher extinguishment losses as the fair value of equity delivered exceeded the carrying amount of the debt extinguished.

In contrast, the 2025 conversions incorporated variable pricing features for the whole period that generally reduced the differential between the fair value of equity issued and the carrying amount of the Notes settled, particularly during periods of lower and less volatile stock prices.

Additionally, the lower loss per dollar in 2025 reflects the reduced contractual interest rate on the notes (10% in 2025 versus 15% in 2024) and the absence of make-whole provisions that were applicable to certain conversions during the first half of 2024.

Loss on Settlement of Related Party Notes Payable (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss on settlement of related party notes payable $ — $ — $ — — %

During the three months ended June 30, 2025 a related party converted a $2.1 million note in exchange for 2,017,794 shares of our Class A Common Stock.

We recognized a $1.9 million Loss on settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt instrument.

There were no related party debt conversions during the three months ended June 30, 2024.

There were no related party conversion activity in either of the periods.

Loss on Settlement of Related Party Notes Payable (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Loss on settlement of related party notes payable $ (3,040) $ (14,295) $ 11,255 (78.7) %

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

We recognized a $3.0 million Loss on settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt.

During the six months ended June 30, 2024 we recognized a $14.1 million loss on related party notes related to interest, penalties, and principal increases resulting from our breach of the agreement with Chongqing Leshi Small Loan Co., Ltd.

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

We recognized a $3.0 million Loss on

settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt.

During the nine months ended September 30, 2024 we recognized a $14.1 million loss on related party notes related to interest, penalties, and principal increases resulting from our breach of the agreement with Chongqing Leshi Small Loan Co., Ltd.

(“Chongqing”), as discussed in Note 9, Related Party Transactions in the notes to the Unaudited Condensed Consolidated Financial Statements.

There was no breach of our agreement with Chongqing during the six months ended June 30, 2025 and 2024.

There was no breach of our agreement with Chongqing during the nine months ended September 30, 2025 and 2024.

Interest Expense (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Interest expense $ (2,244) $ (1,442) $ (802) 55.6 %

Interest expense decreased by approximately $0.9 million for the three months ended June 30, 2025, compared to the same period in 2024.

Interest expense decreased by approximately $0.8 million for the three months ended September 30, 2025, compared to the same period in 2024.

This decrease primarily reflects the allocation of interest expense between reporting quarters, partially offset by higher interest costs associated with our financial obligations related to the FF ieFactory California manufacturing facility in Hanford, California.

1 unchanged sentence

Interest Expense (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Interest expense $ (5,358) $ (5,386) $ 28 (0.5) %

Interest expense decreased by approximately $0.9 million for the six months ended June 30, 2025, compared to the same period in 2024.

Interest expense decreased by approximately $0.8 million for the nine months ended September 30, 2025, compared to the same period in 2024.

This decrease was primarily due to interest expense allocated to construction in progress, partially offset by higher interest costs associated with our financial obligations related to the FF ieFactory California manufacturing facility in Hanford, California.

1 unchanged sentence

Related Party Interest Expense (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Related party interest expense $ — $ (1,212) $ 1,212 (100.0 %)

Related party interest expense decreased by $1.5 million for the three months ended June 30, 2025, compared to the same period in 2024.

Related party interest expense decreased by $1.2 million for the three months ended September 30, 2025, compared to the same period in 2024.

The decrease was primarily driven by our default in the first quarter of 2024 on the loan with our related party lender, Chongqing, which triggered retroactive interest charges and penalties under the prior agreement.

1 unchanged sentence

Related Party Interest Expense (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Related party interest expense $ — $ (7,812) $ 7,812 (100.0 %)

Related party interest expense decreased by $6.6 million for the six months ended June 30, 2025, compared to the same period in 2024.

Related party interest expense decreased by $7.8 million for the nine months ended September 30, 2025, compared to the same period in 2024.

1 unchanged sentence

Other Expense, net (3-Month Overview)

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Other income (loss), net $ (210) $ (292) $ 82 (28.1 %)

Other loss, net decreased by approximately $0.1 million for the three months ended June 30, 2025, compared to the same period in 2024.

During 2025, the U.S.

dollar’s continued strengthening against the Chinese yuan (CNY) resulted in a foreign currency transaction loss within Other income (loss), net.

However, the extent of the dollar's appreciation was less than in 2024, leading to a smaller foreign currency transaction loss and contributing to the overall reduction in Other income (loss), net.

Other (loss) income, net $ (99) $ 361 $ (460) (127.4 %)

Other loss, net decreased by approximately $0.5 million for the three months ended September 30, 2025, compared to the same period in 2024.

he decrease was primarily due to a smaller foreign‑currency transaction loss because the Chinese yuan appreciated against the U.S.

dollar during the current period, but the magnitude of the currency movement was less extreme than the U.S.

dollar’s appreciation in 2024.

This improvement was partially offset by a $0.5 million loss realized on crypto assets, for which there was no comparable activity in the prior‑year period.

Other Expense, net (9-Month Overview)

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in thousands) 2025 2024 Amount %

Other income (loss), net $ 1,574 $ 238 $ 1,336 561.3 %

Other income, net increased by $1,336 for the six months ended June 30, 2025, compared to the same period in 2024.

During 2025, the U.S.

dollar’s continued strengthening against the Chinese yuan (CNY) resulted in a foreign currency

transaction loss within Other income, net.

However, the extent of the dollar's appreciation was less than in 2024, leading to a smaller foreign currency transaction loss and contributing to the overall reduction in Other income, net.

Other income, net $ 1,475 $ 599 $ 876 146.2 %

Other income, net increased by $876 for the nine months ended September 30, 2025, compared to the same period in 2024.

he decrease was primarily due to a smaller foreign‑currency transaction loss because the Chinese yuan appreciated against the U.S.

dollar during the current period, but the magnitude of the currency movement was less extreme than the U.S.

dollar’s appreciation in 2024.

This improvement was partially offset by a $0.5 million loss realized on crypto assets, for which there was no comparable activity in the prior‑year period.

Liquidity and Capital Resources

7 unchanged sentences

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

We have incurred cumulative losses from operations, negative cash flows from operating activities, and we have an accumulated deficit of $4,449.3 million, an unrestricted cash balance of $13.2 million and a negative working capital position of $146.0 million as of June 30, 2025.

We have incurred cumulative losses from operations, negative cash flows from operating activities, and we have an accumulated deficit of $4,671.5 million, an unrestricted cash balance of $62.9 million and a negative working capital position of $121.2 million as of September 30, 2025.

During 2023, we commenced deliveries of the FF Series, specifically the FF 91 model, to customers.

We are currently manufacturing the FF 91 with plans to manufacture FF 92 models within the FF Series.

We have launched the FX Series, beginning with the SuperOne model, and is accepting pre-orders.

We are preparing to initiate full-scale, series production of the FX Series, including the SuperOne, for commercial sale, as distinct from prototype builds or validation units.

We have launched the FX Series, beginning with the Super One model, and is accepting pre-orders.

We are preparing to initiate full-scale, series production of the FX Series, including the Super One, for commercial sale, as distinct from prototype builds or validation units.

We expect to continue to incur significant operating losses for the foreseeable future.

10 unchanged sentences

(iv) 2024 Unsecured SPA Notes (v) and 2025 March Unsecured SPA Notes .

As of June 30, 2025, the SPA Portfolio Notes were in good standing.

As of September 30, 2025, 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 ), we obtained commitments from several investors.

As of June 30, 2025, the SPA Commitments totaled $655.5 million, of which $449.3 million was funded, $206.2 million remained to be funded, and $33.3 million in principal was outstanding.

As of June 30, 2025, Optional Commitments (including incremental warrants) under the SPA Commitments totaled $467.0 million, of which $60.9 million was funded, $406.1 million remained to be funded, and $10.0 million was outstanding.

Of these amounts, $189.2 million of SPA Commitments and $305.1 million of Optional Commitments expired unfunded after June 30, 2025, but prior to issuance of these financial statements.

The remaining amounts to be funded as of June 30, 2025 are subject to the achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of other conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes.

As of September 30, 2025, the SPA Commitments totaled $739.0 million, of which $494.2 million was funded, $189.2 million expired unfunded, $55.6 million remained to be funded, and $52.7 million in principal was outstanding.

As of September 30, 2025, Optional Commitments (including incremental warrants) under the SPA Commitments totaled $467.0 million, of which $100.4 million was funded, $317.1 million expired unfunded, $49.5 million remained to be funded, and $40.7 million was outstanding.

The remaining amounts to be funded as of September 30, 2025 are subject to satisfaction of closing conditions, including minimum share price or minimum trade volume.

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

Subsequent to June 30, 2025, we entered into an $82.0 million financing agreement and raised approximately $45.7 million in gross proceeds from SPA Portfolio Notes financings and $1.4 million from warrant exercises (see Note 16 Subsequent Events) for details.

While these transactions partially address our short-term liquidity needs, substantial doubt continues to exist regarding our ability to continue as a going concern.

Other Financing Arrangements and Related Party Notes:

Additional financing is provided via convertible debt instruments, equipment financing arrangements, and related party notes that support our operations and capital expenditures.

As of June 30, 2025, all notes were in good standing.

As of September 30, 2025, all notes were in good standing.

Standby Equity Purchase Agreement, At-The-Market Offerin g , and Equity Issuance Constraints

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Under the terms of the SEPA, we may, at our 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 at our option) of Class A Common Stock to Yorkville, subject to certain limitations.

As of June 30, 2025, we had the right to issue and sell up to an additional $192.5 million, or $342.5 million if we exercise our option under the SEPA.

As of September 30, 2025, we had the right to issue and sell up to an additional $192.5 million, or $342.5 million if we exercise our option under the SEPA.

At-The-Market Offerin g

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However, if additional capital is not secured, we will not have sufficient resources to meet our obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery.

On September 29, 2025, we completed the consolidation of AIXC, a Nasdaq-listed life sciences company, as a variable interest entity.

This transaction was executed as part of a strategic plan to use AIXC as a corporate platform for future non-automotive initiatives, including blockchain and digital asset ventures.

AIXC’s historical life sciences operations were immaterial to our consolidated results for the period and are expected to wind down or be restructured in future periods.

The consolidation of AIXC did not materially improve our near-term liquidity position or alter its current working capital constraints.

We expect to fund any new strategic initiatives executed through AIXC using external capital sources or asset reallocations, and no revenues were generated from these initiatives during the three or nine months ended September 30, 2025.

While AIXC’s consolidation supports our long-term strategic flexibility, it does not alleviate the substantial doubt that remains regarding our ability to continue as a going concern for the next twelve months.

Funding Alternatives and Risks

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Capital needs to fund development of our remaining product portfolio will highly depend on the market success and profitability of the FF 91 and the launch of the FX series, and our ability to accurately estimate and control costs.

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

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

In addition, elevated U.S.

import tariffs on electric vehicle components sourced from China could increase our future manufacturing costs as production of the FX Series and other future vehicle models are introduced.

While tariffs did not materially impact cost of goods sold for the six months ended June 30, 2025, due to limited production volume, continued reliance on China-based suppliers may contribute to higher input costs, pressure gross margins, and increase the Company's future funding needs.

While tariffs did not materially impact cost of goods sold for the nine months ended September 30, 2025, due to limited production volume, continued reliance on China-based suppliers may contribute to higher input costs, pressure gross margins, and increase the Company's future funding needs.

Going Concern and Future Capital Strat egy

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Sources of Liquidity

As of June 30, 2025, our principal source of liquidity was cash on hand totaling $13.2 million, which was held for working capital and general corporate purposes.

As of September 30, 2025, our principal source of liquidity was cash on hand totaling $62.9 million, which was held for working capital and general corporate purposes.

We also have access to various sources of additional capital, including the SEPA and the SPA Commitments.

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Effective August 13, 2025, during the pendency of the SEC investigation, Mr.

Jia was temporarily excluded from oversight of the finance, legal, accounting, and public reporting functions (see Note 16).

Jia was temporarily excluded from oversight of the finance, legal, accounting, and public reporting functions.

For more information on the outstanding related party notes payable and notes payable as well as the related schedules of maturities, see Note 7, Notes Payable , and Note 8, Related Party Transactions , of the notes to the Consolidated Financial Statements included in this Form 10-Q.

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The financial impact of the SPA Portfolio Notes is reflected in changes in fair value and losses on extinguishment, as presented in our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Third-Party Notes Payable (June 30, 2025)

Third-Party Notes Payable (September 30, 2025)

(in thousands) Contractual

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Adjustments Original Issue Discount and Proceeds Allocated to Warrants Net

2023 Unsecured SPA Notes June 2032 10% - 15% 5,000 39 (500) 4,539

2024 Unsecured SPA Notes Various through January 2030 10% 18,299 8,683 (16,973) 10,009

2023 Unsecured SPA Notes Various through August 2031 10% - 15% 8,100 203 (810) 7,493

2024 Unsecured SPA Notes Various through October 2030 10% 9,070 756 — 9,826

March 2025 Unsecured SPA Notes Various dates in 2030 10% 16,188 3,503 (12,479) 7,212

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Notes payable, long-term portion $ 38,823

Related Party Notes Payable (June 30, 2025)

Related Party Notes Payable (September 30, 2025)

(in thousands) Contractual

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Cash Flow Analysis

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2025 2024

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Our operating cash flows are significantly affected by fluctuations in working capital components, including changes in personnel expenses, accounts payable, accrued interest, other current liabilities, deposits, and current assets.

For the six months ended June 30, 2025, net cash used in operating activities was $43.6 million, compared to $29.1 million for the same period in 2024, reflecting a $14.5 million increase in cash outflows .

For the nine months ended September 30, 2025, net cash used in operating activities was $79.2 million, compared to $51.8 million for the same period in 2024, reflecting a $27.4 million increase in cash outflows.

The reduction of $122.6 million in Net loss is an improvement in 2025 compared to the same period in 2024;

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Non-cash adjustments:

Non-cash adjustments decreased by $12.0 million for the six months ended June 30, 2025 compared to the same period in 2024 .

This decrease was comprised of a $20.0 million increase in Loss from settlement of notes payable, a $15.3 million decrease in fair value adjustments on Change in fair value of notes payable, warrant liabilities, and derivative call options, decrease in Loss from settlement of related party notes payable, and a $7.6 million decrease in Loss from settlement of related party notes payable.

These adjustments were partially offset by a $15.3 million decrease in fair value adjustments on Change in fair value of notes payable, warrant liabilities, and derivative call options, a $5.1 million increase in Change in fair value of related party notes payable and related party warrant liabilities and a $3.8 million inventory reserve adjustment.

Non-cash adjustments decreased by $115.6 million for the nine months ended September 30, 2025 compared to the same period in 2024.

This decrease was comprised of a $32.6 million reduction in Loss on settlement of notes payable, $11.3 million reduction Loss on settlement of related party notes payable, and a $7.8 million Change in fair value of notes payable, warrant liabilities, and derivative liabilities.

These adjustments were partially offset by a $14.9 million decrease in Settlement on accrued research and development expenses a $14.4 million increase in Reserve on inventory and a $130.8 million increase in Asset impairment.

As these adjustments do not represent actual cash changes, they are disclosed for reconciliation purposes consistent with the cash flow statement.

Changes in working capital:

Changes in working capital decreased by $23.8 million for the six months ended June 30, 2025 compared to the same period in 2024.

For the six months ended June 30, 2025, changes in working capital included unfavorable shifts in our operating assets and liabilities.

Notable contributors to the change were a $4.9 million change in Inventory balances, a $5.9 million change in Deposits, a $5.2 million change in Accrued related party interest expense, and a $8.1 million change in Accounts payable.

These were partially offset by a $3.6 million change in Accrued expenses and other current and non-current liabilities.

Changes in working capital increased by $19.8 million for the nine months ended September 30, 2025 compared to the same period in 2024.

For the nine months ended September 30, 2025, changes in working capital included unfavorable shifts in our operating assets and liabilities.

Notable contributors to the change were a $9.1 million change in Accounts payable balances, a $7.5 million change in Related party accrued interest expense, a $5.5 million change in Inventory, and a $2.7 million change in Operating lease liabilities.

These were partially offset by a $10.1 million change in Accrued expenses and other current liabilities.

While these figures are detailed in the cash flow statement, they underscore the critical role that effective working capital management has played in reducing our operating cash outflows.

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Investing Activities

Net cash used in investing activities was $5.0 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

The increase was primarily driven by capitalized Hanford facility improvements funded by a third party, which were accounted for as both additions to property and equipment and a corresponding financing obligation.

Although the Company continues to manage through liquidity constraints, these improvements contributed to the higher level of investing activity reported for the period.

Net cash used in investing activities was $0.3 million for the nine months ended September 30, 2025, compared to $0.6 million for the same period in 2024, reflecting an increase of $0.8 million.

The higher use of cash was primarily attributable to a $8.8 million investment in AIXC, net of cash acquired.

This outflow was partially offset by a $5.9 million increase in capital expenditures for property and equipment.

The Company continues to manage through liquidity constraints;

however, these strategic outlays contributed to the elevated level of investing activity during the period.

Financing Activities

Amid a challenging financing environment, we are actively seeking strategic opportunities to boost our cash reserves and support growth using a mix of convertible loans and non-convertible funding.

For the six months ended June 30, 2025, financing activities provided a net cash inflow of $55.1 million, compared to a net cash inflow of $26.7 million for the same period in 2024—an increase of $28.3 million.

For the nine months ended September 30, 2025, financing activities provided a net cash inflow of $135.8 million, compared to a net cash inflow of $55.7 million for the same period in 2024—an increase of $80.1 million.

The improvement reflects the Company’s continued ability to secure financing despite a challenging capital markets environment.

In 2025, proceeds from notes payable were $132.4 million, up by $78.4 million from $54.0 million in 2024.

Our proceeds from related party notes payable increased to $4.6 million in 2025 from $3.0

million in 2024, an increase of $1.6 million.

Moreover, financing proceeds from other financial obligations transactions totaled $4.4 million for the six months ended June 30, 2025, compared to no similar proceeds for the six months ended June 30, 2024.

In addition to cash-based financing activities, during the six months ended June 30, 2024 , we reduced debt through the conversion of notes payable with fair value of approximately $35.6 million into equity.

We also issued Common Stock warrants with fair value of approximately $33.4 million in connection with financing transactions.

While these transactions did not involve cash inflows or outflows, they form part of our overall financing strategy by reducing outstanding debt in the case of conversions and providing potential future equity proceeds through warrant exercises.

Our proceeds from related party notes payable increased to $4.7 million in 2025 from $3.1 million in 2024, an increase of $1.7 million.

These proceeds were offset by payments of notes payable and other financing obligations, which totaled $4.5 million for the nine months ended September 30, 2025, compared to $0.1 million for the same period in 2024

Effect of Exchange Rate Changes on Cash and Restricted Cash

The exchange rates effect on cash and restricted cash was $0.4 million and zero for the six months ended June 30, 2025 and 2024, respectively.

The exchange rates effect on cash and restricted cash was $1.1 million and zero for the nine months ended September 30, 2025 and 2024, respectively.

The effects of exchange rate changes on cash and restricted cash result from fluctuations on the translation of assets and liabilities denominated in foreign currencies, primarily Chinese Yuan.

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We did not have any material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Thus, we did not have any off-balance sheet arrangements as of June 30, 2025 and 2024.

Thus, we did not have any off-balance sheet arrangements as of September 30, 2025 and 2024.

Critical Accounting Estimates

The preparation of our Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025 and 2024, in accordance GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of expenses during the reporting period.

The preparation of our Unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2025, and 2024, in accordance GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of expenses during the reporting period.

Management bases these estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments that are not readily apparent from other sources.

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For a description of our critical accounting estimates, refer to the section titled “Critical Accounting Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II, Item 7 of our Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025.

As of the date of this report, there have been no changes to our critical accounting estimates described in the Form 10-K that have had a material impact on our Unaudited Condensed Consolidated Financial Statements and related footnotes.

As of the date of this report, there have been no major changes to our critical accounting estimates described in the Form 10-K that have had a material impact on our Unaudited Condensed Consolidated Financial Statements and related footnotes.

The incremental addition to our critical accounting estimates is business combinations and goodwill.

For further details, refer to Note 1, Nature of Business and Organization and Note 3, Business Acquisition .

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis