UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM ~~10-Q/A~~

~~Amendment No. 1~~10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended September 30, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ________________ to ________________

Commission File Number: 001-39395

Faraday Future Intelligent Electric Inc.

(Exact name of registrant as specified in its charter)


Delaware						84-4720320
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

18455 S. Figueroa Street, Gardena, CA						90248
(Address of Principal Executive Offices)						(Zip Code)

(424) 276-7616

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	FFIE	The Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of ~~$11.50~~$920.00 per share	FFIEW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had outstanding ~~386,256,244~~56,616,338 shares of Class A common stock and ~~64,000,588~~800,008 shares of Class B common stock as of November ~~17, 2022.~~9, 2023.

~~Table of Contents~~

~~EXPLANATORY NOTE~~

Faraday Future Intelligent Electric Inc. (the “Company” or “FF”) is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q (this “Form 10-Q/A”) for the period ended September 30, 2022, originally filed with the Securities and Exchange Commission (the “SEC”) on November 21, 2022 (the “Original Filing”), to ~~restate certain information in the Company's previously issued consolidated financial statements and related disclosures for the period ended September 30, 2022~~. Concurrent with the filing of this Form 10-Q/A, the Company will be filing an amended Form 10-K for the year ended December 31, 2022 (originally filed with the SEC on March 9, 2023) and an amended Form 10-Q for the period ended March 31, 2023 (originally filed with the SEC on May 12, 2023).

~~Restatement~~

~~On July 11, 2023, the Company announced thatthe Audit Committee of the Company’s Board of Directors~~ ~~determined, based on the recommendation of management that the Company’s~~ previously issued financial statements included in the 2022 Form 10-K for the period ended December 31, 2022 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and September 30, 2022 (the “Affected Periods”) should no longer be relied upon due to errors identified in the Affected Periods primarily due to an error stemming from a non-cash and non-operating item related to the change in the fair value upon conversion of the ~~notes payable issued under the Company’s debt arrangements.~~ The Company has determined that it is appropriate to correct the misstatements in the Company’s previously issued financial statements and related disclosures by amending the Original Filing, its Annual Report on Form 10-K for the year ended December 31, 2022, and its Quarterly Report on Form 10-Q for the period ended March 31, 2023.

~~Internal Control Considerations~~

~~In the Original Filing in Controls and Procedures~~ within Part I, Item 4, the Company previously identified and reported eight material weaknesses. In connection with this restatement, management has concluded that the errors identified in the Affected Periods were not prevented or detected as a result of certain of the eight material weaknesses that were previously identified and reported, including specifically that the Company did not design and maintain effective controls to address the identification of and accounting for certain non-routine, unusual or complex transactions, including the proper application of U.S. GAAP to such transactions.

~~For a more detailed discussion of the correction of these accounting errors, refer to Note 2,~~ ~~Restatement~~, included in Part I, Item 1, Notes to Condensed Consolidated Financial Statements, of this Form 10-Q/A. For more information about the related material weaknesses in internal control over financial reporting and the Company’s remedial actions, refer to Controls and Procedures in Part I, Item 4 of this Form 10-Q/A.

~~Amendment to Form 10-Q~~

In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the following Items of the Original Filing have been amended and restated and the complete text of those is set out in this Form 10-Q/A:

•~~Part I, Item 1, Financial Statements (unaudited)~~

•~~Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

•~~Part I, Item 4, Controls and Procedures~~

•~~Part II, Item 1A, Risk Factors~~

Note that the only changes to the Original Filing are those related to the matters described herein and only in the Items listed above. Item 1A “Risk Factors” has been updated to reflect risks as of the date of this amended filing. Except as described above, no changes have been made to the Original Filing, and this Form 10-Q/A does not modify, amend or update any of the other financial information or other information contained in the Original Filing. In addition, in accordance with SEC rules, this Form 10-Q/A includes updated certifications from our Chief Executive Officer and Chief Financial Officer as Exhibits 31.1, 31.2 and 32. Otherwise, the information contained in this Form 10-Q/A is as of the date of the Original Filing and does not reflect any information or events occurring after the date of the Original Filing. Such subsequent information or events include, among others, the information and events described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which is being filed concurrently with this Form 10-Q/A, and the information and events described in our Current Reports on Form 8-K filed subsequent to the date of the Original Filing. For a description of such subsequent information and events, please read our reports filed pursuant to the Exchange Act subsequent to the date of the Original Filing, which update and supersede certain information contained in the Original Filing and this Form 10-Q/A.

Table of Contents

~~Table of Contents~~Faraday Future Intelligent Electric Inc.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023

INDEX ~~TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~


		~~Pages~~Page
~~FARADAY FUTURE INTELLIGENT ELECTRIC INC.~~
~~Part I Financial Information~~PART I. FINANCIAL INFORMATION
Item 1.	~~Condensed Consolidated~~ Financial Statements ~~(Unaudited)~~
	Condensed Consolidated Balance Sheets ~~as of September 30, 2022 and December 31, 2021~~(Unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss ~~for the Three and Nine Months Ended September 30, 2022 and 2021~~(Unaudited)	4
	Condensed Consolidated Statements of ~~Commitment to Issue Class A Common Stock and~~ Stockholders’ Equity ~~(Deficit)~~ ~~for the Three and Nine Months Ended September 30, 2022 and 2021~~(Unaudited)	5
	Condensed Consolidated Statements of Cash Flows ~~for the Nine Months Ended September 30, 2022 and 2021~~(Unaudited)	9
	Notes to ~~the~~Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4143
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6362
Item 4.	Controls and Procedures	6362

~~Part II Other Information~~PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	6773
Item 3.	Defaults Upon Senior Securities	6774
Item 4.	Mine Safety Disclosures	6774
Item 5.	Other Information	6774
Item 6.	Exhibits	6875
Signatures		7077

Table of Contents

~~Part~~PART I - ~~Financial Information~~FINANCIAL INFORMATION

~~ITEM~~Item 1. ~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~Financial Statements

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands,, except share and per share data)


	September 30, 2023		December 31, 2022

Assets
Current assets
Cash	$	6,714	$	16,968
Restricted cash	1,853		1,546
Inventory	35,215		4,457
Deposits	62,556		44,066
Other current assets	20,963		17,489
Total current assets	127,301		84,526
Property and equipment, net	416,514		406,320
Finance lease right-of-use assets	12,090		12,362
Operating lease right-of-use assets	17,370		19,588
Other non-current assets	6,252		6,492
Total assets	$	579,527	$	529,288
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	101,857	$	91,603
Accrued expenses and other current liabilities	68,446		65,709
Warrant liabilities	1,613		92,781
Related party warrant liabilities	117		—
Accrued interest	25		189
Related party accrued interest	139		—
Operating lease liabilities, current portion	3,755		2,538
Finance lease liabilities, current portion	1,442		1,364
Related party notes payable, current portion	8,830		8,964
Notes payable, current portion	4,929		5,097
Total current liabilities	191,153		268,245
Finance lease liabilities, less current portion	5,475		6,570
Operating lease liabilities, less current portion	14,868		18,044
Other liabilities	10,783		9,429
Related party notes payable, less current portion	2,945		—
Notes payable, less current portion	92,500		26,008
Total liabilities	317,724		328,296
Commitments and contingencies (Note 9)
Stockholders’ equity
Class A Common Stock, $0.0001 par value; 147,875,000 and 71,312,500 shares authorized; 31,764,093 and 7,041,828 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	3		1
Class B Common Stock, $0.0001 par value; 6,562,500 shares authorized; 800,008 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	4,128,990		3,724,241
Accumulated other comprehensive income	7,512		3,505
Accumulated deficit	(3,874,702)		(3,526,755)
Total stockholders’ equity	261,803		200,992
Total liabilities and stockholders’ equity	$	579,527	$	529,288

~~(Unaudited)~~
September 30, 2022 December 31, 2021
As Restated
Assets
Current assets
Cash $ 31,766 $ 505,091
Restricted cash 2,162 25,386
Deposits 44,530 63,370
Other current assets 23,759 13,410
Total current assets 102,217 607,257
Property and equipment, net 411,657 293,135
Right of use assets 20,202 —
Other non-current assets 6,608 7,040
Total assets $ 540,684 $ 907,432
Liabilities and stockholders’ equity
Current liabilities
Accounts payable 65,239 37,773
Accrued payroll and benefits 31,124 21,752
Accrued expenses and other current liabilities 46,104 68,760
Related party accrued interest 12,760 11,231
Accrued interest 123 8,263
Operating lease liabilities, current portion 2,487 —
Finance lease liabilities, current portion 1,807 —
Related party notes payable 12,253 13,655
Notes payable, current portion 5,008 132,372
Total current liabilities 176,905 293,806
Operating lease liabilities, less current portion 18,640 —
Finance lease liabilities, less current portion 6,917 7,570
Other liabilities, less current portion 3,531 3,720
Notes payable, less current portion 46,950 34,682
Total liabilities 252,943 339,778
Commitments and contingencies (Note 12)
Stockholders’ equity
Class A Common Stock, $0.0001 par value; 750,000,000 shares authorized; 345,794,368 and 168,693,323 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 31 17
Class B Common Stock, $0.0001 par value; 75,000,000 shares authorized; 64,000,588 and no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 6 —
Additional paid-in capital 3,620,281 3,482,226
Accumulated other comprehensive gain (loss) 6,603 (6,945)
Accumulated deficit (3,339,180) (2,907,644)
Total stockholders’ equity 287,741 567,654
Total liabilities and stockholders’ equity $ 540,684 $ 907,432

~~The~~ See accompanying notes ~~are an integral part of these~~to unaudited Condensed Consolidated Financial Statements.

Table of Contents

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands,, except share and per share data)

~~(Unaudited)~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues
Auto sales	$	551	$	—	$	551	$	—
Cost of revenues
Auto sales	16,131		—		22,744		—
Gross loss	(15,580)		—		(22,193)		—
Operating expenses
Research and development	21,593		47,582		104,670		259,741
Sales and marketing	5,318		3,823		18,082		16,207
General and administrative	24,023		28,551		67,598		89,069
Loss on disposal of property and equipment	—		—		3,698		1,407
Change in fair value of earnout liability	(67)		—		2,033		—
Total operating expenses	50,867		79,956		196,081		366,424
Loss from operations	(66,447)		(79,956)		(218,274)		(366,424)
Change in fair value of notes payable and warrant liabilities	17,571		(1,764)		90,030		4,580
Change in fair value of related party notes payable and related party warrant liabilities	4,726		—		5,110		—
Loss on settlement of notes payable	(21,357)		(30,454)		(204,885)		(30,454)
Loss on settlement of related party notes payable	(10,756)		—		(17,248)		—
Interest expense	(90)		(245)		(591)		(5,119)
Related party interest expense	(69)		(996)		(139)		(2,931)
Other expense, net	(1,624)		(6,457)		(1,922)		(14,307)
Loss before income taxes	(78,046)		(119,872)		(347,919)		(414,655)
Income tax provision	—		—		(28)		(9)
Net loss	$	(78,046)	$	(119,872)	$	(347,947)	$	(414,664)

Net loss per share of Class A and B Common Stock attributable to common stockholders:
Basic	$	(3.78)	$	(27.67)	$	(23.28)	$	(100.26)
Diluted	(3.78)		(27.67)		(23.28)		(100.26)
Weighted average shares used in computing net loss per share of Class A and B Common Stock:
Basic	20,647,430		4,332,194		14,944,452		4,135,984
Diluted	20,647,430		4,332,194		14,944,452		4,135,984

Total comprehensive loss
Net loss	$	(78,046)	$	(119,872)	$	(347,947)	$	(414,664)
Foreign currency translation adjustment	(1,560)		9,864		4,007		13,548
Total comprehensive loss	$	(79,606)	$	(110,008)	$	(343,940)	$	(401,116)

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
As Restated As Restated
Operating expenses
Research and development $ 47,582 $ 79,757 $ 259,741 $ 94,506
Sales and marketing 3,823 6,832 16,207 11,099
General and administrative 28,551 36,725 89,069 64,148
Loss on disposal of property and equipment — 62,342 1,407 62,987
Total operating expenses 79,956 185,656 366,424 232,740
Loss from operations (79,956) (185,656) (366,424) (232,740)
Change in fair value measurements (1,764) (22,747) 4,580 (60,394)
Interest expense (245) (296) (5,119) (26,550)
Related party interest expense (996) (1,597) (2,931) (15,765)
Other (expense) income, net (6,457) 1,117 (14,307) (718)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net (30,454) (94,727) (30,454) (96,036)
Loss before income taxes (119,872) (303,906) (414,655) (432,203)
Income tax provision — — (9) (3)
Net loss $ (119,872) $ (303,906) $ (414,664) $ (432,206)
Per share information:
Net loss per Common Stock – Class A and Class B – basic and diluted $ (0.35) $ (1.06) $ (1.25) $ (2.12)
Weighted average Common shares outstanding – Class A and Class B – basic and diluted 346,575,508 287,951,929 330,878,677 203,686,758
Total comprehensive loss:
Net loss $ (119,872) $ (303,906) $ (414,664) $ (432,206)
Change in foreign currency translation adjustment 9,864 189 13,548 (487)
Total comprehensive loss $ (110,008) $ (303,717) $ (401,116) $ (432,693)

~~The~~See accompanying notes ~~are an integral part of these~~to unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

(in thousands, except share data)


	Common Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit		Total Stockholders’ Equity
		Class A	Class B
												Shares		Amount				Shares				Amount
Balance as of June 30, 2023							17,796,893			$	2		800,008			$	—			$	4,065,282			$	9,072			$	(3,796,656)			$	277,700
Conversion of notes payable and accrued interest into Class A Common Stock (Note 7)						12,182,048		1				—		—				51,906				—				—				51,907
Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase						—		—				—		—				1,381				—				—				1,381
Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase						—		—				—		—				2,043				—				—				2,043
Issuance of Common Stock						1,617,500		—				—		—				8,520				—				—				8,520

Reverse Stock split related round up share issuances						163,885		—				—		—								—				—				—
Stock-based compensation						—		—				—		—				216				—				—				216
Issuance of shares for RSU vesting net of tax withholdings						3,767		—				—		—				(358)				—				—				(358)
Foreign currency translation adjustment						—		—				—		—				—				(1,560)				—				(1,560)
Net loss						—		—				—		—				—				—				(78,046)				(78,046)
Balance as of September 30, 2023						31,764,093		$	3			800,008		$	—			$	4,128,990			$	7,512			$	(3,874,702)			$	261,803

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

Table of Contents

Faraday Future Intelligent Electric Inc.

Condensed Consolidated ~~Statements~~Statement of Stockholders’ Equity (Unaudited)

(in thousands, except share data)


	Common Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit		Total Stockholders’ Equity
		Class A	Class B
												Shares		Amount				Shares				Amount
Balance as of December 31, 2022							7,041,828			$	1		800,008			$	—			$	3,724,241			$	3,505			$	(3,526,755)			$	200,992
Conversion of notes payable and accrued interest into Class A Common Stock (Note 7)						22,271,914		2				—		—				335,013				—				—				335,015
Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange (Note 7)						—		—				—		—				(6,811)				—				—				(6,811)
Reclassification of February 28, 2023 earnout shares liability to equity due to authorized share increase (Note 10)						—		—				—		—				5,014				—				—				5,014
Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase (Note 10)						—		—				—		—				8,978				—				—				8,978
Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 10)						—		—				—		—				(2,112)				—				—				(2,112)
Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 10)						—		—				—		—				(2,979)				—				—				(2,979)
Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase						—		—				—		—				1,381				—				—				1,381
Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase						—		—				—		—				2,043				—				—				2,043
Issuance of Common Stock						1,617,500		—				—		—				8,520				—				—				8,520

Reverse Stock split related round up share issuances						163,885		—				—		—				—				—				—				—
Stock-based compensation						—		—				—		—				4,840				—				—				4,840
Exercise of warrants						639,109		—				—		—				51,276				—				—				51,276
Exercise of stock options						619		—				—		—				44				—				—				44
Issuance of shares for RSU vesting net of tax withholdings						32,330		—				—		—				(458)				—				—				(458)
Cancellations						(3,092)		—				—		—				—				—				—				—
Foreign currency translation adjustment								—				—		—				—				4,007				—				4,007
Net loss								—				—		—				—				—				(347,947)				(347,947)
Balance as of September 30, 2023						31,764,093		$	3			800,008		$	—			$	4,128,990			$	7,512			$	(3,874,702)			$	261,803

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statement of Commitment to Issue Class A Common Stock and Stockholders’ Equity ~~(Deficit)~~(Unaudited)

(in thousands,, except share ~~and per share~~ data)

~~(Unaudited)~~


	Commitment to Issue Class A Common Stock	Common Stock					Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
			Class A					Class B
				Shares	Amount								Shares				Amount				Shares				Amount
Balance as of June 30, 2022				—	$	32,900				2,981,794			$	—		800,008			$	—			$	3,491,071			$	(3,261)			$	(3,219,308)			$	268,502
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock				—	—				253,309		—				—		—				—				—				—				—
Transfer of private warrants to unaffiliated parties				—	—				—		—				—		—				186				—				—				186
Amendment of ATW NPA Warrants (Note 13)				—	—				—		—				—		—				1,238				—				—				1,238
Issuance pursuant to commitment to issue registered shares				—	(32,900)				29,844		—				—		—				32,900				—				—				32,900
Conversion of notes payable into Class A Common Stock				—	—				810,549		—				—		—				84,780				—				—				84,780
Stock-based compensation				—	—				—		—				—		—				2,670				—				—				2,670
Exercise of stock options				—	—				39,217		—				—		—				7,181				—				—				7,181
Repurchase of Common Stock				—	—				(1,210)		—				—		—				(767)				—				—				(767)
Receipt of Class A Common Stock in consideration of exercises of options				—	—				(3,899)		—				—		—				(669)				—				—				(669)
Exercise of warrants				—	—				212,828		—				—		—				1,728				—				—				1,728
Foreign currency translation adjustment				—	—				—		—				—		—				—				9,864				—				9,864
Net loss				—	—				—		—				—		—				—				—				(119,872)				(119,872)
Balance as of September 30, 2022				—	$	—			4,322,432		$	—			800,008		$	—			$	3,620,318			$	6,603			$	(3,339,180)			$	287,741

Commitment to Issue Class A Common Stock Common Stock Additional
Paid-in
Capital (As Restated) Accumulated
Other
Comprehensive Gain
(Loss) Accumulated Deficit (As Restated) Total Stockholders’ Equity (Deficit) (As Restated)
Class A Class B
Shares Amount Shares Amount Shares Amount
Balance as of June 30, 2022 — $ 32,900 238,543,475 $ 24 64,000,588 $ 6 $ 3,491,041 $ (3,261) $ (3,219,308) $ 268,502
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock — — 20,264,715 — — — — — — —
Transfer of private warrants to unaffiliated parties — — — — — — 186 — — 186
Amendment of ATW NPA Warrants (Note 13) — — — — — — 1,238 — — 1,238
Issuance pursuant to commitment to issue registered shares — (32,900) 2,387,500 — — — 32,900 — — 32,900
Conversion of notes payable into class A common stock (as restated) — — 64,843,850 6 — — 84,774 — — 84,780
Stock-based compensation (as restated) — — — — — — 2,670 — — 2,670
Exercise of stock options — — 3,137,272 — — — 7,181 — — 7,181
Repurchase of common stock — — (96,759) — — — (767) — — (767)
Receipt of class A common stock in consideration of exercises of options — — (311,878) — — — (669) — — (669)
Exercise of warrants — — 17,026,193 1 — — 1,727 — — 1,728
Foreign currency translation adjustment — — — — — — — 9,864 — 9,864
Net loss (as restated) — — — — — — — — (119,872) (119,872)
Balance as of September 30, 2022 (as restated) — $ — 345,794,368 $ 31 64,000,588 $ 6 $ 3,620,281 $ 6,603 $ (3,339,180) $ 287,741

~~The~~See accompanying notes ~~are an integral part of these~~to unaudited Condensed Consolidated Financial Statements.

~~Table of Contents~~

Faraday Future Intelligent Electric Inc.

Condensed Consolidated ~~Statements~~Statement of Commitment to Issue Class A Common Stock and Stockholders’ Equity ~~(Deficit)~~(Unaudited)

(in thousands,, except share ~~and per share~~ data)

~~(Unaudited)~~

Commitment to Issue Class A Common Stock Common Stock Additional
Paid-in
Capital (As Restated) Accumulated
Other
Comprehensive Gain
(Loss) Accumulated Deficit (As Restated) Total Stockholders’ Equity (Deficit) (As Restated)
Class A Class B
Shares Amount Shares Amount Shares Amount
Balance as of December 31, 2021 — $ — 168,693,323 $ 17 — $ — $ 3,482,226 $ (6,945) $ (2,907,644) $ 567,654
Reclassification of obligation to issue registered shares of Class A Common Stock upon adoption of ASU 2020-06 — 32,900 — — — — — — (20,265) (20,265)
Transfer of private warrants to unaffiliated parties — — — — — — 186 — — 186
Amended Exercise price of ATW NPA warrants (Note 13) — — — — — — 1,238 — — 1,238
Reclassification of deferred gain upon adoption of ASC 842 — — — — — — — — 3,393 3,393
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock — — 89,152,131 7 64,000,588 6 (13) — — —
Issuance pursuant to commitment to issue registered shares — (32,900) 2,387,500 — — — 32,900 — — 32,900
Conversion of notes payable into class A common stock (as restated) — — 64,843,850 6 — — 84,774 — — 84,780
Stock-based compensation (as restated) — — — — — — 9,144 — — 9,144
Exercise of stock options — — 4,100,008 — — — 9,535 — — 9,535
Repurchase of common stock — — (96,759) — — — (767) — — (767)
Receipt of class A common stock in consideration of exercises of options — — (311,878) — — — (669) — — (669)
Exercise of warrants — — 17,026,193 1 — — 1,727 — — 1,728
Foreign currency translation adjustment — — — — — — — 13,548 — 13,548
Net loss (as restated) — — — — — — — — (414,664) (414,664)
Balance as of September 30, 2022 (as restated) — $ — 345,794,368 $ 31 64,000,588 $ 6 $ 3,620,281 $ 6,603 $ (3,339,180) $ 287,741

~~The~~


	Commitment to Issue Class A Common Stock	Common Stock					Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
			Class A					Class B
				Shares	Amount								Shares				Amount				Shares				Amount
Balance as of December 31, 2021				—	$	—				2,108,667			$	—		—			$	—			$	3,482,243			$	(6,945)			$	(2,907,644)			$	567,654
Reclassification of obligation to issue registered shares of Class A Common Stock upon adoption of ASU 2020-06				—	32,900				—		—				—		—				—				—				(20,265)				(20,265)
Transfer of private warrants to unaffiliated parties				—	—				—		—				—		—				186				—				—				186
Amended Exercise price of ATW NPA warrants (Note 13)				—	—				—		—				—		—				1,238				—				—				1,238
Reclassification of deferred gain upon adoption of ASC 842				—	—				—		—				—		—				—				—				3,393				3,393
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock				—	—				1,114,402		—				800,008		—				—				—				—				—
Issuance pursuant to commitment to issue registered shares				—	(32,900)				29,844		—				—		—				32,900				—				—				32,900
Conversion of notes payable into Class A Common Stock				—	—				810,549		—				—		—				84,780				—				—				84,780
Stock-based compensation				—	—				—		—				—		—				9,144				—				—				9,144
Exercise of stock options				—	—				51,251		—				—		—				9,535				—				—				9,535
Repurchase of Common Stock				—	—				(1,210)		—				—		—				(767)				—				—				(767)
Receipt of Class A Common Stock in consideration of exercises of options				—	—				(3,899)		—				—		—				(669)				—				—				(669)
Exercise of warrants				—	—				212,828		—				—		—				1,728				—				—				1,728
Foreign currency translation adjustment				—	—				—		—				—		—				—				13,548				—				13,548
Net loss				—	—				—		—				—		—				—				—				(414,664)				(414,664)
Balance as of September 30, 2022				—	$	—			4,322,432		$	—			800,008		$	—			$	3,620,318			$	6,603			$	(3,339,180)			$	287,741

See accompanying notes ~~are an integral part of these unaudited Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

~~Faraday Future Intelligent Electric Inc.~~

~~Condensed Consolidated Statements of Commitment~~ to ~~Issue Class A Common Stock and Stockholders’ Equity (Deficit)~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Gain (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit)
Class A Class B
Shares(1)
Amount
Shares(1)
Amount
Balance as of June 30, 2021, as recast 107,659,654 $ 10 64,000,588 $ 6 $ 1,973,314 $ (6,650) $ (2,519,439) $ (552,759)
Conversion of related party notes payable into Class A Common Stock (see Note 9) 11,566,196 1 — — 160,436 — — 160,437
Conversion of notes payable into Class A Common Stock (see Note 10) 7,688,153 1 — — 98,374 — — 98,375
Issuance of Class A Common Stock in the Business Combination, net of transaction costs (see Note 4) 27,798,411 3 — — 170,111 — — 170,114
Conversion of assumed PSAC convertible and promissory notes payable into Class A Common Stock (see Note 10) 80,000 — — — 790 — — 790
Conversion of liabilities into Class A Common Stock in the Business Combination (see Note 4) 20,666,825 2 — — 285,335 — — 285,337
Conversion of liabilities into the commitment to issue Class A Common Stock in the Business Combination (see Note 4) — — — — 52,338 — — 52,338
Legacy FF Ordinary Stock exchanged in the Business Combination for a commitment to issue Class A and Class B Common Stock (117,839,510) (12) (64,000,588) (6) 18 — — —
Issuance of Class A Common Stock in the PIPE Financing, net of transaction costs (see Note 4) 76,140,000 8 — — 692,397 — — 692,405
Settlement of lawsuit with issuance of vested stock options (see Note 13) — — — — 8,459 — — 8,459
Settlement of accrued rent with issuance of vested stock options — — — — 951 — — 951
Vesting of restricted stock award for employee bonus — — — — 14,620 — — 14,620
Stock-based compensation — — — — 5,053 — — 5,053
Exercise of stock options 1,078,495 — — — 2,740 — — 2,740
Settlement of receivables through receipt of Class A Common Stock (43,096) — — — (105) — — (105)
Issuance of warrants — — — — 10,483 — — 10,483
Foreign currency translation
adjustment — — — — — 189 — 189
Net loss — — — — — — (303,906) (303,906)
Balance as of September 30, 2021 134,795,128 $ 13 — $ — $ 3,475,314 $ (6,461) $ (2,823,345) $ 645,521

~~(1)~~ The shares of the Company’s common stock prior to the Business Combination (as defined in Note 1) have been retrospectively recast to reflect the change in the capital structure as a result of the Business Combination as described in Note 4.

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

~~Table of Contents~~

~~Faraday Future Intelligent Electric Inc.~~

~~Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit)~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Gain (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit)
Class A Class B
Shares(1)
Amount
Shares(1)
Amount
Balance as of December 31, 2020, as recast 93,099,596 $ 9 64,000,588 $ 6 $ 1,817,760 $ (5,974) $ (2,391,139) $ (579,338)
Conversion of The9 Conditional Obligation 423,053 — — — 2,863 — — 2,863
Conversion of related party notes payable into Class A Common Stock (see Note 9) 22,454,776 2 — — 294,794 — — 294,796
Conversion of notes payable into Class A Common Stock (see Note 10) 7,688,153 1 — — 98,374 — — 98,375
Issuance of Class A Common Stock in the Business Combination, net of transaction costs (see Note 4) 27,798,411 3 — — 170,111 — — 170,114
Conversion of assumed PSAC convertible and promissory notes payable into Class A Common Stock (see Note 10) 80,000 — — — 790 — — 790
Conversion of liabilities into Class A Common Stock in the Business Combination (see Note 4) 20,666,825 2 — — 285,335 — — 285,337
Conversion of liabilities into the commitment to issue Class A Common Stock in the Business Combination (see Note 4) — — — — 52,338 — — 52,338
Legacy FF Ordinary Stock exchanged in the Business Combination for a commitment to issue Class A and Class B Common Stock (117,839,510) (12) (64,000,588) (6) 18 — — —
Issuance of Class A Common Stock in the PIPE Financing, net of transaction costs (see Note 4) 76,140,000 8 — — 692,397 — — 692,405
Settlement of lawsuit with issuance of vested stock options (see Note 13) — — — — 8,459 — — 8,459
Settlement of accrued rent with issuance of vested stock options — — — — 951 — — 951
Vesting of restricted stock award for employee bonus — — — — 14,620 — — 14,620
Stock-based compensation — — — — 8,521 — — 8,521
Exercise of stock options 4,326,920 — — — 10,492 — — 10,492
Settlement of receivables through receipt of Class A Common Stock (43,096) — — — (105) — — (105)
Issuance of warrants — — — — 17,596 — — 17,596
Foreign currency translation
adjustment — — — — — (487) — (487)
Net loss — — — — — — (432,206) (432,206)
Balance as of September 30, 2021 134,795,128 $ 13 — $ — $ 3,475,314 $ (6,461) $ (2,823,345) $ 645,521

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

Table of Contents

Faraday Future Intelligent Electric Inc.

Condensed Consolidated ~~Statements~~Statement of Cash Flows (Unaudited)

(in thousands)

(i
~~n thousands~~)

~~(Unaudited)~~


		Nine Months Ended September 30,
		2022			2021			Nine Months Ended September 30,
		As Restated						2023		2022
Cash flows from operating activities	Cash flows from operating activities						Cash flows from operating activities
Net loss	Net loss	$	(414,664)		$	(432,206)	Net loss	$	(347,947)	$	(414,664)
Adjustments to reconcile net loss to net cash used in operating activities
Adjustments to reconcile net loss to net cash used in operating activities:							Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	15,323			4,268		Depreciation and amortization expense	27,673		2,532
Stock-based compensation	Stock-based compensation	9,144			8,521		Stock-based compensation	8,906		9,144
Vesting of restricted stock awards for employee bonus		—			14,620
Loss on disposal of property and equipment	Loss on disposal of property and equipment	1,407			62,987		Loss on disposal of property and equipment	3,698		1,407
Change in fair value measurement of related party notes payable and notes payable		(4,580)			60,394
Loss (gain) on foreign exchange		2,484			(1,823)
Loss on write-off of vendor deposits, net and (gain) on write-off of accounts payable		2,992			(4,191)
Non-cash change in fair value of related party notes payable and related party warrant liabilities							Non-cash change in fair value of related party notes payable and related party warrant liabilities	(5,110)		—
Non-cash change in fair value of notes payable and warrant liabilities							Non-cash change in fair value of notes payable and warrant liabilities	(90,461)		(4,580)
Change in fair value of earnout liability							Change in fair value of earnout liability	1,381		—
Change in operating lease right-of-use assets							Change in operating lease right-of-use assets	2,491		2,265
Loss on foreign exchange							Loss on foreign exchange	218		2,484
Loss on write-off of vendor deposits, net							Loss on write-off of vendor deposits, net	408		2,992
Non-cash interest expense	Non-cash interest expense	8,050			36,478		Non-cash interest expense	—		8,050
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net		30,454			96,036
Gain on forgiveness of vendor payables in trust		—			(1,731)
Reserve for unrecoverable value added taxes		—			6,404
Loss on settlement of notes payable							Loss on settlement of notes payable	204,885		30,454
Loss on settlement of related party notes payable							Loss on settlement of related party notes payable	17,248		—
Other	Other	324			—		Other	1,008		324
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:						Changes in operating assets and liabilities:
Deposits	Deposits	13,364			(35,796)		Deposits	(19,237)		13,364
Inventory							Inventory	(30,758)		—
Other current and non-current assets	Other current and non-current assets	(16,011)			(18,446)		Other current and non-current assets	(3,415)		(10,656)
Accounts payable	Accounts payable	27,467			(40,434)		Accounts payable	13,838		27,467
Accrued payroll and benefits	Accrued payroll and benefits	9,372			(6,889)		Accrued payroll and benefits	—		9,372
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	(24,628)			12,763		Accrued expenses and other current liabilities	(23,332)		(21,117)
Operating lease liabilities	Operating lease liabilities	(2,886)			—		Operating lease liabilities	(1,838)		(1,226)
Accrued interest expense	Accrued interest expense	(12,721)			—		Accrued interest expense	(26)		(12,721)
Transfers between vendor payables in trust and accounts payable		—			1,167
Net cash used in operating activities	Net cash used in operating activities	$	(355,109)	$(355,109)	$	(237,878)	Net cash used in operating activities	(240,370)		(355,109)
Cash flows from investing activities	Cash flows from investing activities						Cash flows from investing activities
Payments for property and equipment	Payments for property and equipment	$	(112,099)		$	(37,264)	Payments for property and equipment	(10,846)		(112,099)
Net cash used in investing activities	Net cash used in investing activities	$	(112,099)		$	(37,264)	Net cash used in investing activities	(10,846)		(112,099)
Cash flows from financing activities	Cash flows from financing activities						Cash flows from financing activities
Proceeds from issuance of Class A Common Stock in the Business Combination		$	—		$	229,583
Proceeds from issuance of Class A Common Stock pursuant to the PIPE Financing		—			761,400
Transaction costs paid in connection with the Business Combination		—			(23,148)
Transaction costs paid in connection with the PIPE Financing		—			(61,130)
Proceeds from related party notes payable		—			200
Proceeds from related party notes payable, net of original issuance discount							Proceeds from related party notes payable, net of original issuance discount	19,782		—
Proceeds from notes payable, net of original issuance discount	Proceeds from notes payable, net of original issuance discount	40,050			172,031		Proceeds from notes payable, net of original issuance discount	208,650		40,050
Proceeds from the sale of Common Stock, net of issuance costs							Proceeds from the sale of Common Stock, net of issuance costs	8,520		—
Proceeds from exercise of warrants	Proceeds from exercise of warrants	1,728			—		Proceeds from exercise of warrants	4,074		1,728
Payments of notes payable	Payments of notes payable	(87,258)			—		Payments of notes payable	—		(87,258)
Payments of related party notes payable		—			(38,217)
Payments of notes payable, including liquidation premium		—			(48,210)
Payments of notes payable issuance costs		(2,813)			(3,355)
Payments of vendor payables in trust		—			(27,722)
Payment of notes payable issuance costs							Payment of notes payable issuance costs	(2,489)		(2,813)
Payments of finance lease obligations	Payments of finance lease obligations	(1,410)			(2,691)		Payments of finance lease obligations	(1,016)		(1,410)
Repurchase of common stock		(767)			—
Transfers between vendor payables in trust and accounts payable		—			(1,167)
Repurchase of Common Stock							Repurchase of Common Stock	—		(767)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	9,535			10,492		Proceeds from exercise of stock options	44		9,535
Payments of stock issuance costs		—			(1,071)
Net cash (used in) provided by financing activities		(40,935)			966,995
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	237,565		(40,935)
Effect of exchange rate changes on cash and restricted cash	Effect of exchange rate changes on cash and restricted cash	11,594			(2,536)		Effect of exchange rate changes on cash and restricted cash	3,704		11,594
Net (decrease) increase in cash and restricted cash		(496,549)			689,317
Net decrease in cash and restricted cash							Net decrease in cash and restricted cash	(9,947)		(496,549)
Cash and restricted cash, beginning of period							Cash and restricted cash, beginning of period	18,514		530,477
Cash and restricted cash, end of period							Cash and restricted cash, end of period	$	8,567	$	33,928

Table of Contents

Faraday Future Intelligent Electric Inc.

Condensed Consolidated ~~Statements~~Statement of Cash Flows (Unaudited)

(in thousands)

(i~~n thousands~~)

~~(Unaudited)~~

Cash and restricted cash, beginning of period 530,477 1,827
Cash and restricted cash, end of period 33,928 691,144

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

Nine Months Ended
September 30, 2022 Nine Months Ended
September 30, 2021
Cash $ 505,091 $ 1,124
Restricted cash 25,386 703
Total cash and restricted cash, beginning of period $ 530,477 $ 1,827
Cash $ 31,766 $ 666,061
Restricted cash 2,162 25,083
Total cash and restricted cash, end of period $ 33,928 $ 691,144
Supplemental disclosure of noncash investing and financing activities
Conversion of related party notes payable and related party accrued interest into Class A Common Stock — 294,796
Conversion of notes payable and accrued interest into Class A Common Stock — 98,375
Conversion of assumed convertible and promissory notes payable into Class A Common Stock and Private Warrants — 1,080
Recognition of operating right of use assets and lease liabilities upon adoption of ASC 842 and for new leases entered into in 2022 11,906 —
Additions of property and equipment included in accounts payable and accrued expenses 12,056 —
Issuance of Warrants — 17,596
Issuance pursuant to commitment to issue registered shares 32,900 —
Receipt of class A common stock in consideration of exercises of options 669 —
Transfer of private warrants to unaffiliated parties 186 —
Conversion of convertible note to equity 84,780 —
Acquisitions of property and equipment included in accounts payable — 270
Conversion of The9 Conditional Obligation to equity — 2,863
Settlement of vendor payables in trust for a commitment to issue Class A Common Stock — 96,186
Settlement of accounts payable for a commitment to issue Class A Common Stock — 2,879
Supplemental disclosure of noncash investing and financing activities related to the Business Combination
Exchange of Legacy FF redeemable preference stock for a commitment to issue Class A Common Stock $ — $ 859,182
Exchange of Legacy FF convertible preferred stock for a commitment to issue Class B Common Stock — 697,611
Settlement of notes payable and accrued interest for a commitment to issue Class A Common Stock — 68,541
Settlement of related party notes payable and related party accrued interest for a commitment to issue Class A Common Stock — 69,218
Settlement of vendor payables in trust for a commitment to issue Class A Common Stock — 96,186
Settlement of accounts payable for a commitment to issue Class A Common Stock — 2,879
Reclassification of deferred transaction costs paid in prior periods against the proceeds received in the Business Combination — 7,865
Supplemental disclosure of cash flow information
Cash paid for interest $ 12,721 $ 5,837

~~The~~


	September 30, 2023		December 31, 2022
Cash and restricted cash
Cash	$	6,714	$	16,968
Restricted cash	1,853		1,546
Total cash and restricted cash	$	8,567	$	18,514

	Nine Months Ended September 30,
	2023		2022

Supplemental disclosure of noncash investing and financing activities
Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase	$	8,978	$	—
Reclassification of February 28, 2023 earnout shares liability to equity due to authorized share increase	5,014		—
Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares	2,112		—
Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares	2,979		—
Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase	1,381		—
Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase	2,043		—
Conversion of related party notes payable and related party accrued interest into Class A Common Stock	11,254		—
Conversion of notes payable and accrued interest into Class A Common Stock	114,073		—
Recognition of operating right of use assets and lease liabilities upon adoption of ASC 842 and for new leases entered into in 2022	—		11,906
Additions of property and equipment included in accounts payable and accrued expenses	—		12,056
Issuance of Secured SPA Warrants	34,257		—
Issuance pursuant to commitment to issue registered shares	—		32,900
Receipt of class A common stock in consideration of exercises of options	—		669
Transfer of private warrants to unaffiliated parties	—		186
Conversion of convertible note to equity	—		84,780
Acquisitions of property and equipment included in accounts payable	34,124		—
Issuance of Secured SPA Notes pursuant to the Exchange Agreement (Note 7)	16,500		—
Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange (Note 7)	6,811		—
Reduction in outstanding warrants pursuant to the Exchange Agreement (Note 7)	(16,506)		—

Supplemental disclosure of cash flow information
Cash paid for interest	465		12,721

See accompanying notes ~~are an integral part of these~~to unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

1. Nature of Business and Organization and Basis of Presentation

Nature of Business and Organization

Faraday Future Intelligent Electric Inc. (“~~Company” or “FF”~~FFIE”), a holding company incorporated in the State of Delaware on February 11, 2020, conducts its operations through the subsidiaries of FF Intelligent Mobility Global Holdings Ltd. (“Legacy FF”), founded in 2014 and headquartered in Los Angeles, California. References to the “Company” or “FF” refer to FFIE and its consolidated subsidiaries. FF is a global shared intelligent electric mobility ecosystem company with a vision to reformat the automotive industry.

On July 21, 2021 ~~(“Closing”~~(the “Closing Date”), the Company consummated a business combination pursuant to an ~~Agreement~~agreement and ~~Plan~~plan of ~~Merger~~merger dated January 27, 2021 (as amended, the “Merger Agreement”), by and among the Company, PSAC Merger Sub Ltd. (“Merger Sub”), an exempted company with limited liability incorporated under the laws of the Cayman Islands and wholly-owned subsidiary of Property Solutions Acquisition ~~Corp~~Corp. (“PSAC”)., a Delaware corporation our predecessor company, and Legacy FF. Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Legacy FF, with Legacy FF surviving the merger as a wholly-owned subsidiary of the Company (the “Business Combination”)~~, pursuant to which the Company received gross proceeds of $229,583 from the PSAC trust account.~~. Upon the consummation of the Business Combination (the “Closing”), PSAC changed its name from “Property Solutions Acquisition Corp.” to “Faraday Future Intelligent Electric Inc.”

Concurrently with the ~~Closing~~execution of the ~~Business Combination,~~Merger Agreement, the Company entered into separate subscription agreements with a number of investors (“PIPE Investors”) pursuant to which, on the Closing Date, the PIPE Investors purchased, and the Company issued, an aggregate of ~~76,140,000~~951,750 shares of Class A Common Stock (as defined below in this Note), for a purchase price of ~~$10~~$800.00 per share with an aggregate purchase price of ~~$761,400~~$761.4 million (“PIPE Financing”). Shares sold and issued in the PIPE Financing included registration rights. The closing of the private placement occurred immediately prior to the Closing Date.

The Company operates in a single operating segment and designs and engineers next-generation, intelligent, electric vehicles. The Company ~~expects to manufacture~~manufactures vehicles at its ~~ieFactory California~~ production facility in Hanford, California (“FF ieFactory California”) and has additional engineering, sales, and operations capabilities in China. The Company has created innovations in technology, products, and a user-centered business model that are being incorporated into its planned electric vehicle platform.

Principles of Consolidation and Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. They include the accounts of the Company, ~~consolidates the financial statements of~~its wholly-owned subsidiaries and all other entities in which itthe Company has a controlling financial interest, including the accounts of any Variable Interest Entity (“VIE”) in which the Company has a controlling financial interest and for which it is the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation.

The unaudited Condensed Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and are unaudited.

These ~~unaudited~~ Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual audited financial statements prepared in accordance with GAAP and should be read in conjunction with the Company’s audited Consolidated Financial Statements for the year ended December 31, ~~2021,~~2022, included in the Company’s Form ~~10-K~~10-K/A filed with ~~Securities and Exchange Commission (“SEC”)~~the SEC on ~~May 13, 2022~~August 21, 2023 (“Form ~~10-K”~~10-K/A”). Accordingly, the Condensed Consolidated Balance Sheet as of December 31, ~~2021,~~2022, has been derived from the Company’s annual audited Consolidated Financial Statements but does not contain all of the footnote disclosures from the annual financial statements. The Company believes that the disclosures included in this Form 10-Q are adequate to make the information presented not misleading.

In the opinion of management, the ~~Company, the unaudited~~ Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position, its results of operations, and cash flows for the periods presented. The accounting policies used in the preparation of these ~~unaudited~~ Condensed Consolidated Financial Statements are the same as those disclosed in the audited Consolidated Financial Statements for the year ended December 31, ~~2021,~~2022, included in the Form ~~10-K,~~10-K/A, except as described below.

~~Reclassification~~Our annual reporting period is the calendar year. The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year.

~~The Company reclassified certain amounts in the unaudited~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements ~~to conform to the current period's presentation.~~

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions, which affect the reported amounts in the financial statements.

Estimates are based on historical experience, where applicable, and other assumptions which management believes are reasonable under the circumstances. On an ongoing basis

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

management evaluates its estimates, including those related to the: (i) ~~realization of tax assets and estimates of tax liabilities; (ii)~~ valuation of equity ~~securities; (iii)~~securities including warrants; (ii) recognition and disclosure of contingent liabilities, including litigation reserves; ~~(iv)~~and (iii) fair value of related party notes payable and notes payable and warrants liabilities; (v) estimated useful lives and impairment of long-lived assets; (vi) fair value of options granted to employees and non-employees; (vii) fair value of warrants, and (viii) incremental borrowing rate used to measure operating lease liabilities.payable. Such estimates often require the selection of appropriate valuation methodologies and financial models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those ~~estimates.~~estimates under different assumptions, financial inputs, or circumstances.

Given the global economic climate, estimates are subject to additional volatility. As of the date the Company’s ~~unaudited~~ Condensed Consolidated Financial Statements were issued, the Company is not aware of any specific event or circumstance that would require it to update its estimates or judgments or to revise the carrying value of its assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s unaudited Condensed Consolidated Financial Statements in future periods. While the Company considered the effects of COVID-19 on its estimates and assumptions, due to the level of uncertainty regarding the economic and operational impacts of COVID-19 on the Company’s business, there may be other judgments and assumptions that the Company has not considered. Such judgments and assumptions could result in a material impact on the Company’s financial statements in future periods.obtained. Actual results could differ from these estimates and any such differences may have a material impact on the Company’s ~~unaudited~~ Condensed Consolidated Financial Statements.

~~Income Tax~~Revenue Recognition

~~The Company recorded an income tax provision of $0 and $9~~

Automotive sales revenue was $0.6 million for the three and nine months ended September 30, ~~2022,~~2023. Services and ~~$0 and $3~~other revenue was immaterial for the three and nine months ended September 30, ~~2021, respectively,~~2023.

Automotive Sales Revenue

We began the production of our first vehicle the FF 91 Futurist (the “FF 91,” “FF 91 Futurist”, or “FF 91 2.0 Futurist Alliance”) in March 2023 and started making deliveries to customers in August 2023.

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, over-the-air (“OTA”) software updates, internet connectivity and destination fees.

We recognize revenue on automotive sales upon delivery to the customer, which is when control of a vehicle transfers. Payments are typically received at the point control transfers or in accordance with payment terms customary to the business and as indicated in the sales contract. OTA software updates are provisioned upon transfer of control of a vehicle and recognized over time on a straight-line basis as we have a stand-ready obligation to deliver such services to the customer. For our obligations related to automotive sales, we estimate 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. Our vehicle contracts do not contain a significant financing component.

Revenue from immaterial promises will be combined with the vehicle performance obligation and recognized when the product has been transferred. We accrue costs to transfer these immaterial goods and services regardless of whether they have been transferred.

The Company provides its 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 the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2023.

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 promotions in exchange for specified fees. We consider these arrangements consideration payable to a customer. The consideration paid to the customer relates to marketing and research and development services that are distinct and could be purchased by the Company from a separate third-party. We perform an analysis in which we maximize the use of observable market inputs to

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

ascribe a fair value to these services and record the fair value of these services to sales and marketing expense or research and development expense, as applicable. Any consideration payable to a customer that is above the fair value of the distinct services being provided is treated as a reduction of revenue.

Customer Deposits and Deferred Revenue

The Company’s customers may reserve a vehicle and preorder certain services by making a customer deposit, which is fully refundable at any time. Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits (Accrued expenses and other current liabilities).

Customer deposits were $3.3 million and $3.4 million as of September 30, 2023 and December 31, 2022, 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 the transfer of products or services by the Company. Such advance payments are considered non-refundable, and the Company defers revenue related to any products or services that are not yet transferred.

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Deferred revenue related to products and services was immaterial as of September 30, 2023, and December 31, 2022.

Warranties

We provide a manufacturer’s warranty on all vehicles sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item where failure is due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the vehicle. Management tracks warranty claims by vehicle ID, owner, and date. As we continue to manufacture and sell more vehicles we will reassess and evaluate our warranty claims for purposes of our warranty accrual.


(in thousands)	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Accrued warranty- beginning of period	$	—	$	—
Provision for warranty	262		262
Warranty costs incurred	(12)		(12)
Accrued warranty- end of period	$	250	$	250

Cost of Revenue

Cost of automotive sales revenue includes direct and indirect materials, labor costs, manufacturing overhead, including depreciation costs of tooling and machinery, shipping and logistic costs, vehicle connectivity costs, and reserves for estimated warranty expenses. Cost of automotive sales revenues also includes adjustments to warranty expense.

Cost of services and other revenue includes costs associated with providing non-warranty after-sales services, costs for retail merchandise, and costs to provide vehicle insurance. Cost of services and other revenue also includes direct parts and material. Cost of services and other revenue was immaterial for the three and nine months ended September 30, 2023.

Inventory and Inventory Valuation

Inventory is stated at the lower of cost or net realizable value and consists of raw materials, work in progress, and finished goods. The Company primarily computes cost using standard cost, which approximates cost on the ~~unaudited~~first-in, first-out basis. Net realizable value is the estimated selling price of inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company assesses the valuation of inventory and periodically adjusts its value for estimated excess and obsolete inventory based upon expectations of future demand and market conditions, as well as damaged or otherwise impaired goods.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance and repairs, which do not extend the assets

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

lives, are charged to operating expense as incurred. Upon sale or disposition, the cost and related accumulated depreciation or amortization are removed from the Condensed Consolidated Balance Sheets and any gain or loss is included in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Depreciation and amortization on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and for leasehold improvements, over the term of the lease, if shorter.


			Useful Life (in years)
Buildings			39
Building improvements			15
Computer hardware			5
Tooling, machinery, and equipment			5 to 10
Vehicles			5
Computer software			3
Leasehold improvements			Shorter of 15 years or term of the lease

Construction in progress (“CIP”) consists of the construction activities related to the FF ieFactory California plant and tooling, machinery and equipment being built to serve the manufacturing of production vehicles. These assets are capitalized and depreciated once put into service.

The amounts capitalized in CIP that are held at vendor sites relate to the completed portion of work-in-progress of tooling, machinery and equipment built based on the Company’s specific needs. The Company may incur storage fees or interest fees related to CIP which are expensed as incurred. CIP is presented within Property and Equipment, net on the Condensed Consolidated Balance Sheets.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset groups) may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets, including any cash flows upon their eventual disposition, to the assets carrying values. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. Assets classified as held for sale are also assessed for impairment and such amounts are determined at the lower of the carrying amount or fair value, less costs to sell the asset. No impairment charges were recorded during the three and nine months ended September 30, 2023 and 2022.

Stock-Based Compensation

Effective January 1, 2023, stock-based compensation expense is reduced for forfeitures only when they occur. This change of accounting policy resulted in the recognition of a cumulative increase of prior stock-based compensation expenses totaling $1.8 million, which was recorded in the Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023.

Income Tax

The income tax provision (benefit) recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022 was immaterial. The difference in the Company’s effective tax rate from the federal statutory rate of 21% is primarily due to ~~the ratio of~~full domestic and international ~~loss before taxes.~~valuation allowances. The Company records a full valuation allowance to reflect limited benefits for income taxes in jurisdictions that historically reported losses and a provision for income taxes in jurisdictions that are profitable. The income tax provision for each period was the combined calculated tax expenses/benefits for various jurisdictions.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company is subject to taxation and files income tax returns with the U.S. federal government, the state of California and China. The Company’s income tax returns are open to examination by the relevant tax authorities until the expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. As of September 30, ~~2022,~~2023, the Company is not under any tax audits on its income tax returns. All of the Company’s prior year tax returns, from 2016 through 2021, are open under Chinese tax law.

The Company did not accrue any interest or penalties related to the Company's unrecognized tax benefits as of September 30, 2023 and 2022, as the uncertain tax benefits only reduced the net operating losses. The Company does not expect the uncertain tax benefits to have a material impact on its ~~unaudited~~ Condensed Consolidated Financial Statements within the next twelve months.

~~Recently Adopted Accounting Pronouncements~~Reclassifications

~~In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02,~~ ~~Leases~~ (Topic 842) (“ASC 842”), which outlines a comprehensive lease accounting model that supersedes the previous lease guidance. The guidance requires lessees to recognize lease liabilities and corresponding right-of-use (“ROU”) assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, ~~Leases (Topic 842) - Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment~~Certain reclassifications have been made to the ~~opening balance of retained earnings~~prior period in the period of adoption. The Company adopted the standard on January 1, 2022 using the modified retrospective basis and recorded operating lease ROU assets of $11,191 and operating lease liabilities of $11,191 on that date. As part of this adoption, the Company reclassified the deferred gain related to a previous sale and leaseback of $3,393 to accumulated deficit. The Company elected to apply the package of practical expedients permitted under the transition guidance within ASC 842 which does not require reassessment of initial direct costs, reassessment of the classification of leases as operating or financing, or reassessment of the definition of a lease (see Note 11, ~~Leases). Finance lease liabilities and related property and equipment assets did not change as a result of the adoption of this standard.~~

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to~~accompanying Condensed Consolidated Financial Statements to conform with the current presentation. Inventory and Finance lease right-of-use assets are now separately presented in the Condensed Consolidated Balance Sheets, as they were previously included in Other current assets and Property and equipment, net, respectively (see Note 4, Deposits and Other Current Assets and Note 5, Property and Equipment, Net). In addition, the Buildings and Leasehold improvements within Property and equipment, net (see Note 5, Property and Equipment, Net) have been combined, as they were previously presented separately. On the Condensed Consolidated Statement of Cash Flows, amortization of prepaid software costs is now presented in Changes in operating assets and liabilities instead of Depreciation and amortization expense, and Change in operating lease right-of-use assets is now separately presented instead of being combined with Depreciation and amortization expense.

Reverse Stock Split and Recasting of Per-Share Amounts

On August 22, 2023, the Company’s board of directors (the “Board”) approved the implementation of a 1-for-80 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”) and set the number of authorized shares of Common Stock to 154,437,500 (which is 12,355,000,000 divided by 80, the Reverse Stock Split ratio). The Reverse Stock Split was effected after market close on August 25, 2023, and shares of the Company’s Class A common stock par value $0.0001 per share (“Class A Common Stock”) and publicly traded warrants (the “Public Warrants”) began trading on a split-adjusted basis as of market open on August 28, 2023.

(~~in thousands, except share~~All shares of Common Stock, Public Warrants, stock-based compensation awards, earnout shares and per share ~~data)~~

~~(Unaudited)~~

amounts contained in the Condensed Consolidated Financial Statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split. In ~~August 2020, the FASB issued ASU 2020-06,~~ ~~Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity~~ ~~(“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20,~~ ~~Debt — Debt with Conversion and Other Options, for convertible instruments. ASU 2020-06 updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815,~~ ~~Derivatives and Hedging~~, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, ASU 2020-06addition, proportionate adjustments were made ~~amendments~~ to the ~~earnings per share guidance in Topic 260 for convertible instruments, the most significant impact~~number of which is requiring the use of the if-converted method for the diluted EPS calculation, and no longer allowing the net share settlement method. ASU 2020-06 also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. ASU 2020-06 is effective for interim and annual periods beginning after December 15, 2023, with early adoption permitted. Adoption of ASU 2020-06 can either be on a modified retrospective or full retrospective basis. The Company adopted the standard on January 1, 2022 on a modified retrospective basis and reclassified the Obligation to issue registered shares of Class A Common Stock of $12,635 from Accrued expenses and other current liabilities and reclassified $20,265 from Accumulated deficit to Commitment to issue Class A Common Stock on the unaudited Condensed Consolidated Balance Sheets.

~~In May 2021, the FASB issued ASU 2021-04,~~ ~~Issuer’s Accounting for Certain Modifications~~issuable upon exercise or ~~Exchanges of Freestanding Equity-Classified Written Call Options~~ (“ASU 2021-04”). ASU 2021-04 clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. ASU 2021-04 made amendments to the earnings per share guidance in Topic 260 for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options. Further, ASU 2021-04 made amendments to the ~~Debt — Modifications and Extinguishments~~ guidance in Topic 470-50. ASU 2021-04 also added references to revised guidance within Topic 505 and 718. Additionally, ASU 2021-04 made additions to Topic 815-40 related to the issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoptionconversion of the ~~amendments should be applied prospectively to modifications~~Company’s outstanding convertible debt securities and warrants, as well as the applicable exercise or ~~exchanges occurring on or after~~conversion prices. See Note 10, Stockholders' Equity , and Note 11, Stock-Based Compensation, for further discussion regarding the ~~effective date of the amendments. The Company adopted ASU 2021-04 as of January 1, 2022, which had an immaterial effect on the unaudited Condensed Consolidated Financial Statements.~~Reverse Stock Split.

2. ~~Restatement~~

In connection with remediating certain material weaknesses in the Company’s internal control over financial reporting previously disclosed in the Original Filing, the Company identified the error in its accounting for the conversion of the notes payable issued under its debt arrangements. The Company previously elected to measure such notes payable at fair value, as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 10, ~~Notes Payable). B~~etween the third quarter of 2022 and the first quarter of 2023 the purchasers converted certain of the notes into the Company’s Class A Common Stock. The Company historically erroneously applied debt conversion accounting guidance to the notes payable conversion transactions that is not applicable to debt accounted for under the Company’s fair value accounting policy election, which resulted in such conversions being incorrectly accounted for with a credit to Class A Common Stock and Additional paid-in capital equity equal to the fair value of the notes payable on each conversion date and no conversion gain or loss being recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company should have accounted for such conversions by applying debt extinguishment accounting with a credit to Class A Common Stock and Additional paid-in capital equal to the fair value of the Class A Common Stock issued on each conversion date. Under debt extinguishment accounting the difference between the fair value of the Class A Common Stock issued and the fair value of the debt at each conversion date represents a gain or loss on extinguishment. Accordingly, the Company should have recognized an

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

additional $22,764 Loss on settlement of notes payable in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2022 (and a corresponding $22,764 increase in Additional paid-in capital as of September 30, 2022) because the fair value of the Class A Common Stock issued significantly exceeded the fair value of the notes payable converted on each of the various conversion dates during the third quarter of 2022.

~~The restated financial information also includes adjustments to correct other immaterial errors, including errors that had~~ previously been adjusted for as out of period corrections in the Affected Periods. The other immaterial errors impacting the Company’s financial statements as of September 30, 2022 and for the three and nine months then ended relate to Change in fair value measurement of notes payable, Interest expense, Stock-based compensation expense, Accrued interest, Additional paid-in capital, and Accumulated deficit. The restatement adjustments were tax effected and any tax adjustments reflected in the Affected Periods relate entirely to the tax effect on the restatement adjustments.

In addition to the restatement of the financial statements, certain information within the following notes to the financial statements has been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate: ~~Note 8, Fair Value of Financial Instruments, Note 10, Notes Payable, and Note 14, Stock-Based Compensation.~~

Presented below is a reconciliation from the previously reported to the restated amounts as of and for the three and nine months ended September 30, 2022. The amounts labeled “As Previously Reported” were derived from the Original Filing. The impacts to the Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 as a result of the restatement were due to the changes in the Conversion of notes payable into Class A Common Stock, Stock-based compensation expense, and Net loss. In addition, there was no impact to net cash used in operating, investing or financing activities for the nine months ended September 30, 2022 as a result of the restatement.

~~The following tables present the effect of correcting these accounting errors on the Company’s previously issued financial statements (in thousands, except share and per share data):~~

~~Summary of Restatement - Condensed Consolidated Balance Sheet~~

September 30, 2022
As Previously Reported Restatement Impacts As Restated
Liabilities and stockholders’ equity
Current liabilities
Accrued interest $ 541 $ (418) $ 123
Total current liabilities 177,323 (418) 176,905
Total liabilities 253,361 (418) 252,943
Additional paid-in capital 3,603,368 16,913 3,620,281
Accumulated deficit (3,322,685) (16,495) (3,339,180)
Total stockholders’ equity 287,323 418 287,741
Total liabilities and stockholders’ equity $ 540,684 $ — $ 540,684

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~Condensed Consolidated Statements of Operations and Comprehensive Loss~~

Three Months Ended
September 30, 2022
As Previously Reported Restatement Impacts As Restated
Operating expenses
Research and development $ 48,062 $ (480) $ 47,582
Sales and marketing 3,888 (65) 3,823
General and administrative 28,655 (104) 28,551
Loss on disposal of property and equipment — — —
Total operating expenses 80,605 (649) 79,956
Loss from operations (80,605) 649 (79,956)
Change in fair value measurements (6,966) 5,202 (1,764)
Interest expense (663) 418 (245)
Related party interest expense (996) — (996)
Other (expense) income, net (6,457) — (6,457)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net (7,690) (22,764) (30,454)
Loss before income taxes (103,377) (16,495) (119,872)
Income tax provision — — —
Net loss $ (103,377) $ (16,495) $ (119,872)
Per share information:
Net loss per Common Stock – Class A and Class B – basic and diluted $ (0.30) $ (0.05) $ (0.35)
Weighted average Common shares outstanding – Class A and Class B – basic and diluted 346,575,508 — 346,575,508
Total comprehensive loss:
Net loss $ (103,377) $ (16,495) $ (119,872)
Change in foreign currency translation adjustment 9,864 — 9,864
Total comprehensive loss $ (93,513) $ (16,495) $ (110,008)

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

Nine Months Ended
September 30, 2022
As Previously Reported Restatement Impacts As Restated
Operating expenses
Research and development $ 260,221 $ (480) $ 259,741
Sales and marketing 16,272 (65) 16,207
General and administrative 89,173 (104) 89,069
Loss on disposal of property and equipment 1,407 — 1,407
Total operating expenses 367,073 (649) 366,424
Loss from operations (367,073) 649 (366,424)
Change in fair value measurements (622) 5,202 4,580
Interest expense (5,537) 418 (5,119)
Related party interest expense (2,931) — (2,931)
Other (expense) income, net (14,307) — (14,307)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net (7,690) (22,764) (30,454)
Loss before income taxes (398,160) (16,495) (414,655)
Income tax provision (9) — (9)
Net loss $ (398,169) $ (16,495) $ (414,664)
Per share information:
Net loss per Common Stock – Class A and Class B – basic and diluted $ (1.20) $ (0.05) $ (1.25)
Weighted average Common shares outstanding – Class A and Class B – basic and diluted 330,878,677 — 330,878,677
Total comprehensive loss:
Net loss $ (398,169) $ (16,495) $ (414,664)
Change in foreign currency translation adjustment 13,548 — 13,548
Total comprehensive loss $ (384,621) $ (16,495) $ (401,116)

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~Summary of Restatement - Condensed Consolidated Statement of Cash Flows~~

Nine Months Ended
September 30, 2022
As Previously Reported Restatement Impacts As Restated
Cash flows from operating activities
Net loss $ (398,169) $ (16,495) $ (414,664)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense 15,323 — 15,323
Stock-based compensation 9,793 (649) 9,144
Vesting of restricted stock awards for employee bonus — — —
Loss on disposal of property and equipment 1,407 — 1,407
Change in fair value measurement of related party notes payable and notes payable 622 (5,202) (4,580)
Loss (gain) on foreign exchange 2,484 — 2,484
Loss on write-off of vendor deposits, net and (gain) on write-off of accounts payable 2,992 — 2,992
Non-cash interest expense 8,468 (418) 8,050
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net 7,690 22,764 30,454
Gain on forgiveness of vendor payables in trust — — —
Reserve for unrecoverable value added taxes — — —
Other 324 — 324
Changes in operating assets and liabilities:
Deposits 13,364 — 13,364
Other current and non-current assets (16,011) — (16,011)
Accounts payable 27,467 — 27,467
Accrued payroll and benefits 9,372 — 9,372
Accrued expenses and other current liabilities (24,628) — (24,628)
Operating lease liabilities (2,886) — (2,886)
Accrued interest expense (12,721) — (12,721)
Transfers between vendor payables in trust and accounts payable — — —
Net cash used in operating activities $ (355,109) $ — $ (355,109)

Supplemental disclosure of noncash investing and financing activities
Conversion of convertible note to equity $ 67,218 $ 17,562 $ 84,780

3. Liquidity and Capital Resources

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the ~~unaudited~~ Condensed Consolidated Financial Statements are issued. Based on its recurring losses from operations since inception and continued cash outflows from operating activities (all as described below), the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these ~~unaudited~~ Condensed Consolidated Financial Statements were issued.

The timing of first deliveries of FF 91 vehicles is uncertain and is not expected to occur in 2022 and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount reductions and other expense reduction and payment delay measures. It is also subject to suppliers meeting their commitments on program deliverables including parts, and timely and successful certification testing. FF is seeking to raise additional capital from various fundraising efforts currently underway to supplement its cash on hand of $31,766 as of September 30, 2022. The Company has taken steps to preserve its cash position, including reducing spending, extending payment cycles and other similar measures.

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

As part of its funding efforts, on November 11, 2022, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. (“Yorkville”), an affiliate of Yorkville Advisors Global, LP, which provides the Company the sole right, but not the obligation, to direct Yorkville from time to time to purchase up to $200,000 (“Commitment Amount”) of the Company’s shares of Class A Common Stock during the commitment period ending November 11, 2025, at a 3% discount of the VWAP (as defined below) of the shares during the three preceding days of each issuance. The Company has the option to increase the Commitment Amount to up to $350,000 during the commitment period. The Company agreed to issue 789,016 shares of Class A Common Stock in satisfaction of the commitment fee agreed upon in the SEPA. As of the date the unaudited Condensed Consolidated Financial Statement were issued, the Company did not direct Yorkville to buy any shares of Class A Common Stock. The Company shall use commercially reasonable efforts to prepare and file with the SEC a registration statement for the resale by Yorkville of the shares of Class A Common Stock to be issued under the SEPA (including the 789,016 commitment shares). The Company shall not have the ability to draw funds until the effectiveness of such registration statement and the satisfaction of certain other conditions.

Any purchase would be subject to certain limitations, including that Yorkville shall not purchase any shares that would result in it and its affiliates beneficially owning more than 9.99% of the then outstanding voting power or number of shares of Class A Common Stock or any shares that would exceed 19.99% of all shares of Class A Common Stock and Class B common stock of the Company outstanding on the date of the SEPA, unless Company shareholder approval was obtained allowing for issuances in excess of such amount (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including where the average price of all shares of Class A Common Stock equals or exceeds $0.62 per share.

~~Further, and as more fully described in Note 10,~~ ~~Notes Payable,~~ ~~the Company has unfunded commitments from Purchasers, in the amount of $40,000 in connection with the SPA, as such terms are defined in Note 10,~~ ~~Notes Payable~~, $20,000 of which is expected to be funded by the end of 2022, subject to the satisfaction of certain conditions, and the remaining $20,000 of which is expected to be received following the launch of the FF 91 and completion of certain other conditions. The Company also has the right to force the conversion of the warrants underlying the Warrant Reserve, as such term is defined in Note 13, ~~Stockholders' Equity, for a total exercise price of $20,000 in cash, upon the completion of certain milestones and conditions.~~

Despite the access to liquidity resulting from the SEPA when, and if, it shall become effective, the Warrant Reserve and the unfunded commitments from the SPA, the Company projects that it may require additional funds during the remainder of 2022 and will require additional funds beyond 2022 in order to continue operations and support the ramp-up of production of the FF 91 to generate revenues to put the Company on a path to cash flow break-even. Incremental capital needs beyond 2022 to fund development of the Company’s remaining product portfolio will be highly dependent on the market success and profitability of the FF 91 and the Company’s ability to accurately estimate and control costs.

Since its formation, the Company has devoted substantial effort and capital resources to strategic planning, engineering, design, and development of its electric vehicle platform, development of initial electric vehicle models, the build out of the FF ieFactory California, and capital raising. Since inception, the Company has incurred cumulative losses from operations and negative cash flows from operating activities, and has an accumulated deficit of ~~$3,339,180~~$3.9 billion and a cash balance of $6.7 million as of September 30, ~~2022. After~~2023. The Company expects to continue to generate significant operating losses for the closing of the Business Combination and the PIPE Financing on July 21, 2021, the Company received gross proceeds aggregating $990,983 which it used to settle certain liabilities and the remainder of which management has used to finance the ongoing operations of the business.

foreseeable future. The Company has funded its operations and capital needs primarily through the net proceeds received from capital contributions, the issuance of related party notes payable and notes payable (see Note 9,8, Related Party ~~Notes Payable~~Transactions, and Note ~~10,~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

7, Notes Payable), the sale of ~~Preferred and~~ Common Stock, ~~(see Note 13,~~ ~~Stockholders' Equity~~) and the net proceeds received from the Business Combination and the PIPE Financing (see Note 4,1, Nature of Business ~~Combination~~and Organization and Basis of Presentation).

FF announced the start of production of its first electric vehicle, the FF 91 Futurist, on March 29, 2023 and announced the delivery of its first electric vehicle, the Ultimate AI TechLuxury FF 91 2.0 Futurist Alliance, on August 14, 2023. However, FF has recognized an insignificant amount of revenue as of the date hereof. FF’s future business depends in large part on its ability to execute its plans to develop, manufacture, market, and deliver electric vehicles, including the FF 91, FF 81, FF 71 series, and Smart Last Mile Delivery electric vehicle models that appeal to customers. As a result of certain management assumptions, including timely completion of certain testing and suppliers meeting our supply chain requirement, FF originally expected deliveries of the FF 91 Futurist to users to begin before the end of April 2023. However, certain of FF’s suppliers were unable to meet FF’s timing requirements and, therefore, FF updated the timing for the start of deliveries for its FF 91 vehicle. FF has developed a three-phase delivery plan for the FF 91 (the “Delivery Plan”). The ~~Company’s~~first phase is the “Industry Expert Futurist Product Officer (“FPO”) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) are expected to pay in full for an FF 91 vehicle in order to reserve the vehicle and be trained in the use of the vehicle. The Company began delivery of the reserved FF 91 vehicles to the FPO during the second phase, which is the “FPO Co-Creation Delivery.” In the second phase, FPO(s) are taking possession of the FF 91 vehicle and are entering into consulting, branding, marketing, and other arrangements with FF in exchange for fees to be paid by the Company to the FPO(s). The third phase is the “Full Co-Creation Delivery,” in which, FF will deliver FF 91 vehicles to all spire users that are expected to have paid in full for an FF 91 vehicle at time of delivery.

FF needs substantial additional financing to start the third phase of the Delivery Plan and is in discussions with additional potential investors to obtain such financing. As FF executes the Delivery Plan, it plans to continue to move vehicles into production and off-the-line with high quality and high product power. There is no assurance FF will be able to timely receive sufficient funding under existing or new financing commitments to produce and deliver the FF 91 on that timeline or at all. If FF is unable to receive sufficient funding, FF will be required to obtain new financing commitments, which may not be available to it under reasonable commercial terms if at all. Further, there cannot be any assurance that FF will develop the manufacturing capabilities and processes, secure reliable sources of component supply to meet quality, engineering, design or production standards, or to meet the required production volumes to successfully grow into a viable, cash flow positive, business.

The Company has continued financing discussions with multiple parties, but has experienced delays in securing additional funding commitments, which have exacerbated the supply chain and liquidity pressures on FF’s business. Since August 14, 2022, pursuant to the Securities Purchase Agreement (the “Secured SPA”), Unsecured Securities Purchase Agreement (the “Unsecured SPA”), and the Streeterville Securities Purchase Agreement (the “Unsecured Streeterville SPA” and collectively the “SPA Commitments”), the Company has obtained commitments from several investors totaling $513.5 million in convertible note financing. A total of $300.2 million under these convertible note financing commitments has been funded ($263.2 million net of original discount and transaction costs) as of September 30, 2023. The remaining balance of $213.3 million is subject to various conditions, including achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of certain conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes. In addition to the amounts received pursuant to the above commitments, the Company received additional optional funding - an aggregated gross proceeds of $38.0 million ($32.9 million net of original issuance discount) under the Secured SPA. Additionally, the Company has received commitments totaling $20.0 million through forced warrant exercise proceeds, subject to certain conditions.

There can be no assurance that FF will be able to satisfy the closing conditions under the Secured SPA, Unsecured SPA and Unsecured Streeterville SPA or that FF will be able further to successfully obtain additional incremental convertible senior secured note purchasers under the Secured SPA, Unsecured SPA, Unsecured Streeterville SPA or other debt or equity financing in a timely manner or on acceptable terms, if at all. These factors, in addition to the continued rise in inflation and other challenging macroeconomic conditions, have led FF to take steps to preserve its current cash position, including reducing spending, extending payment cycles and implementing other similar measures. If FF’s ongoing ~~liquidity needs~~capital raising efforts are unsuccessful or significantly delayed, or if FF experiences prolonged material adverse trends in its business, FF’s production will ~~depend on the extent to which the Company’s~~be delayed or decreased, and actual ~~costs~~use of cash, production volume and revenue for 2023 will vary from the Company’s ~~estimates~~previously disclosed forecasts, and such variances may be material. In addition to the risk that FF’s assumptions and analyses may prove incorrect, the projections may underestimate the professional fees and other costs to be incurred related to the pursuit of various financing options currently being considered and the ongoing legal risks. Incremental capital needs beyond 2023 to

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

fund operations and the development of the Company’s remaining product portfolio and to ramp up production will be highly dependent on the market success and profitability of the FF 91 series and the Company’s ability to accurately estimate and control ~~these costs,~~costs. Apart from the FF 91 series, substantial additional capital will be required to fund operations, research, development, design, and manufacturing efforts for future vehicles.

On November 11, 2022, FF entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), which is an affiliate of Yorkville Advisors. Under the terms of the SEPA, FF has the right, but not the obligation, to sell up to $200.0 million (which can be increased up to $350.0 million at FF’s option) of Class A Common Stock to Yorkville, subject to certain limitations, at the time of the Company’s choosing during the three-year term of the SEPA. During the three and nine months ended September 30, 2023, FF sold 837,500 shares of Class A Common Stock at a price equal to 97% of the average daily volume weighted average price of the Class A Common Stock to Yorkville under the SEPA for $7.3 million.

On June 16, 2023, the Company filed a shelf registration on Form S-3 with the SEC (the “Shelf Registration”), which was declared effective by the SEC on June 28, 2023. As a result, the Company may from time-to-time issue Class A Common Stock and/or warrants, up to an aggregate amount of $300.0 million in one or more offerings. The Shelf Registration allows the Company to raise additional capital through Class A Common Stock and/or warrant issuances to both institutional and retail investors as ~~well~~it looks to raise additional financing to support production ramp-up. On September 27, 2023, the Company filed a prospectus supplement to the Shelf Registration regarding an at-the-market equity offering sales agreement (the “Sales Agreement”) the Company entered into on September 26, 2023 with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC (the “Sales Agents”) to offer and sell up to $90.0 million of Class A Common Stock. In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of the Class A Common Stock from time to time through or to the Sales Agents as sales agent or principal by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. The aggregate compensation payable to the Sales Agents is up to 3.5% of the gross sales price of the shares sold through the Sales Agents. During the three and nine months ended September 30, 2023, the Company issued 780,000 shares of Class A Common Stock under the Sales Agreement for gross cash proceeds of $1.3 million less placement agent fees of $0.05 million.

Despite the potential access to liquidity resulting from the SEPA, the Shelf Registration (including pursuant to the Sales Agreement) and the unfunded commitments from the Secured SPA, the Unsecured SPA and the Unsecured Streeterville SPA, the Company projects that it will require additional funds in order to continue operations and support the ramp-up of production of the FF 91 Futurist to generate revenues to put the Company on a path to cash flow break-even. Incremental capital needs beyond 2023 to fund operations and the development of the Company’s remaining product portfolio and to ramp up production will be highly dependent on the market success and profitability of the FF 91 Futurist and the Company’s ability to ~~raise additional funds.~~ accurately estimate and control costs.

The Company is exploring various funding and financing alternatives to fund its ongoing operations and to ramp up production, including equipment leasing, construction financing of the FF ieFactory California, secured syndicated debt financing, convertible notes, working capital loans, and equity offerings, among other options. The particular funding mechanisms, terms, timing, and amounts are dependent on the Company’s assessment of opportunities available in the marketplace and the circumstances of the business at the relevant time.

The timely achievement of the Company’s operating plan as well as its ability to maintain an adequate level of liquidity are subject to various risks associated with the Company’s ability to continue to successfully close additional sources of funding, control and effectively manage its costs, as well as factors outside of the Company’s control, including those related to global supply chain disruptions, the rising prices of materials, ~~potential impact of the COVID-19 pandemic,~~ and general macroeconomic conditions. The Company’s forecasts and projections of working capital reflect significant judgment and estimates for which there are inherent risks and uncertainties. The Company expects to continue to generate significant

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

operating losses for the foreseeable future. The plans are dependent on the Company being able to continue to raise significant amounts of capital through the issuance of additional notes payable and equity securities.

There can be no assurance that the Company will be successful in achieving its strategic plans, that the Company’s future funding raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce discretionary spending, alter or scale back vehicle development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures. Any such events would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business ~~objectives.~~

~~As of September 30, 2022,~~objectives, and the Company ~~was in default on~~will likely not be able to continue as a ~~related party note payable with a principal amount of $8,451. In January 2022, the Company defaulted on the Optional Notes (see Note 10,~~ going concern.

~~Notes Payable). The holders of the Optional Notes have waived the default.~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The ~~unaudited~~ Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the ~~unaudited~~ Condensed Consolidated Financial Statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

~~4. Business Combination~~

~~On July 21, 2021, the Company consummated the Business Combination. Pursuant to the terms~~As of ~~the Merger Agreement, Merger Sub merged with~~ and into Legacy FF, with Legacy FF surviving the merger as a wholly-owned subsidiary of the Company. Upon the consummation of the Business Combination, the registrant changed its name from Property Solutions Acquisition Corp. to Faraday Future Intelligent Electric Inc.

~~Commitment to Issue Class A and Class B Common Stock~~

As part of the closing of the Business Combination, former stockholders and noteholders of Legacy FF are required to submit a signed Company share letter of transmittal or converting debt letter of transmittal along with a lockup agreement to the Company’s transfer agent in order for shares of the Company to be issued in their name in exchange for their shares in, notes from, vendor trust or other supplier agreements with, Legacy FF. Until the holder of the right to receive shares of the Company’s Class A Common Stock is issued shares, that holder does not have any of the rights of a stockholder. During the three and nine month ended September 30,since December 31, 2022, the Company ~~issued 20,264,715~~was and ~~89,152,131 shares~~has been in default on the Secured SPA Notes. However, for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023, the holders of ~~Class A Common Stock, respectively, and 64,000,588 shares of Class B Common Stock~~such notes subsequently waived the default. Since April 2023, the Company has been in ~~full satisfaction~~breach of its ~~commitment~~debt agreement with Chongqing Leshi Small Loan Co., Ltd., a related party, with an outstanding principal balance of $4.5 million. As a result of the default, the interest rate on the outstanding principal balance has increased to ~~issue Class A and Class B Common Stock.~~a rate of 18% per annum until the event of default is no longer applicable.

There can be no assurance that the Company will be able to maintain sufficient authorized shares to fully settle all outstanding equity-linked financial instruments in shares.

3. Inventory


(in thousands)	September 30, 2023		December 31, 2022
Raw materials (net of reserves)	$	33,839	$	4,457
Work in progress	1,063		—
Finished goods	313		—

Total inventory	$	35,215	$	4,457

The ~~Company determined that the commitment to issue shares of Class A and Class B Common Stock~~increase in inventory is ~~indexed~~due to the ~~Company’s own equity, within the meaning in ASC 815-10-15-74~~start of production on March 29, 2023. The inventory reserve was $1.0 million and ~~met the scope exception to not be subject to derivative accounting under ASC 815-40-25. As such, the Company classified the commitment to issue shares~~zero as of ~~Class A~~September 30, 2023 and ~~Class B Common Stock in equity.~~December 31, 2022, respectively.

~~For purposes of presentation of shares outstanding~~

4. Deposits and Other Current Assets


(in thousands)
Deposits:	September 30, 2023		December 31, 2022
Deposits for research and development, prototype and production parts, and other	$	59,783	$	40,879
Deposits for goods and services yet to be received (“Future Work”)	2,773		3,187
Total deposits	$	62,556	$	44,066

Other current assets:
Prepaid expenses	$	11,260	$	14,437
Other current assets	9,703		3,052
Total other current assets	$	20,963	$	17,489

Deposits for research and development, prototype and production parts, and other are recognized and reported as Research and development expenses in the ~~Company’s financial statements, the unaudited~~ Condensed Consolidated ~~Balance Sheets and unaudited Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit) present legally issued and outstanding shares.~~

~~For purposes of presentation of basic and diluted net loss per share in the unaudited Condensed Consolidated Statements~~Statement of Operations and Comprehensive Loss when services are provided or as prototype parts are received. In addition, during the three and nine months ended September 30, 2023, the Company made deposits for inventory and property and equipment items which are classified out of Deposits upon receipt of title.

Prepaid expenses primarily consist of software subscriptions and insurance, and other current assets includes ~~shares~~certain deferred expenses. As of September 30, 2023, Other current assets also includes an insurance receivable relating to ~~be issued~~a legal settlement with a corresponding liability recognized in ~~the denominator in accordance with ASC 710-10-54-4~~Accrued expenses and ~~ASC 260-10-45-48 as if they had been issued on the date of the merger, as such shares are non-contingent and are issuable for no consideration.~~other current liabilities.

1918

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

5. ~~Deposits~~Property and ~~Other Current Assets~~Equipment, Net

~~Deposits~~


(in thousands)	September 30, 2023		December 31, 2022
Buildings and leasehold improvements	$	86,320	$	5,598
Computer hardware	2,142		3,112
Tooling, machinery and equipment	265,760		9,542
Vehicles	669		337
Computer software	4,172		4,212
Construction in process	93,626		393,814
Less: Accumulated depreciation	(36,175)		(10,295)
Total property and equipment, net	$	416,514	$	406,320

FF announced the start of production of its first electric vehicle, the FF 91 Futurist, on March 29, 2023, at which point the Company classified a portion of its construction in process assets that are available for their intended use in the amount of $225.7 million and ~~other current assets consist of the following:~~

Deposits: September 30, 2022 December 31, 2021
Deposits for research and development, prototype and production parts, and other $ 39,142 $ 54,990
Deposits for “Future Work” 5,388 8,380
Total deposits $ 44,530 $ 63,370
Other current assets:
Prepaid expenses $ 19,300 $ 11,119
Other current assets 4,459 2,291
Total other current assets $ 23,759 $ 13,410

~~During~~$75.7 million to Tooling, machinery and equipment and Buildings and leasehold improvements, respectively, during the three ~~and nine~~ months ended September 30, 2022, the Company made deposits for research and development (“R&D”), prototype and production parts with its vendors, which support the Company’s ongoing R&D efforts and operations. The Company expenses deposits as the services are provided and prototype parts are received.

~~Amortization expense related to the Palantir hosting arrangement and other prepaid software subscriptions totaled $3,204 and $1,466 for~~March 31, 2023. In the three months ended September 30, ~~2022 and 2021, and $8,866 and $1,739 for the nine months ended September 30, 2022 and 2021, respectively.~~

~~During the three months ended September 30, 2022,~~2023, the Company ~~entered into an insurance policy~~made available for ~~its directors~~intended use another $30.7 million and ~~officers (“D&O Policy”), which required it to make a prepayment in the amount~~$5.0 million of $21,732, of which $4,265 was amortized to General and administrative expenses in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for three and nine months ended September 30, 2022.

~~6. Property and Equipment, Net~~

~~Property~~Tooling, machinery and equipment ~~net, consists of the following:~~

September 30, 2022 December 31, 2021
Buildings $ 14,180 $ 14,180
Computer hardware 3,112 3,051
Tooling, machinery, and equipment 8,916 8,868
Vehicles 337 337
Computer software 4,027 1,032
Leasehold improvements 383 297
Construction in process 391,880 275,048
Less: Accumulated depreciation (11,178) (9,678)
Total property and equipment, net $ 411,657 $ 293,135
and Buildings and leasehold improvements, respectively.

Depreciation expense related to property and equipment totaled ~~$799~~$13.2 million and ~~$659~~$0.8 million for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$2,271~~$27.5 million and ~~$2,529~~$2.3 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

6. Accrued Expenses and Other Current Liabilities


(in thousands)	September 30, 2023		December 31, 2022
Accrued payroll and benefits	$	27,309	$	20,502
Accrued legal contingencies	21,819		18,940


Other current liabilities	19,318		26,267
Total accrued expenses and other current liabilities	$	68,446	$	65,709

7. Notes Payable

The Company has entered into notes payable agreements with third parties, which consist of the following as of September 30, 2023 and December 31, 2022:


	September 30, 2023
(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
Secured SPA Notes (1)	Various	10%-15%	$	113,376	$	(20,945)	$	(13,567)	$	78,864
Unsecured SPA Notes (1)*	Various dates in 2029	10%-15%	20,073		133		(3,625)		16,581
Notes payable – China other	Due on Demand	—%	4,847						4,847
Auto loans	October 2026	7%	82						82
			$	138,378	$	(20,812)	$	(17,192)	100,374
Less: Related party notes payable									$	(2,945)
Less: Notes payable, current portion									(4,929)
Total: Notes payable, less current portion									$	92,500

* includes amounts attributed to the Unsecured Streeterville SPA

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements


	December 31, 2022
(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
Secured SPA Notes (1)	October 27, 2028	10%	$	36,622	$	264	$	(10,878)	$	26,008
Notes payable – China other	Due on Demand	—%	4,997		—		—		4,997
Auto loans	October 2026	7%	100		—		—		100
			$	41,719	$	264	$	(10,878)	31,105
Less: Notes payable, current portion									(5,097)
Total: Notes payable, less current portion									$	26,008

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

(1) Secured and Unsecured SPA Notes

~~7. Accrued Expenses~~ On August 14, 2022, the Company entered into the Secured SPA with FF Simplicity Ventures LLC (“FFSV”) as administrative agent, collateral agent,and ~~Other Current Liabilities~~purchaser and certain additional purchasers (collectively the “Secured SPA Purchasers”) to issue and sell the Company’s senior secured convertible notes (the “Secured SPA Notes” and with the Unsecured SPA Notes (as defined below) the “SPA Notes”) in three tranches originally aggregating to $52.0 million in principal with a four year maturity, which was subsequently extended to six year.

~~Accrued expenses~~

On May 8, 2023, as further described below, the Company entered into the Unsecured SPA with Metaverse Horizon Limited (“MHL”) and V W Investment Holding Limited (“VW”, and together with MHL and other ~~current liabilities consist~~purchasers, the ”Unsecured SPA Purchasers”) to issue and sell $100.0 million aggregate principal of the ~~following:~~Company’s senior unsecured convertible notes (the “Unsecured SPA Notes”). In August 2023, as further described below, the Company entered into the Unsecured Streeterville SPA (collectively included with the Unsecured SPA and Unsecured SPA Notes in future references), as part of its issuance of the Unsecured SPA Notes. The terms of the Secured SPA Notes and Unsecured SPA Notes are generally the same, however, the Secured SPA Notes are secured by the grant of a second lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well as guarantee by substantially all of the Company’s domestic subsidiaries.

September 30, 2022 December 31, 2021
Accrued legal contingencies $ 14,606 $ 16,881
Engineering, design and testing services received not invoiced 7,637 6,620
Deposits from customers 3,708 4,354
Accrued legal contingencies due to affiliates 6,551 6,673
Obligation to issue registered shares of Class A Common Stock (1)
— 12,635
Bridge Warrants (2)
4,686 —
Other current liabilities 8,916 21,597
Total accrued expenses and other current liabilities $ 46,104 $ 68,760

~~(1)~~ The ~~obligation~~SPA Notes are generally subject to an original issue ~~registered~~discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock ~~was reclassified~~at the Conversion Price (as defined in each SPA Note), subject to ~~Commitment~~full ratchet anti-dilution price protection. The conversion price for the SPA Notes is $1.64 as of September 30, 2023, which represents an amended and reduced conversion price due-to the full ratchet price protections, as described below.

The SPA Notes bear interest at 10% per annum (or 15% if interest or settlement is paid in shares) payable on each conversion date and on the maturity date in cash or in shares of Class A Common Stock. Unless earlier paid, the SPA Notes entitle the purchasers, at each conversion date, to ~~issue~~an interest make-whole (“Make-Whole Amount”), in a combination of cash or Class A Common Stock, at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity. The conversion price for the Make-Whole Amount is the greater of (a) the floor price, which is $3.63 as of September 30, 2023 or (b) 90% of the lowest volume-weighted average price (“VWAP”) for the five consecutive trading days. When calculating the shares issuable upon conversion, the ~~adoption~~Make-Whole Amount shall be decreased by 50% of ~~ASU 2020-06~~the original issue discount pertaining to such amount.

Total commitments under the initial Secured SPA were not to exceed $300.0 million, however, each original Secured SPA Purchaser has the option within 12 months from November 12, 2022 to purchase additional Secured SPA Notes under similar terms (the “Tranche B Notes”) (see Note 2, Liquidity and Capital Resources, for detailed discussion on ~~January 1, 2022, and subsequently~~commitments to ~~Additional paid-in capital (“APIC”) upon~~fund additional Secured SPA Notes).

In connection with the issuance of the SPA Notes, the Company also granted to each Secured SPA Purchaser and Unsecured SPA Purchaser a warrant (the “SPA Warrants”) to purchase shares of Class A Common Stock ~~on July 21, 2022 (see Note 8,~~equal to 33% of the shares issuable upon conversion of the aggregate principal amount under the SPA Notes funded.

The Company elected the fair value option afforded by Accounting Standards Codification (“ASC”) 825, ~~Fair Value~~Financial Instruments, with respect to the SPA Notes because the notes include features, such as a contingently exercisable put option, which meet the definition of ~~Financial Instruments).~~an embedded derivative. The Company expenses transaction costs to Changes in fair value of notes

~~(2)~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

payable and warrant liabilities or Changes in fair value of related party notes payable and warrant liabilities, as applicable, in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

First Secured SPA Amendment

On September 23, 2022, the Secured SPA was amended (the “First Secured SPA Amendment”), pursuant to which the existing Secured SPA Purchasers agreed to accelerate their funding obligations. The First Secured SPA Amendment modified the conversion price to $84.00 per share. All of the other terms and conditions of the Secured SPA Notes were unchanged.

The Company evaluated the First Secured SPA Amendment in accordance with ASC 470-50, ~~Issuance~~Debt–Modifications and Extinguishments, and determined that it constitutes an extinguishment because the change in the fair value of ~~Liability-classified Warrants~~the conversion feature is substantial. Accordingly, the Company recognized a loss on extinguishment in Loss on settlement of notes payable in the Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $7.7 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the Secured SPA Notes.

Joinder and Amendment Agreement with Senyun International Ltd (“Senyun”).

On September 25, 2022, the Company entered into a Joinder and Amendment Agreement (the “Joinder”) with Senyun, the Agent, as administrative agent, collateral agent, and purchaser, and RAAJJ Trading LLC (“RAAJJ”), pursuant to which Senyun agreed to purchase Secured SPA Notes in an aggregate principal amount of up to $60.0 million in installments.

Third and Fourth Secured SPA Amendments

On October 24, 2022, the Company entered into a Limited Consent and Third Amendment to the Secured SPA (the “Third Secured SPA Amendment”) with the existing Secured SPA Purchasers, pursuant to which the maturity date for the Secured SPA Notes was extended from August 14, 2026 to October 27, 2028. In addition, pursuant to the Third Secured SPA Amendment, each Secured SPA Purchaser and the Agent (as defined in the First Secured SPA Amendment) waived certain defaults and events of default under the Secured SPA, any notes issued pursuant to the Secured SPA, and other related documents. The Third Secured SPA Amendment was accounted for as a troubled debt restructuring under ASC 470-60, Debt – Troubled Debt Restructurings by Debtors, because the Company was experiencing financial difficulty and the extension of the maturity date following the restructuring results in a reduced effective borrowing rate for the Company. The Third Secured SPA Amendment was accounted for prospectively with no gain or loss recorded in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2022.

On ~~various~~November 8, 2022, the Company entered into a Limited Consent and Amendment to the Secured SPA (the “Fourth Secured SPA Amendment”), pursuant to which the parties agreed that (i) in no event will the effective conversion price of any interest or interest Make-Whole amount payable in shares of Class A Common Stock be lower than $16.80 per share of Class A Common Stock, and (ii) in order for the Company to make payment of any interest or interest Make-Whole amount in shares of Class A Common Stock, certain price and volume requirements must be met, namely that (x) the VWAP of the Class A Common Stock is not less than $16.80 per share on any trading day during the preceding seven trading day period, and (y) the total volume of the Class A Common Stock does not drop below $1.5 million on any trading day during the same period (in each case, as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions). The Fourth Secured SPA Amendment was accounted for as a troubled debt restructuring under ASC 470-60, Debt – Troubled Debt Restructurings by Debtors, because the Company was experiencing financial difficulty and the addition of a floor price on the conversion of the convertible notes is assessed as a concession to the Company. The Fourth Secured SPA Amendment was accounted for prospectively with no gain or loss recorded in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2022.

Senyun Amendment

On December 28, 2022, the Company entered into a Letter Agreement and Amendment to the Secured SPA (the “Senyun Amendment”) with Senyun pursuant to which the conversion rate of notes totaling $19.0 million was lowered from $84.00 to $71.40 and future funding ~~dates~~timeframes were renegotiated. As a result of the new conversion rate, the Company was obligated for the year then ended to issue additional shares to Senyun based on the lower conversion rate. The Company accounted for this obligation by crediting Other current liabilities in the Consolidated Balance Sheet for $0.9 million, which represents the fair value of the additional shares owed to Senyun. In addition, the $0.9 million was recognized as a Loss on settlement of notes payable in the Consolidated Statement of Operations and Comprehensive Loss as the underlying debt

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

instruments were extinguished on the date the Senyun Amendment was entered into. The Company remitted the shares to Senyun in March 2023.

Sixth Secured SPA Amendment

On February 3, 2023, the Company entered into Amendment No. 6 to the Secured SPA (the “Sixth Secured SPA Amendment”) with certain Secured SPA Purchasers, in which the Company agreed to sell up to $135.0 million in aggregate principal (the “Tranche C Notes”) with terms largely congruent to prior issuances and a $84.00 base conversion price subject to full ratchet anti-dilution price protection. Each applicable Secured SPA Purchaser has the option to purchase additional Secured SPA Notes on the same terms as the Tranche C Notes in an amount not to exceed 50% of the initial principal amount of the Tranche C Notes issued to each applicable Secured SPA Purchaser (the “Tranche D Notes”).

Pursuant to the Sixth Secured SPA Amendment, certain outstanding Secured SPA Notes issued by the Company to Secured SPA Purchasers with an aggregate outstanding principal amount of $31.0 million were replaced by the same principal amount of new notes with a $71.40 base conversion price. In accordance with ASC 470-50, Debt— Modifications and Extinguishments, the change in conversion price qualifies as an extinguishment because the change in the fair value of the conversion feature was substantial. Accordingly, the Company recognized a Loss on settlement of notes payable in the Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $3.0 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the Secured SPA Notes.

Pursuant to the Sixth Secured SPA Amendment, the Company entered into an agreement with certain Secured SPA Purchasers (the “Exchange Agreement”) holding a total of 2,476,625 warrants to exchange them for an aggregate 1,131,117 warrants and principal convertible notes (the “Exchange Notes”) totaling $41.0 million. The issued warrants have terms that limit down-round ratchet clauses to price adjustments only. The Exchange Notes mature on February 3, 2025, bear interest at 11% per annum, have no original issuance discount, do not have a fixed price conversion, and convert using a VWAP calculation as described in the Exchange Agreement. The remainder of the terms of the Exchange Notes are largely congruent to the existing Secured SPA Notes, including most-favored nation rights. In connection with the Exchange Agreement, equity-classified warrants were exchanged for warrants which satisfy liability classification per ASC 480, Distinguishing Liabilities from Equity, and were reclassified from equity to Warrant liabilities during the period in an amount totaling $6.8 million (the “Warrant Exchange”). As a result of the transaction the Company did not recognize a gain or loss in the Condensed Consolidated Statements of Operations and Comprehensive Loss, as the fair value of the instruments exchanged and received were approximately the same.

Seventh Secured SPA Amendment

On March 23, 2023, the Company entered into an Amendment No. 7 to the Secured SPA (the “Seventh Secured SPA Amendment”) with FFSV, as administrative agent, collateral agent and purchaser, Senyun, and FF Prosperity Ventures LLC (“FF Prosperity”), pursuant to which the parties agreed to accelerate the funding timeline of Tranche C Notes in the amount of $40.0 million, and FFSV agreed to purchase additional Tranche B Notes in the amount of $5.0 million, in each case, subject to meeting certain conditions, in exchange for an agreement to increase the original issuance costs associated with such funding. As part of the agreement, the Company agreed that the original issuance discount related to $25.0 million in principal amount of Tranche C Notes and Tranche B Notes was 14% and 16%, respectively.

Eighth Amendment to the Secured SPA

On May 8 and 9, 2023, the Company entered into an eighth amendment to the Secured SPA ~~(as defined~~(the “Eighth Secured SPA Amendment”) with certain Secured SPA Purchasers. Pursuant to the Amendments the parties agreed to amend the floor price of all outstanding Secured SPA Notes, including the Exchange Notes, from $16.80 to $8.00 and ~~further discussed in Note 10,~~to change the exercise price of the Secured SPA Notes and SPA Warrants from $84.00 to $71.40.

In accordance with ASC 470-50, ~~Notes Payable~~Debt— Modifications and Extinguishments), the change in conversion price qualifies as an extinguishment because the change in the fair value of the conversion feature was substantial. Accordingly, the Company ~~issued 6,043,623 warrants (“Bridge Warrants”)~~recognized a Loss on settlement of notes payable in the Condensed Consolidated Statements of Operations and Comprehensive

Faraday Future Intelligent Electric Inc.

Notes to ~~purchase~~Unaudited Condensed Consolidated Financial Statements

Loss in the ~~Company’s~~amount of $11.4 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes.

Unsecured SPA

On May 8, 2023, the Company entered into the Unsecured SPA. The Unsecured SPA Notes are subject to an original issue discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock at a conversion price equal to $71.40, subject to anti-dilution protection. When calculating the shares issuable upon conversion, the converted amount shall be decreased by 50% of the original issue discount pertaining to such amount.

Unless earlier paid, the Unsecured SPA Notes entitle the Unsecured SPA Purchasers, at each conversion date, to a Make-Whole Amount, in a combination of cash or Class A Common Stock at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity based on an interest rate of ~~1:1,~~15% per annum. The conversion price of interest is the greater of (a) the floor price, $8.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the date hereof) and (b) 90% of the lowest VWAP for the five consecutive trading days ending immediately prior to the conversion date.

Each Unsecured SPA Purchaser has the option within 12 months from the closing date to purchase additional Unsecured SPA Notes under similar terms for a total potential commitment of up to $50.0 million or with the consent of the Company a total of $100.0 million.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, which meets the definition of an embedded derivative. The Company expenses the transaction costs to Changes in fair value of notes payable and warrant liabilities in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

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

First Amendment to the Unsecured SPA

On June 26, 2023, the Company entered into the First Unsecured SPA Amendment. The First Unsecured SPA Amendment enabled the Unsecured SPA Purchasers to postpone or cancel any closing of their commitment to purchase the Unsecured SPA Notes if the Company has not issued a press release or other public announcement confirming that the second phase of the Company’s Delivery Plan has begun on or prior to August 31, 2023, within 15 calendar days of such date. The First Unsecured SPA Amendment did not change the cash flows of the Unsecured SPA and is accounted for prospectively with no gain or loss recognized. On August 9, 2023, the Company announced that it had completed the relevant processes and steps that are needed for the second phase of delivery to begin.

Joinder Agreements

On June 26, 2023, the Company entered into a Joinder and Amendment Agreement (the “FFVV Joinder”) with FF Vitality Ventures LLC (“ FFVV”), pursuant to which FFSV agreed to exercise its option to purchase $20.0 million of Secured SPA Tranche B Notes, subject to certain closing conditions, including the delivery of a warrant to purchase shares of Class A Common Stock equal to 33% of FFSV’s conversion shares with an exercise price equal to $71.40. In addition, If FFSV exercises its option to invest another $10.0 million of $5Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock, then the Company agrees to subsequently amend the Unsecured SPA whereby FFVV would invest another $20.0 million in new unsecured notes subject to terms substantially identical to those provided in the Unsecured SPA.

Pursuant to the FFVV Joinder, FFVV agreed to purchase, Unsecured SPA Notes up to $40.0 million in eight installments. The floor price of the FFVV Unsecured SPA Notes and for each of the notes issued to FFSV (or its affiliates) under the Secured SPA, shall be $4.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter). The funding at each closing is subject to various closing conditions, including: (a) an effective registration statement with respect to the shares of Common Stock issuable upon exercise of the warrants issuable under the Unsecured SPA and the shares of Common Stock issuable pursuant to the FFVV Unsecured SPA Notes and

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(b) the Company shall have reserved the Required Reserve Amount (as defined in the FFVV Joinder) in full. In addition, FFVV has the option, for 12 months from June 25, 2023, to purchase Unsecured SPA Notes. FFVV agreed, on behalf of its affiliates, that FFSV may exchange any Tranche B Notes for either (x) Tranche D Notes, and/or (y) any Unsecured SPA Notes.

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

On June 26, 2023, Senyun executed a Second Joinder and Amendment Agreement (the “Senyun Joinder”), pursuant to which, Senyun agreed to exercise its option to purchase $15.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes. If Senyun exercises its option to invest another $10.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the Stockholder Approval (as defined below), then the Company agrees to subsequently amend the Unsecured SPA Notes whereby Senyun would invest another $20.0 million. Senyun did not exercise this option.

Pursuant to the Senyun Joinder, Senyun agreed to purchase, under the Unsecured SPA Notes, unsecured notes in an aggregate principal amount of up to $30.0 million in eight installments. The floor price, for each note issued to Senyun (or its affiliates) under the SPA Notes, is $3.63 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter).

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

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

Amendment to Joinder and Amendment Agreement

On August 4, 2023, the Company entered into a Waiver and Amendment Agreement to the FFVV Joinder, pursuant to which FFVV agreed to waive any and all requirements of the Company to reserve shares of Common Stock for issuance pursuant to the SPA Notes or SPA Warrants and defers any obligations of the Company to deliver any shares of Common Stock for issuance pursuant to the SPA Notes or SPA Warrants until the earlier of (x) September 30, 2023 and (y) the earlier of (I) the trading day immediately following the date of consummation of a reverse stock split of the Common Stock and (II) the 15th business day after the Company’s receipt of stockholder approval to increase the authorized shares of Common Stock. Further, if FFVV exercises its option to invest another $10.0 million of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the latest of (x) August 1, 2023, (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock and for purposes of Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5635 (to the extent needed) (the “Stockholder Approval”), and (z) six business days after the Company has filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, then FFVV shall have the right, at any time prior to the 30th day after the date of consummation of such funding, to invest another $20.0 million in Unsecured SPA Notes, subject to terms substantially identical to those provided for in the Unsecured SPA. FFVV did not exercise this option.

Ninth and Tenth Secured SPA Amendments

On August 4, 2023, the Company entered into Amendment No. 9 to the Secured SPA (the “Ninth Secured SPA Amendment”) with FFVV, as purchaser, and Amendment No. 10 to Secured SPA (the “Tenth Secured SPA Amendment”) with Senyun, as purchaser, pursuant to which, the Company, FFVV, and Senyun agreed to amend the definition of Required Minimum to mean (a) until the earlier of (x) September 30, 2023 and (y) the earlier of (I) the trading day immediately following the date of consummation of a reverse stock split of the Common Stock and (II) the 15th business day after the Company shall have obtained stockholder approval to increase the authorized shares of Common Stock (as applicable, the “Waiver Expiration Date”), zero shares of Common Stock, and (b) immediately after the Waiver Expiration Date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents (as defined in the Secured SPA), including any Underlying Shares (as defined in the Secured SPA) issuable upon exercise in full of all Warrants (as defined in the Secured SPA) or conversion in full of all Secured SPA Notes (including Underlying Shares issuable as payment of interest on the Secured SPA Notes), ignoring any conversion or exercise limits set forth therein.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured Securities Purchase Agreement – Streeterville Capital, LLC (“Streeterville”)

On August 4, 2023, the Company entered into the Unsecured Streeterville SPA, for $16.5 million aggregate principal amount of the Company’s senior unsecured promissory notes (the “Streeterville Note”) and a common stock purchase warrant (the “Streeterville Warrant”) to purchase up to 76,261 shares of Common Stock with an exercise price equal to $71.40 per share, subject to ~~customary~~full ratchet anti-dilution protection and other adjustments, and are exercisable for seven years on a cash or cashless basis.

The Streeterville Note is subject to an original issue discount of $1.5 million. In addition, the Company will pay Streeterville $0.2 million to cover Streeterville’s legal fees and other transaction costs incurred in connection with the purchase and sale of the Streeterville Note. The Streeterville Note is convertible into shares of Class A Common Stock, at a conversion price equal to $71.40, plus an interest make-whole amount as described above for the Unsecured SPA, subject to certain adjustments including full ratchet anti-dilution price protection.

The Streeterville Note matures on August 4, 2029 and is subject to the same repayment conversion, and most-favored nation terms and conditions as described above for the Unsecured SPA.

Streeterville has the option, from time to time for 12 months after the date of the Unsecured Streeterville SPA, to purchase up to $7.5 million in aggregate (or $15.0 million in aggregate with Company’s consent) in additional convertible senior unsecured notes and warrants on the same terms as the Streeterville Note and Streeterville Warrant. Additionally, from the date of the Unsecured Streeterville SPA until the date that is the five-year anniversary of the date of the Unsecured Streeterville SPA, upon any issuance by the Company or any of its subsidiaries of Class A Common Stock or Class A Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (subject to certain exceptions set forth in the Unsecured Streeterville SPA) (each, a “Subsequent Financing”), if Streeterville that then owns at least $7.5 million principal amount of Streeterville Notes (when aggregated with any affiliates of Streeterville) shall have the right to participate in up to an amount of the Subsequent Financing such that Streeterville’s ownership of the Company remains the same immediately following such Subsequent Financing as its ownership immediately prior to such Subsequent Financing, pursuant to the procedures outlined in the Unsecured Streeterville SPA.

Pursuant to the Streeterville Note, the Company agrees to include a proposal to obtain stockholder approval, as is required by the Nasdaq listing rules, with respect to the issuance of any shares of Class A Common Stock in excess of 19.99% of the issued and outstanding shares of Class A Common Stock (the “Issuance Cap”), of the Conversion Shares (as defined in the Streeterville Note), the Warrant Shares (as defined in the Unsecured Streeterville SPA), and subject to any applicable Nasdaq rules, any shares Common Stock issuable pursuant to the note and warrant issuable in connection with the reinvestment right set forth in the Unsecured Streeterville SPA in excess of the Issuance Cap at the earlier of its next annual meeting of stockholders to be held in 2024 and any special meeting of stockholders called by the Company at which at least one “routine” proposal is to be included.

Amendment to Joinder and Amendment Agreement

On September 21, 2023, in accordance with the FFVV Joinder, the Company entered into an amendment agreement with FFVV to the Unsecured SPA, pursuant to which FFVV agreed to purchase Unsecured SPA Notes in an aggregate principal amount of up to $20.0 million, subject to terms substantially identical to those provided in the FFVV Joinder, in installments. The funding of each installment is subject to various closing conditions.

End of Period Secured and Unsecured SPA Information

The Company received cash proceeds, net of original issue discounts, of $47.9 million and $228.4 million in exchange for the issuance of the SPA Notes and incurred approximately $0.3 million and $2.5 million in transaction costs during the three and nine months ended September 30, 2023, respectively.

During the nine months ended September 30, 2023, the Company issued to the Secured SPA Purchasers and Unsecured SPA Purchasers a total of 2,225,118 warrants pursuant to both the Secured SPA and Unsecured SPA arrangements and in connection with the Warrant Exchange. As of September 30, 2023 the warrants had an exercise price of $1.64 per share, subject to anti-dilution ratchet price protection, exercisable for seven years from the date of issuance (see Note 10, Stockholders' Equity ). The Company may repurchase ~~the Warrants~~certain warrants for $0.01 per ~~Warrant~~ share if and to the extent the ~~volume weighted average prices~~VWAP of the ~~Company’s~~ Class A Common Stock during 20 out of ~~out~~ 30 trading days prior to the repurchase is greater than ~~$15~~$15.00 per share, subject to certain additional conditions. During the nine months ended September 30, 2023, the Secured SPA Purchasers exercised warrants to

~~The~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

purchase 639,109 shares of Class A Common Stock issued pursuant to the SPA Notes, via both cash and cashless exercise. As of September 30, 2023, there were 1,654,726 warrants outstanding issued pursuant to the SPA Notes.

On September 30, 2023 the Company determined that the ~~Bridge Warrants represent a liability that should be measured at~~ fair value ~~at each issuance date~~of the SPA Notes and ~~reporting period, with changes~~warrants was $95.4 million and $1.7 million, respectively. The Company recorded a gain in ~~Changes~~Change in fair value ~~measurements in the unaudited Condensed Consolidated Statements~~ of ~~Operations~~notes payable and Comprehensive Loss, as the Bridge Warrants contained provisions that allow the holders to redeem them in cash at any time upon the occurrence of a Fundamental Transaction, as defined in the warrants agreements, among other events, as a sale or transfer of the majority of its assets, merger with or acquisition by a third party. Accordingly, the Company recorded the Bridge Warrants in Accrued expense and other currentwarrant liabilities in the ~~Company’s unaudited~~ Condensed Consolidated Balance Sheet upon their issuance based on the relative fair values of the Bridge Notes and Bridge Warrants with portions of the proceeds, net of original issue discount and allocated transaction costs, so allocated to the warrants in the amount of $6,971.

On September 30, 2022, the Company determined the value of the warrants to be $4,686 and recorded the difference as gain in the amount of $2,285 in the Changes in fair value measurements in the unaudited Condensed Consolidated StatementsStatement of Operations and Comprehensive Loss for the three and nine months ended September 30, ~~2022.~~2023 in the amount of $22.3 million and $95.1 million, respectively, for the SPA Notes and warrants.

During the nine months ended September 30, 2023, total SPA Notes principal of $200.4 million with a fair value of $125.3 million was converted to Additional paid-in capital. In connection with the conversions of the SPA Notes the Company recognized a Loss on settlement of notes payable for the three and nine months ended September 30, 2023 in the amount of $32.1 million and $207.7 million, respectively.

Anti-dilution adjustments

During the three months ended September 30, 2023 the Company entered into multiple dilutive stock sale and purchase transactions, as discussed in Note 2, Liquidity and Capital Resources above that triggered the full ratchet anti-dilution price protections embedded in the SPA Notes and SPA Warrants. As a result, the fixed-price conversion price of the SPA Notes and exercise price of the SPA Warrants outstanding prior to such financings was reduced to a price equal to the price per share paid in the dilutive financings. As of September 30, 2023 the SPA Note conversion and SPA Warrant exercise price equals $1.64.

Fair Value of Notes Payable Not Carried at Fair Value

The estimated fair value of the Company’s notes payable not carried at fair value, using inputs from Level 3 under the fair value hierarchy, approximated their carrying value as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Principal Maturities of Notes Payable

The future scheduled principal maturities of notes payable as of September 30, 2023 are as follows:


(in thousands)
Due on demand	$	4,847
2023	—
2024	—
2025	41,000
2026	82
2027
Thereafter	89,126
	$	135,055

8. Related Party Transactions

Related Party Notes Payable

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Related party notes payable consists of the following as of September 30, 2023:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,071
Related party notes – Unsecured SPA	August 2029	10% - 15%	2,945
Related party notes – China various other	Due on Demand	—%	3,759
			11,775
Less: Related party notes payable, current			(8,830)
Total: Related party notes payable, less current			$	2,945

Related party notes payable consists of the following as of December 31, 2022:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,209
Related party notes – China various other	Due on Demand	—%	3,755
			$	8,964

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured SPA

MHL is the anchor investor in the Unsecured SPA and has committed $80.0 million of such funding. MHL is a related party of the Company as MHL’s investors include a subsidiary of FF Global Partners LLC (“FF Global”). FF Global has control over the Company’s management, business and operations. See Note 7, Notes Payable, for details on the Unsecured SPA.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, which meet the definition of an embedded derivative. The Company expensed the original issue discount and transaction costs to Changes in fair value of related party notes payable and warrant liabilities in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

Subsequent to the issuance of the Unsecured SPA, MHL funded, net of original issue discounts, $19.8 million in exchange for the issuance of the Unsecured SPA Notes and related warrants. In connection with the Unsecured SPA, the Company issued MHL warrants to purchase 101,588 shares of the Class A Common Stock at an exercise price of $71.40 per share, subject to anti-dilution ratchet price protection, exercisable for seven years from the date of issuance (see Note 10, Stockholders' Equity and Note 7, Notes Payable). During the nine months ended September 30, 2023 MHL converted $18.7 million of gross principal balances in exchange for 72,353,608 shares of the Class A Common Stock. In connection with the conversion of Unsecured SPA Notes, the Company recognized a $17.2 million Loss on settlement of related party notes payable, during the nine months ended September 30, 2023, for the difference between the fair value of the shares issued and the fair value of the debt instrument.

Related party notes payable issued pursuant to the Unsecured SPA consist of the following as of September 30, 2023:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
MHL - Unsecured SPA Note	August 2029	10% - 15%	$	3,323	$	223	$	(601)	$	2,945

Related Party Notes - China

As of April 1, 2023, the Company has been in breach of its debt agreement with, and contractual obligation to make interest payments to, Chongqing Leshi Small Loan Co., Ltd., a related party, with an outstanding principal balance of $4.5 million. As a result of the default, the interest rate on the outstanding principal balance has increased to a rate of 18% per annum until the event of default is no longer applicable. The Company recorded $0.1 million and $0.1 million in interest expense in related party interest expense during the three and nine months ended September 30, 2023, respectively.

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

The estimated fair value of the Company’s related party notes payable not carried at fair value approximated their carrying value as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Principal Maturities of Related Party Notes Payable

The future scheduled principal maturities of related party notes payable as of September 30, 2023 were as follows:


(in thousands)
Due on demand	$	3,759
2023	5,071
2029	3,323
	$	12,153

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

FF Global Partners LLC (“FFGP”) Expense Reimbursements and Consulting Fees

On January 31, 2023, the Company entered into a supplemental agreement to a preliminary term sheet (the “Term Sheet” and with such supplemental agreement, the “Supplemental Agreement”) with FFGP, pursuant to which the parties agreed, due to the high amount of FFGP’s out-of-pocket legal fees and expenses incurred in connection with its financing efforts, to amend the Term Sheet to increase the cap for legal fees and expenses from $0.3 million to $0.7 million. The Company agreed to pay the remaining $0.4 million of the fees owed to FFGP as follows: (i) $0.2 million within one business day of execution of the Supplemental Agreement, and (ii) $0.2 million within one business day of consummation of new financing by the Company in an amount not less than $5.0 million or an earlier date approved by the Board. Pursuant to the Term Sheet, as amended by the Supplemental Agreement, the Company paid FFGP $0.2 million on each of February 1, 2023 and February 6, 2023. On April 8, 2023, the Company reimbursed FFGP for $0.2 million related to legal expenses incurred by FFGP in connection with the Sixth Secured SPA Amendment. In addition, on April 10, 2023 and May 31, 2023, the Company reimbursed FFGP for $0.1 million and $0.3 million related to legal expenses incurred by FFGP in connection with the Unsecured Financing.

In early February 2023, FFGP requested from the Company legal expense reimbursement of $6.5 million for costs incurred related to the governance changes at the Company, which was not approved by the Board as of the date the Condensed Consolidated Financial Statements were issued. FFGP may in the future continue to request additional expense reimbursements and indemnification from the Company.

On March 6, 2023, the Company entered into a consulting service agreement with an effective date of February 1, 2023 with FF Global (the “Consulting Services Agreement”), according to which the Company agreed to pay a monthly consulting fee of $0.2 million to FF Global for the following services:

•Assistance in developing its funding strategy.

•Assistance in developing its value return and management strategy.

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

•Supporting communications regarding stockholders meetings.

•Developing existing stockholder financing strategy, including with respect to retail investors and others.

•Assistance in risk management strategy.

•Assistance in capability build up and operation strategy.

Either party may terminate the Consulting Services Agreement upon one month prior written notice to the other party. Upon any termination of the Consulting Services Agreement, the Company shall promptly pay FF Global any accrued but unpaid fees hereunder and shall reimburse FF Global for any unreimbursed expenses that are reimbursable hereunder. In addition, FF Global is entitled to reimbursement for all reasonable and documented out-of-pocket travel, legal, and other out-of-pocket expenses incurred in connection with their services, which expenses shall not exceed $0.1 million without the prior written consent of the Company. The Company paid $0.9 million and $1.4 million, respectively, to FF Global during the three and nine months ended September 30, 2023, pursuant to the Consulting Services Agreement.

Advertising Services Payable to Leshi Information Technology Co., Ltd. (“LeTV”)

The Company has recorded a payable to LeTV within Accrued expenses and other current liabilities in the amount of $7.0 million and $7.0 million as of September 30, 2023 and December 31, 2022, respectively, in connection with advertising services provided to the Company in prior years. LeTV is a Shanghai Stock Exchange-listed public company founded and controlled by Mr. Yueting Jia, the Company’s founder and Chief Product and User Ecosystem Officer.

X-Butler previously known as Warm Time Inc. (“Warm Time”) and Ocean View Drive Inc. (“Ocean View”) Transactions

The Company leased two real properties, located in Rancho Palos Verdes, California (the “Rancho Palos Verdes Properties”), from X-Butler from January 1, 2018 through March 31, 2022. X-Butler in turn leased the Rancho Palos Verdes Properties from Mr. Jia. The Rancho Palos Verdes Properties were used by the Company to provide long-term or temporary housing to employees of the Company (including Dr. Carsten Breitfeld, former Global Chief Executive Officer (“CEO”) of the

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

In each of the three and nine months ended September 30, 2023 X-Butler invoiced the Company approximately $0.1 million, for rent and business development services rendered to the Company and its executives. In each of the three and nine months ended September 30, 2022 the Company paid to X-Butler less than $0.1 million, for rent and business development services rendered to the Company and its executives.

As part of its relationship with the Company, X-Butler also served as the conduit for certain loans from Ocean View, an entity formerly controlled by Mr. Jia and now wholly owned by the spouse of Mr. Ruokun Jia, who is the former Assistant Treasurer of the Company and Mr. Jia’s nephew. The loan principal was repaid to the Company in prior years and accrued interest on such loans remains outstanding as of September 30, 2023 and December 31, 2022 in the amount of $0.2 million and $0.2 million, respectively.

In prior years, the Company advanced funding to Ocean View for various real estate purchases, including the Rancho Palos Verdes Properties, and related expenses. As of September 30, 2023 and December 31, 2022, the Company had a receivable in the amount of $0.9 million and $0.9 million, respectively, due from Ocean View recorded in Deposits in the Condensed Consolidated Balance Sheets.

On February 9, 2023, the Company made a payment of approximately $0.2 million on behalf of Ocean View, an indemnified co-defendant, in connection with a seizure of funds related to the outstanding judgment in ongoing litigation, also involving Han’s San Jose Hospitality, LLC. Ocean View fulfilled its payment obligation under the settlement arrangement of such litigation, but the Company did not make its payment on the outstanding judgment which caused such seizure of funds of Ocean View. See Note 9, Commitments and Contingencies, for more information. Following such seizure, the Company paid the outstanding judgment and all accrued interest. The Company received the return of such indemnification payment in April 2023.

Other Related Party Transactions

The Company pays for a vehicle lease totaling less than $0.1 million annually on behalf of Mr. Jia, the Company’s founder and Chief Product and User Ecosystem Officer.

The Company owes a total of $0.4 million and $0.1 million to various related parties as of September 30, 2023 and December 31, 2022, respectively, which is included in Accounts Payable within the Condensed Consolidated Balance Sheets.

9. Commitments and Contingencies

Legal Proceedings

The Company is, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, the outcome of any such claims and disputes cannot be predicted with certainty.

As of September 30, 2023 and December 31, 2022, the Company had accrued legal contingencies of $21.8 million and $18.9 million, respectively, recorded within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets for potential financial exposure related to ongoing legal matters, primarily related to breach of contracts and employment matters, which are deemed both probable of loss and reasonably estimable. For the legal matters involving third-party vendors, such as suppliers and equipment manufacturers, the Company recorded an accrual in Accounts payable in the Condensed Consolidated Balance Sheets based on the amount invoiced by such vendors, which represents the minimum amount of loss out of the range of potential outcomes in accordance with ASC 450-20-30-1, Liabilities – Contingencies – Loss Contingencies – General.

Settlements

In October 2023, the Company agreed, in principle, to settle a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company denies all allegations but deemed a settlement to be in its best interest based on the facts and circumstances of the case and recommendation of a neutral mediator. The settlement agreement provides for a non-reversionary cash payment of $7.5 million for the benefit of the settlement class in exchange for the release of all claims asserted against the Company by the lead plaintiffs. On November 7, 2023, preliminary

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Notes to Unaudited Condensed Consolidated Financial Statements

approval for the settlement was granted, consequently, the Company and plaintiffs will move forward with the settlement process.

Derivative Actions

In March 2022, two putative derivative lawsuits alleging violations of the Exchange Act and various common law claims were filed in the United States District Court, Central District of California, and were subsequently consolidated (“California Federal Derivative Action”). The California Federal Derivative Action was stayed pending resolution of certain proceedings in the putative class action. The stay expired in February 2023 and plaintiffs filed a verified consolidated amended complaint on June 2, 2023. Defendants filed motions to dismiss on September 15, 2023. Plaintiffs must file any response in opposition to the motions to dismiss on or before November 22, 2023, and Defendants must file any reply in support of their motions to dismiss on or before December 21, 2023.

Additionally, in April 2022, two putative derivative lawsuits alleging violations of the Exchange Act and various common law claims were filed in the United States District Court, District of Delaware (the “Delaware Federal Derivative Actions”). The Delaware Derivative Actions were stayed pending resolution of certain proceedings in the putative class action and currently remain stayed.

In June 2023, an additional putative derivative lawsuit alleging common law claims was filed in the Court of Chancery of the State of Delaware (the “Court of Chancery”).

Given the early stages of the legal proceedings in the above derivative actions, it is not possible to predict the outcome of the claims.

Consolidated Delaware Class Action

In June 2022, a verified stockholder class action lawsuit alleging breaches of fiduciary duties was filed in the Court of Chancery (the “Yun Class Action”). In September 2022, a verified stockholder class action lawsuit alleging breaches of contract and fiduciary duties, and aiding and abetting alleged breaches of fiduciary duties, in connection with disclosures and stockholder voting leading up to the Business Combination was filed in the Court of Chancery (the “Cleveland Class Action”). The Yun Class Action and Cleveland Class Action were consolidated and the complaint in the Cleveland Class Action was designated as the operative pleading (the “Consolidated Delaware Class Action”). On April 7 2023, the defendants filed opening briefs in support of their respective motions to dismiss the complaint. Plaintiffs filed an omnibus answering brief in opposition to defendants’ motions to dismiss on September 26, 2023. Defendants must file any reply in support of the motions to dismiss on or before December 5, 2023. Given the early stages of the legal proceedings in the Consolidated Delaware Class Action, it is not possible to predict the outcome of the claims.

Palantir Technologies, Inc. (“Palantir”)

In July 2023, Palantir filed a demand for arbitration against the Company alleging the Company has refused to make payments under the July 12, 2021 Master Subscription Agreement (“MSA”), asserting claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment, for damages totaling $41.5 million. On August 4, 2023, the Company submitted its response to Palantir’s arbitration demand, including both a general denial of all allegations and affirmative defenses. Given the early stage of the legal proceeding, it is not possible to predict the outcome of the claims.

Other Legal Matters

In January 2023, Riverside Management Group, LLC (“Riverside”) filed a complaint seeking to enforce its alleged contractual right to the advancement of costs and expenses, including attorneys’ fees, it has and will incur as a named defendant in the Consolidated Delaware Class Action under its October 13, 2020 transaction services agreement with the PSAC Sponsor, LLC. The Company agreed to conditionally advance to Riverside the reasonable attorneys’ fees and costs it incurs in defense of the Consolidated Delaware Class Action, subject to, and in express reservation of, the Company’s right to recover all such fees and expenses following disposition of the Consolidated Delaware Class Action. Given the early stage of the legal proceeding, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

FF has received correspondence from each of Senyun, MHL and VW alleging that the Company had entered into oral agreements to compensate those investors for any losses in connection with converting their notes into shares of Class A

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Notes to Unaudited Condensed Consolidated Financial Statements

Common Stock in order to support the Company’s proposals at its August 2023 special stockholders meeting. The Company is unaware of any such oral agreements and is contesting these claims on multiple grounds. Given the early stage of the legal proceeding, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

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

Special Committee Investigation

In November 2021, the Board established a special committee of independent directors (“Special Committee”) to investigate allegations of inaccurate Company disclosures, including those made in an October 2021 short seller report and whistleblower allegations, which resulted in FFIE being unable to timely file its third quarter 2021 Quarterly Report on Form 10-Q, Annual Report on Form 10-K for the year ended December 31, 2021, first quarter 2022 Quarterly Report on Form 10-Q and amended Registration Statement on Form S-1 (File No. 333-258993). The Special Committee engaged outside independent legal counsel and a forensic accounting firm to assist in its review. On February 1, 2022, FFIE announced that the Special Committee completed its review. On April 14, 2022, FFIE announced the completion of additional investigative work based on the Special Committee’s findings which were performed under the direction of the Executive Chairperson, reporting to the Audit Committee. In connection with the Special Committee’s review and subsequent investigative work, the following findings were made.

In connection with the Business Combination, statements made by certain Company employees to certain investors describing the role of Mr. Jia, the Company’s founder and former CEO, within the Company were inaccurate and his involvement in the management of the Company post-Business Combination was more significant than what had been represented to certain investors.

•The Company’s statements leading up to the Business Combination that it had received more than 14,000 reservations for the FF 91 Futurist vehicle were potentially misleading because only several hundred of those reservations were paid, while the others (totaling 14,000) were unpaid indications of interest.

•Consistent with FFIE’s previous public disclosures regarding identified material weaknesses in its internal control over financial reporting, the Company’s internal control over financial reporting requires an upgrade in personnel and systems.

•The Company’s corporate culture failed to sufficiently prioritize compliance.

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

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

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

Based on the results of the investigation, the Special Committee concluded that, except as described above, other substantive allegations of inaccurate FF disclosures that it evaluated were not supported by the evidence reviewed. Although the

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Notes to Unaudited Condensed Consolidated Financial Statements

investigation did not change any of the above findings with respect to the substantive allegations of inaccurate FF disclosures, the investigation did confirm the need for remedial actions to help ensure enhanced focus on compliance and disclosure within FF.

Based on the results of the Special Committee investigation and subsequent investigative work described above, the Board approved the following remedial actions designed to enhance oversight and corporate governance of the Company:

•The appointment of Ms. Susan Swenson, a former member of the Board, to the then newly created position of Executive Chairperson of FF;

•Dr. Carsten Breitfeld, FF’s former Global CEO, reporting directly to Ms. Swenson and receiving a 25% annual base salary reduction;

•The removal of Mr. Jia as an executive officer, although continuing in his position as Chief Product and User Ecosystem Officer of FFIE. Certain dual-reporting arrangements were eliminated with respect to Mr. Jia, and he was required to report directly to Ms. Swenson, a non-independent director nominated by FFGP. Mr. Jia also received a 25% annual base salary reduction, and his role was limited from a policy-making position to focusing on (a) product and mobility ecosystem and (b) Internet, Artificial Intelligence (“I.A.I.”), and advanced research and development (“R&D”) technology. On February 26, 2023, after an assessment by the Board of the Company’s management structure, the Board approved Mr. Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Chen, subject to processes and controls to be approved by the Board after consultation with the Company’s management. Based on the changes to his responsibilities within the Company, the Board determined that Mr. Jia is an “officer” of the Company within the meaning of Section 16 of the Exchange Act and an “executive officer” of the Company under Rule 3b-7 under the Exchange Act;

•Mr. Aydt, former Senior Vice President, Business Development and Product Definition of FFIE, and current Global Chief Executive Officer and a director of FFIE, being placed on probation as an executive officer for a six-month period, during which period he remained a non-independent member of the Board, which probationary period has since ended;

•The appointment of Mr. Jordan Vogel as Lead Independent Director; certain changes to the composition of Board committees, including Mr. Brian Krolicki stepping down from his role as Chairman of the Board and Chair of the Nominating and Corporate Governance Committee and becoming a member of the Audit and Compensation Committees of the Board; Mr. Jordan Vogel stepping down from the Nominating and Corporate Governance Committee; and Mr. Scott Vogel becoming the Chair of the Audit Committee and the Nominating and Corporate Governance Committee of the Board;

•The suspension without pay of Mr. Wang, former Vice President, Global Capital Markets, who subsequently notified the Board of his decision to resign from FF on April 10, 2022;

•The assessment and enhancement of FF’s policies and procedures regarding financial accounting and reporting and the upgrading of FF’s internal control over financial accounting and reporting, including by hiring additional financial reporting and accounting support, in each case at the direction of the Audit Committee;

•The implementation of enhanced controls around FF’s contracting and related party transactions, including regular attestations by FF’s employees with authority to bind FF to contracts and related party transactions, for purposes of enabling FF to make complete and accurate disclosures regarding related party transactions;

•The hiring of a Chief Compliance Officer, who reports on a dotted line to the Chair of the Audit Committee, and assessing and enhancing FF’s compliance policies and procedures. The Company hired a Compliance Officer with the title of Deputy General Counsel in March 2023, who reports on a dotted line to the Chair of the Audit Committee, and is actively looking to hire a Chief Compliance Officer;

•The implementation of a comprehensive training program for all directors and officers regarding, among other things, internal FF policies;

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•The separation of Mr. Jarret Johnson, FF’s Vice President, General Counsel and Secretary; and in other disciplinary actions and terminations of employment with respect to other FF employees (none of whom is an executive officer).

As of September 30, 2023, FF is continuing to implement certain of the remedial actions approved by the Board. However, certain of these remedial actions are no longer in effect and no assurance can be provided that those remedial measures that continue to be implemented will be implemented in a timely manner or at all, or will be successful to prevent inaccurate disclosures in the future. Additionally, pursuant to the agreement between FF Global and FFGP, on September 23 2022, FF has implemented certain governance changes, including Board composition and leadership, that impact certain of the above-discussed remedial actions.

SEC and DOJ Investigations

As previously reported, the Company is subject to investigation by the SEC dealing with matters related to the Special Committee investigation, the Company’s transactions with Senyun, timing of the Company’s deliveries, and the consulting and sales agreements with the first three users of the FF 91 Futurist. FF is cooperating fully with the SEC’s investigation, including responding to multiple subpoenas and requests for information. The outcome of such an investigation is difficult to predict. FF has incurred, and may continue to incur, significant expenses related to legal, accounting and other professional services in connection with the SEC investigation. At this stage, FF is unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss.

In addition, in June 2022, FF received a preliminary request for information from the Department of Justice (“DOJ”) in connection with the matters that were the subject of the Special Committee investigation. FF has responded to that request and intends to fully cooperate with any future requests from the DOJ.

The Palantir License

In July 2021, the Company and Palantir entered into the MSA that sets forth the terms of the Palantir’s platform hosting arrangement. Under the MSA, the Company committed to pay a total of $47.0 million of hosting fees over a six-year term, $5.3 million of which was paid in 2021. The software is cloud hosted for the entirety of the subscription term and the Company cannot take possession of the software. Accordingly, the Company determined that the MSA represents a hosting arrangement that is a service contract. The Company recognizes hosting costs on a straight-line basis over the agreement term.

In connection with the MSA, the Company has recorded $12.3 million and $2.5 million as of September 30, 2023 and December 31, 2022, respectively, in Accounts payable and recorded $3.0 million as of December 31, 2022 in Accrued expenses and other current liabilities. During the three months ended September 30, 2023 and 2022, the Company recognized expense of $2.0 million and $2.0 million, respectively, related to the MSA. During the nine months ended September 30, 2023 and 2022, the Company recognized expense of $5.9 million and $5.9 million, respectively, related to the MSA.

10. Stockholders’ Equity

Amendments to the Company’s Certificate of Incorporation

On the Closing Date of the Business Combination, the Company’s stockholders adopted the Company’s Second Amended and Restated Certificate of Incorporation. The amendment set forth the rights, privileges, and preferences of the Class A Common Stock and 6,562,500 shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock”). The amendment authorizes the issuance of 10,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”) with such designations, rights and preferences as may be determined from time to time by the Board. The Board is empowered, without stockholder approval, to issue the Preferred Stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of Common Stock; provided that any issuance of Preferred Stock with more than one vote per share will require the prior approval of the holders of a majority of the outstanding shares of Class B Common Stock.

At a special meeting of the Company’s stockholders held on November 3, 2022, stockholders approved, among other things, an increase to the number of the Company’s authorized shares of Common Stock and Preferred Stock from 20,312,500 to 26,750,000. On November 22, 2022, the Company filed an amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the increase.

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At a special meeting of the Company’s stockholders held on February 28, 2023, the Company’s stockholders approved a further increase to the number of the Company’s authorized shares of Class A Common Stock from 10,187,500 to 21,125,000, increasing the Company’s total number of authorized shares of Common Stock and Preferred Stock from 26,750,000 to 37,687,500. On March 1, 2023, the Company filed an amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to reflect such amendment.

Additionally, at a special meeting of the Company’s stockholders held on August 16, 2023, the Company’s stockholders approved a proposal authorizing the Board to effect a reverse stock split of the outstanding Common Stock at a range between 1-for-2 and 1-for-90 shares of outstanding Common Stock, and a proposal stating that a reverse stock split is implemented at a ratio of 1-for-8 or greater, the Company will amend its Second Amended and Restated Certificate of Incorporation to reduce the number of authorized shares of the Common Stock to a number equal to 12,355,000,000 divided by the reverse stock split ratio determined by the Board. On August 22, 2023, the Board approved the Reverse Stock Split ratio. Accordingly, on August 24, 2023, the Company filed the Third Amended and Restated Certificate of Incorporation of the Company to effect the Reverse Stock Split and to set the number of authorized shares of Common Stock to 154,437,500 (which is 12,355,000,000 divided by 80, the Reverse Stock Split ratio). As a result, effective August 25, 2023, every 80 shares of the issued and outstanding Common Stock were converted into one share of Common Stock, without any change in par value per share, and the authorized shares of Common Stock were reduced to 154,437,500, composed of (i) 147,875,000 shares of Class A Common Stock and (ii) 6,562,500 shares of Class B Common Stock. No fractional shares of Common Stock were issued as a result of the Reverse Stock Split. Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of such fractional share.

The Class A Common Stock began trading on The Nasdaq Capital Market on a split-adjusted basis at the opening of trading on August 28, 2023 under the symbol “FFIE” with a new CUSIP number (307359 505). The Company’s Public Warrants continue to be traded on the Nasdaq Capital Market under the symbol “FFIEW” and the CUSIP number for the warrants remains unchanged.

Series A Preferred Stock

On June 16, 2023, in connection with a purchase agreement entered into with Mr. Chen, the Company’s Global CEO at that time, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designates one share of the Company’s Preferred Stock as Series A preferred stock, par value $0.0001 per share (the “Series A Preferred”) and establishes and designates the preferences, rights and limitations thereof. The closing of the sale and purchase of the share of Series A Preferred was completed on June 16, 2023 for a purchase price of $100.00.

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

The holder of the Series A Preferred is entitled to 60,000,000,000 votes for each share held of record, but has the right to vote only on any reverse stock split proposal and until such time as a reverse stock split proposal is approved by the stockholders, and will have no voting rights except (i) with respect to a reverse stock split proposal in which its votes are cast for and against such reverse stock split proposal in the same proportion as shares of Common Stock are voted for and against such reverse stock split proposal (with any shares of Common Stock that are not voted, whether due to abstentions, broker non-votes or otherwise not counted as votes for or against the reverse stock split proposal) and (ii) unless the holders of one-third (1/3rd) of the outstanding shares of Common Stock are present, in person or by proxy, at the meeting of stockholders at which a reverse stock split proposal is submitted for stockholder approval (or any adjournment thereof). The share of Series A Preferred will vote together with the Common Stock as a single class on any reverse stock split proposal. The Series A Preferred has no other voting rights, except as may be required by the General Corporation Law of the State of Delaware.

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

The Series A Preferred may not be transferred at any time prior to stockholder approval of a reverse stock split without the prior written consent of the Board. The outstanding share of Series A Preferred will be redeemed in whole, but not in part, for a redemption price of $100.00, payable out of funds lawfully available therefor, (i) if such redemption is ordered by the

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Board in its sole discretion, automatically and effective on such time and date specified by the Board in its sole discretion, or (ii) automatically immediately following the approval by the Company’s stockholders of a reverse stock split. The Series A Preferred was redeemed for $100.00 following the August 16, 2023 special meeting of the Company’s stockholders.

Warrants

Period End Warrant Information

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of September 30, 2023 are as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	1,654,726	$1.64	Various through September 30, 2030
Ares warrants	4,096,242	$1.64	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	6,046,621

During the nine months ended September 30, 2023, 754,945 warrants were exercised to purchase 639,109 shares of Class A Common Stock for cash proceeds of $4.1 million. Certain of the warrants were exercised pursuant to a cashless exercise feature whereby 115,836 warrant shares were surrendered as the purchase price.

The number of outstanding warrants to purchase Class A Common Stock as of December 31, 2022 were as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	4,330,664	$18.40	Various through September 23, 2029
ATW NPA Warrants(1)	960,056	$18.40	Various through August 10, 2028
Ares warrants	368,183	$18.20	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	5,954,556

(1) The ATW NPA Warrants were fully exercised during the nine months ended September 30, 2023, through which the Company received aggregate proceeds of $0.3 million that was recorded as an increase to Additional paid-in capital.

Insufficient Authorized Shares

From time to time, certain of the Company’s equity-linked financial instruments may be classified as derivative liabilities under ASC 815, Derivatives and Hedging, due to the Company having insufficient authorized shares to fully settle the equity-linked financial instruments in shares. In such case, the Company applies a sequencing policy under ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity, whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary due to the Company’s inability to demonstrate it has sufficient authorized shares to settle the equity-linked financial instrument in shares, the Company will reclassify contracts that have overlapping settlement dates with the latest inception date as derivative instruments. The contracts reclassified as derivative instruments are recognized at fair value with changes in fair value recognized in earnings until such time as the conditions giving rise to such derivative liability classification were settled or the Company has sufficient authorized, unissued shares to settle such contracts with shares. The Company has elected to apply the same sequencing policy for share-based compensation arrangements if the Company granted share-based payment arrangements where the Company may have insufficient shares to settle the contract.

As of December 31, 2022, the Company reclassified the earnout shares from equity classification to liability classification as a result of the Company having insufficient authorized shares to share-settle the earnout, which was previously determined to be equity classified under ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. As a result of the

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Notes to Unaudited Condensed Consolidated Financial Statements

reclassification, the Company reclassified $2.3 million out of Additional paid-in capital into the Earnout liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheet as of December 31, 2022.

As of December 31, 2022, the Company reclassified 672,758 shares of outstanding share-based payment arrangements from equity classification to liability classification as a result of the Company having insufficient authorized shares to settle the share-based payment arrangements when the awards vest or are exercised. As a result of the reclassification, the Company reclassified an amount of $4.0 million out of Additional paid-in capital into Share-based payment liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheet as of December 31, 2022.

On February 28, 2023, upon shareholder approval to increase the Company’s authorized shares, the Company had sufficient authorized shares to fully settle all outstanding equity-linked financial instruments. As of April 21, 2023, the Company had insufficient authorized shares to fully settle its equity-linked financial instruments in shares primarily due to the issuance of additional convertible notes and warrants between February 28, 2023 and April 21, 2023.

As a result of the Reverse Stock Split and the related increase in the number of available authorized shares of Class A Common Stock, effective August 25, 2023 the Company has sufficient authorized shares of Class A Common Stock to fully settle its equity-linked financial instruments in shares. Accordingly, on August 25, 2023, the Company reclassified the fair value of the Earnout liability of $1.4 million and the fair value of the Share-based payment liability of $2.0 million into Additional paid-in capital. Refer to the table summarizing the activity of Level 3 fair value measurements in Note 12 for the changes in fair value of the Earnout liability and the Share-based payment liability recognized in periods when they were thus classified.

Salary Deduction and Stock Purchase Agreement

On September 21, 2023, certain executive officers of the Company entered into Salary Deduction and Stock Purchase Agreements (collectively, the “Purchase Agreement”) with the Company. Under the Purchase Agreement, on each payroll date after the receipt of stockholder approval of the Purchase Agreement, the officer has agreed to authorize the Company to deduct 50% of the officer’s after-tax base salary. This deducted amount will be used to purchase a number of shares of Class A Common Stock determined using the VWAP (as defined in the Purchase Agreement) of Class A Common Stock per share on the applicable payroll date. Pursuant to the Purchase Agreement, the officer may decrease the amount of the deduction upon notice to the Board. No shares have been purchased under the Salary Deduction and Stock Purchase Agreements as of September 30, 2023.

11. Stock-Based Compensation

2021 Stock Incentive Plan (“2021 SI Plan”)

In July 2021, the Company adopted the 2021 SI Plan. The 2021 SI Plan allows the Board to grant incentive and nonqualified stock options, restricted shares, unrestricted shares, restricted share units, and other stock-based awards for Class A Common Stock to employees, directors, and non-employees. At the special meeting held on August 16, 2023, the Company’s stockholders approved (among other proposals) an amendment to the 2021 SI Plan to increase the number of shares of Class A Common Stock available for issuance under the 2021 SI Plan by an additional 2,584,825 shares.

As a result of the Reverse Stock Split, the number of shares of Class A Common Stock reserved for issuance under the 2021 SI Plan, the Company’s Equity Incentive Plan, and the Company’s Special Talent Incentive Plan (the “Plans”), as well as the number of shares subject to the then-outstanding awards under each of the Plans, were proportionately adjusted, using the 1-for-80 ratio, rounded down to the nearest whole share. In addition, the exercise price of the then-outstanding stock options under each of the Plans was proportionately adjusted, using the 1-for-80 ratio, rounded up to the nearest whole cent.

As of September 30, 2023 and December 31, 2022, the Company had 3,352,775 and 303,156 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.

SOP/SOD Incentive Plan

On February 23, 2023, the Board approved the Company’s SOP/SOD Incentive Plan (“Incentive Plan”) granting: (i) cash bonuses to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the commencement of the start of production of the Company’s FF 91 Futurist on or prior to March 31, 2023 and (ii) cash bonuses and equity incentive awards to all active employees of the Company that began employment at the Company prior to December

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

31, 2022 upon the commencement of the start of delivery of the Company’s FF 91 Futurist on or prior to April 30, 2023 (“Delivery Condition”).

On August 17, 2023, the Board approved an amendment to the Incentive Plan (“Incentive Plan Amendment”) to reflect the updated timing of the previously announced FF 91 2.0 Futurist Alliance phase two of its Delivery Plan from the end of April 2023 to the end of the second quarter 2023 and subsequently to August 2023. The Incentive Plan Amendment is available to all active employees of the Company that began employment at the Company prior to July 1, 2023 and reduced the cash bonuses and milestone based restricted stock units (“RSUs”) by 10% for the internal Company sign-off on requirements to commence phase two of the Company’s Delivery Plan on or prior to July 31, 2023 (“New Delivery Condition”). Pursuant to the Incentive Plan Amendment, RSU awards will be granted after the Company has sufficient additional shares available for such issuance (“Share Issuance Condition”) and cash bonuses will be paid once the Company has received an additional $15.0 million in financings.

The Incentive Plan Amendment includes the grant of RSUs to certain executive officers of the Company upon the Company’s satisfaction of the New Delivery Condition and the Share Issuance Condition with a grant date fair market value of approximately $8.0 million, subject to vesting in three annual installments on the first three anniversaries of the grant date, generally subject to the applicable executive’s continuous employment through each applicable vesting date. In addition, subject to the Share Issuance Condition, upon the satisfaction of the New Delivery Condition and continuing for an eight-year period, certain executive officers will annually receive a grant of fully-vested RSUs with a grant date fair market value of $0.78 million, subject to their continued employment through each grant date of the award.

During the three and nine months ended September 30, 2023, the Company recognized $0.7 million of cash bonus expense under the Incentive Plan. As a result of the Share Issuance Condition not yet being met, no RSUs have been granted under the Incentive Plan.

Other than the above, during the nine months ended September 30, 2023, the Company granted:

•0.04 million stock options which had a weighted-average grant date fair value of $86.40 per share. 25,000 stock options vest ratably over eight years. 12,500 stock options commenced vesting on March 29, 2023 upon the start of production of the FF 91 Futurist Alliance at its FF ieFactory California, and 25% of such stock options will vest on each of the first four one-year anniversaries of the vesting start date. As of September 30, 2023, the total remaining stock-based compensation expense for unvested stock options was $0.7 million, which is expected to be recognized over a weighted-average period of 2.85 years.

•0.08 million RSUs, which had a weighted-average grant date fair value of $75.52 per share, and 0.01 million performance share units (“PSUs”), which had a weighted-average grant date fair value of $86.40 per share. The substantial majority of the RSUs will vest ratably over four years. The PSUs will commence vesting upon the start of delivery of the FF 91 Futurist Alliance, and 25% of such PSUs will vest on each of the first four one-year anniversaries of the vesting start date. As of September 30, 2023, the total remaining stock-based compensation expense for unvested RSU’s was $1.7 million, which is expected to be recognized over a weighted-average period of 4.24 years.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	(358)	$	1,831	$	6,616	$	6,532
Sales and marketing	(33)		236		786		861
General and administrative	(79)		603		1,504		1,751
	$	(470)	$	2,670	$	8,906	$	9,144

Included in stock-based compensation expense for the three months ended September 30, 2023 is a $0.7 million gain related to when the Company’s share-based payment awards were classified as liabilities from July 1, 2023 through August 25, 2023. Included in stock-based compensation expense for the nine months ended September 30, 2023 is $4.1 million related to

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

when the Company’s share-based payment awards were classified as liabilities from time to time during the nine months ended September 30, 2023.

12. Fair Value of Financial Instruments ~~(As Restated)~~

Fair Value ~~Measurements~~

~~The Company applies the provisions~~ of ~~ASC 820,~~ Notes Payable Not Carried at Fair Value ~~Measurement, which defines a single authoritative definition of~~

The estimated fair value ~~sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions~~ of ~~ASC 820 relate to financial assets and liabilities as well as other assets and liabilities~~the Company’s notes payable not carried at fair value, on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the~~using inputs ~~used in measuring fair value as follows:~~

~~Level 1~~Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from ~~readily available pricing sources for market transactions involving identical assets, liabilities, or funds.~~

~~Level 2~~Valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 instruments typically include U.S. Government and agency debt securities and corporate obligations. Valuations are usually obtained through market data of the investment itself as well as market transactions involving comparable assets, liabilities or funds.

Level 3Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models or similar techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

~~Fair value estimates are made at a specific point in time based on relevant market information and information about the financial or nonfinancial asset or liability.~~

~~The Company has elected to apply the fair value option to certain notes payable with conversion features as discussed in Note 10,~~ ~~Notes Payable. Fair value measurements associated with the warrant liabilities, and notes payable represent Level 3 valuations~~ under the fair value ~~hierarchy.~~hierarchy, approximated their carrying value as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Principal Maturities of Notes Payable

The ~~Company has elected to measure certain~~future scheduled principal maturities of notes payable at fair value. Specifically, the Optional Notes and the June 2021 Notes (as defined below), issued pursuant to the Note Purchase Agreement (“NPA”), and the Bridge Notes (as defined below), issued pursuant to the SPA (as defined below), as ~~amended~~of September 30, 2023 are as ~~they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 10,~~ follows:~~Notes Payable~~). The Company used a binomial lattice model to value the notes payable which is widely used for valuing convertible notes. The significant assumptions used in the binomial lattice model include the risk-free rate, annual dividend yield, expected life, and volatility of the Company's stock.

~~The fair value adjustments related to notes payables were recorded in Change in Fair Value Measurements on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.~~

~~Commitment to Issue Class A Common Stock~~

Upon the closing of the Business Combination, the Company assumed an obligation of PSAC to deliver 2,387,500 registered shares of Class A Common Stock to an entity that provided consulting and advisory services in connection with the Business Combination to PSAC for no consideration.

Prior to the adoption of ASU 2020-06, the agreement with the service provider specified that the shares to be delivered are required to be registered, which is considered to be outside of the control of the Company, and therefore this obligation failed to qualify for equity treatment under ASC 815-40-25-10, and net cash settlement was assumed.

As a result, in conjunction with recording the assets and liabilities of PSAC on the closing of the Business Combination, the Company recorded a liability of $32,900 for the Obligation to issue registered shares of Class A Common Stock in the Consolidated Balance Sheets during the year ended December 31, 2021. As of December 31, 2021, the fair value of the liability was $12,635 resulting in a gain of $20,265 recorded in the Change in Fair value measurements in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2021.

On January 1, 2022, upon the adoption of ASU 2020-06, the requirement to consider whether settlement is required to be in registered shares is no longer required to be considered in an entity’s evaluation of net cash settlement, however ASC 480-10-S99-3a was not amended in a similar fashion and therefore the Company, as part of the adjustments due to the adoption of ASU 2020-06, reclassified the Obligation to issue registered shares of Class A Common Stock from liabilities to the Commitment to issue Class A Common Stock within temporary equity.

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

On July 21, 2022, the Company amended its agreement with the service provider and delivered 2,387,500 unregistered shares of Class A Common Stock in satisfaction of its obligation. Upon its settlement, the carrying amount of the commitment equaled its initial carrying amount, therefore the Company classified the entire commitment to issue Class A Common Stock to APIC in the amount of $32,900.

~~Transfer of Private Warrants to Unaffiliated Third Parties~~

On August 9, 2022, PSAC Sponsor transferred 398,420 Private Warrants to unaffiliated third-party purchasers on the open market. Upon such transfer, the transferred warrants became subject to identical terms to the Public Warrants underlying the units offered in the initial public offering of PSAC. Therefore, upon their transfer the Company classified the warrants to APIC at their fair value of $186.

~~Issuance of Liability-classified Warrants~~

The Company used a Monte Carlo simulation model to measure the fair value of the warrants, where the significant assumptions used the volatility rate, the forecasted term of the Bridge Warrants and the projected stock price of the Company’s Class A Common Stock over such term.

~~Recurring Fair Value Measurements~~

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present financial assets and liabilities remeasured on a recurring basis by level within the fair value hierarchy:

~~September 30, 2022~~

~~Level 1~~

~~Level 2~~

~~Level 3~~

~~Liabilities:~~

~~Notes payable~~

—

~~46,950~~

~~Private Warrants~~

—

~~130~~

~~Bridge Warrants~~

—

~~4,686~~

~~December 31, 2021~~

~~Level 1~~

~~Level 2~~

~~Level 3~~

~~Liabilities:~~

~~Notes payable~~

—

~~161,282~~

~~Private Warrants~~

—

~~642~~

~~Obligation to issue registered shares of Class A Common Stock~~

—

~~12,635~~

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

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~The following table summarizes the activity of Level 3 fair value measurements:~~

Bridge Warrants Notes
Payable at
Fair Value Private Warrants Obligation to Issue Registered Shares
Balance as of December 31, 2021 $ — $ 161,282 $ 642 $ 12,635
Additions 6,971 44,500 — —
Changes in fair value measurements (as restated) (2,285) 653 (326) —
Payments of notes payable, including Payment Premium — (87,065) — —
Conversions of notes to common stock (as restated) — (72,420) — —
Reclassification of Private Warrants to Public Warrants — — (186) —
Reclassification of obligation to issue registered shares upon adoption of ASC 2020-06 — — (12,635)
Balance as of September 30, 2022 $ 4,686 $ 46,950 $ 130 $ —


(in thousands)
Due on demand	$	4,847
2023	—
2024	—
2025	41,000
2026	82
2027
Thereafter	89,126
	$	135,055

9. 8. Related Party Transactions

Related Party Notes Payable

The Company ~~has been significantly funded by~~receives funding via notes payable from various parties, including related parties. These related parties include employees as well as affiliates of employees, affiliates, and other companies controlled or previously controlled by the Company’s founder and Chief Product and User Ecosystem Officer.

~~Related party notes payable consists of the following as of September 30, 2022:~~

Note Name Contractual
Maturity
Date Contractual
Interest
Rates Balance as of September 30, 2022 Interest Expense for the Three Months Ended September 30, 2022 Interest Expense for the Nine Months Ended September 30, 2022
Related party notes – China(1)
Due on Demand 18% $ 8,451 $ 996 $ 2,931
Related party notes – China various other Due on Demand —% 3,802 — —
$ 12,253 $ 996 $ 2,931

~~(1)As of September 30, 2022, the Company was in default on a related party note with a principal value of $8,451.~~

The estimated fair value of the related party notes payable, which are not carried at fair value, using inputs from Level 3 under the fair value hierarchy, was $12,726 and $13,337 as of September 30, 2022 and December 31, 2021, respectively.

~~Related party notes payable consists of the following as of December 31, 2021:~~
December 31, 2021
Note Name Contractual
Maturity Date Contractual
Interest Rates Unpaid Balance Net Carrying
Value at 12/31/21
Related party notes - China Due on Demand 18% $ 9,411 $ 9,411
Related party notes - China various other Due on Demand 0% 4,244 4,244
Total related party notes payable $ 13,655 $ 13,655

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~10. Notes Payable (As Restated)~~

~~The Company has entered into notes payable agreements with third parties, which consists of the following as of September 30, 2022:~~

September 30, 2022
Note Name Contractual
Maturity Date Contractual
Interest
Rates Unpaid Principal
Balance Fair Value
Measurement
Adjustments Original issue discount and proceeds allocated to warrants Net
Carrying
Value Interest Expense for the Three Months Ended September 30, 2022 (As Restated) Interest Expense for the Nine Months Ended September 30, 2022 (As Restated)
June 2021 Notes (3)
October 31, 2026 0% $ 4,012 $ 612 $ (955) $ 3,669 $ — $ —
Optional Notes (3)
October 31, 2026 15% 2,687 737 (912) 2,512 28 2,572
Bridge Notes (as restated) (4)
August 14, 2026 10% 44,500 7,690 (11,421) 40,769 — —
Notes payable – China various other Due on Demand 0% 4,902 — — 4,902 — —
Auto loans October 26, 2026 7% 106 — — 106 — —
$ 56,207 $ 9,039 $ (13,288) $ 51,958 $ 28 $ 2,572

~~The~~ ~~Company settled certain notes payable during the nine months ended September 30, 2022 as follows:~~

Nine months ended September 30, 2022
Note Name Contractual
Maturity Date Contractual
Interest
Rates Net carrying value at 12/31/2021 Fair Value
Measurement
Adjustments Payment Premium Cash Payment Conversion into Class A Common Stock
March 1, 2021 Notes (1)
March 1, 2022 14% $ 56,695 $ (1,695) $ — $ (55,000) $ —
August 26, 2021 Notes (1)
March 1, 2022 14% 30,924 (924) 2,065 (32,065) —
June 2021 Notes (3)
October 31, 2026 0% 35,071 917 — — (35,988)
Optional Notes (3)
October 31, 2026 15% 31,934 (704) — — (31,230)
PPP Loan (2)
April 17, 2022 1% 193 — — (193) —
$ 154,817 $ (2,406) $ 2,065 $ (87,258) $ (67,218)

(1) On March 1, 2021, the Company amended the NPA to permit the issuance of additional notes payable with principal amounts up to $85,000. On the same day, the Company entered into notes payable agreements with Ares for an aggregate principal of $55,000. The notes payable were collateralized by a first lien on virtually all tangible and intangible assets of the Company, bore interest at 14% per annum and matured on March 1, 2022. On February 25, 2022, the Company repaid the $55,000 principal amount of the March 1, 2021 Notes with accrued interest of $7,721.

~~On August 26, 2021, the Company exercised its option under the March 1, 2021 notes payable agreement with Ares to draw an additional principal amount of $30,000 which matured on March 1, 2022~~. As the August 26, 2021 Notes mature in less than one year, according to the terms of the amended NPA, the Company expected to repay them with payment premium of 14% (“Payment Premium”). On February 25, 2022, the Company repaid the $30,000 principal amount of the August 26, 2021 Notes, with accrued interest of $2,135 and Payment Premium of $2,065.

~~The settlement of the March 1, 2021 Notes and August 26, 2021 Notes are summarized below:~~

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~


	September 30, 2022		December 31, 2021
~~March 1, 2021 Notes~~
~~Outstanding principal~~	$	—	$	~~55,000~~
~~Accrued interest~~	—		~~6,455~~
~~Interest expense for the nine months ended September 30, 2022~~	~~1,266~~		—
~~Principal payments~~	~~55,000~~		—
~~Interest payments~~	~~7,721~~		—


	September 30, 2022		December 31, 2021
~~August 26, 2021 Notes~~
~~Outstanding principal~~	$	—	$	~~30,000~~
~~Accrued interest~~	—		~~1,473~~
~~Interest expense for the nine months ended September 30, 2022~~	~~662~~		—
~~Principal payments~~	~~30,000~~		—
~~Interest payments~~	~~2,135~~		—
~~Payment Premium payments~~	~~2,065~~		—

~~(2) In April 2022, the Company paid the remaining principal and accrued interest in an aggregate amount of $193.~~

(3) On July 26, 2022, the Company entered into an agreement (the “ATW July Amendment”) with entities affiliated with ATW Partners LLC (collectively, the “Investors”), to extend the maturity date, adjust the conversion price and otherwise amend the terms (as described further below) of the Optional Notes and the June 2021 Notes (together, “ATW NPA Notes”).

~~Pursuant to the ATW July Amendment:~~

(a) the maturity date of each of the ATW NPA Notes was extended to October 31, 2026. This extension does not, however, defer the accrual of interest to the new maturity date. Interest shall accrue on the Notes at 10% per annum following February 10, 2023;

(b) the conversion price of each of the ATW NPA Notes was adjusted to equal the lesser of (x) $10, (y) 95% of the per share daily volume weighted average prices (“VWAP”) of the Company’s Class A Common Stock during the 30 trading days immediately prior to the applicable conversion date and (z) the lowest effective price per share of Class A Common Stock (or equivalents) issued or issuable by the Company in any financing of debt or equity after July 26, 2022, subject to possible adjustment as set forth therein (the “Set Price”). However, from July 26, 2022 to December 30, 2022, the conversion price of each of the ATW NPA Notes is equal to the lesser of (i) the Set Price, and (ii) 92% of the lowest of the VWAP during the seven (7) trading days immediately prior to the applicable conversion date;

(c) a “forced conversion” feature was added to each of the ATW NPA Notes that allows the Company, on or after December 31, 2022, to cause the conversion of all or part of, in the aggregate among all of the ATW NPA Notes, up to $35,000 principal amount of the ATW NPA Notes less any principal amount of the ATW NPA Notes voluntarily converted by the holder thereof after July 26, 2022, subject to certain conditions as set forth in the ATW July Amendment;

~~(d) the date by which the Investors must exercise their option to purchase additional June 2021 Notes of up to $40,000 from the Company under the terms of the NPA was extended to July 20, 2023; and~~

(e) within 45 days of the date on which at least $50,000 in senior secured convertible term loans have been funded to the Company by the Investors or their affiliates under the “Tranche A Loans” facility (the “Tranche A Facility”) (which funding by the Investors or their affiliates is conditioned upon the Company obtaining binding commitments for at least $100,000 in additional financing) (the “Collateral Trigger Date”), subject to agreement by the Company and the Investors on the terms of such Tranche A Facility, the Amendment provides that the

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~Company and the Investors will enter into a security agreement to secure the obligations under the Notes with a junior lien on substantially all~~Related party notes payable consists of the ~~assets that secure the Tranche A Facility (the “Lien Security Agreement”).~~

~~The ATW July Amendment was accounted for~~following as ~~a troubled debt restructuring under ASC 470-60,~~ ~~Troubled Debt Restructuring,~~ because the Company was experiencing financial difficulty and the conversion mechanism results in the effective borrowing rate decreasing after the restructuring which was determined to be a concession. Since the future undiscounted cash flows of the restructured notes payable exceed the net carrying value of the original note payable due to the maturity date extension, the modification was accounted for prospectively with no gain or loss recorded in the unaudited Consolidated Statements of Operations and Comprehensive Loss.

Interest expense on the ATW NPA Notes is computed using the contractual interest rate. The Company concluded that the conversion feature does not require bifurcation based on the derivative accounting scope exception in ASC 815 for certain contracts involving an entity’s own equity.

~~Between August 16, 2022 and September 14, 2022, the Investors converted $67,218 of principal at conversion prices ranging from $0.84 to $2.29 per share into 64,843,850 shares of Class A Common Stock,~~ resulting in a $22,764 Loss on settlement of notes payable being recognized in the Condensed Consolidated Statement of Operations and Comprehensive Loss during the three and nine months ended September 30, 2022.

The Tranche A Facility was funded on October 10, 2022 (as further described below with regards to the Fourth Bridge Notes), which was considered the Collateral Triggered Date. On the same day and on October 19, 2022, the remaining ATW NPA Notes in the aggregate amount of $6,699 were exchanged for 11,496,868 shares of Class A Common Stock of the Company (see Note 16, ~~Subsequent Events) and, therefore, the requirement to enter into the Lien Security Agreement was terminated.~~

(4) On August 14, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with certain entities affiliated with ATW Partners LLC and RAAJJ Trading LLC (and together with Senyun, as defined below, the “Purchasers”) to issue and sell the Company’s senior secured convertible notes (the “Bridge Notes”) in three tranches aggregating to $52,000 in principal (as increased on September 23, 2022 to $57,000, which increase was subsequently terminated upon the Initial Senyun Funding Date, as defined below) and maturing on August 14, 2026 (subsequently extended to October 27, 2028). The Bridge Notes are subject to an original issue discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock at a conversion price equal to $2.69 (or $2.2865 for the initial tranche) (“Conversion Price”), subject to a full ratchet anti-dilution protection. When calculating the shares issuable upon conversion, the converted amount shall be decreased by 50% of the original issue discount pertaining to such amount. As of September 30, ~~2022, the Purchasers funded $44,500, less total original discounts of $4,450 and transaction costs of $2,813, equating to net proceeds of $37,237.~~2023:

~~The Bridge Notes bear interest of 10% per annum~~


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,071
Related party notes – Unsecured SPA	August 2029	10% - 15%	2,945
Related party notes – China various other	Due on Demand	—%	3,759
			11,775
Less: Related party notes payable, current			(8,830)
Total: Related party notes payable, less current			$	2,945

Related party notes payable quarterly and on each conversion and on the maturity date in cash or in shares of Class A Common Stock. Unless earlier paid, the Bridge Notes entitle the Purchasers, at each conversion date, to an interest make-whole (“Make-Whole Amount”), in a combination of cash or Class A Common Stock at the Company’s discretion, in the amountconsists of the ~~interest that would have been payable if such converted amount was held to maturity based on an interest rate~~following as of ~~15% per annum. The conversion price of interest is the lesser of (a) the Conversion Price or (b) 90% of the lowest VWAP for the five consecutive trading days.~~December 31, 2022:

As part of the SPA, the Company issued to the Purchasers 6,043,623 warrants with ratchet clauses triggering an increase to 42,342,839 warrants (“Bridge Warrants"), with an exercise price of $5.00 per share, subject to full ratchet anti-dilution protection and other adjustments, exercisable for seven years from the date of issuance (see Note 13, ~~Stockholders' Equity~~). The Company may repurchase the Bridge Warrants for $0.01 per share if and to the extent the VWAP of the Company’s Class A Common Stock during 20 of out 30 trading days prior to the repurchase is greater than $15 per share, subject to certain additional conditions.

Total commitments under the SPA shall not exceed $300,000, however each Purchaser has the option within 12 months from November 12, 2022 (the “Form S-1 Effective Date”) to purchase additional senior secured convertible notes under similar terms for a total potential commitments of up to $600,000 (“Tranche B Notes”).

On September 23, 2022, the SPA was amended (the “SPA Amendment”), pursuant to which the Purchasers agreed to accelerate their funding obligations, with $7,500 aggregate principal amount (the “Third Bridge Notes”) being funded and issued on the same day, and the remaining $7,500 aggregate principal amount (the “Fourth Bridge Notes”) being funded


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,209
Related party notes – China various other	Due on Demand	—%	3,755
			$	8,964

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured SPA

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

and issued on October 10, 2022. The Third Bridge Notes and Fourth Bridge Notes are convertible into shares of Class A Common Stock at a conversion price of $1.05 per share, mature on October 27, 2028, and are otherwise subject toMHL is the ~~same terms and conditions~~anchor investor in the Unsecured SPA ~~as applicable to the Bridge Notes described therein.~~

~~The Bridge Notes are secured by the grant~~and has committed $80.0 million of such funding. MHL is a ~~second lien upon substantially all of the personal and real property~~related party of the Company ~~and its subsidiaries,~~ as ~~well as guarantee by substantially all~~MHL’s investors include a subsidiary of FF Global Partners LLC (“FF Global”). FF Global has control over the Company’s ~~domestic subsidiaries.~~

management, business and operations. See Note 7, ~~Additionally, the SPA Amendment modified the conversion price of $25,000 of principal of the Bridge~~ Notes ~~which were funded on August 14, 2022, to $1.05 per share. The Company evaluated the SPA Amendment in accordance with ASC 470-50,~~ ~~Debt~~Payable, and determined that it constitutes an extinguishment because the change in the conversion price is substantial. According, the Company recognized a loss in Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net in the unaudited Condensed Consolidated Statements of Operations and Comprehensive for ~~the three and nine months ended September 30, 2022 in the amount of $7,690, calculated as the cumulative change in fair value from initial recognition through to the date of amendment.~~

On September 25, 2022, the Company entered into a Joinder and Amendment Agreement to the SPA (the “Joinder”) with Senyun International Ltd., an affiliate of Daguan International Limited (“Senyun”), pursuant to which Senyun agreed to purchase incremental notes under the SPA in an aggregate principal amount of up to $60,000, subject to the completion of due diligence by the Company of Senyun and its financing sources. Senyun has all of the same rights and obligations as a Purchaser under the SPA.

Pursuant to the Joinder and following the completion of the Company’s due diligence of Senyun and its financing sources, Senyun is expected to fund its commitments according to the following schedule (subject, in each case to the satisfaction of certain conditions): (a) $10,000 in principal which was funded on October 27, 2022 (“First Senyun Funding Date”), out of which the Company received $8,800, net of original issue discount and transaction costs); (b) $10,000 in principaldetails on the later of (x) 14 business days after the First Senyun Funding Date and (y) the receipt of approval of the Company’s stockholders of certain proposals (which was obtained on November 3, 2022), and was funded on November 15, 2022, out of which the Company received $8,970, net of original issue discount and transaction costs (“Second Senyun Funding Date”); (c) $10,000 in principal amount not later than 15 business days after the Form S-1 Effective Date; (d) $10,000 in principal amount within 30 business days after the Form S-1 Effective Date; and (e) $20,000 in principal amount on a date that is no later than ten (10) business days after the launch of the FF 91.

~~Upon the First Senyun Funding Date, the Purchasers’ obligation to purchase an additional $5,000 in aggregate principal amount of senior secured convertible notes automatically terminated.~~Unsecured SPA.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the ~~Bridge~~Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, which ~~meets~~meet the definition of an embedded derivative. ~~Upon their issuance, the Company determined that the aggregated fair value of the Bridge Notes and Bridge Warrants was $33,079 and $6,971, respectively.~~ The Company ~~expenses~~expensed the original issue discount and transaction costs to Changes in fair value ~~measurements~~of related party notes payable and warrant liabilities in the ~~unaudited~~ Condensed Consolidated Statement of Operations and Comprehensive Loss. ~~The Company did not separately report interest expense attributable~~

Subsequent to the ~~Bridge~~issuance of the Unsecured SPA, MHL funded, net of original issue discounts, $19.8 million in exchange for the issuance of the Unsecured SPA Notes ~~accounted~~and related warrants. In connection with the Unsecured SPA, the Company issued MHL warrants to purchase 101,588 shares of the Class A Common Stock at an exercise price of $71.40 per share, subject to anti-dilution ratchet price protection, exercisable for ~~pursuant to~~seven years from the ~~fair value option~~date of issuance (see Note 10, Stockholders' Equity and Note 7, Notes Payable). During the nine months ended September 30, 2023 MHL converted $18.7 million of gross principal balances in exchange for 72,353,608 shares of the ~~Consolidated Statements~~Class A Common Stock. In connection with the conversion of ~~Operations and Comprehensive Income (Loss) because such interest was included in~~Unsecured SPA Notes, the ~~determination~~Company recognized a $17.2 million Loss on settlement of related party notes payable, during the nine months ended September 30, 2023, for the difference between the fair value of the ~~notes payable~~shares issued and ~~changes thereto.~~

~~On September 30, 2022, the Company determined that~~ the fair value of the ~~Bridge~~debt instrument.

Related party notes payable issued pursuant to the Unsecured SPA consist of the following as of September 30, 2023:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
MHL - Unsecured SPA Note	August 2029	10% - 15%	$	3,323	$	223	$	(601)	$	2,945

Related Party Notes - China

As of April 1, 2023, the Company has been in breach of its debt agreement with, and ~~Bridge Warrants was $40,769~~contractual obligation to make interest payments to, Chongqing Leshi Small Loan Co., Ltd., a related party, with an outstanding principal balance of $4.5 million. As a result of the default, the interest rate on the outstanding principal balance has increased to a rate of 18% per annum until the event of default is no longer applicable. The Company recorded $0.1 million and ~~$4,686, respectively, resulting~~$0.1 million in ~~a loss~~interest expense in ~~Changes in~~related party interest expense during the three and nine months ended September 30, 2023, respectively.

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

The estimated fair value ~~measurements~~of the Company’s related party notes payable not carried at fair value approximated their carrying value as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Principal Maturities of Related Party Notes Payable

The future scheduled principal maturities of related party notes payable as of September 30, 2023 were as follows:


(in thousands)
Due on demand	$	3,759
2023	5,071
2029	3,323
	$	12,153

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

FF Global Partners LLC (“FFGP”) Expense Reimbursements and Consulting Fees

In early February 2023, FFGP requested from the Company legal expense reimbursement of $6.5 million for costs incurred related to the governance changes at the Company, which was not approved by the Board as of the date the Condensed Consolidated Financial Statements were issued. FFGP may in the ~~unaudited~~future continue to request additional expense reimbursements and indemnification from the Company.

•Assistance in developing its funding strategy.

•Assistance in developing its value return and management strategy.

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

•Supporting communications regarding stockholders meetings.

•Developing existing stockholder financing strategy, including with respect to retail investors and others.

•Assistance in risk management strategy.

•Assistance in capability build up and operation strategy.

Advertising Services Payable to Leshi Information Technology Co., Ltd. (“LeTV”)

X-Butler previously known as Warm Time Inc. (“Warm Time”) and Ocean View Drive Inc. (“Ocean View”) Transactions

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated ~~Statement~~Financial Statements

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

On February 9, 2023, the Company made a payment of approximately $0.2 million on behalf of Ocean View, an indemnified co-defendant, in connection with a seizure of funds related to the outstanding judgment in ongoing litigation, also involving Han’s San Jose Hospitality, LLC. Ocean View fulfilled its payment obligation under the settlement arrangement of such litigation, but the Company did not make its payment on the outstanding judgment which caused such seizure of funds of Ocean View. See Note 9, Commitments and Contingencies, ~~respectively.~~for more information. Following such seizure, the Company paid the outstanding judgment and all accrued interest. The Company received the return of such indemnification payment in April 2023.

Other Related Party Transactions

The Company pays for a vehicle lease totaling less than $0.1 million annually on behalf of Mr. Jia, the Company’s founder and Chief Product and User Ecosystem Officer.

9. Commitments and Contingencies

Legal Proceedings

Settlements

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

approval for the settlement was granted, consequently, the Company and plaintiffs will move forward with the settlement process.

Derivative Actions

In June 2023, an additional putative derivative lawsuit alleging common law claims was filed in the Court of Chancery of the State of Delaware (the “Court of Chancery”).

Given the early stages of the legal proceedings in the above derivative actions, it is not possible to predict the outcome of the claims.

Consolidated Delaware Class Action

Palantir Technologies, Inc. (“Palantir”)

Other Legal Matters

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Special Committee Investigation

•The Company’s corporate culture failed to sufficiently prioritize compliance.

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

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

•The appointment of Ms. Susan Swenson, a former member of the Board, to the then newly created position of Executive Chairperson of FF;

•Dr. Carsten Breitfeld, FF’s former Global CEO, reporting directly to Ms. Swenson and receiving a 25% annual base salary reduction;

•The suspension without pay of Mr. Wang, former Vice President, Global Capital Markets, who subsequently notified the Board of his decision to resign from FF on April 10, 2022;

•The implementation of a comprehensive training program for all directors and officers regarding, among other things, internal FF policies;

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

SEC and DOJ Investigations

The Palantir License

10. Stockholders’ Equity

Amendments to the Company’s Certificate of Incorporation

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Series A Preferred Stock

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Warrants

Period End Warrant Information

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of September 30, 2023 are as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	1,654,726	$1.64	Various through September 30, 2030
Ares warrants	4,096,242	$1.64	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	6,046,621

The number of outstanding warrants to purchase Class A Common Stock as of December 31, 2022 were as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	4,330,664	$18.40	Various through September 23, 2029
ATW NPA Warrants(1)	960,056	$18.40	Various through August 10, 2028
Ares warrants	368,183	$18.20	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	5,954,556

Insufficient Authorized Shares

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Salary Deduction and Stock Purchase Agreement

11. Stock-Based Compensation

2021 Stock Incentive Plan (“2021 SI Plan”)

As of September 30, 2023 and December 31, 2022, the Company had 3,352,775 and 303,156 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.

SOP/SOD Incentive Plan

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

31, 2022 upon the commencement of the start of delivery of the Company’s FF 91 Futurist on or prior to April 30, 2023 (“Delivery Condition”).

Other than the above, during the nine months ended September 30, 2023, the Company granted:

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	(358)	$	1,831	$	6,616	$	6,532
Sales and marketing	(33)		236		786		861
General and administrative	(79)		603		1,504		1,751
	$	(470)	$	2,670	$	8,906	$	9,144

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

when the Company’s share-based payment awards were classified as liabilities from time to time during the nine months ended September 30, 2023.

12. Fair Value of Financial Instruments

Fair Value of Notes Payable Not Carried at Fair Value

The estimated fair value of the Company’s notes payable not carried at fair value, using inputs from Level 3 under the fair value hierarchy, ~~was $4,857 and $5,350~~approximated their carrying value as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

Schedule of Principal Maturities of Notes Payable

The future scheduled principal maturities of notes payable as of September 30, ~~2022~~2023 are as follows:


(in thousands)				(in thousands)
Due on demand	Due on demand	$	4,902	Due on demand	$	4,847
2022		4,012
2023	2023	2,687		2023	—
2024				2024	—
2025				2025	41,000
2026	2026	44,606		2026	82
2027				2027
Thereafter				Thereafter	89,126
		$	56,207		$	135,055

* On October 24, 2022,

8. Related Party Transactions

Related Party Notes Payable

The Company receives funding via notes payable from various parties, including related parties. These related parties include employees as well as affiliates of employees, affiliates, and other companies controlled or previously controlled by the ~~Company entered into a Limited Consent~~Company’s founder and ~~Third Amendment to the SPA (the “Third Amendment”) pursuant to which the maturity date for the Bridge Notes was extended from August 14, 2026 to October 27, 2028 (see Note 16,~~ Chief Product and User Ecosystem Officer.

~~Subsequent Events~~).

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Related party notes payable consists of the following as of September 30, 2023:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,071
Related party notes – Unsecured SPA	August 2029	10% - 15%	2,945
Related party notes – China various other	Due on Demand	—%	3,759
			11,775
Less: Related party notes payable, current			(8,830)
Total: Related party notes payable, less current			$	2,945

Related party notes payable consists of the following as of December 31, ~~2021:~~2022:

December 31, 2021
Note Name Contractual
Maturity Date Contractual
Interest Rates Unpaid
Balance Fair Value
Measurement
Adjustments Original issue discount and proceeds allocated to warrants Net
Carrying
Value
March 1, 2021 Notes March 1, 2022 14 % $ 55,000 $ 7,692 $ (5,997) $ 56,695
August 26, 2021 Notes March 1, 2022 14 % 30,000 1,011 (87) 30,924
June 9, 2021 Note 1 and Note 2 December 9, 2022 — % 40,000 8,503 (9,522) 38,981
August 10, 2021 Optional Notes February 10, 2023 15 % 33,917 12,283 (11,518) 34,682
Notes payable - China various other Due on demand — % 5,458 — — 5,458
PPP Loan April 17, 2022 1 % 193 — — 193
Auto loans Various Various 121 — — 121
Total notes payable $ 164,689 $ 29,489 $ (27,124) $ 167,054


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Net Carrying Value
Related party notes – China	December 31, 2023	12.0%	$	5,209
Related party notes – China various other	Due on Demand	—%	3,755
			$	8,964

~~11. Leases~~Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured SPA

The Company ~~determines if an arrangement is a lease at its commencement if~~elected the Company is both able to identify an asset and conclude the Company has the right to control the identified asset. Leases are classified as finance or operating based on the principle of whether or not the lease is effectively a financed purchasefair value option afforded by ~~the lessee. An ROU asset represents the Company’s right to use an underlying asset for the lease term and a lease liability represents the Company’s obligation to make lease payments related~~ASC 825, Financial Instruments, with respect to the ~~lease.~~Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, which meet the definition of an embedded derivative. The Company ~~recognizes operating~~expensed the original issue discount and ~~finance lease ROU assets and liabilities at the commencement date based on the present~~transaction costs to Changes in fair value of ~~lease payments over the lease term. The lease term includes renewal options when it is reasonably certain that the option will be exercised,~~related party notes payable and excludes termination options. The Company’s leases do not provide an implicit rate therefore, the Company uses its incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments. The incremental borrowing rate used is estimated based on what the Company would be required to pay for a collateralized loan for a similar asset over a similar term. The Company’s leases do not include any material residual value guarantees, bargain purchase options, or asset retirement obligations.

~~To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate~~warrant liabilities in the measurement and classification of a lease and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recorded in operating expenses on the unaudited Condensed Consolidated ~~Statements~~Statement of Operations and Comprehensive Loss. ~~Amortization~~

Subsequent to the issuance of ~~ROU assets~~the Unsecured SPA, MHL funded, net of original issue discounts, $19.8 million in exchange for the issuance of the Unsecured SPA Notes and related warrants. In connection with the Unsecured SPA, the Company issued MHL warrants to purchase 101,588 shares of the Class A Common Stock at an exercise price of $71.40 per share, subject to anti-dilution ratchet price protection, exercisable for seven years from the date of issuance (see Note 10, Stockholders' Equity and Note 7, Notes Payable). During the nine months ended September 30, 2023 MHL converted $18.7 million of gross principal balances in exchange for 72,353,608 shares of the Class A Common Stock. In connection with the conversion of Unsecured SPA Notes, the Company recognized a $17.2 million Loss on ~~finance leases~~settlement of related party notes payable, during the nine months ended September 30, 2023, for the difference between the fair value of the shares issued and the fair value of the debt instrument.

Related party notes payable issued pursuant to the Unsecured SPA consist of the following as of September 30, 2023:


(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
MHL - Unsecured SPA Note	August 2029	10% - 15%	$	3,323	$	223	$	(601)	$	2,945

Related Party Notes - China

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

The estimated fair value of the Company’s related party notes payable not carried at fair value approximated their carrying value as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Principal Maturities of Related Party Notes Payable

The future scheduled principal maturities of related party notes payable as of September 30, 2023 were as follows:


(in thousands)
Due on demand	$	3,759
2023	5,071
2029	3,323
	$	12,153

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

FF Global Partners LLC (“FFGP”) Expense Reimbursements and Consulting Fees

On January 31, 2023, the Company entered into a supplemental agreement to a preliminary term sheet (the “Term Sheet” and with such supplemental agreement, the “Supplemental Agreement”) with FFGP, pursuant to which the parties agreed, due to the high amount of FFGP’s out-of-pocket legal fees and expenses incurred in connection with its financing efforts, to amend the Term Sheet to increase the cap for legal fees and expenses from $0.3 million to $0.7 million. The Company agreed to pay the remaining $0.4 million of the fees owed to FFGP as follows: (i) $0.2 million within one business day of execution of the Supplemental Agreement, and (ii) $0.2 million within one business day of consummation of new financing by the Company in an amount not less than $5.0 million or an earlier date approved by the Board. Pursuant to the Term Sheet, as amended by the Supplemental Agreement, the Company paid FFGP $0.2 million on ~~a straight-line basis within operating~~each of February 1, 2023 and February 6, 2023. On April 8, 2023, the Company reimbursed FFGP for $0.2 million related to legal expenses incurred by FFGP in connection with the Sixth Secured SPA Amendment. In addition, on April 10, 2023 and May 31, 2023, the Company reimbursed FFGP for $0.1 million and $0.3 million related to legal expenses incurred by FFGP in connection with the Unsecured Financing.

In early February 2023, FFGP requested from the Company legal expense reimbursement of $6.5 million for costs incurred related to the governance changes at the Company, which was not approved by the Board as of the date the Condensed Consolidated Financial Statements were issued. FFGP may in the ~~unaudited Condensed Consolidated Statements~~future continue to request additional expense reimbursements and indemnification from the Company.

On March 6, 2023, the Company entered into a consulting service agreement with an effective date of ~~Operations. Interest expense~~February 1, 2023 with FF Global (the “Consulting Services Agreement”), according to which the Company agreed to pay a monthly consulting fee of $0.2 million to FF Global for the following services:

•Assistance in developing its funding strategy.

•Assistance in developing its value return and management strategy.

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

•Supporting communications regarding stockholders meetings.

•Developing existing stockholder financing strategy, including with respect to retail investors and others.

•Assistance in risk management strategy.

•Assistance in capability build up and operation strategy.

Either party may terminate the Consulting Services Agreement upon one month prior written notice to the other party. Upon any termination of the Consulting Services Agreement, the Company shall promptly pay FF Global any accrued but unpaid fees hereunder and shall reimburse FF Global for any unreimbursed expenses that are reimbursable hereunder. In addition, FF Global is entitled to reimbursement for all reasonable and documented out-of-pocket travel, legal, and other out-of-pocket expenses incurred ~~on finance lease liabilities is recorded~~ in ~~Interest expense on~~connection with their services, which expenses shall not exceed $0.1 million without the ~~unaudited Condensed Consolidated Statements~~prior written consent of ~~Operations~~the Company. The Company paid $0.9 million and ~~Comprehensive Loss.~~ $1.4 million, respectively, to FF Global during the three and nine months ended September 30, 2023, pursuant to the Consulting Services Agreement.

Advertising Services Payable to Leshi Information Technology Co., Ltd. (“LeTV”)

The Company has ~~elected not~~recorded a payable to ~~recognize ROU assets~~LeTV within Accrued expenses and ~~lease~~other current liabilities ~~that arise from short-term (12 months or less) leases for any class~~in the amount of ~~underlying asset. Additionally,~~$7.0 million and $7.0 million as of September 30, 2023 and December 31, 2022, respectively, in connection with advertising services provided to the Company ~~does not separate lease~~in prior years. LeTV is a Shanghai Stock Exchange-listed public company founded and ~~non-lease components. Operating leases are included~~controlled by Mr. Yueting Jia, the Company’s founder and Chief Product and User Ecosystem Officer.

X-Butler previously known as Warm Time Inc. (“Warm Time”) and Ocean View Drive Inc. (“Ocean View”) Transactions

The Company leased two real properties, located in ~~ROU assets, Operating leases liabilities, current~~Rancho Palos Verdes, California (the “Rancho Palos Verdes Properties”), from X-Butler from January 1, 2018 through March 31, 2022. X-Butler in turn leased the Rancho Palos Verdes Properties from Mr. Jia. The Rancho Palos Verdes Properties were used by the Company to provide long-term or temporary housing to employees of the Company (including Dr. Carsten Breitfeld, former Global Chief Executive Officer (“CEO”) of the

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share~~Company). According to the agreement between the parties, the Company paid X-Butler for rent and ~~per share data)~~certain services, including catering, room services and organization of meetings, external gatherings and events, for the Rancho Palos Verdes Properties.

~~(Unaudited)~~

~~portion~~In each of the three and ~~Operating lease liabilities, less current portion in~~nine months ended September 30, 2023 X-Butler invoiced the ~~Company's unaudited Condensed Consolidated Balance Sheets. Finance leases are included in Property~~Company approximately $0.1 million, for rent and ~~equipment, net, Finance lease liabilities, current portion,~~business development services rendered to the Company and ~~Finance lease liabilities, less current portion in the Company's unaudited Condensed Consolidated Balance Sheets.~~

~~The Company’s lease arrangements consist primarily~~its executives. In each of its ieFactory California production facility, corporate office, store, equipment, and vehicle lease agreements. The leases expire at various dates through 2032, some of which include options to extend the lease term for additional 5 years periods.

~~Total lease costs for~~ the three and nine months ended September 30, 2022 ~~were:~~the Company paid to X-Butler less than $0.1 million, for rent and business development services rendered to the Company and its executives.

Three Months Ended
September 30, 2022 Nine Months Ended
September 30, 2022
Finance lease cost
Amortization of right-of-use assets $ 91 $ 273
Interest on lease liabilities 169 520
Total finance lease cost 260 793
Operating lease cost 434 1,966
Variable lease cost 24 425
Total lease cost $ 718 $ 3,184

As part of its relationship with the Company, X-Butler also served as the conduit for certain loans from Ocean View, an entity formerly controlled by Mr. Jia and now wholly owned by the spouse of Mr. Ruokun Jia, who is the former Assistant Treasurer of the Company and Mr. Jia’s nephew. The ~~following table summarizes future lease payments~~loan principal was repaid to the Company in prior years and accrued interest on such loans remains outstanding as of September 30, ~~2022:~~2023 and December 31, 2022 in the amount of $0.2 million and $0.2 million, respectively.

Fiscal year Operating Leases Finance Leases
2022 $ 1,289 $ 643
2023 5,259 2,166
2024 5,482 1,757
2025 5,243 1,792
2026 5,197 1,828
Thereafter 12,173 1,864
Total 34,643 10,050
Less: Imputed Interest 13,516 1,326
Present value of net lease payments 21,127 8,724
Lease liability, current portion $ 2,487 $ 1,807
Lease liability, net of current portion 18,640 6,917
Total lease liability $ 21,127 $ 8,724
In prior years, the Company advanced funding to Ocean View for various real estate purchases, including the Rancho Palos Verdes Properties, and related expenses. As of September 30, 2023 and December 31, 2022, the Company had a receivable in the amount of $0.9 million and $0.9 million, respectively, due from Ocean View recorded in Deposits in the Condensed Consolidated Balance Sheets.

~~Supplemental information and non-cash activities~~On February 9, 2023, the Company made a payment of approximately $0.2 million on behalf of Ocean View, an indemnified co-defendant, in connection with a seizure of funds related to ~~operating~~the outstanding judgment in ongoing litigation, also involving Han’s San Jose Hospitality, LLC. Ocean View fulfilled its payment obligation under the settlement arrangement of such litigation, but the Company did not make its payment on the outstanding judgment which caused such seizure of funds of Ocean View. See Note 9, Commitments and ~~finance leases are as follows:~~


	Nine Months Ended September 30, 2022
~~Cash paid for amounts included in the measurement of lease liabilities~~
~~Operating cash flows from operating leases~~	$	~~1,966~~
~~Operating cash flows from finance leases~~	~~520~~
~~Financing cash flows from finance leases~~	~~1,410~~
	~~3,896~~
~~Lease liabilities arising from new right-of-use assets~~
~~Operating leases~~	~~11,906~~

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands~~Contingencies, ~~except share~~for more information. Following such seizure, the Company paid the outstanding judgment and ~~per share data)~~all accrued interest. The Company received the return of such indemnification payment in April 2023.

~~(Unaudited)~~


	~~As of September 30, 2022~~
~~Weighted average remaining lease term (in years)~~
~~Operating leases~~	~~6.2~~
~~Finance leases~~	5

~~Weighted average discount rate~~
~~Operating leases~~	~~15.6~~	%
~~Finance leases~~	~~5.7~~	%

~~Disclosures~~Other Related ~~to Periods Prior to Adoption of the New Lease Standard:~~Party Transactions

The Company ~~recorded rent expense~~pays for a vehicle lease totaling less than $0.1 million annually on behalf of ~~$1,131~~Mr. Jia, the Company’s founder and ~~$2,361 for the three~~Chief Product and ~~nine months ended September 30, 2021, respectively.~~

~~The minimum aggregate future obligations under non-cancelable operating leases as of December 31, 2021 were as follows:~~

Year ended December 31,
2022 $ 2,384
2023 2,695
2024 2,775
2025 2,859
2026 2,944
Thereafter 991
$ 14,648
User Ecosystem Officer.

The Company ~~has three capital leases, one in Hanford, California for its ieFactory California production facility,~~owes a total of $0.4 million and ~~two equipment leases.~~

~~The minimum aggregate future minimum lease payments under capital leases~~$0.1 million to various related parties as of September 30, 2023 and December 31, ~~2021 were as follows:~~

Year ended December 31,
2022 $ 2,574
2023 2,166
2024 1,757
2025 1,792
2026 1,840
Thereafter 1,864
$ 11,993
2022, respectively, which is included in Accounts Payable within the Condensed Consolidated Balance Sheets.

~~12.~~9. Commitments and Contingencies

Legal ~~Matters~~Proceedings

On December 23, 2021, a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934 was filed in the United States District Court, Central District of California, against the Company, among others, and its current Global CEO, its former CFO, its current Chief Product and User Ecosystem Officer, as well as the CFO of Legacy FF and

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

former CFO of the Company, and the Co-CEOs of PSAC. Also, on March 8, March 21, April 11, and April 25 2022, putative stockholder derivative lawsuits were filed in the United States District Court, Central District of California and United States District Court, District of Delaware against numerous current and former officers and directors of the Company alleging violations of the Securities Exchange Act of 1934 and various common law claims. Also, on June 14, 2022, a verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, the Company, its current Global CEO, its former CFO and its current Chief Product and User Ecosystem Officer alleging breaches of fiduciary duties. Lastly, on September 21, 2022, a verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, the Company, the Co-CEOs and independent directors of PSAC, and certain third-party advisors to PSAC, alleging breaches of fiduciary duties, and aiding and abetting the alleged breaches, in connection with disclosures and stockholder voting leading up to the Business Combination.

On March 8, 2022 and March 21, 2022, putative derivative lawsuits alleging violations of the Securities Exchange Act of 1934 and various common law claims were filed in the United States District Court, Central District of California. On April 8, 2022, these two derivative lawsuits were consolidated. On May 24, 2022, the consolidated derivative actions were stayed pending resolution of a motion to dismiss in the putative class action described above. Additionally, on April 11 and April 25, 2022, putative derivative lawsuits alleging violations of the Securities Exchange Act of 1934 and various common law claims were filed in the United States District Court, District of Delaware. These lawsuits purport to assert claims on behalf of the Company against numerous current and former officers and directors of the Company. Lastly, on June 14, 2022, a verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, the Company, its current Global CEO, its former CFO and its founder and Chief Product and User Ecosystem Officer alleging breaches of fiduciary duties. Given the early stages of the legal proceedings, it is not possible to predict the outcome of the claims.

On June 14, 2022, a verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, the Company, its current Global CEO, its former CFO and its current Chief Product and User Ecosystem Officer alleging breaches of fiduciary duties. On August 11, 2022, the Court of Chancery granted a stipulation and order governing briefing on a motion to dismiss the complaint. On September 21, 2022, an additional verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, the Company alleging, among other issues, breaches of fiduciary duties. On October 12, 2022, plaintiff filed a motion to consolidate the ~~Cleveland~~ ~~and~~ ~~Yun~~ ~~actions and appoint~~ ~~Cleveland’s~~ ~~counsel as lead counsel for the consolidated action. On October 20, 2022, the Company filed a motion to dismiss the complaint.~~

On September 23, 2022, plaintiff and defendants of the original June 14, 2022 action filed a stipulation and proposed order vacating the briefing schedule set forth pending consolidation of the action alongside the September 21, 2022 complaint. If the proposed order is entered by the court, the parties will meet and confer regarding a schedule governing further proceedings following consolidation of the actions. Given the early stages of the legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

On September 19, 2022, three Company employees and stockholders brought an action seeking to compel the Company to comply with its obligations under Delaware law to hold an annual meeting of stockholders for the purpose of electing directors. Plaintiffs have stayed this action until January 10, 2022. Given the early stages of the legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

On October 20, 2022, FF received a subpoena from the SEC requiring FF to produce certain documents relating to FF’s transactions with Senyun International Ltd. FF intends to fully comply with the subpoena.

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued legal contingencies of ~~$22,417~~$21.8 million and ~~$16,881,~~$18.9 million, respectively, recorded within Accrued expenses and other current liabilities ~~and Accounts Payable on~~in the ~~unaudited~~ Condensed Consolidated Balance Sheets for potential financial exposure related to ongoing legal matters, primarily related to breach of contracts and employment matters, which are deemed both probable of loss and reasonably estimable. ~~Accrued~~For the legal ~~contingencies recorded to Accounts Payable relate to disputes with service providers, whereas legal contingencies recorded to Accrued expenses~~matters involving third-party vendors, such as suppliers and ~~other current liabilities include all other anticipated legal accruals.~~

~~During the nine months ending September 30, 2022,~~equipment manufacturers, the Company ~~settled a legal dispute for breach~~recorded an accrual in Accounts payable in the Condensed Consolidated Balance Sheets based on the amount invoiced by such vendors, which represents the minimum amount of ~~lease under which~~loss out of the ~~Company was named a co-defendant,~~range of potential outcomes in ~~a civil action case~~accordance with ~~the plaintiff seeking damages including unpaid rent, future unpaid rent, unpaid expenses, and unpaid taxes related to the lease for a total of $6,400. Pursuant to the settlement agreement,~~ASC 450-20-30-1, Liabilities – Contingencies – Loss Contingencies – General.

Settlements

In October 2023, the Company agreed, in principle, to ~~pay $1,800~~settle a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company denies all allegations but deemed a settlement to be in its best interest based on the facts and circumstances of the case and recommendation of a neutral mediator. The settlement agreement provides for a non-reversionary cash payment of $7.5 million for the benefit of the settlement class in ~~January 2022 and an additional $3,400 plus 5% interest in October 2022 and was~~exchange for the release of all claims asserted against the Company by the lead plaintiffs. On November 7, 2023, preliminary

3230

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~liable~~approval for the ~~remainder~~settlement was granted, consequently, the Company and plaintiffs will move forward with the settlement process.

Derivative Actions

In March 2022, two putative derivative lawsuits alleging violations of the ~~settlement,~~Exchange Act and various common law claims were filed in the ~~amount~~United States District Court, Central District of ~~$1,200,~~California, and were subsequently consolidated (“California Federal Derivative Action”). The California Federal Derivative Action was stayed pending resolution of certain proceedings in the ~~event~~putative class action. The stay expired in February 2023 and plaintiffs filed a verified consolidated amended complaint on June 2, 2023. Defendants filed motions to dismiss on September 15, 2023. Plaintiffs must file any response in opposition to the ~~co-defendants failed~~motions to ~~make the payment~~dismiss on or before November 22, 2023, and Defendants must file any reply in ~~January 2022. In January~~support of their motions to dismiss on or before December 21, 2023.

Additionally, in April 2022, ~~the Company made the initial settlement payment of $1,800 and was relieved~~two putative derivative lawsuits alleging violations of the ~~liability of $1,200. As of the date of issuing these unaudited Condensed Consolidated Financial Statements, the Company has not made the additional $3,400 settlement~~Exchange Act and ~~interest payments, as prescribed~~various common law claims were filed in the ~~settlement agreement. On October 26, 2022, the plaintiff filed a motion to enforce the settlement agreement~~United States District Court, District of Delaware (the “Delaware Federal Derivative Actions”). The Delaware Derivative Actions were stayed pending resolution of certain proceedings in the ~~Superior~~putative class action and currently remain stayed.

In June 2023, an additional putative derivative lawsuit alleging common law claims was filed in the Court of Chancery of the State of ~~California~~Delaware (the “Court of Chancery”).

Given the early stages of the legal proceedings in the above derivative actions, it is not possible to predict the outcome of the claims.

Consolidated Delaware Class Action

Palantir Technologies, Inc. (“Palantir”)

In July 2023, Palantir filed a demand for arbitration against the ~~County~~Company alleging the Company has refused to make payments under the July 12, 2021 Master Subscription Agreement (“MSA”), asserting claims for breach of ~~Santa Clara,~~contract, breach of the covenant of good faith and fair dealing, and unjust enrichment, for damages totaling $41.5 million. On August 4, 2023, the Company submitted its response to Palantir’s arbitration demand, including both a general denial of all allegations and affirmative defenses. Given the early stage of the legal proceeding, it is not possible to predict the outcome of the claims.

Other Legal Matters

In January 2023, Riverside Management Group, LLC (“Riverside”) filed a complaint seeking noto enforce its alleged contractual right to the advancement of costs and expenses, including attorneys’ fees, it has and will incur as a named defendant in the Consolidated Delaware Class Action under its October 13, 2020 transaction services agreement with the PSAC Sponsor, LLC. The Company agreed to conditionally advance to Riverside the reasonable attorneys’ fees and costs it incurs in defense of the Consolidated Delaware Class Action, subject to, and in express reservation of, the Company’s right to recover all such fees and expenses following disposition of the Consolidated Delaware Class Action. Given the early stage of the legal proceeding, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Other than disclosed herein, as of the date hereof FF is not a party to any legal proceedings the outcome of which, if determined adversely to FF, would individually or in the aggregate be reasonably expected to have a material ~~additional damages. Such hearing is scheduled for December 22, 2022.~~adverse effect on FF’s business, financial condition, or results of operations.

Special Committee Investigation

~~As previously disclosed on~~In November ~~15,~~ 2021, the ~~Company’s~~ Board ~~of Directors (the “Board”)~~ established a special committee of independent directors (“Special Committee”) to investigate allegations of inaccurate Company disclosures, including those made in an October 2021 short seller report and whistleblower allegations, which resulted in ~~the Company~~FFIE being unable to timely file its third quarter 2021 Quarterly Report on Form 10-Q, Annual Report on Form 10-K for the year ended December 31, 2021, first quarter 2022 Quarterly Report on Form 10-Q and amended Registration Statement on Form S-1 (File No. 333-258993) ~~(the “Form S-1")~~. The Special Committee engaged outside independent legal counsel and a forensic accounting firm to assist ~~with~~in its review. On February 1, 2022, ~~the Company~~FFIE announced that the Special Committee completed its review. On April 14, 2022, ~~the Company~~FFIE announced the completion of additional investigative work based on the Special Committee’s findings which were performed under the direction of the Executive Chairperson, reporting to the Audit Committee. In connection with the Special Committee’s review and subsequent investigative work, the following findings were ~~made:~~made.

•In connection with the Business Combination, statements made by certain Company employees to certain investors describing the role of ~~Yueting (“YT”)~~Mr. Jia, the Company’s founder and former CEO, within the Company were inaccurate and his involvement in the management of the Company post-Business Combination was more significant than what had been represented to certain investors.

•Consistent with ~~the Company’s~~FFIE’s previous public disclosures regarding identified material weaknesses in its internal control over financial reporting, the Company’s internal control over financial reporting requires an upgrade in personnel and systems.

•The Company’s corporate culture failed to sufficiently prioritize compliance.

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

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

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

The investigation also found that certain individuals failed to cooperate and withheld potentially relevant information in connection with the Special Committee investigation. Among such individuals were non-executive officers or members of the management team of FF, and remedial action was taken with respect to such individuals based on the extent of non-cooperation and/or withholding of information. The failure to cooperate with the investigation was taken into consideration in connection with the remedial actions outlined below with respect to Mr. Jiawei (“Jerry”) Wang, ~~the Company’s former Vice President, Global Capital Markets,~~ and ~~withholding of information also affected the remedial action taken with respect to~~ Mr. Matthias ~~Aydt, Senior Vice President, Business Development and Product Definition and a director of the Company.~~Aydt.

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

•~~certain remedial actions designed to enhance oversight and corporate governance of the Company, namely the following:~~

•~~the~~The appointment of Ms. Susan Swenson, a former member of the Board, to the then newly created position of Executive Chairperson of FF;

•Dr. Carsten Breitfeld, FF’s former Global ~~Chief Executive Officer,~~CEO, reporting directly to Ms. Swenson and receiving a 25% annual base salary reduction;

•~~the~~The removal of Mr. Jia as an executive officer, although continuing in his position as Chief Product &and User Ecosystem Officer of ~~the Company.~~FFIE. Certain dual-reporting arrangements were eliminated with respect to Mr. Jia, and he iswas required to report directly to Ms. Swenson, a non-independent director nominated by ~~FF Top Holding LLC (“FF Top”).~~FFGP. Mr. Jia also received a 25% annual base salary reduction, and his role was limited from a policy-making position to focusing on (a) ~~Product~~product and ~~Mobility Ecosystem~~mobility ecosystem and (b) Internet, Artificial Intelligence (“I.A.I.”), and ~~Advanced~~advanced research and development (“R&D”) technology. On February 26, 2023, after an assessment by the Board of the Company’s management structure, the Board approved Mr. Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D ~~technology;~~technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Chen, subject to processes and controls to be approved by the Board after consultation with the Company’s management. Based on the changes to his responsibilities within the Company, the Board determined that Mr. Jia is an “officer” of the Company within the meaning of Section 16 of the Exchange Act and an “executive officer” of the Company under Rule 3b-7 under the Exchange Act;

•Mr. ~~Matthias~~ Aydt, former Senior Vice President, Business Development and Product Definition of FFIE, and current Global Chief Executive Officer and a director of ~~the Company,~~FFIE, being placed on probation as an executive officer for a six-month period, during which period he ~~will remain as~~remained a non-independent member of the ~~Board;~~Board, which probationary period has since ended;

•~~the~~The appointment of Mr. Jordan Vogel as Lead Independent Director; certain changes to the composition of Board committees, including Mr. Brian Krolicki stepping down from his role as Chairman of the Board and Chair of the Nominating and Corporate Governance Committee and becoming a member of the Audit and Compensation Committees of the Board; Mr. Jordan Vogel stepping down from the Nominating and Corporate Governance Committee; and Mr. Scott Vogel becoming the Chair of the Audit Committee and the Nominating and Corporate Governance Committee of the Board;

•~~the~~The suspension without pay of Mr. ~~Jiawei (“Jerry”)~~ Wang, ~~the Company’s~~ former Vice President, Global Capital Markets, who subsequently notified the Board of his decision to resign from FF on April 10, 2022;

•~~the~~The assessment and enhancement of FF’s policies and procedures regarding financial accounting and reporting and the upgrading of FF’s internal control over financial accounting and reporting, including by hiring additional financial reporting and accounting support, in each case at the direction of the Audit Committee;

•~~the~~The implementation of enhanced controls around FF’s contracting and related party transactions, including regular attestations by FF’s employees with authority to bind FF to contracts and related party transactions, for purposes of enabling FF to make complete and accurate disclosures regarding related party transactions;

•~~the~~The hiring of a Chief Compliance Officer, who reports on a dotted line to the Chair of the Audit Committee, and assessing and enhancing FF’s compliance policies and ~~procedures (and~~procedures. The Company hired a ~~search for~~Compliance Officer with the title of Deputy General Counsel in March 2023, who reports on a dotted line to the Chair of the Audit Committee, and is actively looking to hire a Chief Compliance ~~Officer of FF is still pending as of the date of this Report);~~Officer;

•~~the~~The implementation of a comprehensive training program for all directors and officers regarding, among other things, internal FF policies;

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

•~~the~~The separation of Mr. Jarret Johnson, FF’s Vice President, General Counsel and Secretary; and

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

~~Faraday Future Intelligent Electric Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

As of ~~the date hereof,~~September 30, 2023, FF is continuing to implement certain of the remedial actions approved by the Board. However, certain of these remedial actions are no longer in effect and no assurance can be provided that ~~such~~those remedial measures that continue to be implemented will be implemented in a timely manner or at all, or will be successful to prevent inaccurate disclosures in the future. Additionally, pursuant to the agreement between FF Global and FFGP, on September 23 2022, FF has implemented certain governance changes, including Board composition and leadership, that impact certain of the above-discussed remedial actions.

SEC and DOJ Investigations

~~Subsequent~~

As previously reported, the Company is subject to ~~FF announcing~~investigation by the ~~completion of~~SEC dealing with matters related to the Special Committee investigation, ~~on February 1, 2022, FF, certain members~~the Company’s transactions with Senyun, timing of the ~~management team~~Company’s deliveries, and ~~employees of FF received a notice of preservation~~the consulting and ~~subpoena from~~sales agreements with the ~~staff~~first three users of the ~~SEC stating that the SEC had commenced a formal investigation relating to the matters that were the subject of the Special Committee investigation.~~ FF ~~which had previously voluntarily contacted the SEC in connection with the Special Committee investigation in October 2021,~~91 Futurist. FF is cooperating fully with the SEC’s ~~investigation.~~investigation, including responding to multiple subpoenas and requests for information. The outcome of such an investigation is difficult to predict. FF has incurred, and may continue to incur, significant expenses related to legal, accounting and other professional services in connection with the SEC investigation. At this stage, FF is unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss.

In addition, in June 2022, FF received a preliminary request for information from the ~~U.S.~~ Department of Justice (“DOJ”) in connection with the matters that were the subject of the Special Committee investigation. FF has responded to that request and intends to fully cooperate with any future requests from the DOJ.

The Palantir License

~~13.~~10. Stockholders’ Equity

Amendments to the Company’s Certificate of Incorporation

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Series A Preferred Stock

On June 16, 2023, in connection with a purchase agreement entered into with Mr. Chen, the Company’s Global CEO at that time, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designates one share of the Company’s Preferred Stock as Series A preferred stock, ~~were as follows:~~par value $0.0001 per share (the “Series A Preferred”) and establishes and designates the preferences, rights and limitations thereof. The closing of the sale and purchase of the share of Series A Preferred was completed on June 16, 2023 for a purchase price of $100.00.

September 30, 2022
Authorized
Shares Issued Shares
Preferred Stock 10,000,000 —
Class A Common Stock 750,000,000 345,794,368
Class B Common Stock 75,000,000 64,000,588
835,000,000 409,794,956
The share of Series A Preferred is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The share of Series A Preferred shall not be entitled to receive dividends.

December 31, 2021
Authorized
Shares Issued Shares Shares to be Issued Total Issued and to be Issued Shares
Preferred Stock 10,000,000 — — —
Class A Common Stock 750,000,000 168,693,323 89,152,130 257,845,453
Class B Common Stock 75,000,000 — 64,000,588 64,000,588
835,000,000 168,693,323 153,152,718 321,846,041
Upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily, pursuant to which assets of the Company or consideration received by the Company are to be distributed to the stockholders, the holder of the Series A Preferred will be entitled to receive, before any payment is made to the holders of Common Stock by reason of their ownership thereof, an amount equal to $100.00.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Board in ~~thousands, except share~~its sole discretion, automatically and ~~per share data)~~

~~(Unaudited)~~

effective on such time and date specified by the Board in its sole discretion, or (ii) automatically immediately following the approval by the Company’s stockholders of a reverse stock split. The Series A Preferred was redeemed for $100.00 following the August 16, 2023 special meeting of the Company’s stockholders.

Warrants

Period End Warrant Information

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of September 30, ~~2022 and December 31, 2021 were~~2023 are as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	1,654,726	$1.64	Various through September 30, 2030
Ares warrants	4,096,242	$1.64	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	6,046,621

Number of Warrants Exercise Price Expiration Date
Public Warrants (1)
23,375,988 $ 11.50 July 21, 2026
Private Warrants(2)
276,131 11.50 July 21, 2026
ATW NPA Warrants(3)
28,431,635 0.64 Various through August 10, 2028
Bridge Warrants(4)
42,342,839 0.71 Various through September 23, 2029
Other warrants 1,429,068 4.69 August 5, 2027
Total 95,855,661

~~(1) On August 9, 2022, PSAC Sponsor transferred 398,420 Private Warrants to unaffiliated third-party purchasers on~~During the open market. Upon such transfer the transferred warrants became subject to identical terms to the Public Warrants underlying the units offered in the initial public offering of PSAC. Therefore, upon their transfer the Company classified the warrants to APIC at their fair value.

~~(2) The Private Warrants are recorded in Other liabilities, less current portion in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.~~

(3) On September 23, 2022, the Company and Purchasers of the ATW NPA Notes entered into an agreement to place a total of 31,118,718 outstanding warrants related to the Optional Notes and the June 2021 Notes (see Note 10, ~~Notes Payable)~~ into a warrant reserve with an exercise price now set to $0.6427 per warrant (“Warrant Reserve”). Upon the completion of certain milestones and conditions, the Company may elect a forced conversion clause settleable in cash through January 23, 2023 on the warrants, requiring the warrant holders to exercise their warrants on a cash basis in exchange for newly issued shares of the Company’s Class A Common Stock. The aggregate exercise price of the Warrant Reserve is $20,000. The remaining outstanding warrants not in the Warrant Reserve but also issued pursuant to the Optional Notes and the June 2021 Notes totaling 29,158,364 warrants, are agreed to have their exercise price set at $0.50 per warrant. As of the date the unaudited Consolidated Condensed Financial Statements were issued, the Company did not force the conversion of any of the warrants underlying the Warrant Reserve.

The amendment of the warrants issued pursuant to the Optional Notes and the June 2021 Notes, which set the exercise price to $0.50 per warrant, resulted in the recognition of expense of $1,238 in Change in fair value measurements in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, ~~2022.~~

~~(4) The Bridge Warrants are recorded in Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2022. The~~2023, 754,945 warrants were ~~issued~~exercised to purchase 639,109 shares of Class A Common Stock for cash proceeds of $4.1 million. Certain of the warrants were exercised pursuant to a cashless exercise feature whereby 115,836 warrant shares were surrendered as the ~~SPA and recorded at fair value at each issuance date and at September 30, 2022.~~purchase price.

The number of outstanding warrants to purchase ~~the Company’s~~ Class A Common Stock as of December 31, ~~2021~~2022 were as follows:


	Number of Warrants	Exercise Price	Expiration Date
SPA Warrants	4,330,664	$18.40	Various through September 23, 2029
ATW NPA Warrants(1)	960,056	$18.40	Various through August 10, 2028
Ares warrants	368,183	$18.20	August 5, 2027
Public Warrants	294,263	$920.00	July 21, 2026
Private Warrants	1,390	$920.00	July 21, 2026
Total	5,954,556

Number of Warrants Exercise Price Expiration Date
Public Warrants 22,977,568 $ 11.50 July 21, 2026
Private Warrants(1)
674,551 11.50 July 21, 2026
Other warrants 4,544,258 10.00 Various through August 10, 2028
Total 28,196,377
(1) The ATW NPA Warrants were fully exercised during the nine months ended September 30, 2023, through which the Company received aggregate proceeds of $0.3 million that was recorded as an increase to Additional paid-in capital.

Insufficient Authorized Shares

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~(1) The Private Warrants are recorded~~reclassification, the Company reclassified $2.3 million out of Additional paid-in capital into the Earnout liability, which is included in Other ~~liabilities, less~~ current ~~portion~~liabilities in the ~~unaudited~~ Condensed Consolidated Balance Sheet as of December 31, ~~2021.~~2022.

Salary Deduction and Stock Purchase Agreement

~~14.~~11. Stock-Based Compensation ~~(As Restated)~~

2021 Stock Incentive Plan (“2021 SI ~~Plan~~Plan”)

In July 2021, the Company adopted the 2021 ~~Stock Incentive Plan (“2021~~ SI ~~Plan”).~~Plan. The 2021 SI Plan allows the Board ~~of Directors~~ to grant ~~up to 49,573,570~~ incentive and nonqualified stock options, restricted shares, unrestricted shares, restricted share units, and other stock-based awards for ~~the Company’s~~ Class A Common Stock to employees, directors, and non-employees. ~~The~~At the special meeting held on August 16, 2023, the Company’s stockholders approved (among other proposals) an amendment to the 2021 SI Plan to increase the number of shares of Class A Common Stock available for issuance under the 2021 SI Plan ~~will increase annually on~~by an additional 2,584,825 shares.

As a result of the first day of each calendar year, beginning with the calendar year ending December 31, 2022, and continuing until (and including) the calendar year ending December 31, 2031. Annual increases are equal to the lesser of (i) 5 ~~percent~~ ofReverse Stock Split, the number of shares of Class A Common Stock ~~issued and outstanding on December 31 of the immediately preceding fiscal year and (ii) an amount determined by the Board of Directors. As of the effective date of~~reserved for issuance under the 2021 SI Plan, ~~no further~~the Company’s Equity Incentive Plan, and the Company’s Special Talent Incentive Plan (the “Plans”), as well as the number of shares subject to the then-outstanding awards under each of the Plans, were proportionately adjusted, using the 1-for-80 ratio, rounded down to the nearest whole share. In addition, the exercise price of the then-outstanding stock ~~awards have been or will be granted~~options under each of the ~~EI Plan or STI Plan (defined below).~~Plans was proportionately adjusted, using the 1-for-80 ratio, rounded up to the nearest whole cent.

As of September 30, 2023 and December 31, 2022, the Company had ~~43,410,364~~3,352,775 and 303,156 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.

~~A summary~~SOP/SOD Incentive Plan

On February 23, 2023, the Board approved the Company’s SOP/SOD Incentive Plan (“Incentive Plan”) granting: (i) cash bonuses to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the commencement of the start of production of the Company’s ~~stock option activity under~~FF 91 Futurist on or prior to March 31, 2023 and (ii) cash bonuses and equity incentive awards to all active employees of the ~~SI Plan is as follows:~~

Number of
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life (Years) Aggregate
Intrinsic
Value
Outstanding as of December 31, 2021 —
Granted 6,632,387 3.68
Exercised — —
Cancelled/forfeited (469,181) 5.32
Outstanding as of September 30, 2022 6,163,206 $ 3.56 9.55 $ —

~~The weighted-average assumptions used in~~Company that began employment at the ~~Black-Scholes option pricing model for awards granted during the nine months ended September 30, 2022 are as follows:~~

September 30, 2022 September 30, 2021
Risk-free interest rate: 2.46 % 0.79 %
Expected term (in years): 7.16 6.05
Expected volatility: 42.17 % 42.10 %
Dividend yield: 0.00 % 0.00 %

~~As of September 30, 2022, the total remaining stock-based compensation expense for unvested stock options was $4,790, which is expected~~Company prior to ~~be recognized over a weighted average period of 2.47 years.~~

~~EI Plan~~

On February 1, 2018, the Board of Directors adopted the Equity Incentive Plan (“EI Plan”), under which the Board of Directors authorized the grant of up to 42,390,000 incentive and nonqualified stock options, restricted stock, unrestricted stock, restricted stock units, and other stock-based awards for Legacy FF’s Class A Ordinary Stock to employees, directors, and non-employees.December

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

~~A summary~~31, 2022 upon the commencement of the start of delivery of the Company’s FF 91 Futurist on or prior to April 30, 2023 (“Delivery Condition”).

On August 17, 2023, the Board approved an amendment to the Incentive Plan (“Incentive Plan Amendment”) to reflect the updated timing of the previously announced FF 91 2.0 Futurist Alliance phase two of its Delivery Plan from the end of April 2023 to the end of the second quarter 2023 and subsequently to August 2023. The Incentive Plan Amendment is available to all active employees of the Company that began employment at the Company prior to July 1, 2023 and reduced the cash bonuses and milestone based restricted stock ~~option activity~~units (“RSUs”) by 10% for the internal Company sign-off on requirements to commence phase two of the Company’s Delivery Plan on or prior to July 31, 2023 (“New Delivery Condition”). Pursuant to the Incentive Plan Amendment, RSU awards will be granted after the Company has sufficient additional shares available for such issuance (“Share Issuance Condition”) and cash bonuses will be paid once the Company has received an additional $15.0 million in financings.

During the three and nine months ended September 30, 2023, the Company recognized $0.7 million of cash bonus expense under the ~~EI Plan is as follows:~~Incentive Plan. As a result of the Share Issuance Condition not yet being met, no RSUs have been granted under the Incentive Plan.

Number of
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life (Years) Aggregate
Intrinsic
Value
Outstanding as of December 31, 2021 31,962,921 $ 2.81 7.77 $ 86,075
Granted —
Exercised (1,606,795) 2.52 3,658
Cancelled/forfeited (5,083,652) 2.57
Outstanding as of September 30, 2022 25,272,474 $ 2.82 7.17 $ 74
Other than the above, during the nine months ended September 30, 2023, the Company granted:

•0.04 million stock options which had a weighted-average grant date fair value of $86.40 per share. 25,000 stock options vest ratably over eight years. 12,500 stock options commenced vesting on March 29, 2023 upon the start of production of the FF 91 Futurist Alliance at its FF ieFactory California, and 25% of such stock options will vest on each of the first four one-year anniversaries of the vesting start date. As of September 30, ~~2022,~~2023, the total remaining stock-based compensation expense for unvested stock options was ~~$9,039,~~$0.7 million, which is expected to be recognized over a ~~weighted average~~weighted-average period of ~~2.52~~2.85 years.

~~STI Plan~~

~~The Special Talent Incentive Plan (“STI Plan”) allows the Board~~•0.08 million RSUs, which had a weighted-average grant date fair value of ~~Directors to grant up to 14,130,000 incentive~~$75.52 per share, and ~~nonqualified stock options, restricted shares, unrestricted shares, restricted~~0.01 million performance share units ~~and other stock-based awards for Legacy FF’s Class A Ordinary Stock to employees, directors, and non-employees.~~

(“PSUs”), which had a weighted-average grant date fair value of $86.40 per share. The ~~STI Plan does not specify a limit on the number of stock options that can be issued under the plan. Per the terms~~substantial majority of the ~~STI Plan,~~RSUs will vest ratably over four years. The PSUs will commence vesting upon the ~~Company must reserve and keep available a sufficient number~~start of ~~shares to satisfy the requirements~~delivery of the ~~STI Plan.~~

~~A summary~~FF 91 Futurist Alliance, and 25% of such PSUs will vest on each of the ~~Company’s stock option activity under~~first four one-year anniversaries of the ~~STI Plan is as follows:~~

Number of
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life (Years) Aggregate
Intrinsic
Value
Outstanding as of December 31, 2021 9,526,727 $ 5.55 8.0 $ 13,905
Granted — —
Exercised (2,181,335) 2.5 1,678
Cancelled/forfeited (888,381) 8.04
Outstanding as of September 30, 2022 6,457,011 $ 6.51 7.99 $ —

vesting start date. As of September 30, ~~2022,~~2023, the total remaining stock-based compensation expense for unvested ~~stock options~~RSU’s was ~~$5,630,~~$1.7 million, which is expected to be recognized over a ~~weighted average~~weighted-average period of ~~approximately 3.6~~4.24 years.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022 (As Restated)		2021		2022 (As Restated)		2021
(in thousands)										(in thousands)	2023		2022		2023		2022
Research and development	Research and development	$	1,831	$	1,879	$	6,532	$	2,873	Research and development	$	(358)	$	1,831	$	6,616	$	6,532
Sales and marketing	Sales and marketing	236		538		861		847		Sales and marketing	(33)		236		786		861
General and administrative	General and administrative	603		2,636		1,751		4,801		General and administrative	(79)		603		1,504		1,751
		$	2,670	$	5,053	$	9,144	$	8,521		$	(470)	$	2,670	$	8,906	$	9,144

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

when the Company’s share-based payment awards were classified as liabilities from time to time during the nine months ended September 30, 2023.

12. Fair Value of Financial Instruments

Fair Value Measurements

(The Company applies the provisions of ASC 820, ~~in thousands~~Fair Value Measurement, ~~except share~~which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and ~~per share data)~~expands on required disclosures about fair value measurements. The provisions of ASC 820, Fair Value Measurement relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

~~(Unaudited)~~Level 1Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds.

Level 2Valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 instruments typically include U.S. Government and agency debt securities and corporate obligations. Valuations are usually obtained through market data of the investment itself as well as market transactions involving comparable assets, liabilities or funds.

Fair value estimates are made at a specific point in time based on relevant market information and information about the financial or nonfinancial asset or liability.

Notes Payable

The Company has elected to measure certain notes payable and related party notes payable at fair value. Specifically, the SPA Notes as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 7, Notes Payable). The Company used a binomial lattice model and discounted cash flow methodology to value the SPA Notes. The significant assumptions used in the models include the volatility of the Class A Common Stock, the Company’s expectations around the full ratchet trigger, the Company’s debt discount rate based on a CCC rating, annual dividend yield, and the expected life of the instrument. Fair value measurements associated with the notes payable represent Level 3 valuations under the fair value hierarchy.

The fair value adjustments related to notes payables were recorded in Change in fair value measurements on the Condensed Consolidated Statements of Operations and Comprehensive Loss.

SPA Warrants

The Company has elected to measure the SPA Warrants at fair value. The Company uses a Monte Carlo simulation model to measure the fair value of the SPA Warrants, where the significant assumptions used include the volatility of the Company’s Class A Common Stock, the Company’s expectations around the full ratchet trigger, the contractual term of the SPA Warrants, the risk-free rate and annual dividend yield. Fair value measurements associated with the liability-classified warrants represent Level 3 valuations under the fair value hierarchy.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~15.~~SEPA

Since November 14, 2022, the Company has had the right, but not the obligation, to issue and sell to Yorkville up to $200.0 million in shares of Class A Common Stock. The Company determined that SEPA represents a derivative financial instrument under ASC 815, Derivatives and Hedging, which should be recorded at fair value at inception and each reporting date thereafter. The financial instrument was classified as a derivative asset with a fair value of zero as of September 30, 2023 and December 31, 2022.

Liabilities due to Insufficient Authorized Shares

Recurring Fair Value Measurements

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present financial liabilities remeasured on a recurring basis by level within the fair value hierarchy:


	September 30, 2023
(in thousands)	Level 1		Level 2		Level 3
Liabilities:
Warrant liabilities1	$	—	$	—	$	1,730
Notes payable1	—		—		95,445

1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.


	December 31, 2022
(in thousands)	Level 1		Level 2		Level 3
Liabilities:
Warrant liabilities	$	—	$	—	$	92,833
Notes payable	—		—		26,008
Earnout shares liability	—		—		2,250
Share-based payment liabilities	—		—		3,977

There were not any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the nine months ended September 30, 2023. The carrying amounts of the Company’s financial assets and liabilities, including cash, restricted cash, deposits, accounts payable, accrued liabilities and current notes payable approximate fair value because of their short-term nature or contractually defined value.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the activity of Level 3 fair value measurements:


(in thousands)	Warrant Liabilities1		Notes Payable1		Earnout Shares Liability		Liability for Insufficient Authorized Shares Related to Stock Options and RSUs
Balance as of December 31, 2022	$	92,833	$	26,008	$	2,250	$	3,977
Additions	41,068		211,088		—		—
Net disposal pursuant to Warrant Exchange	(16,506)		—		—		—
Exercises	(47,202)		—		—		—
Debt extinguishments	1,317		13,078		—		—
Change in fair value measurements	(69,780)		(28,235)		2,033		—
Payments of notes payable, including periodic interest	—		(1,167)		—		—
Stock-based compensation expense	—		—		—		4,067
Reclassification from liability to equity on February 28, 2023	—		—		(5,014)		(8,979)
Reclassification from equity to liability on April 21, 2023	—				2,112		2,978
Reclassification from liability to equity on August 25, 2023					(1,381)		(2,043)
Conversions of notes to Class A Common Stock	—		(125,327)		—		—
Balance as of September 30, 2023	$	1,730	$	95,445	$	—	$	—

1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.

13. Net Loss per Share

Net Loss Per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares ~~issued and shares~~ to be issued under the commitment to issue shares, as these shares are issuable for no consideration.

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

For purposes of presentation of basic and diluted net loss per ~~share,~~shares, the Company includes shares to be issued in the denominator in accordance with ASC 710-10-54-4 and ASC 260-10-45-48, Earnings Per Share - Overall - Other Presentation Matters - Contingently Issuable Shares, as if they had been issued on the date of the ~~merger,~~Business Combination (see Note 1, Nature of Business and Organization and Basis of Presentation), as such shares are non-contingent and are issuable for no ~~consideration (see Note 4,~~ ~~Business Combination~~).consideration.

The net loss per common share was the same for the Class A Common Stock and Class B Common Stock because they are entitled to the same liquidation and dividend rights and are therefore combined onin the ~~unaudited~~ Condensed Consolidated Statements of Operations and Comprehensive ~~Loss for the three and nine months ended September 30, 2022 and 2021.~~

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

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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

September 30, 2022 September 30, 2021
Stock-based compensation awards – SI Plan 6,163,206 —
Stock-based compensation awards – EI Plan 25,272,474 32,137,760
Stock-based compensation awards – STI Plan 6,457,011 9,529,482
Restricted stock awards — 1,364,018
Public Warrants 23,375,988 22,977,568
Private Warrants 276,131 674,551
ATW NPA Warrants 28,431,635 3,874,166
Bridge Warrants 42,342,839 —
Other Warrants 1,429,068 670,092
ATW NPA Notes 8,982,677 9,009,210
Bridge Notes 46,918,768 —
Make-Whole Amount 32,954,973 —
Total 222,604,770 80,236,847


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Shares issuable upon conversion of SPA Notes and settlement of make-whole provisions	89,569,362	1,110,705	89,569,362	1,110,705
Shares issuable upon exercise of SPA Warrants	1,654,726	884,681	1,654,726	884,681
Other warrants	4,096,242	17,863	4,096,242	17,863
Stock-based compensation awards – Options	428,081	473,659	428,081	473,659
Stock-based compensation awards – RSUs	177,650	—	177,650	—
Public warrants	294,263	292,200	294,263	292,200
Private warrants	1,390	3,452	1,390	3,452
Total	96,221,714	2,782,560	96,221,714	2,782,560

~~16.~~14. Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the ~~unaudited~~ Condensed Consolidated Financial Statements were issued. Other than as described below, ~~and in Note 3,~~ ~~Liquidity and Capital Resources~~ ~~with respect to the Company entering into the SEPA, in Note 10,~~ ~~Notes Payable~~ ~~with respect to the Lien Security Agreement, the funding of the Fourth Bridge Notes, the First Senyun Funding Date and the Second Senyun Funding Date and in Note 12,~~ ~~Commitments and Contingencies~~ ~~with respect to certain legal matters,~~ the Company did not identify any subsequent events that would have required adjustment or disclosure in the ~~unaudited~~ Condensed Consolidated Financial Statements.

~~Exchange Agreements~~

~~Faraday Future Intelligent Electric Inc.~~

Conversion of Notes ~~to Condensed Consolidated Financial Statements~~

(~~in thousands, except share and per share data)~~

~~(Unaudited)~~

On October 10, 2022 and October 19, 2022, the Company exchanged $4,012 and $2,687, respectively, in aggregate principal amounts of the remaining outstanding ATW NPA Notes for 6,269,031 and 5,227,837 shares ofPayable into Class A Common Stock ~~reflecting a price per share of Class A Common Stock of $0.64 and $0.51, respectively.~~

~~Third and Fourth Amendments to the SPA~~

OnBetween October 24, 2022, the Company entered into a Limited Consent and Third Amendment to the SPA (the “Third Amendment”), pursuant to which the maturity date for the Bridge Notes was extended from August 14, 2026 to October 27, 2028. In addition, pursuant to the Third Amendment, each Purchaser and the Agent waived certain defaults and events of default under the SPA, any notes issued pursuant to the SPA and other related documents.

On November 8, 2022, the Company entered into a Limited Consent and Amendment to the SPA (the “Fourth Amendment”), pursuant to which the parties agreed that (i) in no event will the effective conversion price of any interest or interest make-whole amount payable in shares of Class A Common Stock in respect of Bridge Notes issued or issuable under the SPA be lower than $0.21 per share of Class A Common Stock, and (ii) in order for the Company to make payment of any interest or interest make-whole amount in shares of Class A Common Stock, certain price and volume requirements must be met, namely that (x) the VWAP of the Class A Common Stock is not less than $0.21 per share on any trading day during the preceding seven trading day period, and (y) the total volume of the Class A Common Stock does not drop below $1,500 on any trading day during the same period (in each case, as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions).

~~Bridge Notes Conversions~~

~~Between November 10, 2022~~2, 2023 and November ~~21, 2022,~~9, 2023, the Purchasers converted portions of the aggregate principal amount of ~~the outstanding convertible~~$9.4 million notes ~~of $13,500 of principal of Bridge Notes at a conversion price of~~ ~~$0.89~~ ~~per share~~payable into ~~14,369,722~~10,570,266 shares of Class A Common Stock ~~with an additional 26,910,917~~including aggregate principle amount of $1.5 million of related party notes payable (MHL) into 1,781,682 shares of Class A Common ~~Stock issued at conversion prices of~~ ~~$0.35 to $0.53~~ ~~per share in accordance with Make-Whole Amount provisions.~~Stock.

~~Equity Awards~~Sale Leaseback Transaction

On October ~~15, 2022,~~19, 2023, Faraday&Future Inc. (the “Tenant”), a subsidiary of FFIE, entered into a sale leaseback transaction whereby it has exercised its option to purchase the ~~Board granted, under~~FF ieFactory California and simultaneously completed a sale leaseback to Ocean West Capital Partners (“Landlord”) pursuant to that certain Lease Agreement, dated as of October 19, 2023, by and between the ~~2021 SI Plan, 1,393,616 restricted stock units (“RSUs”~~Tenant and 10701 Idaho Owner, LLC (the “Lease Agreement”),. The Lease Agreement also allows the Tenant to access to up to $12.0 million of tenant improvement allowance for the FF ieFactory California. The new lease will be for a term of five years, with a ~~grant date value~~monthly lease rate of ~~$0.50,~~$0.4 million, with a five-year extension option, and the Tenant has an option to ~~certain non-executive employees~~purchase the fee interest in the FF ieFactory California at any time after the second year of the ~~Company.~~lease term. Furthermore, the Tenant has a right of first offer to purchase the FF ieFactory California in the event Landlord desires to sell the FF ieFactory California.

OnUnsecured SPA Funding

In October ~~25, 2022, the Board granted, under the 2021 SI Plan, 1,379,310 RSUs, with a grant date value~~2023, VW and MHL funded an additional portion of ~~$0.58, to Ms. Yun Han, the Company’s Chief Accounting Officer and Interim Chief Financial Officer. Ms. Han’s RSUs vest according~~Unsecured SPA Notes. The Company received net proceeds of $1.8 million in exchange for such issuance.

At-the-Market Funding

Pursuant to the following schedule: (a) 25% on the 30th day following the grant date; (b) 37.5% in four equal installments on each of the first four anniversaries of the grant date; and (c) 37.5% in three equal installments on each of the first three anniversaries of the start of production of FF 91.

~~Authorized Shares~~

~~As of the date of issuance of the unaudited Condensed Consolidated Financial Statements, and as a result of securing additional commitments subsequent to September 30, 2022, as described above,~~Sales Agreement, the Company ~~does not have sufficient remaining authorized~~has sold 14,273,045 shares of Class A Common Stock ~~to fulfill its obligation to issue shares upon exercise~~for a total gross proceeds of ~~all~~$16.6 million. The Company pays a fee of 3.5% of the warrants and conversion of all of the notes issued or issuable under the NPA and SPA, or to pay interest Make-Whole Amounts in shares upon conversion of such notes. Under the SPA, each Purchaser has the option, from time to time until November 10, 2023, to purchase additional Tranche B Notes and warrants of the Company, subject to certain conditions, in an aggregate amount not to exceed the initial principal amount of the Bridge Notes and Incremental Notes issued to such Purchaser. Under the NPA, the Investors have a similar option to acquire additional Optional Notes and warrants of the Company, subject to certain conditions. If there is an insufficient number of remaining authorized shares of Class A Common Stock, the Company would be required to pay the interest “Make-Whole Amount” in cash, which could adversely affect the Company’s liquidity position, business and results of operations. At a special meeting of the Company’s stockholders held on November 3, 2022, the Company’s stockholders approved (among other proposals) a proposal to amend the Amended and Restated Charter to increase the Company’s authorized number of shares of common stock from 825,000,000 to 900,000,000 shares. In order to have a sufficient number of authorized shares of common stock to issuegross sales price, to the ~~Purchasers and/or Investors pursuant to the NPA~~Sales Agents and ~~SPA, the Company intends to call a subsequent special meeting to obtain stockholder approval to further increase the Company’s authorized shares~~received $16.1 million net of ~~common stock.~~this fee.

4042

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ~~(AS RESTATED)~~

The following discussion and analysis is intended to help the reader understand FF’s results of operations and financial condition. This discussion and analysis is provided as a supplement to, and should be read in conjunction with FF’s ~~unaudited~~ Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this quarterly report on Form 10-Q (this “Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to FF’s plans and strategy for FF’s business, includes forward-looking statements that involve risks and uncertainties. FF’s actual results may differ materially from management’s expectations as a result of various factors, including but not limited to those discussed in the sections entitled “Risk Factors” in the Company’s Annual Report on Form ~~10-K, as updated by Part II, Item 1A of~~10-K/A filed on August 21, 2023 (“Form 10-K/A”), “Risk Factors” in this Report and “Cautionary Note Regarding ~~Forward Looking~~Forward-Looking Statements” below. The objective of this section is to provide investors an understanding of the financial drivers and levers in FF’s business and describe the financial performance of the business.

Cautionary Note Regarding Forward-Looking Statements

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our financial and business performance, market acceptance and success of our business model, our ability to expand the scope of our offerings, and our ability to comply with the extensive, complex, and evolving regulatory requirements. These statements are based on management's current expectations, but actual results may differ materially due to various factors.

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section titled “Risk Factors” in the Form ~~10-K,~~10-K/A, as updated in this Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation (and expressly disclaim any obligation) to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under the section titled “Risk Factors” in the Form ~~10-K,~~10-K/A, as updated in this Report, may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Report. 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.

~~Restatement~~Availability of Information

~~The accompanying Management’s Discussion~~We make available through our company website, free of charge, our company filings with the Securities and ~~Analysis of Financial Condition and Results of Operations gives effect~~Exchange Commission (the “SEC”) as soon as reasonably practicable after we electronically file them with, or furnish them to, the ~~correction~~SEC. The reports we make available include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, registration statements, and any amendments to those documents.

The website link to our SEC filings is investors.ff.com/financial-information/sec-filings.

We intend to use press releases, our Investor Relations website, investor.ff.com, and certain social media accounts as a means of ~~errors in~~disclosing information and observations about the Company and its business which may be of interest or material to our ~~previously reported consolidated financial statements as of~~investors, material, non-public information, and for ~~the three~~complying with our disclosure obligations under Regulation FD: Instagram, Facebook, X, LinkedIn, Youtube, FF App, WeChat, Weibo, Toutiao, Douyin, and ~~nine month periods ended September 30, 2022. For additional~~Futu. The information and observations we post through these social media channels may be deemed material. Accordingly, investors should monitor the

Investor Relations website and these social media channels, in addition to following our press releases, filings with the SEC, public conference calls, presentations, and webcasts. The social media channels that we intend to use as a ~~detailed discussion~~means of ~~these error corrections, refer~~disclosing the information described above may be updated from time to time. The information contained on, or that may be accessed through, our website or social media channels, is not incorporated by reference into, and is not a part of, this Report or any other report or document filed with the ~~Explanatory Note and Part I, Item 1, Notes~~SEC. Any reference to ~~the Condensed Consolidated Financial Statements, Note 2,~~ ~~Restatement~~.our website in this Report is intended to be an inactive textual reference only.

Overview

Faraday Future Intelligent Electric, Inc. (together with its consolidated subsidiaries, “FF,” “the Company,” “we,” “us” or “our”) is a California-based, global, shared, intelligent, mobility ecosystem company founded in 2014 with a vision to disrupt the automotive industry.

On July 21, 2021, ~~(the “Closing Date”), Faraday Future Intelligent Electric Inc.~~FF (f/k/a Property Solutions Acquisition Corp. (“PSAC”)), a Delaware corporation, consummated the previously announced business combination pursuant to ~~that certain Agreement~~an agreement and ~~Plan~~plan of ~~Merger,~~merger, dated as of January 27, 2021 (as amended, the “Merger Agreement”), by and among PSAC, PSAC Merger Sub Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands and wholly-owned subsidiary of PSAC (“Merger Sub”), and FF Intelligent Mobility Global Holdings Ltd. (“Legacy ~~FF.~~FF”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Legacy FF, with Legacy FF surviving the merger as a wholly-owned subsidiary of the Company ~~(“Business~~(the “Business Combination”).

Upon the consummation of the Business Combination, ~~(“Closing”),~~ PSAC changed its name from Property Solutions Acquisition Corp. to Faraday Future Intelligent Electric Inc. ~~(“FF”)~~, and FF’s Class A common stock, par value $0.0001 per share (the Class A Common ~~Stock~~Stock”) and 287,220 public warrants ~~(“Public~~(the “Public Warrants”) ~~originally issued in the initial public offering of PSAC~~ began trading on The Nasdaq Global ~~Select~~ Market ~~(“Nasdaq”)~~ under the ticker symbols ~~FFIE~~“FFIE” and ~~FFIEW,~~“FFIEW,” respectively.

With headquarters in Los Angeles, California, FF designs and engineers next-generation, intelligent, connected, electric vehicles. FF ~~intends to manufacture~~manufactures vehicles at its ~~ieFactory California~~ production facility in Hanford, California (the “FF ieFactory California”), with additional future production capacity needs addressed through a contract manufacturing agreement with Myoung Shin Co., Ltd., (“Myoung Shin”), an automotive manufacturer headquartered in South Korea. FF has additional engineering, sales, and operational capabilities in China and is exploring opportunities for potential manufacturing capabilities in China through a joint venture or other ~~arrangement.~~arrangements.

Since its founding, FF has created major innovations in technology, products, and a user-centered business model. FF believes these innovations will enable FF to set new standards in luxury and performance that will redefine the future of intelligent mobility.

~~FF’s innovations in technology include its proprietary Variable Platform Architecture (“VPA”), propulsion system, and Internet Artificial Intelligence (“I.A.I.”) system.~~ We believe the following combination of capabilities of FF’s products, technology, the recent upgrade to FF Product and Technology Upgrade Generation 2.0 (PT Gen 2.0), team, and business model distinguish FF from its competitors:

•FF has designed and developed a breakthrough mobility platform — its proprietary ~~VPA.~~Variable Platform Architecture (“VPA”).

•FF’s propulsion system provides a competitive edge in acceleration and range, enabled by an expected industry-leading inverter design, and propulsion system.

•FF’s advanced Internet Artificial Intelligence (“I.A.I.”) technology offers high-performance computing, high speed internet connectivity, Over the Air (“OTA”) updating, an open ecosystem for third-party application integration, and a Level 3 autonomous driving-ready system, in addition to several other proprietary innovations that enable FF to build an advanced, highly-personalized user experience.

•Since inception, FF has developed a portfolio of intellectual property, established its proposed supply chain, and assembled a global team of automotive and technology experts and innovators to achieve its goal of redefining the future of the automotive industry. As of ~~September 30, 2022,~~November 7, 2023, FF has been granted approximately ~~650~~660 patents globally.

•FF’s B2C (business-to-customer) passenger vehicle ~~launch~~ pipeline over the next five years ~~includes~~is planned to include the FF 91 series, the FF 81 series, and the FF 71 series.

•FF believes that the FF 91 Futurist ( the “FF 91,” “FF 91 Futurist,” or “FF 91 2.0 Futurist Alliance”) will be the first ultra-luxury EVelectric vehicle to offer a highly-personalized, fully-connected user experience for driver and passengers. FF ~~previously expected deliveries of~~started production on the first FF 91 ~~series to begin~~futurist and delivered the first FF 91 2.0 Futurist Alliance in the ~~fourth quarter~~first half of 2022. However, in light of its delayed timing in securing funding commitments needed to fund its projected use of cash, FF no longer expects to launch the FF 91 in the fourth quarter of 2022. The timing of launch of FF 91 vehicles is uncertain and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount reductions and other expense reduction and payment delay measures. It is also subject to suppliers meeting their commitments on program deliverables including parts, and timely and successful certification testing.2023.

•Subject to future financing, FF plans to ~~launch~~produce and deliver its second passenger vehicle, the FF 81, which will be a premium, mass-market electric vehicle positioned to compete against the Tesla Model S, Tesla Model X, the BMW 5-series, and the Nio ES8.

•Subject to future financing, FF plans to develop a mass-market passenger vehicle, the FF 71. FF expects to ~~launch~~start production and deliveries of the FF 71 subsequent to production and deliveries of the ~~launch of~~ FF 81. The FF 71 will integrate full connectivity and advanced technology into a smaller vehicle size and is positioned to compete against the Tesla Model 3, Tesla Model Y, and the BMW 3-series.

•Subject to future financing, FF plans to develop a Smart Last Mile Delivery (“SLMD”) vehicle to address the high-growth, last-mile delivery opportunity, particularly in Europe, China and the U.S. FF’s modular VPA facilitates entry into the last-mile delivery segment, allowing FF to expand its total addressable market and avenues of growth.

All FF has adopted a hybrid manufacturing strategy consisting of its refurbished manufacturing facility in Hanford, California and a collaboration with Myoung Shin. FF is also exploring other potential contract manufacturing options in addition to the contract manufacturing agreement in South Korea. FF is also exploring the possibility of manufacturing capacity in China through a joint venture or other arrangements. All passenger vehicles ~~as well as the SLMD vehicle~~ are expected to be available for sale in the U.S. and ~~China.~~China, with potential expansion to European ~~markets may be added as early as 2024.~~markets.

Emerging Growth Company Status

Section 102(b)(1) of the ~~JOBS~~Jumpstart Our Business Startups Act (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies. Any such election to not take advantage of the extended transition period is irrevocable.

FF is an “emerging growth company” as defined in Section 2(a) of the Securities Act ~~of 1933, as amended,~~ and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. FF expects to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Segment Information

FFOn February 26, 2023, after an assessment by the board of directors of the Company (the “Board”) of the Company’s management structure, the Board approved Mr. Yueting Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced research and development (“R&D”) technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Chen, subject to processes and controls to be determined by the Board after consultation with the Company’s management. Based on the changes to his responsibilities within the Company, the Board determined that Mr. Jia is an “officer” of the Company within the meaning of Section 16 of the Exchange Act and an “executive officer” of the Company under Rule 3b-7 under the Exchange Act.

Therefore, the Company’s co-CODM's are both its Global Chief Executive Officer (“CEO”) and Founder. The Company has determined that FFit operates asin one operating segment and one reportable segment, ~~which is~~as the ~~design, development, manufacture, engineering, sale,~~co-CODM’s review financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and ~~distribution~~evaluating financial performance. Substantially all of ~~electric vehicles~~the Company’s consolidated operating activities, including its long-lived assets, are located within the U.S. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers.

On September 16, 2023, Mr. Chen notified the Company of his decision to resign from his position as Global CEO of the Company and ~~related products~~as a member of the Board effective September 29, 2023. On September 21, 2023, the Board appointed Mattias Aydt to succeed Mr. Chen as Global Chief Executive Officer and as a member of the Board, effective September 29, 2023. The change in the ~~global market.~~

~~Impact of COVID-19 on FF’s Business (in thousands~~)

~~There continues to be worldwide impact from~~Company’s Global CEO has not impacted the ~~COVID-19 pandemic. The impact of COVID-19 includes changes in consumer~~Company’s prior determination that its co-CODM's are both its Global CEO and business behavior, pandemic fears, market downturns, restrictions on business, and individual activities have created significant volatility in the global economy and have led to reduced economic activity. The spread of COVID-19 has also created a disruption in the manufacture, delivery, and overall supply chain of vehicle manufacturers and suppliers and has led to a global decrease in vehicle sales in markets around the world.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans, restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. For example, FF’s employees based in California have been subject to stay-at-home orders from state and local governments. While the stay-at-home orders were lifted on June 15, 2021, FF continues to operate under various return-to-work protocols and must continue to follow certain safety and COVID-19 protocols. These measures may adversely impact FF’s employees and operations, the operations of FF’s suppliers and business partners, and could negatively impact the construction schedule of FF’s manufacturing facility and the production schedule of the FF 91. In addition, various aspects of FF’s business and manufacturing facility cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and could adversely affect FF’s construction and manufacturing plans, sales and marketing activities, and business operations. The extent of the continuing impact of the COVID-19 pandemic on FF’s operational and financial performance is uncertain and will depend on many factors outside FF’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic; the availability, distribution and effectiveness of vaccines; the imposition of protective public safety measures; and the impact of the pandemic on the global economy, including FF’s supply chain, and on the demand for consumer products. Future measures taken by government authorities in response the COVID-19 pandemic could adversely affect FF’s construction and manufacturing plans, sales and marketing activities, and business operations.Founder.

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In response to the pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the United States Small Business Administration (“SBA”). In 2020, Legacy FF received a Paycheck Protection Program (“PPP”) loan in the amount of $9,168. The Company was notified by East West Bank that a principal amount of $8,975 as well as accrued interest of $155 relating to the PPP Loan had been forgiven as of December 31, 2021. The Company paid an amount of $193 in April 2022 to settle the PPP loan.

The COVID-19 vaccine is currently being administered. Any resurgence may slow down FF’s ability to ramp-up FF’s production program on time to satisfy investors and potential customers. Any delay to production will delay FF’s ability to launch the FF 91 and begin generating revenue. The COVID-19 pandemic could limit the ability of FF’s suppliers and business partners to perform, including third-party suppliers’ ability to provide components and materials used in the FF 91. FF may also experience an increase in the cost of raw materials. FF does not anticipate any material impairments as a result of COVID-19; however, FF will continue to evaluate conditions on an ongoing basis. Even after the COVID-19 pandemic has subsided, FF may continue to experience an adverse impact to its business as a result of the global economic impact and any lasting effects on the global economy, including any recession that has occurred or may occur in the future. Refer to the section titled ~~“Risk Factors” of the Form 10-K for a full discussion of the risks associated with the COVID-19 pandemic.~~

~~Business Combination~~

On June 24, 2021, the registration statement on Form S-4 (File No. 333-255027), initially filed with the U.S. Securities and Exchange Commission (“SEC”) on April 5, 2021 (as amended, the “Registration Statement”), relating to the Business Combination was declared effective by the SEC, and (ii) PSAC established a record date of June 24, 2021 and a meeting date of July 21, 2021 for its special meeting of stockholders, where the Business Combination was approved. For purposes of the discussions in this section related to conversion on the Closing Date of all issued and outstanding Legacy FF Ordinary Stock into shares of Common Stock of FF in accordance with the terms and conditions of the Merger Agreement and the settlement of liabilities in conjunction with the closing of the Business Combination, we refer to that parties’ right to receive Class A and Class B Common Stock.

Recent Developments

~~FF accomplished the following major milestones during the three months ended~~ ~~September 30, 2022~~:

•~~Announced that Mathias Hofmann, Head of Global Supply Chain, would assume the additional position of Head of Manufacturing Operations, on an interim basis.~~

•Announced its sponsorship and attendance at the 2022 Pebble Beach Concours d'Elegance taking place from August 18-21, 2022. FF’s flagship FF 91 EV was available for demo rides and made a special appearance on the Concept Lawn on August 21, 2022.

•~~Announced a joint partnership with Gameloft, a leader in the creation and development of games. FF’s first concept car, the FFZERO1, is featured inside Asphalt 8.~~

•Announced the FF 91 Futurist, the Ultimate Intelligent TechLuxury EV, was officially certified to have a robust rating of 381 miles of EV range from the U.S. Environmental Protection Agency (“EPA”).

•Announced that PricewaterhouseCoopers LLP (“PwC”) notified Faraday Future Intelligent Electric Inc. (the “Company”) that it would not stand for re-election as the Company’s independent registered public accounting firm for the year ending December 31, 2022 and, effective August 23, 2022, was no longer the Company’s independent registered public accounting firm.

•~~Announced that a thorough independent external investigation found that allegations that certain directors were conspiring to pursue an unnecessary bankruptcy of the Company were without merit.~~

•~~Announced an agreement relating to its governance dispute with FF Top. SeeRecent Governance Developments~~ ~~for more information.~~

~~Subsequent to September 30, 2022, FF accomplished these additional events and milestones:~~

•Announced the resignation of Becky Roof, the Company’s former Interim Chief Financial Officer, resigned from the Company effective October 12, 2022. Ms. Roof’s departure from the Company followed the successful completion of key milestones in the Company’s SEC reporting and fundraising activities, and was not a result of any disagreement with the Company’s independent auditors or any member of Company management on any matter of accounting principles or practices, financial statement disclosure, or internal controls.

•Appointed Yun Han as Chief Accounting Officer and Interim Chief Financial Officer, effective October 25, 2022. Ms. Yun Han was most recently Senior Vice President and Chief Accounting Officer of Romeo Power, Inc., and spent over 13 years with PwC. Ms. Yun Han is a Certified Public Accountant licensed in the State of California.

•~~Appointed Mazars USA LLP as the Company’s independent registered public accounting firm as of and for the year ending December 31, 2022, effective October 27, 2022.~~

•Announced 369 pre-orders as of November 17, 2022. Pre-orders are fully refundable, non-binding, paid deposits for the FF 91 Futurist Alliance Edition and/or the FF 91 Futurist vehicles available initially for sale to customers in the U.S. and China. FF 91 Futurist Alliance Edition pre-orders require a $5,000 deposit for customers in the U.S. and an CNY 50,000 deposit for customers in China. FF 91 Futurist pre-orders require a $1,500 deposit for customers in the U.S. and an CNY 20,000 deposit for customers in China.

•Announced the achievement of Production Milestone #6, completion of construction and equipment installation in final vehicle manufacturing areas at FF’s Hanford, California manufacturing facility (“ieFactory California”).

•Announced the California Air Resources Board (CARB) has certified the FF 91 Futurist as a zero-emissions vehicle (ZEV). The ZEV program is part of CARB's Advanced Clean Cars package of coordinated standards that control smog-causing pollutants and greenhouse gas emissions of passenger vehicles in California.

Recent Governance Developments

•As previously disclosed, from June to September 2022, FF and FF Global Partners LLC (“FF Global”) were party to a dispute over various terms of the Shareholder Agreement as then in effect, including relating to FF Global’s right to remove its designees fromOn August 4, 2023, the Board of Directors. On September 23, 2022, the Company, FF Global and FF Top entered into a governance settlement with FF Top, the largest holder of the Company’s Common Stock, including with respect to the composition of the Board, resignation of Ms. Susan Swenson andappointed Mr. Brian Krolicki, and the appointment of Adam (Xin) He to the Board. In connection with the Heads of Agreement, on September 23, 2022, the Company and FF Global entered into a mutual release agreement (the “Mutual Release”), pursuant to which, the Company and FF agreed to a mutual general release of claims and to settle fully and finally all differences between them, including any differences that arose out of the Company directors’ serviceLev Peker as ~~a director, employee, officer or manager of the Company up through and including the date of the Mutual Release subject to customary exceptions. See “Governance Agreement with FF Top and FF Global~~” for more information. Pursuant to the Heads of Agreement, FF Top and FF Global caused all actions in the Court of Chancery of the State of Delaware, and any other forum, filed by FF Top, FF Global and/or any of their respective controlled affiliates as of the effective date of the Heads of Agreement, naming the Company or any of its directors or officers to be dismissed without prejudice as of September 27, 2022.

Shortly following the execution of the Heads of Agreement, FF Global began making additional demands of the Company which were beyond the scope of the terms contemplated by the Heads of Agreement and pertained to, among other things, the Company’s management reporting lines and certain governance matters. On September 30, 2022, FF Global alleged that the Company was in material breach of the spirit of the Heads of Agreement. The Company believes it is in full compliance with the Heads of Agreement and intends to comply with its terms, and disputes any characterization to the contrary. While the Company is in discussions with FF Global regarding these additional demands, such disputes divert management and Board resources and are costly. There can be no assurance that this or any other dispute between the Company and FF Global will not result in litigation. See “Item 1A. Risk Factors — ~~Disputes with our shareholders are costly and distracting~~.”

~~On October 3, 2022, Ms. Swenson and Mr. Scott Vogel,~~ a member of the Board ~~tendered their resignation from~~and as a member and Chair of the ~~Board effective immediately. On October 3, 2022, Mr. Jordan Vogel also tendered his resignation from~~Audit Committee of the Board ~~effective on October 5, 2022 upon his receipt of a supplemental release pursuant to the Mutual Release.~~

•~~On October 14, 2022, FF Top delivered to the Company a “Notice of Nomination of Replacement FF Top Designees” stating, among other things, that FF Top was nominating Ms. Li Han~~ to fill the vacancy on the Board ~~left by Ms. Swenson’s resignation. FF Top asserted the right to nominate Ms. Li Han to fill the vacancy~~and Audit Committee created by ~~Ms. Swenson’s~~Mr. Adam (Xin) He’s resignation ~~because such~~from the Board on July 31, 2023. In connection with Mr. He’s resignation, and to comply with the Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5605(c)(4)(B), on August 2, 2023, the Company notified Nasdaq that the Company no longer complied with Nasdaq’s independent director and audit committee requirements as set forth in Listing Rule 5605 as the Board was not ~~effected~~comprised of a majority of independent directors as required by Nasdaq Listing Rule 5605(b)(1) and the Audit Committee was not comprised of at least three independent directors as required by Nasdaq Listing Rule 5605(c)(2)(A), which noncompliance was subsequently cured by the appointment of Mr. Peker as a member of the Board and as a member of the Audit Committee. In response to the Company’s notice, Nasdaq issued a letter to the Company on August 4, 2023 indicating that, effective July 31, 2023, the Company no longer complies with Nasdaq’s independent director and audit committee requirements as set forth in ~~accordance~~Nasdaq Listing Rule 5605. As a result of the appointment of Mr. Peker as a member of the Board and as a member and chair of the Audit Committee, the Company regained compliance with the ~~Heads of Agreement,~~board independence requirements as set forth in Nasdaq Listing Rule 5605(b)(1) and ~~thus,~~ the provision that Ms. Swenson’s seat would remain empty until the 2022 Annual General Meeting of Stockholders (the “2022 AGM”) did not apply. FF Top maintained that it believed that Ms. Swenson’s vacancy should be filled with a nominee of FF Top, notwithstanding the current level of FF Top’s beneficial ownership of the Company shares,audit committee requirements as set forth in ~~light of substantial dilution in its ownership of the Company shares based on recent financing transactions entered into by the Company. See “Governance Agreement with FF Top and FF Global” for more information.~~

Nasdaq Listing Rule 5605(c)(2)(A).

•On October 22, 2022, the Company and FF Top entered into the FF Top Amendment to the FF Top Voting Agreement. Pursuant to the FF Top Amendment, FF Top (among other things) reaffirmed its commitment under the FF Top Voting Agreement, in light of the extension of the maturity date of the Bridge Notes under the Third Amendment, to vote all of its shares of the Company voting stock in favor of the proposal to approve (for purposes of the NASDAQ listing rules) the issuance, in the aggregate, of shares in excess of 19.99% of the total issued and outstanding shares of the Company Common Stock pursuant to the Financing Documents at theAt a special meeting of the Company’s stockholders held on ~~November 3, 2022. FF Top’s obligations pursuant to~~August 16, 2023, the ~~FF Top Amendment are conditioned on (i) the appointment of Mr. Chad Chen (or~~Company’s stockholders approved a ~~substitute nominee, as applicable), in lieu of Ms. Li Han, to~~proposal authorizing the Board ~~of Directors~~to effect a reverse stock split of the ~~Company as the fourth FF Top designee no later than October 27, 2022 (provided that Mr. Chen or~~Company’s outstanding common stock, par value $0.0001 per share (the “Common Stock”) at a ~~substitute nominee, as applicable, is reasonably acceptable to the Nominating~~range between 1-for-2 and ~~Corporate Governance Committee of the Board with respect to the Nasdaq independence rules~~1-for-90, and ~~legal compliance and criminal compliance) (provided~~a proposal stating that if ~~Mr. Chen~~a reverse stock split is ~~not so reasonably acceptable to the Nominating and Corporate Governance Committee~~implemented at a ratio of the Board, then FF Top will be permitted to nominate another individual to the Board); and (ii) constructive engagement by Mr. Adam (Xin) He, the Chairman of the Board, directly with representatives of FF Top on certain additional governance and management matters and, to the extent the Chairman of the Board so determines, in his discretion, such matters will be put to a discussion and a vote of the full Board. On October 27, 2022, Mr. Chad Chen was appointed to the Board. On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately.

~~Recent Financing Developments~~

•~~On August 14, 2022,~~1-for-8 or greater, the Company entered into a definitive Securities Purchase Agreement (“SPA”) with FF Simplicity Ventures LLC, an entity affiliated with ATW Partners LLC (“FF Simplicity”), for $52 million of committed near-term convertible senior secured notes financing and the potential for an additional $248 million of incremental senior secured convertible notes financing to be funded within 90 days after the initial closing. See Note 10, ~~Notes Payable~~ ~~in FF’s unaudited Condensed Consolidated Financial Statements included above, and the Company’s Form 8-Ks filed with the SEC on August 15, 2022 for additional information.~~

•~~On September 23, 2022, the Company entered into Amendment No. 1 to Securities Purchase Agreement and Convertible Senior Secured Promissory Notes (the “Amendment”) with~~will amend its subsidiaries party thereto, FF Simplicity as administrative and collateral agent (in such capacity, the “Agent”) and purchaser and RAAJJ Trading LLC, as purchaser (together with FF Simplicity Ventures LLC, the “Purchasers”), to amend, among other things, (a) that certain Securities Purchase Agreement, dated as of August 14, 2022, by and among the Company, its subsidiaries party thereto, the Purchasers and the Agent (the “Existing SPA”), (b) that certain Convertible Senior Secured Promissory Note in favor of FF Simplicity in the principal amount of $25.0 million, dated as of August 15, 2022, and (c) that certain Convertible Senior Secured Promissory Note in favor of FF Simplicity in the principal amount of $10.0 million, dated as of September 14, 2022. Please refer to the Current Report on Form 8-K that was filed by the Company with the the SEC on August 15, 2022 for a description of the key terms of the Existing SPA.

•On September 25, 2022, the Company entered into a Joinder and Amendment Agreement with Senyun International Ltd., an affiliate of Daguan International Limited (“Senyun”), FF Simplicity and RAAJJ Trading LLC (“RAAJJ”), for the purchase of up to $60 million under the SPA, subject to the completion of due diligence by the Company of Senyun and its financing sources. See Note 10, ~~Notes Payable~~ ~~for additional information.~~

•Beginning on August 16, 2022, FF Aventuras SPV XI, LLC, FF Adventures SPV XVIII LLC, FF Ventures SPV IX LLC and FF Venturas SPV X LLC, entities affiliated with ATW Partners LLC (“Investors”), converted portions of the aggregate principal amount of the outstanding convertible notes issued by the Company in a private placement pursuant to a Second Amended and Restated ~~Note Purchase Agreement, dated as~~Certificate of ~~October 9, 2020 (as amended from time~~Incorporation to ~~time,~~reduce the ~~“NPA,”~~number of authorized shares of the Common Stock to a number equal to 12,355,000,000 divided by the reverse stock split ratio determined by the Board. On August 22, 2023, the Board approved a reverse stock split ratio of 1-for-80 of Common Stock (the “Reverse Stock Split”). Accordingly, on August 24, 2023, the Company filed the Third Amended and ~~such convertible notes~~Restated Certificate of Incorporation of the Company to effect the Reverse Stock Split and to set the number of authorized shares of Common Stock, to 154,437,500 (which is 12,355,000,000 divided by 80, the Reverse Stock Split ratio). As a result, effective August 25, 2023, every 80 shares of the issued ~~under~~and outstanding Common Stock were converted into one share of Common Stock, without any change in par value per share, and the ~~NPA, the “ATW NPA Notes”), into~~Company’s authorized shares of Common Stock were reduced to 154,437,500, composed of (i) 147,875,000 shares of Class A Common Stock and (ii) 6,562,500 shares of the Company’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”). No fractional shares of common stock were issued as ~~follows below:~~a result of the Reverse Stock Split. Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of such fractional share.

Conversion Period
Total Principal Amount of ATW NPA Notes Converted (in thousands)
Conversion Price Total Number of Shares of Class A Common Stock Issued
August 16, 2022 to September 14, 2022 $67,218 $0.84 to $2.29 64,843,850

•On September 26, 2022, the Investors exercised 2,687,083 ATW NPA Warrants, each with an exercise price of $0.6427 per share, into an equivalent number of shares of Class A Common Stock, resulting in net cash exercise proceeds to16, 2023, Mr. Chen notified the Company of ~~$1.7 million.~~

•his decision to resign from his position as Global CEO of the Company and as a member of the Board effective September 29, 2023. On September ~~27, 2022,~~21, 2023, the ~~Investors exercised 29,158,364 ATW NPA Warrants, each with an exercise price~~Board appointed Mr. Mattias Aydt to succeed Mr. Chen as Global Chief Executive Officer and as a member of ~~$0.50 per share, on a cashless basis into 14,339,110 shares of Class A Common Stock.~~the Board, effective September 29, 2023.

•On October 10, 2022, the Company entered into an exchange agreement with the Investors, pursuant to which, on October 10, 2022, the Investors exchanged $4,012,180 in aggregate principal amount of the outstanding ATW NPA Notes for 6,269,031 newly issued shares of Class A Common Stock, reflecting a price per share of Class A Common Stock of $0.64.

•On October 19, 2022, the Company and the Investors entered into an exchange agreement, pursuant to which, on October 19, 2022, the Investors exchanged $2,687,109 in aggregate principal amount of the outstanding ATW NPA Notes for 5,227,837 newly issued shares of the Class A Common Stock, reflecting a price per share of Class A Common Stock of $0.51. Following the completion of such exchange, there were no outstanding ATW NPA Notes.

•~~Between November 10, 2022 and November 21, 2022,~~ ~~FF Simplicity and RAAJJ Trading LLC~~ ~~converted portions of the aggregate principal amount of the outstanding convertible notes of $13,500 issued by the Company pursuant to the SPA at a conversion price of~~ ~~$0.89~~ ~~per share into 14,369,722 shares of Class A Common Stock with an additional 26,910,917 Class A Common Stock issued at conversion prices of~~ ~~$0.35 to $0.53~~ ~~per share in accordance with Make-Whole Amount provisions, as defined in the SPA.~~

•On November 14, 2022,the Company announced entry into a definitive Standby Equity Purchase Agreement (“SEPA”) for a new standby equity line of credit with an affiliate of Yorkville Advisors Global, LP (“Yorkville”), with an initial commitment of $200 million. Under the terms of the SEPA, Faraday Future will have the right, but not the obligation, to issue and sell to Yorkville up to $200 million in shares of the Company’s Class A common stock subject to customary conditions including an effective registration statement for the resale of such shares. The Company has the right to increase the $200 million commitment by up to $150 million in one or more installments. The shares will be sold to Yorkville at a discounted price of 97% of the 3-day volume-weighted average price at the time of funding, and generally limited to one-third of the Company’s trading volume during such time period. Additional information about the SEPA can be found in our 8-K filed on November 14, 2022.

~~Governance Agreement with FF Top and FF Global~~

As previously disclosed, beginning in June 2022 the Company was party to a dispute with FF Global, its largest stockholder, over various terms of the Shareholder Agreement (as then in effect), including relating to FF Global’s right to remove its designees from the Board. On September 23, 2022, the Company entered into the Heads of Agreement with FF Global and FF Top, pursuant to which, effective as of September 23, 2022, the Company (a) increased the size of the Board from nine to ten, (b) appointed Mr. He to fill the vacancy resulting from such increase in the size of the Board until the 2022 AGM, (c) appointed Mr. He to the Audit Committee and the Nominating and Corporate Governance Committee of the Board and (d) agreed to not remove Mr. He from either committee prior to the 2022 AGM. Pursuant to the Heads of Agreement, FF Top and FF Global caused all actions in the Court of Chancery of the State of Delaware, and any other forum, filed by FF Top, FF Global and/or any of their respective controlled affiliates as of the effective date of the Heads of Agreement, naming the Company or any of its directors or officers, to be dismissed without prejudice as of September 27, 2022. Pursuant to the Heads of Agreement, the Company, FF Global and FF Top agreed to the following matters, and have further agreed to work expeditiously, cooperatively and in good faith to draft, negotiate, execute and deliver definitive documentation, including an amendment to the Shareholder Agreement by no later than December 2, 2022 (or such later date as may be agreed by the Company, FF Global and FF Top in writing), with the Heads of Agreement constituting the binding agreement of the parties with respect to such matters unless and until such further definitive documentation is entered into:

•~~the Company will call, convene, hold and complete the 2022 AGM on the earliest date permitted under Delaware law and applicable Nasdaq and SEC requirements;~~

•~~the size of the Board will be reduced to seven members effective with the directors to be elected at the 2022 AGM;~~

•the following individuals will be nominated for election to the Board and included on the Board’s recommended slate at the 2022 AGM: (a) Dr. Breitfeld, (b) three directors selected by FF Top, at least one of whom will be an independent director, and (c) three independent directors selected by a committee, consisting of Mr. He (the designee from the Nominating and Corporate Governance Committee of the Board reasonably acceptable to FF Top), Dr.

Breitfeld and Mr. Chui Tin Mok (the individual designated by FF Top and reasonably acceptable to the Company) (the “Selection Committee”), from a pool of candidates recruited with the assistance of an executive search firm;

•~~no re-nomination of existing directors of the Company (other than Dr. Breitfeld and Mr. He) at the 2022 AGM without the consent of the Selection Committee;~~

•FF Top’s right to maintain three FF Top-nominated directors on the Board through the Company’s 2026 annual general meeting of stockholders (subject to certain conditions) and thereafter the right to nominate directors to the Board based on the formula in the Shareholder Agreement between the Company and FF Top, in each case as long as FF Top maintains a Shareholder Share Percentage (as defined in the Shareholder Agreement) of at least five percent (5%); and

•the resignation of Ms. Swenson and Mr. Krolicki as directors of the Company. It was also agreed that (i) Ms. Swenson and Mr. Krolicki would not thereafter seek or accept re-appointment, re-nomination or re-election to the Board and (ii) that following their resignations from the Board, their seats would be left empty until the 2022 AGM (which would result in the Company having an eight-person Board until the 2022 AGM).

~~On October 3, 2022, Ms. Swenson and Mr. Scott Vogel,~~2023, Ke Sun, a member of the Board tendered their resignation from the Board effective immediately. On October 3, 2022, Mr. Jordan Vogel also tendered his resignation from the Board effective on October 5, 2022 upon his receipt of a supplemental release pursuant to the Mutual Release (described below). On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately.

~~As of November 17, 2022,~~notified the Company ~~had executed $80 million in financing commitments toward satisfaction~~ of ~~the Implementation Condition, $19.5 million of which have been funded and made available for the Company’s general use.~~

~~In connection with the Heads of Agreement, on September 23, 2022, the Company entered into~~her decision to resign as a ~~Mutual Release (the “Mutual Release”) with FF Global, its executive committee members and their controlled affiliates, FF Global’s controlled affiliates (including FF Top), and the directors~~director of the Company and their controlled affiliates (collectively, and together with the Company, the “Release Parties”), pursuant to which the Release Parties agreed to a mutual release of claims and to settle various matters among them, including with respect to any differences that arose out of the Company directors’ service as a director, employee, officer or manager of the Company up through and including the date of the Mutual Release, subject to customary exceptions.

As a result of the governance settlement described above, we expect that the composition of the Board will change substantially effective as of the completion of the 2022 AGM. See “Item 1A. Risk Factors– The composition of the Company’s Board has changed, and is expected to further change substantially prior to or immediately following completion of the 2022 AGM.” In addition, as a result of these developments, Mr. Jia and FF Global have strengthened their already significant influence over the Company. See “Item 1A. Risk Factors– Yueting Jia and FF Global, over which Mr. Jia exercises influence, have the ability to significantly influence the Company’s management, business and operations, and may use this ability in ways that are not aligned with the Company’s business or financial objectives or strategies or that are otherwise inconsistent with the Company’s interests. Such significant influence may increase if and to the extent the current members of the Board and management are removed and replaced with individuals who are aligned with Mr. Jia and/or FF Global.”

On October 14, 2022, FF Top delivered to the Company a “Notice of Nomination of Replacement FF Top Designees” stating, among other things, that FF Top was nominating Ms. Li Han to fill the vacancy on the Board left by Ms. Swenson’s resignation. FF Top asserted the right to nominate Ms. Li Han to fill the vacancy created by Ms. Swenson’s resignation because such resignation was not effected in accordance with the Heads of Agreement, and thus, the provision that Ms. Swenson’s seat would remain empty until the 2022 AGM did not apply. FF Top maintained that it believed that Ms. Swenson’s vacancy should be filled with a nominee of FF Top, notwithstanding the current level of FF Top’s beneficial ownership of the Company shares, in light of substantial dilution in its ownership of the Company shares based on recent financing transactions entered into by the Company.

On October 22, 2022, the Company and FF Top entered into the FF Top Amendment to the FF Top Voting Agreement. Pursuant to the FF Top Amendment, FF Top (among other things) reaffirmed its commitment under the FF Top Voting Agreement, in light of the extension of the maturity date of the Bridge Notes under the Third Amendment, to vote all of its

shares of the Company voting stock in favor of the proposal to approve (for purposes of the Nasdaq listing rules) the issuance, in the aggregate, of shares in excess of 19.99% of the total issued and outstanding shares of the Company Common Stock pursuant to the Financing Documents at the special meeting of the Company’s stockholders held on November 3, 2022. FF Top’s obligations pursuant to the FF Top Amendment are conditioned on (i) the appointment of Mr. Chen (or a substitute nominee, as applicable), in lieu of Ms. Li Han, to the Board as the fourth FF Top designee no later than October 27, 2022 (provided that Mr. Chen or a substitute nominee, as applicable, is reasonably acceptable to the Nominating and Corporate Governance Committee of the Board with respect to the Nasdaq independence rules and legal compliance and criminal compliance) (provided that if Mr. Chen is not acceptable to the Nominating and Corporate Governance Committee of the Board, then FF Top will be permitted to nominate another individual to the Board); and (ii) constructive engagement by Mr. He, the Chairman of the Board, directly with representatives of FF Top on certain additional governance and management matters and, to the extent the Chairman of the Board so determines, in his discretion, such matters will be put to a discussion and a vote of the full Board. On October 27, 2022, Mr. Chen was appointed to the Board. On October 28, 2022, Mr. Krolicki tendered his resignation from the Board effective immediately.

While the Company is in discussions with FF Global regarding these additional demands, such disputes divert management and Board resources and are costly. There can be no assurance that this or any other dispute between the Company and FF Global will not result in litigation. See “Item 1A. Risk Factors– ~~Disputes with our stockholders are costly and distracting.~~”

~~Financing Discussions and New Convertible Note and Warrant Financing~~

In order to fund its ongoing operations and business plan, including to launch the FF 91, FF is seeking to raise additional capital from various fundraising efforts currently underway. Although FF has successfully obtained commitments from several investors and continues financing discussions with multiple parties, FF has experienced delays in securing additional funding commitments relative to its business plan included in the Form 8-K filed on July 25, 2022, which have exacerbated the supply chain pressures on FF’s business. These factors, in addition to the continued rise in inflation and other challenging macroeconomic conditions, have led FF to take steps to preserve its current cash position, including implementing headcount reductions and other expense reduction and payment delay measures. Further efforts, including additional headcount reductions, may be undertaken in response to FF’s financial condition and market conditions. The timing of first deliveries of FF 91 vehicles is uncertain and is not expected to occur in 2022 and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount reductions and other expense reduction and payment delay measures. It is also subject to suppliers meeting their commitments on program deliverables including parts, and timely and successful certification testing. There is no assurance FF will be able to raise sufficient funding to launch the FF 91, develop the manufacturing capabilities and processes, or secure reliable sources of component supply to meet the quality, engineering, design or production standards, or the required production volumes to successfully grow into a viable business.

FF is actively engaged in confidential discussions and negotiations with entities affiliated with FF Top and other potential investors with respect to purchasing incremental convertible senior secured notes on the same terms as FF Simplicity Ventures LLC under the SPA. There can be no assurance that FF will be able to successfully obtain additional incremental convertible senior secured note Purchasers under the SPA or other debt or equity financing in a timely manner or on acceptable terms, if at all. In particular, the Company is currently conducting due diligence on potential financing sources. This process has been time consuming and may result in the Company not being able to consummate any financing from these or other financing sources on a timely basis or at all. If we are unable to raise sufficient additional funds in the near term, we may be required to further delay our launch plans for the FF 91, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, and/or cease operations.

FF’s cash needs after the launch of the FF 91 will depend on the extent to which FF’s actual costs vary from FF’s estimates and FF’s ability to control these costs and raise additional funds. Any challenges in supplier engagements, delays in ramping capacity or labor at the Hanford facility or for sales and service engagements, rising prices of materials, or ongoing global supply chain disruptions may further increase the need for additional capital to launch the FF 91 series. In particular, recently, some suppliers have threatened to terminate their relationship with the Company because of late payments or requested accelerated payments and other terms and conditions as a result of our past payment history and concerns about the Company’s financial condition, leading to less favorable payment terms than the Company had anticipated, and delaying or putting at risk certain deliveries. FF is in active negotiations with these suppliers to minimize these risks. Apart from the FF 91 series, substantial additional capital will be required to fund operations, research, development, and design efforts for future vehicles.

Components of FF’s Results of Operations

Key Factors Affecting Operating Results~~(in thousands)~~

FF’s performance and future success depend on several factors that present significant opportunities but also pose risks and challenges including those discussed below and, in the section titled “Risk Factors” in the Form ~~10-K,~~10-K/A, as updated in this Report.

~~Faraday Future Vehicle Launch~~

FF expects to derive revenue from the sale of the FF 91. FF previously expected deliveries of the FF 91 series to begin in the fourth quarter of 2022. However, in light of delayed timing in securing funding commitments needed to fund its projected use of cash, FF no longer expects to begin deliveries of the FF 91 in the fourth quarter of 2022. The timing of first deliveries of FF 91 vehicles is uncertain and is not expected to occur in 2022 and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount reductions and other expense reduction and payment delay measures. It is also subject to suppliers meeting their commitments on program deliverables including parts, and timely and successful certification testing. FF plans to manufacture the FF 91 in its own manufacturing facility in Hanford, California. The FF 81, FF 71, and SLMD electric vehicle models are in various stages of development and are planned to be released after the FF 91.

Production and Operations

FF expects to continue to incur significant operating costs that will impact its future profitability, including ~~research and development~~R&D expenses as it introduces new models and improves existing models; capital expenditures for the expansion of its manufacturing

capacities; additional operating costs and expenses for production ramp-up; raw material procurement costs; general and administrative expenses as it scales its operations; interest expense from debt financing activities; and selling and distribution expenses as it builds its brand and markets its vehicles. FF may incur significant costs in connection with its services once it delivers the FF 91 Futurist, including servicing and warranty costs. FF’s ability to become profitable in the future will depend on its ability to successfully market its vehicles and control its costs.

~~To date,~~As of September 30, 2023, FF has ~~not yet sold any electric vehicles.~~delivered only three vehicles to spire users. As a result, FF will require substantial additional capital to develop products and fund operations for the foreseeable future. Until FF can generate sufficient revenue from product sales, FF will fund its ongoing operations through a combination of various funding and financing alternatives, including equipment leasing and construction financing of the ~~Hanford, California,~~FF ieFactory California, ~~manufacturing facility,~~ secured syndicated debt financing, convertible notes, working capital loans, and equity offerings, among other options. The particular funding mechanisms, terms, timing, and amounts are dependent on the Company’s assessment of opportunities available in the marketplace and the circumstances of the business at the relevant time. Any delays in the successful completion of its FF ieFactory California ~~manufacturing facility~~ will impact FF’s ability to generate revenue. For additional discussion of the substantial doubt about FF’s ability to continue as a going concern, see Note 3,2, Liquidity and Capital Resources in the notes to the ~~unaudited~~ Condensed Consolidated Financial Statements and for further details on liquidity, please see the “Liquidity and Capital Resources” section below.

~~Revenues~~Revenue Recognition

Automotive Sales Revenue

We began the production of our FF 91 Futurist in March 2023 and started making deliveries to customers in August 2023.

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.

We recognize revenue on automotive sales upon delivery to the customer, which is when control of a ~~development stage company~~vehicle transfers. Payments are typically received at the point control transfers or in accordance with payment terms customary to the business indicated in the sales contract. OTA software updates are provisioned upon control transfer of a vehicle and ~~has~~recognized over time on a straight-line basis as we have a stand-ready obligation to deliver such services to the customer. For our obligations related to automotive sales, we estimate 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. Our vehicle contracts do not ~~generated any revenue~~contain a significant financing component.

We have entered into and may continue to ~~date. FF’s anticipated introduction~~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 promotions in exchange for specified fees. We consider these arrangements consideration payable to a customer. The consideration paid to the customer relates to marketing and R&D services that are distinct and could be purchased by the Company from a separate third-party. We perform an analysis in which we maximize the use of observable market inputs to ascribe a fair value to these services and record the fair value of these services to sales and marketing expense or R&D expense, as applicable. Any consideration payable to a customer that is above the fair value of the ~~FF 91, its first~~distinct services being provided is treated as a reduction of revenue.

Customer Deposits

The Company’s customers may reserve a vehicle ~~launch,~~and preorder certain services by making a customer deposit, which is ~~expected~~fully refundable at any time. Refundable deposits, for vehicle reservations and services, received from customers prior to ~~generate~~an executed vehicle purchase agreement are recorded as customer deposits (Accrued expenses and other current liabilities). Customer deposits were $3.3 million and $3.4 million as of September 30, 2023 and December 31, 2022, respectively. When vehicle purchase agreements are executed, the ~~majority~~consideration for the vehicle and any accompanying products and services must be paid in advance prior to the transfer of ~~FF’s future~~products or services by the Company. Such advance payments are considered non-refundable, and the Company defers revenue ~~while other~~related to any products or services that are not yet transferred.

Warranties

We provide a manufacturer’s warranty on all vehicles ~~are in development.~~sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item where failure is due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the vehicle. Management tracks warranty claims by vehicle ID, owner, and date. As we continue to manufacture and sell more vehicles we will reassess and evaluate our warranty claims for purposes of our warranty accrual.

Cost of Automotive Sales Revenue

Operating Expenses

Research and Development

~~Research and development~~R&D activities represent a significant part of FF’s business. FF’s ~~research and development~~R&D efforts focus on the design and development of FF’s electric vehicles and continuing to prepare its prototype electric vehicles to exceed industry standards for compliance, innovation, and performance. ~~Research and development~~R&D expenses consist of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for FF’s employees focused on ~~research and development~~R&D activities, other related costs, depreciation, R&D services provided by co-creators, and an allocation of overhead. FF expects ~~research and development~~R&D expenses to ~~increase as FF continues to develop its vehicles. FF anticipates an increase in activities~~decrease in the ~~U.S. and China, where FF’s research and development operations are primarily located.~~near future as the Company substantially completed R&D activities related to the FF 91.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for FF’s employees focused on sales and marketing, costs associated with sales and marketing activities, marketing services provided by co-creators, and an allocation of overhead. Marketing activities are those related to introducing FF’s brand and its electric vehicle prototypes to the market. FF expects selling and marketing expenses to continue to increase as FF brings its electric vehicles to market and seeks to generate sales.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, (including salaries, bonuses, benefits, and stock-based compensation) for employees associated with administrative services such as legal, human resources, information technology, accounting and finance, other related costs, and legal loss contingency expenses, which are FF’s estimates of future legal settlements. These expenses also include certain third-party consulting services, certain facilities costs, and any corporate overhead costs not allocated to other expense categories. FF expects its general and administrative expenses to increase as FF continues to grow its business. ~~FF also anticipates that it will incur additional costs for employees and third-party consulting services now that it operates as a public company.~~

Loss on Disposal of Property and Equipment

Loss on disposal of property 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 FF’s cost reduction program. Charges associated with disposals are recognized within operating expenses in the ~~unaudited~~ Condensed Consolidated Statements of Operations and Comprehensive Loss.

Change in Fair Value of Earnout Liability

Legacy FF shareholders, as of the Closing Date of the Business Combination until its fifth anniversary, are entitled to contingent consideration of up to 312,500 additional shares of Class A Common Stock in the aggregate in two equal tranches upon the occurrence of each earnout triggering event (“Earnout Shares”). The Company recognized the Earnout Shares at fair value upon the closing of the Business Combination and classified them in Stockholders’ Equity (Deficit) since the Earnout Shares were determined to be indexed to the Company’s own stock and meet the requirements for equity classification in accordance with ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. From time to time subsequent to the closing of the Business Combination, the Earnout Shares may be classified as derivative liabilities under ASC 815, Derivatives and Hedging, due to the Company having insufficient authorized shares to fully settle the equity-linked financial instruments in shares. The Earnout Shares reclassified as derivative instruments are recognized at fair value with changes in fair value recognized in earnings until such time as the conditions giving rise to such derivative liability classification were settled or the Company has sufficient authorized, unissued shares to settle such contracts with shares.

Non-operating Expenses

Change in Fair Value ~~Measurements~~of (Related Party and Third Party) Notes Payable and Warrant Liabilities

Change in fair value measurements consists of the losses and gains as a result of fair value measurements of certain ~~financial instruments~~notes payable and warrant liabilities which FF records at fair value. ~~Changes in fair value measurement~~

Loss on Settlement of ~~related party~~(Related Party and Third Party) Notes Payable

Loss on settlement of notes payable ~~and~~consists of losses resulting from the settlement of notes payable ~~have decreased following the Business Combination~~ as ~~the majority~~part of the ~~liabilities converted~~Company’s ongoing financing activities and losses incurred on modifications of the Company’s notes payable that qualify as an extinguishment pursuant to ~~equity or were paid in cash.~~ASC 470-50, Debt–Modifications and Extinguishments.

Interest Expense

Interest expense primarily consists of interest on outstanding notes payable, finance leases, and certain supplier payables.

Related Party Interest Expense

Related party interest expense consists of interest expense on notes payable with related parties. ~~Related party interest expense has decreased relative to prior periods, as the majority of related party notes payable converted to equity upon completion of the Business Combination.~~

~~Interest Expense~~

Interest expense primarily consists of interest on outstanding notes payable, capital leases, certain supplier payables, and vendor payables in trust. Interest expense decreased as the majority of notes payable and vendor payables in trust were either settled in cash or converted to equity upon completion of the Business Combination.

Other Expense, net

Other expense, 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. FF expects other expense to fluctuate as FF continues to transact internationally.

~~Loss on Extinguishment or Settlement of Related Party Notes Payable, Notes Payable and Vendor Payables in Trust, net~~

Loss on extinguishment or settlement of related party notes payable, notes payable, and vendor payables in trust, net consists of losses resulting from the settlement of related party notes payable, notes payable, and vendor payables in trust in connection with the Business Combination.

Results of Operations (


	Three Months Ended September 30,
(in thousands)	2023		2022
Consolidated Statements of Operations
Revenues
Auto sales	$	551	$	—
Cost of revenues
Auto sales	16,131		—
Gross loss	(15,580)		—
Operating expenses
Research and development	21,593		47,582
Sales and marketing	5,318		3,823
General and administrative	24,023		28,551

Change in fair value of earnout liability	(67)		—
Total operating expenses	50,867		79,956
Loss from operations	(66,447)		(79,956)
Change in fair value of notes payable and warrant liabilities	17,571		(1,764)
Change in fair value of related party notes payable and related party warrant liabilities	4,726		—
Loss on settlement of notes payable	(21,357)		(30,454)
Loss on settlement of related party notes payable	(10,756)		—
Interest expense	(90)		(245)
Related party interest expense	(69)		(996)
Other expense, net	(1,624)		(6,457)
Loss before income taxes	(78,046)		(119,872)
Income tax provision	—		—
Net loss	$	(78,046)	$	(119,872)

Revenues


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Auto Sales	$	551	$	—	$	551	NM*

*NM = not meaningful.

Automotive sales revenue was $0.6 million for the three months ended September 30, 2023. The Company started vehicle delivery to its customers during the three months ended September 30, 2023.

Cost of Revenues


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Cost of revenues	$	16,131	$	—	$	16,131	NM*

*NM = not meaningful.

Cost of revenues was $16.1 million for the three months ended September 30, 2023. OnMarch 29, 2023, the Company announced the start of production of its first electric vehicle, the FF 91 Futurist and, on April 14, 2023, the Company’s first production FF 91 Futurist vehicle came off the line. The Company started to recognize automotive sales revenue during the three months ended September 30, 2023 and the corresponding cost of revenue. Cost of revenue is primarily driven by higher costs of early-stage cost inefficiencies including lower fixed cost absorption largely due to depreciation of tooling and

machinery. To a lesser extent, the Cost of Revenues includes higher initial manufacturing inefficiencies coupled with higher initial cost of parts resulting from lower volume associated with delivery of the FF 91 Futurist vehicles.

Research and Development


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Research and development	$	21,593	$	47,582	$	(25,989)	(55)	%

The decrease in ~~thousands~~R&D expense is primarily due to the reduction in engineering, design, and testing (“ED&T”) services of $11.9 million as the Company substantially completed R&~~) (Unaudited)~~D activities related to the FF 91 Futurist vehicle in 2022. Further, as the Company started production in March 2023, certain costs were recognized as cost of revenues and certain materials purchases were capitalized to inventory versus all being recognized as R&D expense. In addition, there was a decrease in personnel and compensation expenses of $10.0 million due to a decrease in headcount as part of cost saving measures implemented by the Company in light of its financial position, as well as the allocation of certain personnel from the R&D department to production, a decrease in stock-based compensation expense of $2.7 million and a decrease in other miscellaneous expenses of $1.3 million.

Sales and Marketing


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Sales and marketing	$	5,318	$	3,823	$	1,495	39	%

The increase in sales and marketing expense is due to an increase in compensation expenses of $0.9 million, an increase in professional services expenses of $0.4 million and an increase in marketing expenses of $0.1 million as the Company allocated more resources to sales and marketing due to the achievement of the delivery milestone in August 2023.

General and Administrative


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
General and administrative	$	24,023	$	28,551	$	(4,528)	(16)	%

The decrease in general and administrative expense is primarily due to a decrease in professional services expenses of $6.6 million due to the conclusion of the Special Committee investigation in 2022; partially offset by an increase in compensation related expense of $2.1 million.

Change in Fair Value of Earnout Liability


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of earnout liability	$	(67)	$	—	$	(67)	NM*

*NM = not meaningful.

As of August 25, 2023, the Company reclassified the Earnout Shares from liability classification to equity classification as a result of the Company having sufficient authorized shares to share-settle the earnout, which was determined to be equity classified under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. The $0.1 million decrease in the Earnout liability was recognized as a Change in fair value of earnout liability during the three months ended September 30, 2023.

Change in Fair Value of Notes Payable and Warrant Liabilities


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of notes payable and warrant liabilities	$	17,571	$	(1,764)	$	19,335	(1,096)	%

~~FF has not generated any revenue from the design, development, manufacturing, engineering, sale, or distribution of its electric vehicles. Please refer to the section “Risk Factors~~”The Change in the ~~Form 10-K, as updated~~fair value of notes payable and warrant liabilities is primarily due to a significant increase in ~~this Report~~the volume of outstanding notes payable and warrants accounted for ~~a full discussion on~~at fair value when compared with the ~~risks and uncertainties related to costs.~~

~~Comparison~~comparative period in 2022. As of ~~the Three Months Ended~~ September 30, 2022 ~~and 2021~~

Three Months Ended September 30,
2022 (As Restated) 2021
Consolidated Statements of Operations
Operating expenses
Research and development $ 47,582 $ 79,757
Sales and marketing 3,823 6,832
General and administrative 28,551 36,725
Loss on disposal of property and equipment — 62,342
Total operating expenses 79,956 185,656
Loss from operations (79,956) (185,656)
Change in fair value measurements (1,764) (22,747)
Interest expense (245) (296)
Related party interest expense (996) (1,597)
Other (expense) income, net (6,457) 1,117
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net (30,454) (94,727)
Loss before income taxes (119,872) (303,906)
Income tax provision — —
Net loss $ (119,872) $ (303,906)

~~Research and Development~~

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Research and development $ 47,582 $ 79,757 $ (32,175) (40) %

~~The decrease in research and development expense~~the Company had $44.5 million of~~$32,175 was primarily due~~ notes payable outstanding, compared with $130.1 million outstanding as of September 30, 2023, excluding the impact of mark to ~~the occurrence of expense in~~market valuation adjustments. Additionally, during the three months ended September 30, ~~2021, related~~2022 the Company did not have material liability classified warrants with changes in fair value included in earnings. During the three months ended September 30, 2023, the Company recognized a gain in the Change in fair value of notes payable and warrant liabilities of $21.9 million, specific to a non-exclusive, perpetual, irrevocable, and sublicensable license to use an electric vehicle manufacturing platform owned by Liankong, a subsidiary of Geely Holdings, for $50,000, reserve for unrecoverablethe change in fair value ~~added taxes of $2,984, and expense associated with the grant of restricted stock awards issued as a bonus to employees and other service providers in connection with the closing~~ of the ~~Business Combination~~Company’s warrant liabilities. These gains were offset by an increase in the fair value of ~~$6,061 with no comparable activity~~the Company’s notes payable during the period, stemming from the impact of the full ratchet price adjustments that were applied to the Company’s SPA Notes.

Change in Fair Value of Related Party Notes Payable and Related Party Warrant Liabilities


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of related party notes payable and related party warrant liabilities	$	4,726	$	—	$	4,726	NM*

*NM = not meaningful.

The Company did not have any related party notes payable or warrants that were re-measured at fair value during the three months ended September 30, 2022. ~~The decrease~~In May 2023, the Company entered into Unsecured SPA Notes with MHL, who is ~~further derived from~~ a ~~$5,985 reduction in bonus accruals given~~related party, and VW. On September 30, 2023, the ~~Company’s liquidity needs~~related party Unsecured SPA Notes and ~~as part~~warrant were revalued at a lower fair value than at their issuance due to pricing inputs that use the market price of the ~~implementation~~Class A Common Stock and debt discount rate which have experienced a decline.

Loss on Settlement of costs saving measures. These decreases were partially offset by higher expenses for engineering, design, and testing (“ED&T”) services of $13,991, professional services of $8,363 and employee compensation related expenses of $11,795, incurred to support the development of the FF 91.Notes Payable

~~Sales and Marketing~~


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Loss on settlement of notes payable	$	(21,357)	$	(30,454)	$	9,097	(30)	%

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Sales and marketing $ 3,823 $ 6,832 $ (3,009) (44) %

The decrease in ~~sales and marketing expense~~the Loss on settlement of ~~$3,009 was primarily due to the occurrence of expense in~~notes payable during the three months ended September 30, ~~2021, related to restricted stock awards issued as~~2023 is primarily driven by a ~~bonus to employees and other service providers~~reduced conversion volume during the period. During the three months ended September 30, 2023 note holders converted $25.8 million of notes payable compared with $67.2 million in ~~connection with~~ the ~~closing~~prior period. The impact of the ~~Business Combination~~volume difference is offset by a larger loss on settlement per dollar of ~~$1,797, with no comparable activity~~principal. The increase in the loss on settlement per dollar of principal is driven by the trailing-twelve-month trend of declines in the fair value of the Company’s notes payable driven by the change in the Company’s stock price over the period.

Loss on Settlement of Related Party Notes Payable


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Loss on settlement of related party notes payable	$	(10,756)	$	—	$	(10,756)	NM*

*NM = not meaningful.

The Company did not have any related party notes payable that settled during the three months ended September 30, 2022. In May 2023, the Company entered into Unsecured SPA Notes with MHL,who is a related party, and VW. During the three months ended September 30, 2023, the related party converted Unsecured SPA Notes with principal balances of $6.6 million in exchange for 2,621,940 shares of Class A Common Stock. The Company recognized a 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.

months ended September 30, 2022, lower allocations of overhead expenses based on headcount of $1,526, and a decrease in marketing-related expenses due to the implementation of cost saving measures of $706, partially offset by an increases in employee compensation and related expenses of $794 and stock-based compensation expense of $213 due to an increase in headcount.

~~General and Administrative~~

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
General and administrative $ 28,551 $ 36,725 $ (8,174) (22) %

The decrease in general and administrative expense of $8,174 was primarily related to restricted stock awards issued as a bonus to employees and other service providers in connection with the closing of the Business Combination of $1,797 during the three months ended September 30, 2021, with no comparable activity in the three months ended September 30, 2022, lower accruals for legal contingencies of $18,753, and lower allocated expenses resulting from cost reduction initiatives of $1,431, partially offset by an increase in professional services primarily related to the Special Committee investigation, financing efforts and governance matters totaling ~~$26,049, an increase in information technology related expense, including software licenses, of $688, and an increase in employee benefits and stock compensation of~~ ~~$647~~ ~~and~~ ~~$405, respectively, both due to an increase in headcount.~~

~~Loss on disposal of property and equipment~~Interest Expense

Three Months Ended September 30, Change
2022 2021 Amount %
Loss on disposal of property and equipment $ — $ 62,342 $ (62,342) (100) %

During the three months ended September 30, 2021, the Company wrote off $62,342 relating to the abandonment of certain construction in progress FF 91 program assets, primarily vendor tooling, machinery and equipment, due to the redesign of the related FF 91 components and implementation of FF’s cost reduction program. For the three month period ended September 30, 2022, there was no comparable activity.

~~Change in Fair Value Measurements~~

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Change in fair value measurements $ (1,764) $ (22,747) $ 20,983 92 %


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Interest expense	$	(90)	$	(245)	$	155	63	%

The decrease in the change in fair value measurements is primarily due to notes payable that were measured at fair value in the comparative period in 2021 and were converted into shares of Class A Common Stock during the three-months ended September 30, 2022, partially offset by the issuance of liability-classified warrants under the Company’s Secured Purchase Agreement in August of 2022.

~~Interest Expense~~

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Interest expense $ (245) $ (296) $ 51 17 %

Interest expense ~~decreased from $296 during the three months ended September 30, 2021 to $245 during the three months ended September 30, 2022.~~

~~Related Party Interest Expense~~

Three Months Ended September 30, Change
2022 2021 Amount %
Related party interest expense $ (996) $ (1,597) $ 601 38 %

~~The decrease in related party interest expense for the three months ended September 30, 2022 as compared to the same period in 2021~~ was primarily due to the Company’s ~~settlement~~repayment of ~~$91,420~~$85.0 million of Ares notes payable principal ~~amounts~~and the conversion of $73.9 million of ATW NPA notes payable principal into the Class A Common Stock in the year ended December 31, 2022. The SPA Notes are carried at fair value and fluctuations in interest expense are included in the Change in fair value of notes payable.

Related Party Interest Expense


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Related party interest expense	$	(69)	$	(996)	$	927	93	%

The decrease in Related party interest expense was due to an agreement, dated December 27, 2022, with Chongqing Leshi Small Loan Co., Ltd, a related party, ~~notes payable upon closing~~according to which it was agreed that a portion of ~~the Business Combination in July 2021, which~~principal and all outstanding accrued interest ~~from July 1, 2021, to July 21, 2021.~~was waived.

Other ~~Expense,~~(Expense) Income, Net

Three Months Ended September 30, Change
2022 2021 Amount %
Other (expense) income, net $ (6,457) $ 1,117 $ (7,574) NM


	Three Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Other expense, net	$	(1,624)	$	(6,457)	$	4,833	75	%

The change in Other ~~(expense) income,~~expense, net ~~of $7,574~~ was primarily due to a decrease in foreign currency transaction losses ~~of $5,986 in the three months ended September 30, 2022,~~ resulting from the revaluation of transactions denominated in currencies other than ~~local currencies, including $3,026 related to vendor deposits paid by~~U.S. Dollars that are remeasured at the ~~U.S. operations, franchise, other taxes and bank fees~~end of ~~$448 and penalties related to late vendor payments of $405.~~

~~Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net~~

Three Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net $ (30,454) $ (94,727) $ 64,273 68 %

The loss in the three months ended September 30, 2022 represents a $22,764 loss on settlement of NPA Notes due to their conversion into Class A Common Stock and a $7,690 loss on extinguishment due to the change in the conversion price relating to an amendment to convertible notes issued during theeach period. The loss in the three months ended September 30, 2021 represents the conversion of certain related party notes payable, notes payable, and vendor payables in trust to equity at $10 per share which was below the fair value of the stock on the date of conversion in connection with the closing of the Business Combination.

5453

~~Comparison of~~


	Nine Months Ended September 30,
(in thousands)	2023		2022
Consolidated Statements of Operations
Revenues
Auto	$	551	$	—
Cost of revenues
Auto	22,744		—
Gross loss	(22,193)		—
Operating expenses
Research and development	104,670		259,741
Sales and marketing	18,082		16,207
General and administrative	67,598		89,069
Loss on disposal of property and equipment	3,698		1,407
Change in fair value earnout liability	2,033		—
Total operating expenses	196,081		366,424
Loss from operations	(218,274)		(366,424)
Change in fair value of notes payable and warrant liabilities	90,030		4,580
Change in fair value of related party notes payable and related party warrant liabilities	5,110		—
Loss on settlement of notes payable	(204,885)		(30,454)
Loss on settlement of related party notes payable	(17,248)		—
Interest expense	(591)		(5,119)
Related party interest expense	(139)		(2,931)
Other expense, net	(1,922)		(14,307)
Loss before income taxes	(347,919)		(414,655)
Income tax provision	(28)		(9)
Net loss	$	(347,947)	$	(414,664)

Revenues


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Auto Sales	$	551	$	—	$	551	NM*

*NM = not meaningful.

Automotive sales revenue was $0.6 million for the ~~Nine Months Ended~~nine months ended September 30, ~~2022 and 2021~~

Nine Months Ended September 30,
2022 (As Restated) 2021
Consolidated Statements of Operations
Operating expenses
Research and development $ 259,741 $ 94,506
Sales and marketing 16,207 11,099
General and administrative 89,069 64,148
Loss on disposal of property and equipment 1,407 62,987
Total operating expenses 366,424 232,740
Loss from operations (366,424) (232,740)
Change in fair value measurements 4,580 (60,394)
Interest expense (5,119) (26,550)
Related party interest expense (2,931) (15,765)
Other expense, net (14,307) (718)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net (30,454) (96,036)
Loss before income taxes (414,655) (432,203)
Income tax provision (9) (3)
Net loss $ (414,664) $ (432,206)

~~Research and Development~~

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Research and development $ 259,741 $ 94,506 $ 165,235 175 %

2023. The ~~increase in research and development expense was primarily due~~Company started vehicle delivery to the increase in ED&T services of $153,954 and professional services related expense of $12,224 as the Company re-engaged suppliers and made significant purchases of ED&T services to progress the development of the FF 91; an increase in personnel and compensation related expenses and stock-based compensation expenses due to increased headcount of $45,382 and $5,391, respectively; an increase in information technology related expense due to increases in business activities and headcount of $7,896, partially offset by a decrease in general expenses of $57,365, primarily due to expensing a one-time amount of $50,000 for a non-exclusive, perpetual, irrevocable, and sublicensable license to use a platform owned by Liankong, a subsidiary of Geely Holdings, and recognition of restricted stock awards issued as a bonus to employees and other service providers in connection with the closing of the Business Combinationits customers during the nine months ended September 30, 2023.

Cost of Revenues


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Cost of revenues	$	22,744	$	—	$	22,744	NM*

*NM = not meaningful.

Cost of revenue was $22.7 million for the nine months ended September 30, 2023. OnMarch 29, 2023, the Company announced the start of production of its first electric vehicle, the FF 91 Futurist and, on April 14, 2023, the Company’s first production FF 91 Futurist vehicle came off the line. The Company started to recognize automotive sales revenue during the three months ended September 30, 2023 and the corresponding cost of revenue. Cost of revenue is primarily driven by higher costs of early-stage cost inefficiencies including lower fixed cost absorption largely due to depreciation of tooling and

Research and Development


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Research and development	$	104,670	$	259,741	$	(155,071)	(60)	%

The decrease in R&D expense is primarily due to the reduction in ED&T services of $118.5 million as the Company substantially completed R&D activities related to the FF 91 Futurist vehicle in 2022. Further, as the Company started production in March 2023, certain costs were recognized as cost of revenues and certain materials purchases were capitalized to inventory versus all being recognized as R&D expense in 2022. In addition, there was a decrease in personnel and compensation expenses of $15.7 million due to a decrease in headcount as part of cost saving measures implemented by the Company in light of its financial position, as well as the allocation of certain personnel from the R&D department to production; a decrease in professional services related expense of $15.3 million as the Company substantially completed R&D activities related to the FF 91 Futurist vehicle in 2022 and a decrease in other miscellaneous expenses of ~~$6,061.~~$3.6 million.

Sales and Marketing


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Sales and marketing	$	18,082	$	16,207	$	1,875	12	%

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Sales and marketing $ 16,207 $ 11,099 $ 5,108 46 %

The increase in sales and marketing expense ~~was~~is primarily due to the increase in professional services expenses of $1.5 million and an increase in other miscellaneous expenses of $1.8 million due to the allocation of more resources to sales and marketing due to the achievement of the delivery milestone; partially offset by a decrease in personnel and compensation ~~related~~ expenses of ~~$6,703, stock-based compensation expense of $528 and employee benefits relates expenses of $489~~$0.3 million due to ~~an increase~~a decrease in ~~headcount; an increase~~headcount as part of cost saving measures implemented by the Company in ~~marketing expenses due to an increase in marketing efforts~~ light of $614 and an increase in rent relates expense of $865 due to increase in business activity, partially offset by primarily restricted stock awards issued as a bonus to employees and other service providers in connection with the closing of the Business Combination during the nine months ended September 30, 2022 and other overhead expenses of $3,408its financial position and a decrease of $0.3 million in ~~professional services related expenses of $644.~~stock-based compensation expense.

General and Administrative


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
General and administrative	$	67,598	$	89,069	$	(21,471)	(24)	%

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
General and administrative $ 89,069 $ 64,148 $ 24,921 39 %

The ~~increase~~decrease in general and administrative expense was primarily due to ~~an increase~~the decrease in personnel and compensation expenses of $14.3 million due to a decrease in headcount as part of cost saving measures implemented by the Company in light of its financial position and the focus on achieving start of production; a decrease in professional ~~service~~services expenses ~~primarily related~~of $13.7 million due to the conclusion of the Special Committee investigation in 2022; a decrease in information technology related expenses of $0.9 million; partially offset by $4.8 million in increased premiums associated with a new D&O policy entered into in the ~~amount~~third quarter of ~~$50,311;~~2022 and an increase in ~~personnel and compensation related~~remaining other miscellaneous expenses of $11,574 due to headcount changes; an increase in insurance related expenses of $7,236, partially offset primarily by lower provisions for legal contingencies of $18,753; decrease in general expenses of $13,003 primarily related to expenses recognized in connection with issuance of restricted stock awards as compensation for prior salary reductions during the nine months ended September 31, 2021 with no comparable activity in the nine months ended September 31, 2022; decrease in stock based compensation of $1,572 and a decrease in depreciation and amortization expense and other overhead expenses primarily due to change in allocations of expenses to Research and development and Sales and Marketing of $5,170.$2.6 million.

Loss on ~~disposal~~Disposal of ~~property~~Property and ~~equipment~~

Nine Months Ended September 30, Change
2022 2021 Amount %
Loss on disposal of property and equipment $ 1,407 $ 62,987 $ (61,580) (98) %
Equipment


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Loss on disposal of property and equipment	$	3,698	$	1,407	$	2,291	163	%

The loss on disposal of property and equipment during the nine months ended September 30, ~~2022, is~~2023 was primarily due to the ~~continued refinement~~write off of $3.7 million of certain construction in process assets that are not expected to be used as part of start of production.

Change in Fair Value of Earnout Liability


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of earnout liability	$	2,033	$	—	$	2,033	NM*

*NM = not meaningful.

As of December 31, 2022, the Company reclassified the Earnout Shares from equity classification to liability classification as a result of the ~~bill of materials~~Company having insufficient authorized shares to share-settle the earnout, which was previously determined to be equity classified under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. As a result of the ~~FF 91. During~~reclassification, the Company reclassified $2.2 million out of Additional paid-in capital into the Earnout liability. On February 28, 2023, upon shareholder approval to increase the Company’s authorized shares, the Company had sufficient authorized shares to fully settle all outstanding equity-linked financial instruments. Accordingly, the Company reclassified the fair value of the Earnout liability of $5.0 million into Additional paid-in capital. The $2.8 million increase in the Earnout liability from December 31, 2022 to February 28, 2023 was recognized as an expense in the Change in fair value of earnout liability during the three months ended March 31, 2023.

As of April 21, 2023, the Company had insufficient authorized shares to fully settle its equity-linked financial instruments in shares primarily due to the issuance of additional convertible notes and warrants between February 28, 2023 and April 21, 2023. As a result, on April 21, 2023, the Company reclassified $2.1 million out of Additional paid-in capital into the Earnout liability.

As of August 25, 2023, the Company reclassified the Earnout Shares from liability classification to equity classification as a result of the Company having sufficient authorized shares to share-settle the earnout. The $2.0 million decrease in the Earnout liability from August 25, 2023 to September 30, 2023 was recognized as a Change in fair value of earnout liability during the nine months ended September 30, 2021, the Company wrote off $62,342 relating to the abandonment of certain construction in progress FF 91 program assets, primarily vendor tooling, machinery and equipment, due to the redesign of the related FF 91 components and implementation of FF’s cost reduction program.2023.

Change in Fair Value ~~Measurements~~of Notes Payable and Warrant Liabilities


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of notes payable and warrant liabilities	$	90,030	$	4,580	$	85,450	1,866	%

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Change in fair value measurements $ 4,580 $ (60,394) $ 64,974 108 %

~~During the nine months ended September 30, 2021,~~The change in the fair value of notes payable and warrant liabilities is due to a significant change in the volume of outstanding notes payable and warrants accounted for at fair value when compared with the comparative period in 2022 and the re-valuation of the Company’s ~~debt obligations increased substantially~~notes payable and warrants at predominantly lower fair values due to ~~tightening~~pricing inputs that use the market price of the ~~credit spreads~~Common Stock and debt discount rate, which have experienced a decline. As of September 30, 2022 the Company ~~due to the increased probability~~had $44.5 million of ~~the close~~notes payable outstanding, compared with $130.1 million outstanding as of ~~the Business Combination, which ultimately occurred in July 2021. Change in fair value measurements for the nine months ended~~ September 30, ~~2021 also includes an increase in fair value~~2023, excluding the impact of ~~The9 Conditional Obligation in the amount of $1,735 and there was no comparable activity~~mark to market valuation adjustments. Additionally, during ~~the nine month period ended September 30, 2022. During~~ the nine months ended September 30, 2022 the Company ~~settled, through cash or shares of Class A Common Stock, approximately $154.5 million of its NPA notes payable measured at~~did not have material liability classified warrants with changes in fair value ~~which were not fully replaced by~~included in earnings. During the ~~August issuance of~~nine months ended September 30, 2023, the ~~SPA notes payable measured at fair value. Additionally,~~Company recognized a gain in the ~~Company’s stock price~~Change in ~~2022 was lower and more volatile than in 2021 resulting in decreased~~ fair value of ~~its~~ notes payable and warrant liabilities of $69.8 million, specific to the change in fair value of the Company’s warrant liabilities. These gains were offset by an increase in the fair value of the Company’s notes payable during the period, ~~over period.~~

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Interest expense $ (5,119) $ (26,550) $ 21,431 81 %
stemming from the impact of the full ratchet price adjustments that were applied to the Company’s SPA Notes.

Change in Fair Value of Related Party Notes Payable and Related Party Warrant Liabilities


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Change in fair value of related party notes payable and related party warrant liabilities	$	5,110	$	—	$	5,110	NM*

*NM = not meaningful.

The ~~decrease in interest expense~~Company did not have any related party notes payable or warrants that were re-measured at fair value during the nine months ended September 30, ~~2022 was due~~2022. In May 2023, the Company issued the Unsecured SPA Notes to ~~the Company’s settlement of~~ ~~$85,202 principal of notes payable upon closing of the Business Combination in 2021 which resulted in~~MHL, who is a ~~decrease of interest between the periods. Further decreases resulted from the repayment of $85,193 in notes payable principal in the nine months ended~~related party, and VW. On September 30, ~~2022~~2023, the related party Unsecured SPA Notes and ~~interest related to finance leases as~~warrants were revalued at a result of the successful sale leaseback transaction of the Company’s Gardena, California headquarters in the three months ended December 31, 2021. These decreases were partially offset by increases in interest expense related to the ATW NPA Notes which bore interest in 2022 due to the triggering of interest clauses.lower fair

~~Related Party Interest Expense~~value than at their issuance due to pricing inputs that use the market price of the Class A Common Stock and debt discount rate which have experienced a decline.

Nine Months Ended September 30, Change
2022 2021 Amount %
Related party interest expense $ (2,931) $ (15,765) $ 12,834 81 %
Loss on Settlement of Notes Payable


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Loss on settlement of notes payable	$	(204,885)	$	(30,454)	$	(174,431)	573	%

The ~~decrease~~increase in ~~related party interest expense for~~the Loss on settlement of notes payable during the three months ended September 30, 2023 is driven by a substantially higher conversion volume during the period and an increase in the loss on settlement per dollar of principal. During the nine months ended September 30, ~~2022, as~~2023 note holders converted $187.7 million of notes payable compared to $67.2 million in the ~~same period~~prior period. The increase in ~~2021,~~the loss on settlement per dollar of principal is driven by the trailing-twelve-month trend of declines in the fair value of the Company’s notes payable driven by the change in the Common Stock price over the period.

Loss on Settlement of Related Party Notes Payable


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Loss on settlement of related party notes payable	$	(17,248)	$	—	$	(17,248)	NM*

*NM = not meaningful.

The Company did not have any related party notes payable that settled during the nine months ended September 30, 2022. In May 2023, the Company entered into Unsecured SPA Notes with MHL,who is a related party, and VW. During the nine months ended September 30, 2023, the related party converted Unsecured SPA Notes with principal balances of $18.7 million in exchange for 72,353,608 shares of Class A Common Stock and the Company recognized a 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.

Interest Expense


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Interest expense	$	(591)	$	(5,119)	$	4,528	88	%

The decrease in Interest expense was primarily due to the Company’s ~~settlement~~repayment of ~~$91,420~~$85.0 million of Ares notes payable principal ~~amounts~~and the conversion of $73.9 million of ATW NPA notes payable principal into Class A Common Stock in the year ended December 31, 2022. The SPA Notes are carried at fair value and fluctuations in interest expense are included in the Change in fair value of notes payable.

Related Party Interest Expense


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Related party interest expense	$	(139)	$	(2,931)	$	2,792	(95)	%

Other ~~Expense,~~(Expense) Income, Net

Nine Months Ended September 30, Change
2022 2021 Amount %
Other expense, net $ (14,307) $ (718) $ (13,589) NM


	Nine Months Ended September 30,				Change
(in thousands)	2023		2022		Amount		%
Other expense, net	$	(1,922)	$	(14,307)	$	12,385	(87)	%

The change in ~~other~~Other expense, net was primarily due to ~~increase~~a decrease in foreign ~~exchange loss of $13,304~~currency transaction losses resulting from the revaluation of transactions denominated in currencies other than ~~local currencies.~~U.S. Dollars that are remeasured at the end of each period.

~~Loss~~

Liquidity and Capital Resources

Going Concern

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued. Based on ~~extinguishment or settlement~~its recurring losses from operations since inception and continued cash outflows from operating activities (all as described below), the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these Condensed Consolidated Financial Statements were issued.

Since its formation, the Company has devoted substantial effort and capital resources to strategic planning, engineering, design, and development of its electric vehicle platform, development of initial electric vehicle models, and capital raising. Since inception, the Company has incurred cumulative losses from operations and negative cash flows from operating activities, and has an accumulated deficit of $3,874.7 million and a cash balance of $6.7 million as of September 30, 2023. The Company expects to continue to generate significant operating losses for the foreseeable future. The Company has funded its operations and capital needs primarily through the net proceeds received from capital contributions, the issuance of related party notes payable and notes payable (see Note 8, Related Party Transactionsand ~~vendor payables in trust, net~~

Nine Months Ended September 30, Change
2022 (As Restated) 2021 Amount %
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net $ (30,454) $ (96,036) $ 65,582 68 %

~~The loss in~~Note 7, Notes Payable), the ~~nine months ended September 30, 2022 represents a $22,764 loss on settlement~~sale of ~~ATW NPA Notes due to their conversion into Class A~~ Common Stock, and the net proceeds received from the Business Combination and a ~~$7,690 loss~~subscription agreement with certain investors (see Note 1, Nature of Business and Organization and Basis of Presentation).

FF announced the start of production of its first electric vehicle, the FF 91 Futurist, on ~~extinguishment due to~~March 29, 2023 and announced the ~~change in~~delivery of its first electric vehicle, the ~~conversion price relating to~~Ultimate AI TechLuxury FF 91 2.0 Futurist Alliance, on August 14, 2023. However, FF has recognized an ~~amendment to convertible notes issued during the period. The loss in the nine months ended September 30, 2021 represents the conversion~~insignificant amount of ~~certain related party notes payable, notes payable, and vendor payables in trust to equity at $10 per share which was below the fair value~~revenue as of the ~~stock~~date hereof. FF’s future business depends in large part on ~~the date of conversion in connection with the closing of the Business Combination.~~

~~Liquidity and Capital Resources (in thousands~~)

~~As described in the “Overview” section of this MD&A, the COVID-19 pandemic impacted FF’s~~its ability to ~~raise funds~~execute its plans to develop, manufacture, market, and ~~may have a material adverse impact on future periods as FF prepares to bring its~~deliver electric vehicles, ~~to market,~~ including its cash flows from financing activities, which fund its operations. The extent of COVID-19’s impact on FF’s liquidity will depend upon, among other things, the duration and severity of the outbreak or subsequent outbreaks and related government responses, such as required physical distancing, restrictions on business operations and travel, the pace of recovery of economic activity and the impact to consumers, all of which are uncertain and difficult to predict. Refer to the section titled “~~Risk Factors” in the Form 10-K for a full discussion of the risks associated with the COVID-19 pandemic.~~

~~As of September 30, 2022, the Company’s principal source of liquidity was cash totaling $31,766, which was held for working capital and general corporate purposes.~~

The timing of first deliveries of FF 91 vehicles is uncertain and is not expected to occur in 2022 and remains subject to various conditions, many of which are outside of FF’s control, including the timing, size, and availability of additional financing as well as the implementation and effectiveness of FF’s headcount, temporary salary and other expense reductions as well as payment deferral measures. It is also subject to suppliers meeting their commitments on program deliverables including parts, and timely and successful certification testing. In order to fund its ongoing operations and business plan, including to launch the FF 91, FF ~~is seeking~~81, FF 71 series, and Smart Last Mile Delivery electric vehicle models that appeal to ~~raise additional capital from various fundraising efforts currently underway to supplement its cash~~customers. Based on ~~hand.~~

From August 14, 2022 through September 25, 2022, the Company obtained commitments from several investors totaling $132,000 in new convertible note financing and in committed forced warrant exercise proceeds, subject to certain ~~conditions. A~~

~~total of $72,000~~ under these commitments has been funded to date, through which the Company received $61,149 (net of original issue discount and transaction costs). Of the remaining balance of $40,000 committed by Senyun, an amount of $20,000 is expected to be received by the end of 2022, subject to the satisfactionmanagement assumptions, including timely completion of certain ~~conditions,~~testing and ~~an amount of $20,000 is contingent upon the launch~~suppliers meeting our supply chain requirement, FF originally expected deliveries of the FF 91 ~~as well as subject~~ to users to begin before the end of April 2023. However, certain ~~other conditions.~~of FF’s suppliers were unable to meet FF’s timing requirements and, therefore, FF updated the timing for the start of deliveries for its FF 91 vehicle. FF has developed a three-phase delivery plan for the FF 91 (the “Delivery Plan”). The ~~Company also has~~first phase, which began in May 2023, is the ~~right~~“Industry Expert Futurist Product Officer (“FPO”) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) are expected to ~~force~~pay in full for an FF 91 vehicle in order to reserve the ~~conversion~~vehicle and be trained in the use of the ~~warrants underlying~~vehicle. The second phase, which is the ~~Warrant Reserve, as~~“FPO Co-Creation Delivery,” began in August 2023. In this second phase, FPO(s) are taking possession of the FF 91 vehicle and are also entering into consulting, branding, marketing, and other arrangements with FF in exchange for fees to be paid by the Company to the FPO(s). The third phase is the “Full Co-Creation Delivery,” in which, FF will deliver FF 91 vehicles to all spire users that are expected to have paid in full for an FF 91 vehicle at time of delivery.

Further, FF needs substantial additional financing to start the third phase of the Delivery Plan and is in discussions with additional potential investors to obtain such ~~term~~financing. As FF executes the three-phase Delivery Plan, it plans to continue to move vehicles into production and off-the-line with high quality and high product power. There is ~~defined in Note 13,~~no assurance FF will ~~Stockholders' Equity~~be~~, for~~ able to timely receive sufficient funding under existing or new financing commitments to produce and deliver the FF 91 Futurist on that timeline or at all. If unable to receive sufficient funding, FF will be required to obtain new financing commitments, which may not be available to it under reasonable commercial terms or at all. Further, there cannot be any assurance that FF will develop the manufacturing capabilities and processes, secure reliable sources of component supply to meet quality, engineering, design or production standards, or to meet the required production volumes to successfully grow into a ~~total exercise price of $20,000 in~~viable, cash ~~upon the completion of certain milestones and conditions.~~ flow positive business.

The Company has continued financing discussions with multiple parties, but has experienced delays in securing additional funding commitments, ~~relative to its business plan included in the Form 8-K filed on July 25, 2022,~~ which have exacerbated the supply chain and liquidity pressures on FF’s business. Since August 14, 2022, pursuant to the Secured SPA, Unsecured SPA and Unsecured Streeterville SPA (as defined in Note 7, Notes Payable), the Company has obtained commitments from several investors totaling $513.5 million in convertible note financing. Additionally, the Company has received commitments totaling $20.0 million through forced warrant exercise proceeds, subject to certain conditions. A total of $300.2 million under these convertible note financing commitments has been funded to date ($263.2 million net of original discount and transaction costs). The remaining balance of $213.3 million is subject to various conditions, including achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of certain conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes. In addition to the amounts received pursuant to the above commitments, the Company received additional optional funding - an aggregated gross proceeds of $38.0 million ($32.9 million net of original issuance discount) under the Secured SPA.

There can be no assurance that FF will be able to satisfy the closing conditions under the Unsecured SPA or that FF will be able further to successfully obtain additional incremental convertible senior secured note purchasers under the Secured SPA,

Unsecured SPA, Unsecured Streeterville SPA or other debt or equity financing in a timely manner or on acceptable terms, if at all. These factors, in addition to the continued rise in inflation increasing the cost of labor and materials and other challenging macroeconomic conditions, have led FF to take steps to preserve its current cash position, including reducing spending, extending payment cycles and implementing other similar measures. If our ongoing capital raising efforts are unsuccessful or significantly delayed, or if we experience prolonged material adverse trends in our business, our production will be delayed or decreased, and our actual use of cash, production volume and revenue for ~~2022~~2023 will vary from our previously disclosed forecasts, and such variances may be material. While FF iscontinues to be actively engaged in negotiations with potential financing sources, there is no guarantee that it will be able to raise additional capital on terms acceptable to it or at all. In addition to the risk that FF’s assumptions and analyses may prove incorrect, the projections may underestimate the professional fees and other costs to be incurred related to the pursuit of various financing options currently being considered and ongoing legal risks. Incremental capital needs beyond ~~2022~~2023 to fund operations and the development of the Company’s remaining product portfolio and to ramp up production will be highly dependent on the market success and profitability of the FF 91 and the Company’s ability to accurately estimate and control costs. Apart from the FF 91 Futurist series, substantial additional capital will be required to fund operations, as well as, research, development, and design efforts for future vehicles.

~~As described under~~ ~~“- Financing Discussions and New Convertible Note and Warrant Financing,” on~~On November 11, 2022, ~~the Company~~FF entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), which is an affiliate of Yorkville Advisors. Under the terms of the SEPA, ~~with Yorkville, which provides~~FF has the ~~Company the sole~~ right, but not the obligation, to ~~direct Yorkville from~~ ~~time~~ ~~to time to purchase~~sell up to ~~$200~~$200.0 million ~~(“Commitment Amount”)~~(which can be increased up to $350.0 million at FF’s option) of Class A Common Stock to an affiliate of Yorkville Advisors, subject to certain limitations, at the time of the Company’s choosing during the three-year term of the SEPA. During the three and nine months ended September 30, 2023, FF sold 837,500 shares of Class A Common Stock ~~during the commitment period ending November 11, 2025,~~ at a ~~3% discount~~price equal to 97% of the ~~VWAP (as defined below)~~average daily volume weighted average price of the ~~shares during~~Class A Common Stock to Yorkville under the ~~three preceding days of each issuance. The~~SEPA for $7.3 million.

On June 16, 2023, the Company ~~has~~filed the ~~option to increase~~Shelf Registration with the ~~Commitment Amount to~~SEC, which was declared effective by the SEC on June 28, 2023. As a result, the Company may from time-to-time issue Class A Common Stock and/or warrants, up to ~~$350,000 during~~an aggregate amount of $300.0 million in one or more offerings. The Shelf Registration provides an ability for the ~~commitment period. The~~ Company ~~agreed~~ to ~~issue 789,016~~raise additional capital through Class A Common Stock and/or warrant issuances to both institutional and retail investors as it looks to raise additional financing to support production ramp-up. On September 27, 2023, the Company filed a prospectus supplement to the Shelf Registration regarding the At-the-Market Equity Offering Sales Agreement (the “Sales Agreement”) the Company entered into on September 26, 2023 with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC (the “Sales Agents”) to offer and sell up to $90.0 million of Class A Common Stock. In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of Class A Common Stock from time to time through or to the Sales Agents as sales agent or principal by any method that is deemed to be an “at the market offering” as defined in ~~satisfaction~~Rule 415 under the Securities Act of 1933. The aggregate compensation payable to the Sales Agents shall be up to 3.5% of the commitment fee agreed upon in the SEPA. As of the date the unaudited Condensed Consolidated Financial Statement were issued, the Company did not direct Yorkville to buy any shares of Class A Common Stock. The Company shall use commercially reasonable efforts to prepare and file with the SEC a Registration Statement for the resale by Yorkvillegross sales price of the shares sold through the Sales Agents. During the three and nine months ended September 30, 2023, the Company issued 780,000 shares of its Class A Common Stock ~~to be issued~~ under the ~~SEPA (including the 789,016 commitment shares). The Company shall not have the ability to draw funds until the effectiveness~~Sales Agreement for gross cash proceeds of ~~such registration statement and the satisfaction~~$1.3 million less placement agent fees of ~~certain other conditions..~~

Any purchase would be subject to certain limitations, including that Yorkville shall not purchase any shares that would result in it and its affiliates beneficially owning more than 9.99% of the then outstanding voting power or number of shares of Class A Common Stock or any shares that would exceed 19.99% of all shares of Class A Common Stock and Class B Common Stock of the Company outstanding on the date of the SEPA, unless Company shareholder approval was obtained allowing for issuances in excess of such amount (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including where the average price of all shares of Class A Common Stock equals or exceeds $0.62 per share.$0.1 million.

Despite the potential access to liquidity resulting from the SEPA, ~~when and if it shall become effective,~~ the ~~Warrant Reserve~~Shelf Registration and the unfunded commitments from the Secured SPA and the Unsecured SPA, the Company projects that it ~~may require additional funds during the remainder of 2022 and~~ will require additional funds ~~beyond 2022~~ in order to continue operations and support the ramp-up of production of the FF 91 Futurist to generate revenues to put the Company on a path to cash flow break-even. Incremental capital needs beyond ~~2022~~2023 to fund operations and the development of the Company’s remaining product portfolio and ramp up production will be highly dependent on the market success and profitability of the FF 91 Futurist and the Company’s ability to accurately estimate and control costs.

~~Since~~The Company is exploring various funding and financing alternatives to fund its ~~formation, the Company has devoted substantial effort~~ongoing operations and ~~capital resources~~ to strategic planning, engineering, design, and development of its electric vehicle platform, development of initial electric vehicle models, and capital raising. Since inception, the Company has incurred cumulative losses from operations, negative cash flows from operating activities, and has an accumulated deficit of $3,339,180 as of ~~September 30, 2022. After the closing~~ramp up production, including equipment leasing, construction financing of the ~~Business Combination~~FF ieFactory California, secured syndicated debt financing, convertible notes, working capital loans, and equity offerings, among other options. The particular funding mechanisms, terms, timing, and amounts are dependent on the Company’s assessment of opportunities available in the marketplace and the PIPE Financing on July 21, 2021, the Company received gross proceeds aggregating $990,983 which it used to settle certain liabilities and the remainder of which management has used to finance the ongoing operationscircumstances of the ~~business.~~business at the relevant time.

The Company has funded its operations and capital needs primarily through the net proceeds received from capital contributions, the issuance of related party notes payable and notes payable (see Note 9, ~~Related Party Notes Payable~~ ~~and Note 10,~~ ~~Notes Payable, the sale of Preferred and Common Stock (see Note 13,~~ ~~Stockholders' Equity)~~ ~~and the net proceeds received from the Business Combination and the PIPE Financing (see Note 4,~~ ~~Business Combination).~~

The Company’s ongoing liquidity needs will depend on the extent to which the Company’s actual costs vary from the Company’s estimates and the Company’s ability to control these costs, as well as the Company’s ability to raise additional funds. The timely achievement of the Company’s operating plan as well as its ability to maintain an adequate level of liquidity are subject to various risks associated with the Company’s ability to continue to successfully close additional sources of funding, control and effectively manage its costs, as well as factors outside of the Company’s control, including those related to global supply chain disruptions, the rising prices of materials, ~~potential impact of the COVID-19 pandemic,~~ and general macroeconomic conditions. ~~Refer to the section titled “Risk Factors~~” of the Company’s Form 10-K, as updated in this Report, for a full discussion of the risks. The Company’s forecasts and projections of working capital reflect significant judgment and estimates for which there are inherent risks and uncertainties. The Company expects to continue to generate significant operating losses for the foreseeable future. The plans are dependent on the Company being able to continue to raise significant amounts of capital through the issuance of additional notes payable and equity securities.

The Company has evaluated whether there are certain conditions and events, when considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited Condensed Consolidated Financial Statements were issued. Based on its recurring losses from operations since inception and continued cash outflows from operating activities, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these unaudited Condensed Consolidated Financial Statements were issued.

required to reduce discretionary spending, alter or scale back vehicle development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures. Any such events would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business ~~objectives.~~objectives, and the Company will likely not be able to continue as a going concern.

~~Significant Related Party Notes Payable and Notes Payable Facilities~~

~~The~~As of September 30, 2023, the Company was in default on the Secured SPA Notes; however, the holders of such notes subsequently waived the default. As of April 2023, the Company has been ~~significantly funded by~~in breach of its debt agreement with Chongqing Leshi Small Loan Co., Ltd., a related party, with an outstanding principal balance of $4.5 million. As a result of the default, the interest rate on the outstanding principal balance has increased to a rate of 18% per annum until the event of default is no longer applicable.

There can be no assurance that the Company will be able to maintain sufficient authorized shares to fully settle all outstanding equity-linked financial instruments in shares.

Material Cash Requirements

The Company's material cash requirements include the following contractual and other obligations:

As of September 30, 2023, the Company had outstanding notes payable ~~from~~to related parties, comprised of $3.8 million which is due on demand, $5.1 million is scheduled to become due in December 2023, and ~~third parties.~~$3.3 million due in the year 2029. The related parties include employees as well as affiliates of employees and affiliates and other companies controlled or previously controlled by Mr. Jia, the Company’s founder and Chief Product and User Ecosystem Officer.

~~The following tables summarize the outstanding related party notes payable and notes payable as well as the related schedules of maturities of the related party notes payable and notes payable.~~ See Note 9,8, Related Party ~~Notes Payable~~ Transactions~~and Note 10,~~ ~~Notes Payable~~, in ~~FF’s unaudited~~the Condensed Consolidated Financial Statements.

~~Related party notes payable consists of the following as~~As of September 30, ~~2022:~~

September 30, 2022
Note Name Contractual
Maturity
Date Contractual
Interest
Rates Balance as of September 30, 2022 Interest Expense for the Three Months Ended September 30, 2022 Interest Expense for the Nine Months Ended September 30, 2022
Related party notes – China Due on Demand 18% $ 8,451 $ 996 $ 2,931
Related party notes – China various other Due on Demand 0% 3,802 — —
$ 12,253 $ 996 $ 2,931

~~Schedule~~2023, the Company had outstanding $135.1 million in aggregate principal amount of ~~Principal Maturities of Related Party Notes Payable~~

~~The future scheduled principal maturities of related party~~ notes payable asto third parties, of which $4.8 million is due on demand, $41.0 million and the remainder due in year 2029. See Note 7, Notes Payable, in the Condensed Consolidated Financial Statements.

As of September 30, ~~2022 were~~2023, the Company had operating and financing lease obligations (inclusive of interest) of $37.0 million, primarily related to its FF ieFactory California production facility, corporate office, store, equipment, and vehicle lease agreements, of which approximately $7.2 million in payments are scheduled to become due in the succeeding 12 months.

We have purchase commitments under legally enforceable agreements for goods and services, including purchases of inventory, tooling, machinery and equipment, and items to be used in research and development activities, with defined terms as ~~follows:~~to quantity, price and timing of delivery.


~~Due on demand~~						$	~~12,253~~

Sources of Liquidity

~~The Company has entered into notes payable agreements with third parties, which consists of the following as~~As of September 30, ~~2022:~~

2023, the Company’s principal source of liquidity was cash on hand totaling $6.7 million, which was held for working capital and general corporate purposes. The Company also has access to various sources of additional capital, including the SEPA, the Sales Agreement, and the SPA Commitments. The Company’s ability to access these sources of capital and further information on amounts available is discussed in Note 2, ~~Company settled certain notes payable during the nine months ended September 30, 2022 as follows:~~Liquidity and Capital Resources

~~Schedule of Principal Maturities of Notes Payable~~

~~The future scheduled principal maturities of notes payable as of September 30, 2022 are as follows:~~

Due on demand $ 4,902
2022 4,012
2023 2,687
2026 44,606
$ 56,207
.

~~Notes payable consists of the following as of December 31, 2021:~~

Cash Flow Analysis

Presented below is a summary of FF’s cash flows for the periods indicated:


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Net cash provided by (used in)	Net cash provided by (used in)					Net cash provided by (used in)
Operating activities	Operating activities	$	(355,109)	$	(237,878)	Operating activities	$	(240,370)	$	(355,109)
Investing activities	Investing activities	(112,099)		(37,264)		Investing activities	(10,846)		(112,099)
Financing activities	Financing activities	(40,935)		966,995		Financing activities	237,565		(40,935)
Effect of exchange rate changes on cash and restricted cash	Effect of exchange rate changes on cash and restricted cash	11,594		(2,536)		Effect of exchange rate changes on cash and restricted cash	3,704		11,594

Operating Activities

FF continues to experience negative cash flows from operations as FF designs and develops its vehicles and builds its infrastructure both in the ~~United States~~U.S. and China. FF’s cash flows from operating activities are significantly affected by FF’s cash investments to support the growth of FF’s business in areas such as ~~research and development~~R&D associated with FF’s electric vehicles, corporate

planning, and general and administrative functions. FF’s operating cash flows are also affected by its working capital needs to support growth and fluctuations in personnel-related expenditures, accounts payable, accrued interest, other current liabilities, deposits, and other current assets.

Net cash used in operating activities was ~~$355,109 and $237,878~~$240.4 million for the nine months ended September 30, ~~2022~~2023 which were primarily related to ED&T services, compensation and ~~2021, respectively.~~benefits, and other professional services associated with research and development activities performed. The largest components of FF’s cash used by operating activities during the nine months ended September 30, 2023, were $87.5 million for research and development expenses, $82.1 million for wages and compensation related expenses, and $31.1 million for professional services.

Net cash used in operating activities was $355.1 million for the nine months ended September 30, 2022. The largest components of FF’s cash used by operating activities during the nine months ended September 30, 2022, were for professional and contracted services totaling ~~$119,526,~~$119.5 million, compensation, benefits and related expenses totaling ~~$95,251~~$95.3 million and prepaid insurance totaling $21,732. The largest components of FF’s cash used by operating activities during the nine months ended September 30, 2021, were $69,466 for wages and compensation related expenses, $50,000 for a non-exclusive, perpetual, irrevocable, and sublicensable license to use a platform, the Geely License, owned by Liankong, a subsidiary of Geely Holdings, and $18,792 for professional services. Net cash used by operating activities for the nine months ended September 30, 2021, included cash used of $3,000 for prepayment of hosting costs. Other movements were related to changes in working capital.$21.7 million.

Investing Activities

Net cash used in investing activities was ~~$112,099~~$10.8 million and ~~$37,264~~$112.1 million for the nine months ended September 30, 2023 and 2022, respectively, and ~~2021, respectively,~~is related to the acquisition of fixed assets.

Financing Activities

~~Net~~For the nine months ended September 30, 2023, net cash ~~(used in)~~ provided by financing activities was ~~($40,935) and $966,995 for~~$237.6 million. For the nine months ended September 30, 2022, net cash used in financing activities was $40.9 million.

Net cash provided by financing activities during the nine months ended September 30, 2023, primarily consists of $228.4 million in proceeds from notes payable, net of original issue discount, and ~~2021, respectively.~~

$4.1 million in proceeds from the exercise of warrants, partially offset by the payment of $2.5 million in debt issuance costs and $1.0 million in payments of finance lease obligations.

Net cash used in financing activities during the nine months ended September 30, 2022 primarily consists of ~~$87,258~~$87.3 million in repayment of notes payable, including ~~payment premium,~~liquidation premiums, and ~~$2,813~~$1.4 million in payments of finance lease obligations, partially offset by ~~40,050 and 9,535~~$9.5 million in ~~proceeds from notes payable, net of original issue discount and~~ proceeds from exercise of stock ~~options, respectively.~~

Cash provided from financing activities during the nine months ended September 30, 2021, primarily consists of $229,583 in cash proceeds from the issuance of Class A Common Stock, net of redemptions of $206 as a result of the Business Combination; $761,400 in cash proceeds from the aggregate purchase price in the PIPE Financing; $172,231 in proceeds from the issuance of notes payable net of original issuance discounts; and $10,492 from the exercise of stock options. These were partially offset by cash payments of $61,130 for PIPE Financing transaction costs; $48,210 for settling notes payable and accrued interest; $38,217 for settling related party notes payable and accrued interest; $27,722 for settling vendor payables in trust; $23,148 for Business Combination transaction costs; $3,355 for debt transaction costs; $2,691 for capital lease obligations; and $1,071 for stock issuance costs.

Effect of Exchange Rate Changes on Cash and Restricted Cash

The exchange rates effect on ~~Cash~~cash and ~~Restricted~~restricted cash was ~~$11,594~~$3.7 million and ~~$(2,536)~~$11.6 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, 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 Renminbi. Fluctuations in exchange rates against the U.S. ~~dollar~~Dollar may positively or negatively affect FF’s operating results.

~~Contractual Obligations and Commitments~~Off-Balance Sheet Arrangements

The ~~following table sets forth,~~Company 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, the Company did not have any off-balance sheet arrangements as of September 30, ~~2022, significant cash obligations that affect FF’s future liquidity:~~

Payments Due by Period
Total 2022
(3 months) 2023 -
2024 2025 -
2026 Thereafter
(in thousands)
Operating lease obligations $ 34,643 $ 1,289 $ 10,741 $ 10,440 $ 12,173
Finance lease obligations 10,050 643 3,923 3,620 1,864
Related party notes payable 12,253 12,253 — — —
Related party accrued interest 12,760 12,760 — — —
Notes payable 56,207 8,914 2,687 44,606 —
Accrued interest (as restated) 123 123 — — —
Palantir license 41,667 2,667 19,500 19,500 —
Total contractual obligations $ 167,703 $ 38,649 $ 36,851 $ 78,166 $ 14,037

~~The commitment amounts in the table above are associated with contracts that are enforceable~~2023 and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that FF can cancel without a significant penalty.December 31, 2022.

Critical Accounting Estimates

The preparation of our ~~unaudited~~ Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of expenses during the reporting period. Management has based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by FF’s management. To the extent that there are material differences between these estimates and actual results, future financial statement presentation, financial condition, results of operations, and cash flows will be affected. Given the global economic climate, ~~and unpredictable nature and unknown duration of the COVID-19 pandemic,~~ estimates are subject to additional ~~variability and~~ volatility.

6261

Critical accounting estimates are defined as estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial condition or results of operations. For a description of the Company’s critical accounting estimates, refer to the section titled “Critical Accounting ~~estimates and assumptions are evaluated on an ongoing basis, which are discussed~~Estimates” in ~~more detail under the caption “Critical Accounting Policies and Estimates” in~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations,, set forth in Part II, Item 7, of the Form 10-K/A. As of the date of this report, there have been no changes to our ~~Form 10-K for the year ended December 31, 2021, as well as see Note Note 1,~~ ~~Nature of Business and Organization and Basis of Presentation~~critical accounting estimates described in the ~~Notes to the unaudited~~Form 10-K/A that have had a material impact on our Condensed Consolidated Financial Statements ~~for discussion of estimates~~and related ~~to accounting pronouncements recently adopted.~~

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the Consolidated Financial Statements. For a description of the Company’s significant accounting policies, see Note 1, footnotes.~~Nature of Business and Organization and Basis of Presentation~~ ~~of the Notes to the Consolidated Financial Statements for the years ended December 31, 2021 and 2020 included in our Form 10-K for the year ended December 31, 2021.~~

~~Recent Accounting Pronouncements~~

~~See Note 1,~~ ~~Nature of Business and Organization and Basis of Presentation~~ ~~in the Notes to the unaudited Condensed Consolidated Financial Statements for a discussion about accounting pronouncements recently adopted and recently issued, but not yet adopted.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant to Item 305(e) of Regulation S-K, FF is not required to provide the information required by this Item as it is a “smaller reporting company.”

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

FF’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in the reports that FF files or submits under the ~~Securities~~ Exchange Act, ~~of 1934, as amended,~~ is recorded, processed, summarized, and reported within the time periods specified in the ~~Commission's~~SEC’s rules and forms, and that such information is accumulated and communicated to management, including its ~~Chief Executive Officer~~CEO and Interim ~~Chief Financial Officer,~~CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on an evaluation of FF’s disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) of the ~~Securities~~ Exchange ~~Act of 1934, as amended)~~Act), FF’s Global CEO and Chief ~~Executive~~Accounting Officer and Interim ~~Chief Financial Officer~~CFO (its principal executive officer and principal financial and accounting officer, respectively) have concluded that FF’s disclosure controls and procedures were not effective as of September 30, ~~2022,~~2023, due to the material weaknesses in our internal control over financial reporting described below.

Material Weaknesses in Internal Control Over Financial Reporting ~~(As Restated)~~

FF identified material weaknesses in FF’s internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual Condensed Consolidated Financial Statements or interim ~~unaudited~~ Condensed Consolidated Financial Statements will not be prevented or detected on a timely basis. The material weaknesses are as follows:

•FF did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, FF lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training, and experience to appropriately analyze, record, and disclose accounting matters timely and accurately. Additionally, management did not establish formal reporting lines in pursuit of its objectives. Further, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of its financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in its finance and accounting functions.

•FF did not design and maintain effective controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls were not sufficient to respond to changes to the risks of material misstatement to financial reporting due to growth in the business.

•FF did not design and maintain effective controls for communicating and sharing information between the legal, capital markets, and accounting and finance departments. Specifically, the accounting and finance departments were not consistently provided the complete and adequate support, documentation, and information including the nature of relationships with certain counterparties to record transactions within the financial statements timely, completely, and accurately.

These material weaknesses contributed to the following additional material weaknesses:

•FF did not design and maintain effective controls to address the identification of and accounting for certain non-routine, unusual or complex transactions, including the proper application of ~~U.S.~~ GAAP to such transactions. Specifically, FF did not design and maintain controls to timely identify and account for convertible notes under the fair value option, warrant liabilities, embedded derivatives related to convertible notes, impute interest on related

party notes payable with interest rates below market rates, account for failed sale leaseback transactions, and account for warrant instruments.

•FF did not design and maintain formal accounting policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting, and disclosures, including controls over the period-end financial reporting process addressing areas including financial statement and footnote presentation and disclosures, account reconciliations and journal entries, including segregation of duties, assessing the reliability of reports and spreadsheets used in controls, and the timely identification and accounting for cut-off of expenditures.

These material weaknesses resulted in adjustments primarily related to expense cut-off and the associated accounts including operating expenses, accounts payable and accruals, property and equipment, convertible notes payable and interest expense and related financial disclosures, which were recorded as of and for the year ended December 31, 2019. These material weaknesses also resulted in adjustments primarily related to the extinguishment of a noncontrolling interest, accounts payable, vendor payables in trust and adjustments to the statement of cash flows which were recorded as of and for the year ended December 31, 2019 as well as disclosure errors related to the anti-dilutive shares excluded from the calculation of diluted net loss per share, deferred tax assets and related valuation allowance, accrued interest for certain notes payable, and the fair value of the Vendor Trust as of December 31, 2019. Refer to Note 3 to FF’s Condensed Consolidated Financial Statements for the year ended December 31, 2020, included in its Registration Statement on Form S-4 (File Number 333-255027), initially filed with the SEC on April 5, 2021 ~~(as amended, the “Registration Statement”).~~as amended. Additionally, the material weakness related to accounting for warrant instruments resulted in the restatement of the previously issued financial statements as disclosed in Note 2 to PSAC’s Condensed Consolidated Financial Statements for the year ended December 31, 2020 within PSAC’s Annual Report on Form 10-K/A, of the entity acquired as part of the July 21, 2021 ~~merger agreement~~Merger Agreement related to warrant liabilities and equity. Finally, these material weaknesses resulted in the restatement of the Company’s previously filed financial statements as of and for the year ended December 31, 2022 and for the quarterly periods ended March 31, 2023 and September 30, ~~2022 (see Note 2,~~ ~~Restatement) primarily due to an error stemming from a non-cash and non-operating item related to the change in the fair value upon conversion of the notes payable issued under the Company’s debt arrangements.~~2022.

•FF did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of its financial statements, specifically, with respect to: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel; and (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored. These IT deficiencies did not result in a material misstatement to the consolidated financial statements, however, the deficiencies, when aggregated, could result in material misstatements potentially impacting all financial statement accounts and disclosures.

In connection with the Special Committee investigation, and the completion of additional investigative and remedial work based on Special Committee findings, which were performed under the direction of the newly-appointed Executive Chairperson, reporting to the Audit Committee, additional material weaknesses were identified in FF’s internal control over financial reporting (as disclosed in Note 3 to FF’s ~~consolidated financial statements~~Consolidated Financial Statements for the years ended December 31, 2021 and 2020 included in FF’s Annual Report on Form 10-K for the ~~Form 10-K)~~fiscal year ended December 31, 2021). Specifically, in addition to the material weaknesses described above relating to management not establishing formal reporting lines in pursuit of its objectives as well as maintaining effective controls for communicating and sharing information between the legal, capital markets, and accounting and finance departments, the following material weaknesses were identified:

•FF did not maintain an effective control environment or demonstrate a commitment to maintain integrity and ethical values. Specifically, certain members of senior management failed to reinforce the need for an attitude of compliance and internal control awareness with certain of FF’s governance, accounting and finance policies and procedures. This resulted in the inaccurate and incomplete disclosures of certain relationships, arrangements, and transactions.

This material weakness contributed to the following additional material weakness:

•FF did not design and maintain effective controls related to the identification and disclosure of certain arrangements and transactions with related parties.

The material weaknesses identified in connection with the Special Committee investigation resulted in the revision of ~~our~~the Company’s previously filed financial statements as of and for the period ended December 31, 2020 (as disclosed in Note 9 to FF’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021) and for the periods ended March 31, 2021 (as disclosed in Note 1 to FF’s Quarterly Report on Form 10-Q for the quarterly period ended on March 31, 2022) and ~~September~~June 30, 2021 (as disclosed in Note 1 to FF’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022) related to notes

payable, related party notes payable, accrued interest, related party accrued interest, interest expense, and related party interest ~~expense as disclosed in Note 1,~~ ~~Nature of Business and Organization and Basis of Presentation~~ ~~within the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q~~.expense.

Additionally, each of the material weaknesses described above could result in a material misstatement to substantially all of our accounts or disclosures.

Remediation Plan for Material Weaknesses in Internal Control Over Financial Reporting

Management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the material weaknesses. ~~During 2021 and~~Since identifying the ~~first nine months of 2022,~~material weaknesses described above, FF made the following enhancements to our internal control over financial reporting:

•FF added finance and accounting personnel to the organization to strengthen our finance and accounting teams. The additional personnel are expected to provide oversight, structure, reporting lines, and additional review over our disclosures;

•FF implemented certain new accounting policies and procedures, and an IT system relevant to the preparation of our financial statements to improve communication of key areas across the different departments at FF and to provide adequate structure, accountability, and segregation of duties;

•FF appointed Ms. Becky Roof as Interim ~~Chief Financial Officer (CFO)~~CFO and engaged an affiliate of AlixPartners LLP to accelerate implementation of Special Committee recommendations including, but not limited to remediation of the material weaknesses in internal control over financial ~~reporting (on~~reporting. On October 12, 2022, Ms. Roof resigned from FF upon the successful completion of key milestones in FF’s reporting and fundraising activities, on October 22, 2022, the Company appointed Ms. Yun Han as Chief Accounting Officer and Interim CFO, effective as of October 25, 2022, on July 5, 2023, Ms. Han resigned from her positions as Interim ~~Chief Financial Officer,~~CFO, principal financial officer and principal accounting officer (but will continue in her role as Chief Accounting Officer), and on July 11, 2023, the Board appointed Jonathan Maroko as Interim ~~Chief Financial Officer,~~CFO, principal financial officer and principal accounting officer effective as of July 24, 2023.); Mr. Maroko’s responsibilities include, but are not limited to, the remediation of the material weaknesses in internal control over financial reporting;

•FF implemented enhanced controls around FF’s related party transactions, including regular attestations;

•FF removed ~~Yueting (“YT”)~~Mr. Jia, FF’s founder, as an ~~Executive Officer,~~executive officer, although he continued in his position as Chief Product &and User Ecosystem Officer of ~~the Company,~~FF, reporting to the ~~Executive~~ Chairperson with his role limited to focusing on (a) ~~Product~~product and ~~Mobility Ecosystem~~mobility ecosystem and (b) ~~Internet, Artificial Intelligence,~~I.A.I., and advanced R&D ~~technology;~~technology (however, as of February 26, 2023, this remedial measure is no longer being implemented as further discussed below);

•Functions previously dual-reporting to Mr. Jia and Mr. Breitfeld reported only to Ms. Swenson (but Mr. Jia remained involved in long-term strategy) (and following the resignation of Ms. Swenson on October 3, 2022, all FF management (including Mr. Jia) ~~now report~~reported directly or indirectly to ~~Dr. Breitfeld,~~ the Global CEO of FF ~~until December 9, 2022 or the next Board meeting thereafter~~(previously Dr. Breitfeld and currently Mr. Aydt) indefinitely while the Board continues to evaluate the appropriate FF management reporting ~~lines;~~lines) (however, as of February 26, 2023, this remedial measure is no longer being implemented as further discussed below); and

•FF adopted an Insider Investment Reporting ~~Policy.~~Policy to enhance internal reporting of related party transactions.

Our remediation activities are continuing during ~~2022.~~ 2023, although certain of the remedial efforts described above are no longer applicable given recent developments and resignations. There have also been substantial changes to the composition of the Board as a result of the governance settlement entered into between FF and FF Global, as well as substantial turnover in key management personnel, including legal and compliance personnel, which could impact our ability to implement the above described remedial measures.

In addition, as of February 26, 2023, certain departments within the Company report to both Mr. Jia and Mr. Chen, including the Company’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments, subject to processes and controls to be determined by the Board after consultation with the Company’s management. Further, based on the changes to his responsibilities within FF, the Board determined that Mr. Jia is an “officer” of the Company within the meaning of Section 16 of the Exchange Act, and an “executive officer” of the Company under Rule

3b-7 under the Exchange Act. FF has or is planning to put in place processes and controls to mitigate the risks associated with the changes in Mr. Jia’s responsibilities as well as to enhance oversight and corporate governance, including but not limited to:

•segregating responsibilities and duties in the Company’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments;

•requiring the Board, or a designated committee of the Board, to approve the signing of financing agreements, the hiring, promoting or terminating vice presidents of the Company and above (including additional Section 16 officers), and the adopting of Company-wide compensation policies;

•hiring of a Compliance Officer with the title of Deputy General Counsel (hired in March 2023), who reports on a dotted line to the Chair of the Audit committee; and

•engaging an external consulting firm in April 2023 to work in the capacity of an internal audit function who will report on a dotted line to the Chair of the Audit Committee.

In addition to the above actions and in view of the governance changes that the Company implemented pursuant to the Heads of Agreement and Amended Shareholder Agreement and otherwise, FF expects to engage in additional activities, including, but not limited to:

•~~Continuing~~continuing to hire key finance and accounting personnel as FF scales and until FF has sufficient technical accounting resources, combined with engaging external consultants to provide support and to assist us in our evaluation of more complex applications of ~~U.S.~~ GAAP and to assist us with documenting and assessing our accounting policies and procedures;

•~~Designing~~designing and implementing controls in response to the risks of material misstatement to identify and evaluate changes in our business and the impact on our internal controls;

•~~Designing~~designing and implementing controls for communicating and sharing information between legal, capital markets, and accounting to facilitate transactions being recorded timely and accurately;

•~~Designing~~designing and implementing formal processes, accounting policies, procedures, and controls supporting certain business processes and our financial close process, including creating standard balance sheet reconciliation templates and journal entry controls assessing the reliability of reports and spreadsheets used in controls; and the timely identification and accounting for cut-off of expenditures;

•~~Designing~~designing and implementing controls to address the identification of and accounting for certain non-routine, unusual or complex transactions;

•~~Designing~~designing and implementing controls related to the identification and disclosure of certain arrangements and transactions with related parties;

•~~Continuing~~continuing to implement additional IT systems relevant to the preparation of our financial statements and controls over financial reporting to improve communication of key areas across the different departments at FF and to provide adequate structure, accountability, and segregation of duties; and

•~~Designing~~designing and implementing IT general controls, including controls over change management, the review and update of user access controls and controls over critical batch jobs and data backups.

While FF has made progress, the material weaknesses will not be considered remediated until FF completes the design and implementation of the enhanced controls, the controls operate for a sufficient period of time, and FF has concluded, through testing, that these controls are effective. FF believes that our remediation plan will be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting.

As we continue to evaluate and work to improve our internal control over financial reporting, FF may determine that additional measures or modifications to the remediation plan are necessary.

We are working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation likely will go beyond December 31, 2023. At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, will result in FF incurring significant costs, and will place significant demands on our financial and operational resources.

While FF believes these efforts will remediate the material weaknesses, FF may not be able to complete its evaluation, testing or any required remediation in a timely fashion, or at all. FF cannot assure you that the measures it has taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to its material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. The effectiveness of FF’s internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. Further loss and/or turnover in key management personnel, particularly accounting, finance and legal personnel, may negatively impact our ability to implement our remediation plan. If FF is unable to remediate its material weaknesses, FF’s ability to record, process and report financial information accurately, and to prepare financial statements within the time periods specified by the forms of the SEC, could be adversely affected which, in turn, may adversely affect FF’s reputation and business and the market price of the Class A Common Stock. Any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of FF’s securities and harm to FF’s reputation and financial condition, or diversion of financial and management resources from the operation of FF’s business.

Changes in Internal Control Over Financial Reporting

~~There~~Other than as described in the preceding paragraphs, there have been no changes in internal control over financial reporting during the quarter ended September 30, ~~2022,~~2023, that have materially affected, or are reasonably likely to materially affect, FF’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position. Other than disclosed under Note ~~12,~~9, Commitments and Contingencies, to FF’s ~~unaudited~~ Condensed Consolidated Financial Statements included in this Quarterly Report of Form 10-Q (“Report”), we are not presently party to any legal proceedings that, in the opinion of management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

ITEM 1A. RISK FACTORS

~~Factors that could cause our actual results to differ materially from those in this report include~~Other than the risk factors listed below, there have been no material changes from the risk factors previously described inunder Item 1A of our Annual Report on ~~Form10-K/~~Form 10-K/A ~~for the year ended December 31, 2022~~ filed with the SEC on August 21, 2023 (the “Form 10-K/A”).

FF has identified material weaknesses in its internal control over financial reporting. FF’s inability to remediate these material weaknesses, or identification of additional material weaknesses in the future or other failure to maintain effective internal control over financial reporting, has, and could further, result in material misstatements in FF’s consolidated financial statements and FF’s ability to accurately or timely report its financial condition or results of operations, which may adversely affect FF’s business and share price.

FF’s management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 as amended. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of these material weaknesses, FF’s management concluded that its internal control over financial reporting was not effective as of December 31, 2022. FF is actively engaged in remediation efforts designed to address these material weaknesses. As FF continues to evaluate and work to improve its internal control over financial reporting, FF may determine that additional measures or modifications to the remediation plan are necessary. FF is working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation to potentially go beyond December 31, 2023. At this time, we cannot predict the total costs expected to be incurred; however, the remediation measures have been and will continue to be time consuming, costly, and a significant demand on our financial and operational resources.

While FF believes these efforts will remediate the material weaknesses, it will not be considered remediated until FF completes the design and implementation of the enhanced controls, the controls operate for a sufficient period of time, and FF has concluded, through testing, that these controls are effective.FF may not be able to complete its evaluation, testing or any required remediation in a timely fashion, or at all. FF cannot assure you that the measures it has taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to its material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. The effectiveness of FF’s internal control over financial reporting is subject to various inherent limitations, including cost, judgments and assumptions, human error and the risk of fraud. The material weaknesses, or a failure to promptly remediate them, may adversely affect our business, our reputation, our results of operations and the market price of our Class A common stock, par value $0.0001 per share (“Class A Common Stock”). If FF is unable to remediate the material weaknesses in a timely manner, our investors, customers and other business partners may lose confidence in our business or our financial reports, and our access to capital markets may be adversely affected.

In addition, our ability to record, process, and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and regulations of the Securities and Exchange Commission (“SEC”) and other regulatory authorities, could be adversely affected, which may result in violations of applicable securities laws, stock exchange listing requirements and the covenants under our debt and equity agreements. Any such delays or deficiencies could penalize us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and hurt our reputation and could thereby impede our ability to implement our growth strategy. We could also be exposed to lawsuits, investigations, or other legal actions.

The control deficiencies resulting in the material weaknesses, in the aggregate, has resulted, and may in the future result, in misstatements of accounts or disclosures that would result in a material misstatement of the annual or interim consolidated financial statements. For example, in July 2023, the Company identified errors in its Annual Report on Form 10-K for the year

ended December 31, 2022 and Quarterly Report on Form 10-Q for the periods ended March 31, 2023 and September 30, 2022, determined these financial statements should no longer be relied upon, and subsequently restated them.

In addition, we cannot be certain that we will not identify additional control deficiencies or material weaknesses in the future. If we identify future control deficiencies or material weaknesses, these may lead to adverse effects on our business, our reputation, our results of operations, and the market price of our Class A Common Stock. Further, if our remedial measures are insufficient to address the material weaknesses, or if additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate additional financial results.

Further, FF has recently experienced substantial turnover in key management personnel, including legal and compliance personnel, as well as substantial changes to the composition of the Board, and further changes may occur in the future. See “– The composition of FF’s Board has changed, and may further change.” As a result these Board and management changes, there can be no guarantee that the Company’s board of directors (the “Board”) as composed in the future will agree with decisions made by the Board regarding the material weakness and the necessary remedial measures, that they will not identify other areas that require remediation or that they will continue to pursue the remediation measures. Any turnover of personnel, particularly accounting, finance and legal personnel, may also negatively impact FF’s internal controls over financial reporting and other disclosures and our ability to prepare and make timely and accurate public disclosures.

FF needs to raise additional capital to support its operations.

FF operates in a capital-intensive industry which requires significant cash to fund its operations. As of September 30, 2023, FF’s cash position was $8.6 million, including restricted cash of $1.9 million. FF expects its capital expenditures to continue to be significant for the foreseeable future as it continues to develop and grow its business. In response to the delay in obtaining funding commitments and negative macroeconomic trends in the industry in which FF operates, such as supply chain pressures, rising interest rates, and high inflation, FF has identified and implemented certain cost reduction and cash conservation measures, including headcount and temporary salary reductions and supplier payment deferrals. FF expects to defer the completion of construction of certain areas in its manufacturing facility and for the ramp up of production to be slower relative to previous plans.

Despite having 330 non-binding, fully refundable pre-orders as of September 30, 2023, the Company has only recognized $0.6 million in revenue for the three and nine months ended of September 30, 2023. Accordingly, FF relies on capital from investors to support its operations.

Currently, FF has several financing agreements, such as the Secured SPA, Unsecured SPA, the Unsecured Streeterville SPA, the SEPA, FFVV Joinder, and the Senyun Joinder (each as defined in Note 7, Notes Payable, in the Notes to Unaudited Condensed Consolidated Financial Statements in this Report). However, certain investors under FF’s existing financing agreements may not fund their commitments if the volume-weighted average price for the Class A Common Stock is less than $8.00 for the five trading days prior to the closing date for the funding. Furthermore, there can be no assurance that FF would be able to satisfy the closing conditions under certain of the existing financing agreements, or that FF will be able to successfully obtain additional purchasers under the certain of the agreements. Accordingly, the Company needs additional financing agreements to support its operations, including the production and delivery of the FF 91 Futurist.

FF may raise additional funds through the issuance of equity, equity related or debt securities, or through obtaining credit from financial institutions or governmental organizations. The Company has continued financing discussions with multiple parties, but has experienced delays in securing additional funding commitments, which have exacerbated the supply chain pressures on FF’s business. If the Company is unable to obtain additional financing on acceptable terms, in a timely manner, or at all the Company’s business, liquidity and results of operations may be materially adversely affected. Further, any additional financing is expected to dilute FF’s stockholder value, which would affect your investment in FF and/or adversely effect the market for FF’s shares.

If our ongoing capital raising efforts are unsuccessful or significantly delayed, or if we experience prolonged material adverse trends in our business, our production will be delayed or decreased, and our actual use of cash, production volume and revenue for 2023 will vary from our previously disclosed forecasts, and such variances may be material. In addition the Company’s assumptions and analyses relating to its various financing options currently being considered, including professional fees and other cost, and ongoing legal risks related to these financing transactions may prove incorrect. Incremental capital needs beyond the date hereof to fund development of the Company’s remaining product portfolio and ramp up production will be highly dependent on the market success and profitability of the FF 91 Futurist and the Company’s ability to

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

FF has significant unfunded commitments from its investors. If FF is unable to satisfy the conditions to funding or if there is a dispute regarding the conversion requirements related to the unfunded commitments, FF may not have enough capital to support its business and could be subject to investor legal claims.

Pursuant to the Secured SPA, Unsecured SPA, the Unsecured Streeterville SPA, FFVV Joinder, and the Senyun Joinder, the Company has obtained commitments from several investors totaling $513.5 million in convertible note financing and $20.0 million in committed forced warrant exercise proceeds, subject to certain conditions. A total of $300.2 under these commitments has been funded as of September 30, 2023 ($263.2 million net of original discount and transaction costs) with the remaining unfunded commitment of $213.3 million. There can be no assurance that FF will be able to successfully satisfy the conditions to receive the additional funding. Further, if FF fails to satisfy these funding conditions to receive the unfunded commitments, the Company may be required to further delay our production and delivery plans for the FF 91 Futurist, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, and/or cease operations. In addition, during and after the third quarter of 2023, the Company temporarily suspended effecting the conversion requests from its noteholders. While the Company has begun effecting these conversion requests, there can be no assurance that the Company will not again suspend effecting such requests in a manner that could result in an event of default and monetary penalties under the various securities purchase agreements. Further, the Company may be subject to legal claims by the investors, which could have a material and adverse impact on FF’s reputation and financial condition.

FF may also be subject to legal claims arising from disagreement over the terms of its securities. For example, FF previously issued certain convertible notes (the “Senyun Notes”) to Senyun. The Senyun Notes are subject to a restriction that FF will not convert the Senyun Notes, and Senyun will not have the right to convert the Senyun Notes, to the extent that Senyun would own more than 9.99% of the Company’s outstanding common stock, par value $0.0001 per share (the “Common Stock”) of FF after giving effect to the conversion. In May 2023, Senyun requested to convert the Senyun Notes into shares of Common Stock and FF converted a certain amount of the Senyun Notes. FF did not convert the Senyun Notes that would have resulted in Senyun owning more than 9.99% of the Common Stock. However, Senyun believes that the Senyun Notes should have been converted in full in accordance with its interpretation of conversion limitations in the Senyun Notes. The Company disputes this interpretation. In July 2023 and October 2023, Senyun sent the Company a letter outlining its position and reserving its rights under the Secured SPA. Further, pursuant to the Senyun Joinder, Senyun agreed to exercise its option to purchase $15.0 million of Tranche A Notes (as defined in Note 7, Notes Payable, in the Notes to Unaudited Condensed Consolidated Financial Statements in this Report) in accordance with the terms of the Secured SPA, with funding of 75% of such amount within five business days of the date of ~~this report, there~~the Senyun Joinder and the remaining 25% of such amount within three business days thereafter, subject to certain conditions which have been nosatisfied. As of September 30, 2023, Senyun has funded $11.5 million of its obligation and has not funded the remaining $3.5 million until the disagreement described herein is resolved. The Company is in active discussions to resolve the disagreement. However, it is not possible at this time to predict the outcome of the disagreement with Senyun and if it is not resolved, Senyun may not fund its remaining obligation.

Further, any litigation, proceedings or dispute related to legal claims of the Company’s investors, even those without merit, may divert the Company’s financial and management resources that would otherwise be used to benefit the future performance of the Company’s operations. Any adverse determination against the Company in any potential proceedings may also result in settlements, injunctions or damages that could have a material adverse effect on the Company’s business, financial condition and results of operations and investors or other financing sources may be unwilling to provide additional funding to FF on commercially reasonable terms, or at all, as a result of any legal claims.

If FF has insufficient reserves to cover future warranty claims, its business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected.

As our vehicles are produced and delivered, we will need to maintain warranty reserves to cover warranty-related claims. If our warranty reserves are inadequate to cover future warranty claims on our vehicles, our business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected. Additionally, estimating the necessary amount of warranty reserves is inherently uncertain, particularly in light of our limited operating history and limited field data available to us, and changes to such estimates based on real-world observations may cause material changes to our warranty reserves. In the future, we may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims. In addition, if future laws or regulations impose additional warranty obligations on us that go beyond our manufacturer’s warranty, we may be exposed to materially higher warranty expenses than we expect, and our reserves may be insufficient to cover such expenses.

FF might not obtain and maintain sufficient insurance coverage, which could expose FF to significant costs and business disruption.

FF may be subject to losses resulting from claims such as product liability, accidents, force majeure or other claims brought against the Company, for which it may have no or insufficient insurance coverage. As FF commercializes its vehicles, it may not maintain as much insurance coverage as other OEMs, and in some cases, it may not maintain any at all. Additionally, the policies that FF has may include significant deductibles or exclusions, and FF cannot be certain that its insurance coverage will be sufficient to cover all or any future claims. A loss that is uninsured or exceeds existing policy limits may require FF to pay unexpected and substantial amounts, which could adversely affect FF’s financial condition and results of operations. Further, insurance coverage may not continue to be available to FF or, if available, may be at a significantly higher cost, based on insurance market conditions or a change in FF’s risk ~~factors disclosed~~profile. This may require a change in FF’s insurance purchasing philosophy and strategy which can result in the assumption of greater risks to offset insurance market fluctuations.

FF is subject to legal proceedings, claims, and disputes arising both in and outside the ordinary course of business.

FF has been, continues to be, and may in the future be involved in legal proceedings and claims arising both in and outside the ordinary course of FF’s business. We could also be subject to claims and litigation by investors based on the decline of the price of our Common Stock. For example, FF has been involved in litigation with contractors and suppliers over past due payments and FF’s subsidiaries in the People’s Republic of China (the “PRC Subsidiaries”) are involved in multiple proceedings or disputes involving lease contracts, third-party suppliers or vendors, or labor disputes. Additionally, FF has in the past been, and may in the future be, party to various disputes with our stockholders, such as the dispute with FF Global Partners LLC (“FF Global”), the California Federal Derivative Action, the Delaware Federal Derivative Actions, the Consolidated Delaware Class Action, and a putative class action (each as defined in Note 9, Commitments and Contingencies). See “Part I, Item 1. Financial Statements – Note 9, Commitments and Contingencies” and “Part II, Item 1. Legal Proceedings” for more information regarding the current proceedings the Company is involved in.

Such litigation and other legal proceedings or disputes are inherently uncertain, divert managements time and attention, and are costly. Any adverse judgments or settlements in some of these legal disputes, or future proceedings or disputes, may result in adverse monetary damages, penalties or injunctive relief against FF, which could negatively impact its financial position, cash flows or results of operations. Additionally, if one or more of those legal matters were resolved against FF in a reporting period for amounts above management’s expectations, FF’s business prospects, financial condition and operating results could be materially adversely affected. Further, any claims or litigation, regardless of outcome or if fully indemnified or insured, could damage FF’s reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.

Furthermore, while FF maintains insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as retentions and caps on amounts recoverable. Even if FF believes a claim is covered by insurance, insurers may dispute its entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of FF’s recovery.

In the event that the independent registered public accounting firm operating in China that FF uses as an auditor for its operations in China is not permitted to be subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”), then investors may be deprived of the benefits of such inspection.

Under the Holding Foreign Companies Accountable Act (the “HFCA”), if the SEC determines that a company has filed audit reports by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC shall prohibit such ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. The PCAOB provides a framework to use when determining, as contemplated under the HFCA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. Additionally, the SEC has disclosure requirements that apply to registrants that the SEC identifies as having filed an Annual Report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

Our current auditor, the independent registered public accounting firm that issued the audit report included the Form 10-K/A, is registered with the PCAOB, and is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Accordingly, we have not been identified as a “Commission-Identified Issuer” by the PCAOB under the current framework of the HFCA. However, prior to 2022, the

auditors of the PRC Subsidiaries were not subject to inspection by the PCAOB and any future determination by the PCAOB that the PRC Subsidiaries’ auditors are not subject to inspection could materially adversely affect the Company.

Our ability to retain an auditor subject to PCAOB inspection and investigation may depend on the relevant positions of U.S. and Chinese regulators. If the PCAOB is unable to inspect or investigate completely the Company’s auditor in China because of a position taken by the Chinese authorities, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCA, and ultimately result in a determination by the SEC to delist the Company’s securities. Such a prohibition would substantially impair an investor’s ability to sell or purchase the Common Stock and negatively impact the price of the Common Stock. Accordingly, the HFCA calls for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially non-U.S. auditors. In addition, PCAOB inspections help improve future audit quality and effectiveness. Without the benefit of PCAOB inspections, existing or potential investors could lose confidence in our ~~Annual Report~~reported financial information and the quality of our financial statements with respect to the PRC Subsidiaries.

There can be no assurance that FF will be able to comply with the continued listing standards of Nasdaq.

If the Nasdaq Stock Market LLC (“Nasdaq”) delists FF’s shares from trading on its exchange for failure to meet the applicable listing standards, we and our stockholders could face significant material adverse consequences including:


			●			a limited availability of market quotations for our securities;


			●			reduced liquidity for our securities;


			●			a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of our Common Stock;


			●			a limited amount of news and analyst coverage; and


			●			a decreased ability to issue additional securities or obtain additional financing in the future.

On October 31, 2022, we received written notice from Nasdaq that we were not in compliance with the Nasdaq requirement for the bid price for Class A Common Stock to be at least $1.00 per share (the “Minimum Bid Price Requirement”). In order to comply with the Minimum Bid Price Requirement, in the third quarter of 2023, the Company, after stockholder approval, effected the Reverse Stock Split at a ratio of 1:80 and set the number of authorized shares of Class A Common Stock to 154,437,500. Nasdaq notified the Company that it had regained compliance with the Minimum Bid Price Requirement on September 13, 2023.

In addition, in connection with Mr. He’s resignation, and to comply with Nasdaq Listing Rule 5605(c)(4)(B), on August 2, 2023, the Company notified Nasdaq that the Company no longer complied with Nasdaq’s independent director and audit committee requirements as set forth in Listing Rule 5605 as the Board was not comprised of a majority of independent directors and the Audit Committee of the Board (the “Audit Committee”) was not comprised of at least three independent directors. The non-compliance was subsequently cured by the appointment of Mr. Peker as an independent member of the Board and Audit Committee.

Although, the Company has regained compliance with Nasdaq Listing Rules, there can be no assurance that the Company will remain compliant with such rules or other Listing Rules in the future. In particular, the rights granted to FF Global Partners LLC (“FFGP”) under the Amended Shareholder Agreement or other similar rights granted to other investors in the future may cause FF to fall out of compliance with certain of Nasdaq’s Listing Rules, including Nasdaq Rule 5640, which disallows the voting rights of existing stockholders to be disparately reduced through any corporate action or issuance. Any future non-compliance may be costly, divert management’s time and attention, and could have a material adverse effect on the Company’s business, reputation, financing, and results of operations.

FF may issue additional shares of Common Stock or preferred shares, which would dilute the interest of our stockholders.

FF may, in the future, issue a substantial number of additional shares of Common Stock or preferred stock. The issuance of additional shares of Common Stock or preferred stock:


			●			may significantly dilute the equity interest of investors;


			●			may subordinate the rights of holders of Common Stock if preferred stock is issued with rights senior to those afforded our Common Stock;


			●			could cause a change of control if a substantial number of shares of our Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and


			●			may adversely affect prevailing market prices for our Common Stock.

Sales of a substantial number of shares of our Class A Common Stock in the public market, including the resale of the shares of Common Stock held by FF stockholders pursuant to its registrations statements on Form ~~10-K/A for the year ended December 31, 2022~~S-3 filed with the SEC or pursuant to Rule 144, could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of Common Stock intend to sell shares, could reduce the market price of the Class A Common Stock. Pursuant to our obligations under the Secured SPA, Unsecured SPA, Unsecured Streeterville SPA, FFVV Joinder and the Senyun Joinder, we have registered 23,671,743 shares of Class A Common Stock issuable upon conversion of the Secured SPA Notes, the Unsecured SPA Notes and the exercise of Warrants (the “August Registration Statement”). Such securities represent approximately 74.5% of the shares of Class A Common Stock outstanding as of September 30, 2023. The August Registration Statement permits the resale of these shares until it is no longer effective. The resale, or expected or potential resale, of a substantial number of shares of our Class A Common Stock in the public market could adversely affect the market price for the Class A Common Stock and make it more difficult for you to sell your holdings at times and prices that you determine are appropriate. Furthermore, because there is a large number of shares registered under the August Registration Statement, we expect the selling Stockholders (as defined in the August Registration Statement and related prospectus) will continue to offer the securities covered thereby pursuant to the August Registration Statement or Rule 144 for a significant period of time, the precise duration of which cannot be predicted. Accordingly, the adverse market and price pressures resulting from an offering pursuant to the August Registration Statement may continue for an extended period of time.

In addition, as of September 30, 2023, the Class A Common Stock is also subject to potential dilution from: (i) the exercise of up to 4,391,895 warrants, (ii) the exercise of up to 428,081 stock options, (iii) the vesting of 177,650 unvested RSUs, (iv) the issuance of up to 312,500 earnout shares pursuant to the triggering events in the Merger Agreement and (v) the issuance of up to 289,001 remaining registered shares of Class A Common Stock that FF may elect, in its sole discretion, to issue and sell to Yorkville pursuant to the SEPA. Additionally, the Class A Common Stock is subject to potential dilution upon the full conversion and exercise of the SPA Notes, Unsecured SPA Notes and SPA Warrants. The Class A Common Stock is also subject to potential dilution due to issuance of Common Stock in connection with future equity and/or convertible debt financings. Sales of substantial numbers of such shares in the public market, including the resale of the shares of Common Stock held by FF stockholders, could adversely affect the market price of the Class A Common Stock, the impact of which is increased as the value of our stock price increases.

FFGP is able to exert substantial influence over FF, including by delaying or preventing a change in control.

Under the Amended Shareholder Agreement, FFGP is entitled to nominate a number of directors based on ~~August~~its voting power with respect to FF’s outstanding Common Stock, currently entitling FFGP to nominate four out of seven directors to the Board of FF. In addition, on September 23, 2022 and January 13, 2023, FF, FF Global and FFGP entered into governance settlements with FFGP, including with respect to the composition of the Board.

As a result, certain of FF’s stockholders particularly FFGP, may have the ability to determine the outcome of corporate actions requiring stockholder approval. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our Class A Common Stock.

Additionally, FFGP beneficially owns, directly or indirectly, all of the outstanding shares of the Company’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), which accounts for approximately 2.5% of FF’s total outstanding shares of Common Stock (i.e., Class A Common Stock and Class B Common Stock combined) and voting power as of September 30, 2023. Under FF’s Third Amended and Restated Certificate of Incorporation, each share of Class A Common Stock is entitled to one vote per share and each share of Class B Common Stock is entitled to one vote per share, subject to an increase to 10 votes per share if the company reaches a $20.0 billion equity market capitalization. Pursuant to the Amended Shareholder Agreement, FFGP informed FF that it expects FF will submit a proposal to FF stockholders for approval to amend the Third Amended and Restated Certificate ofIncorporation to provide that (i) the voting power of the Class B Common Stock will be increased to 10 votes per share (after which the outstanding shares of Class B Common Stock, which FFGP beneficially owns, will account for approximately 19.7% of FF’s voting power) and (ii) the voting power of the Class B

Common Stock will increase from 10 votes per share to 20 votes per share following the Company achieving an equity market capitalization of $3.0 billion (after which the outstanding shares of Class B Common Stock, which FFGP beneficially owns, will account for approximately 32.9% of FF’s voting power). If FFGP obtains such enhanced voting rights, it would have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of the assets of FF, election of directors and other significant corporate actions. FFGP could take actions that are not in the best interest of FF or its other stockholders. This mechanism may discourage, delay or prevent a change in control, which could have the effect of depriving other stockholders of FF of the opportunity to receive a premium for their shares as part of a sale of FF.

Based on a Schedule 13D/A filed on June 21, 2023, FFGP has beneficial ownership over 1,346,856 shares of Common Stock, which includes: (i) 800,008 shares of Class A Common Stock issuable upon conversion of 800,008 shares of Class B Common Stock held by FFGP and (ii) shares for which FFGP has entered into voting agreements with certain FF stockholders pursuant to which FFGP will vote as a proxy of all of the Class A Common Stock owned by such FF stockholders subject to certain limitations. As a result, FFGP exercises voting power for less than 4.1% of FF’s outstanding Common Stock as of September 30, 2023. We

The Company’s ability to produce the FF 91 series on a meaningful scale at its Hanford, California facility may ~~disclose changes~~be substantially delayed or result in material unanticipated cost increases, which would have a material adverse impact on the Company’s business, prospects, financial condition, results of operations, and cash flows.

FF plans to ~~such factors or disclose additional factors from time~~continue building out its FF ieFactory in Hanford, California, to ~~time~~support the production of the FF 91 series. The Company may experience delays and other difficulties that could further increase costs and adversely affect FF’s scheduled timeline to manufacture and deliver vehicles at scale. Various risks and uncertainties inherent in ~~our future filings~~new manufacturing processes could result in delays in the production of FF’s vehicles including, for example, those with respect to the Company’s:

•ability to secure funding necessary to complete the build-out of the FF ieFactory California;

•securing permits and certificates required to manufacture FF’s vehicles at scale;

•pace of bringing production equipment and processes online with the ~~SEC.~~capability to manufacture high-quality units at scale;

•compliance with complex and evolving environmental, workplace safety and similar regulations;

•channels to secure necessary equipment, tools and components from suppliers on acceptable terms or at all and in a timely manner;

•the ability to attract, recruit, hire and train skilled employees;

•quality controls;

•facing a health emergency such as the outbreak of the COVID-19 pandemic, difficult economic conditions, and international political tensions; and

•other delays and cost increases and overruns.

If the Company in unable to timely produce the FF 91 series on a meaningful scale at FF ieFactory California or experiences unanticipated cost increases or overruns, it would have a material adverse impact on its business, prospects, financial condition, results of operations, and cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~None~~Pursuant to the Secured SPA, Unsecured SPA and Unsecured Streeterville SPA, each as amended or supplemented, the Company sold approximately $4.2 million in principal amount of SPA notes to investors since the filing of Item 3.02. Unregistered Sales of Equity Securities in the Form 8-K filed on October 18, 2023. The Company may sell an additional approximately $85.1 million in principal amount of SPA Notes.The SPA Notes were issued, to the extent issued, or will be issued, to the extent unissued, pursuant to the exemption from registration requirements of the Securities Act, provided by Section 4(a)(2) thereof.See “Part I, Item 1. Financial Statements—Note 7, Notes Payable” for additional information regarding the SPA Notes.

The SPA Notes, upon the funding, may be converted into shares of Class A Common Stock on a cashless basis at any time, at the request of the holders subject to the availability of registered shares or the note holder satisfying the holding period pursuant to Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”). As of November 9, 2023, the principal conversion price of the SPA Notes was $1.05 per share and the interest make whole conversion price was $3.6320 per share. The principal conversion price is subject to a anti-dilution adjustments, including full ratchet price protection if the

Company has a subsequent equity sale below $1.05 per share, subject to certain exceptions set forth in the convertible notes. For every $1.0 million of notes converted, the Company would issue 10,235,408, 1,187,789, 1,123,381, and 1,037,881 shares at a hypothetical per share price of Class A Common Stock of $0.10, $3.00, $5.00, and $10.00, respectively.

The shares to be issued upon conversion of the principal amounts under the convertible notes to each of the holders, will be issued pursuant to the exemption from the registration requirements of the Securities Act, provided by Section 3(a)(9) thereof.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None

6774

ITEM 6. EXHIBITS


Exhibit No.	Description of Exhibits		Incorporation by Reference

~~4.1~~3.1	~~Form~~Second Certificate of ~~Common Stock Purchase Warrant (under Securities Purchase Agreement, dated as~~Amendment to the Third Amended and Restated Certificate of ~~August 14, 2022) (incorporated by reference to Exhibit 4.1 to~~ Incorporation of Faraday Future Intelligent.		Exhibit 3.1 to the Current Report on Form 8-K/A filed on August 29, 2023
3.2	Certificate of Designation of Elimination of Series A Preferred.		Exhibit 3.1 to the Current Report on Form 8-K /A filed on August 29, 2023
3.3	Amended and Restated Bylaws of Faraday Futures Intelligent Electric ~~Inc,’s~~Inc. (effective as of June 12, 2023).		Exhibit 3.2 to the Current Report on Form 8-K filed ~~August 15, 2022)~~on June 16, 2023
~~4.2~~4.1	~~Form of~~ Common Stock Purchase Warrant, ~~(under Amendment No. 1~~dated August 4, 2023, issued to the Securities Purchase Agreement and Convertible Senior Secured Promissory Notes, dated as of September 23, 2022) (incorporated by reference to Streeterville Capital, LLC.		Exhibit 4.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed September 26, 2022)
~~4.3~~	Form of Adjustment Warrant (under Amendment No. 1 to Securities Purchase Agreement and Convertible Senior Secured Promissory Notes, dated as of September 23, 2022) (incorporated by reference to Exhibit 4.2 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed September 26, 2022)
~~10.1#~~	Second Amendment to Amended and Restated Employment Agreement by and among Faraday Future Intelligent Electric Inc., Faraday&Future Inc. and Carsten Breitfeld dated September 3, 2022 (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on September 6, 2022)
~~10.2~~	Amendment letter agreement, dated as of July 26, 2022, among Faraday Future Intelligent Electric Inc., FF Aventuras SPV XI, LLC, FF Adventures SPV XVIII LLC, FF Ventures SPV IX LLC and FF Venturas SPV X LLC (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’sthe Current Report on Form 8-K filed on August ~~2, 2022)~~7, 2023
~~10.3^~~4.2	Common Stock Purchase Warrant, dated September 21, 2023, issued to FF Vitality Ventures LLC.		Exhibit 4.1 to the Current Report on Form 8-K filed on September 22, 2023
10.1++	Offer Letter, dated July 11, 2023.		Exhibit 10.1 to the Current Report on Form 8-K filed on July 11, 2023
10.2	Securities Purchase Agreement, dated as of August ~~14, 2022,~~4, 2023, among Faraday Future Intelligent Electric Inc., FF Simplicity Ventures LLC and the purchasers from time to time party thereto incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s and Streeterville Capital, LLC.		Exhibit 10.1 to the Current Report on Form 8-K filed on August ~~15, 2022)~~7, 2023
~~10.4~~10.3	~~Form of~~Unsecured Convertible Senior ~~Secured~~ Promissory Note, ~~(under Securities Purchase Agreement,~~ dated ~~as of~~ August ~~14, 2022) (incorporated by reference~~4, 2023, issued to Streeterville Capital, LLC.		Exhibit 10.2 to Faraday Future Intelligent Electric Inc.’sthe Current Report on Form 8-K filed on August ~~15, 2022)~~7, 2023
~~10.5+~~10.4	Amendment No. 19 to Securities Purchase Agreement, and Convertible Senior Secured Promissory Notes, dated ~~as of September 23, 2022,~~August 4 2023, by and ~~among~~between Faraday Future Intelligent Electric Inc, the credit parties from time to time party thereto, the financial institutions or other entities from time to time party theretoInc. and FF ~~Simplicity~~Vitality Ventures LLC, as administrative and collateral agent (incorporated by referenceLLC.		Exhibit 10.3 to ~~Exhibit 10.3 to Faraday Future Intelligent Electric Inc.’s~~the Current Report on Form 8-K filed on ~~September 26, 2022)~~August 7, 2023
~~10.6~~10.5	~~Form of Convertible Senior Secured Promissory Note (under~~ Amendment No. 110 to Securities Purchase Agreement, dated August 4, 2023, by and Convertible Senior Secured Promissory Notes, dated as of September 23, 2022) (incorporated by reference to Exhibit 10.4 tobetween Faraday Future Intelligent Electric Inc.’s and Senyun International Ltd.		Exhibit 10.4 to the Current Report on Form 8-K filed on ~~September 26, 2022)~~August 7, 2023
~~10.7~~10.6	~~Joinder~~Waiver and Amendment Agreement, dated as of ~~September 25, 2022, by and~~August 4, 2023, among Senyun International Ltd., FF Simplicity Ventures LLC, RAAJJ Trading LLC and Faraday Future Intelligent Electric Inc. (incorporated by reference to Exhibit 10.5 to Faraday Future Intelligent Electric Inc.’s and FF Vitality Ventures LLC.		Exhibit 10.5 to the Current Report on Form 8-K filed on August 7, 2023
10.7	Employment Agreement, dated [ ], by and between Faraday Future Intelligent Electric Inc. and Mattias Aydt.
10.8	Form of Salary Deduction and Stock Purchase Agreement.		Exhibit 10.1 to the Current Report on Form 8-K filed on September ~~26, 2022)~~22, 2023
~~10.8~~10.9	~~Warrant Exercise~~Amendment Agreement, dated as of September ~~23, 2022,~~21, 2023, among Faraday Future Intelligent Electric Inc. and the investors listed on the signature pages thereto (incorporated by reference to Exhibit 10.6 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on September 26, 2022)
~~10.9+~~	~~Letter Agreement Regarding Advanced Approval, dated as of September 23, 2022, between Faraday~~ Future Intelligent Electric Inc. and FF ~~Top Holding LLC (incorporated by reference~~Vitality Ventures LLC.		Exhibit 10.1 to Exhibit 10.7 to Faraday Future Intelligent Electric Inc.’sthe Current Report on Form 8-K filed on September ~~26, 2022)~~22, 2023
~~10.10+~~10.10	~~Letter Agreement Regarding Advanced Approval,~~Unsecured Convertible Senior Promissory Note, dated ~~as of~~ September 23, 2022, between Faraday Future Intelligent Electric Inc. and Season Smart Ltd. (incorporated by reference21, 2023, issued to FF Vitality Ventures LLC.	Exhibit ~~10.8~~10.2 to ~~Faraday Future Intelligent Electric Inc.’s~~ the Current Report on Form 8-K filed on June 27, 2023	Exhibit 10.2 to the Current Report on Form 8-K filed on September ~~26, 2022)~~
~~10.11~~	Heads of Agreement, dated as of September 23, 2022, by and among Faraday Future Intelligent Electric Inc., FF Global Partners LLC and FF Top Holding LLC (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on September 26, 2022)
~~10.12~~	Mutual Release, dated as of September 23, 2022, among Faraday Future Intelligent Electric Inc., FF Global Partners LLC, FF Top Holding LLC and the other parties thereto (incorporated by reference to Exhibit 10.2 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on September 26, 2022)
~~10.13~~	Exchange Agreement, dated October 10, 2022, by and among Faraday Future Intelligent Electric Inc., FF Aventuras SPV XI LLC, FF Venturas SPV X LLC, FF Ventures SPV IX LLC and FF Adventures SPV XVIII LLC (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on October 11, 2022)

22, 2023


~~10.14~~			Exchange Agreement, dated October 19, 2022, by and among Faraday Future Intelligent Electric Inc., FF Aventuras SPV XI LLC, FF Venturas SPV X LLC, FF Ventures SPV IX LLC and FF Adventures SPV XVIII LLC (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on October 20, 2022)
~~10.15~~			Summary of Amendment dated October 22, 2022 to the Letter Agreement Regarding Advanced Approval, dated as of September 23, 2022, between Faraday Future Intelligent Electric Inc. and FF Top Holding LLC (incorporated by reference to Exhibit 10.47 to Faraday Future Intelligent Electric Inc.’s Amendment 6 to the Registration Statement on Form S-1 filed on November 8, 2022)
~~10.16~~			Limited Consent and Third Amendment to Securities Purchase Agreement, dated as of October 24, 2022, by and among Senyun International Ltd., FF Simplicity Ventures LLC, RAAJJ Trading LLC and Faraday Future Intelligent Electric Inc. (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on October 25, 2022)
~~10.17#~~			Offer Letter, dated October 22, 2022, by and between Faraday Future Intelligent Electric Inc. and Yun Han (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on October 26, 2022)
~~10.18~~			Limited Consent and Amendment, dated as of November 8, 2022, by and among Senyun International Ltd., FF Simplicity Ventures LLC, RAAJJ Trading LLC and Faraday Future Intelligent Electric Inc. (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’ Current Report on Form 8-K filed on November 8, 2022)
~~10.19~~			Standby Equity Purchase Agreement, dated as of November 11, 2022, by and between YA II PN, Ltd. and Faraday Future Intelligent Electric Inc. (incorporated by reference to Exhibit 10.1 to Faraday Future Intelligent Electric Inc.’s Current Report on Form 8-K filed on November 14, 2022)
31.1*			Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*			Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**			Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


32.2**			Certification of Principal ~~Financial~~Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			Inline XBRL Document Set for the unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements and accompanying notes to unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements
104			Cover Page Interactive Data File - formatted in Inline XBRL and included in Exhibit 101

* Filed herewith.

** Furnished herewith.

~~+ The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.~~

~~# Indicates management contract or compensatory plan or arrangement.~~

~~^ Portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.~~

6976

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Faraday Future Intelligent Electric Inc.

Date: ~~August 21,~~November 13, 2023


By:			/s/ ~~Xuefeng Chen~~Matthias Aydt
Name:			~~Xuefeng Chen~~Matthias Aydt
Title:			Global Chief Executive Officer
			(Principal Executive Officer)

By:			/s/ Jonathan Maroko
Name:			Jonathan Maroko
Title:			Interim Chief Financial Officer
			(Principal Accounting and Financial Officer)

7077


	September 30, 2022		December 31, 2021
	As Restated

Assets
Current assets
Cash	$	31,766	$	505,091
Restricted cash	2,162		25,386
Deposits	44,530		63,370
Other current assets	23,759		13,410
Total current assets	102,217		607,257
Property and equipment, net	411,657		293,135
Right of use assets	20,202		—
Other non-current assets	6,608		7,040
Total assets	$	540,684	$	907,432
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	65,239		37,773
Accrued payroll and benefits	31,124		21,752
Accrued expenses and other current liabilities	46,104		68,760
Related party accrued interest	12,760		11,231
Accrued interest	123		8,263
Operating lease liabilities, current portion	2,487		—
Finance lease liabilities, current portion	1,807		—
Related party notes payable	12,253		13,655
Notes payable, current portion	5,008		132,372
Total current liabilities	176,905		293,806
Operating lease liabilities, less current portion	18,640		—
Finance lease liabilities, less current portion	6,917		7,570
Other liabilities, less current portion	3,531		3,720
Notes payable, less current portion	46,950		34,682
Total liabilities	252,943		339,778
Commitments and contingencies (Note 12)
Stockholders’ equity
Class A Common Stock, $0.0001 par value; 750,000,000 shares authorized; 345,794,368 and 168,693,323 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	31		17
Class B Common Stock, $0.0001 par value; 75,000,000 shares authorized; 64,000,588 and no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	6		—
Additional paid-in capital	3,620,281		3,482,226
Accumulated other comprehensive gain (loss)	6,603		(6,945)
Accumulated deficit	(3,339,180)		(2,907,644)
Total stockholders’ equity	287,741		567,654
Total liabilities and stockholders’ equity	$	540,684	$	907,432


	Commitment to Issue Class A Common Stock	Common Stock					Additional Paid-in Capital (As Restated)		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit (As Restated)				Total Stockholders’ Equity (Deficit) (As Restated)
			Class A					Class B
				Shares	Amount								Shares				Amount				Shares				Amount
Balance as of June 30, 2022				—	$	32,900				238,543,475			$	24		64,000,588			$	6			$	3,491,041			$	(3,261)			$	(3,219,308)			$	268,502
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock				—	—				20,264,715		—				—		—				—				—				—				—
Transfer of private warrants to unaffiliated parties				—	—				—		—				—		—				186				—				—				186
Amendment of ATW NPA Warrants (Note 13)				—	—				—		—				—		—				1,238				—				—				1,238
Issuance pursuant to commitment to issue registered shares				—	(32,900)				2,387,500		—				—		—				32,900				—				—				32,900
Conversion of notes payable into class A common stock (as restated)				—	—				64,843,850		6				—		—				84,774				—				—				84,780
Stock-based compensation (as restated)				—	—				—		—				—		—				2,670				—				—				2,670
Exercise of stock options				—	—				3,137,272		—				—		—				7,181				—				—				7,181
Repurchase of common stock				—	—				(96,759)		—				—		—				(767)				—				—				(767)
Receipt of class A common stock in consideration of exercises of options				—	—				(311,878)		—				—		—				(669)				—				—				(669)
Exercise of warrants				—	—				17,026,193		1				—		—				1,727				—				—				1,728
Foreign currency translation adjustment				—	—				—		—				—		—				—				9,864				—				9,864
Net loss (as restated)				—	—				—		—				—		—				—				—				(119,872)				(119,872)
Balance as of September 30, 2022 (as restated)				—	$	—			345,794,368		$	31			64,000,588		$	6			$	3,620,281			$	6,603			$	(3,339,180)			$	287,741


	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
		Class A		Class B
									Shares(1)				Amount				Shares(1)				Amount
Balance as of June 30, 2021, as recast						107,659,654			$	10		64,000,588			$	6			$	1,973,314			$	(6,650)			$	(2,519,439)			$	(552,759)
Conversion of related party notes payable into Class A Common Stock (see Note 9)					11,566,196		1				—		—				160,436				—				—				160,437
Conversion of notes payable into Class A Common Stock (see Note 10)					7,688,153		1				—		—				98,374				—				—				98,375
Issuance of Class A Common Stock in the Business Combination, net of transaction costs (see Note 4)					27,798,411		3				—		—				170,111				—				—				170,114
Conversion of assumed PSAC convertible and promissory notes payable into Class A Common Stock (see Note 10)					80,000		—				—		—				790				—				—				790
Conversion of liabilities into Class A Common Stock in the Business Combination (see Note 4)					20,666,825		2				—		—				285,335				—				—				285,337
Conversion of liabilities into the commitment to issue Class A Common Stock in the Business Combination (see Note 4)					—		—				—		—				52,338				—				—				52,338
Legacy FF Ordinary Stock exchanged in the Business Combination for a commitment to issue Class A and Class B Common Stock					(117,839,510)		(12)				(64,000,588)		(6)				18				—				—				—
Issuance of Class A Common Stock in the PIPE Financing, net of transaction costs (see Note 4)					76,140,000		8				—		—				692,397				—				—				692,405
Settlement of lawsuit with issuance of vested stock options (see Note 13)					—		—				—		—				8,459				—				—				8,459
Settlement of accrued rent with issuance of vested stock options					—		—				—		—				951				—				—				951
Vesting of restricted stock award for employee bonus					—		—				—		—				14,620				—				—				14,620
Stock-based compensation					—		—				—		—				5,053				—				—				5,053
Exercise of stock options					1,078,495		—				—		—				2,740				—				—				2,740
Settlement of receivables through receipt of Class A Common Stock					(43,096)		—				—		—				(105)				—				—				(105)
Issuance of warrants					—		—				—		—				10,483				—				—				10,483
Foreign currency translation adjustment					—		—				—		—				—				189				—				189
Net loss					—		—				—		—				—				—				(303,906)				(303,906)
Balance as of September 30, 2021					134,795,128		$	13			—		$	—			$	3,475,314			$	(6,461)			$	(2,823,345)			$	645,521


Cash and restricted cash, beginning of period	530,477	1,827
Cash and restricted cash, end of period	33,928	691,144


	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Cash	$	505,091	$	1,124
Restricted cash	25,386		703
Total cash and restricted cash, beginning of period	$	530,477	$	1,827

Cash	$	31,766	$	666,061
Restricted cash	2,162		25,083
Total cash and restricted cash, end of period	$	33,928	$	691,144

Supplemental disclosure of noncash investing and financing activities
Conversion of related party notes payable and related party accrued interest into Class A Common Stock	—		294,796
Conversion of notes payable and accrued interest into Class A Common Stock	—		98,375
Conversion of assumed convertible and promissory notes payable into Class A Common Stock and Private Warrants	—		1,080
Recognition of operating right of use assets and lease liabilities upon adoption of ASC 842 and for new leases entered into in 2022	11,906		—
Additions of property and equipment included in accounts payable and accrued expenses	12,056		—
Issuance of Warrants	—		17,596
Issuance pursuant to commitment to issue registered shares	32,900		—
Receipt of class A common stock in consideration of exercises of options	669		—
Transfer of private warrants to unaffiliated parties	186		—
Conversion of convertible note to equity	84,780		—
Acquisitions of property and equipment included in accounts payable	—		270
Conversion of The9 Conditional Obligation to equity	—		2,863
Settlement of vendor payables in trust for a commitment to issue Class A Common Stock	—		96,186
Settlement of accounts payable for a commitment to issue Class A Common Stock	—		2,879

Supplemental disclosure of noncash investing and financing activities related to the Business Combination
Exchange of Legacy FF redeemable preference stock for a commitment to issue Class A Common Stock	$	—	$	859,182
Exchange of Legacy FF convertible preferred stock for a commitment to issue Class B Common Stock	—		697,611
Settlement of notes payable and accrued interest for a commitment to issue Class A Common Stock	—		68,541
Settlement of related party notes payable and related party accrued interest for a commitment to issue Class A Common Stock	—		69,218
Settlement of vendor payables in trust for a commitment to issue Class A Common Stock	—		96,186
Settlement of accounts payable for a commitment to issue Class A Common Stock	—		2,879
Reclassification of deferred transaction costs paid in prior periods against the proceeds received in the Business Combination	—		7,865

Supplemental disclosure of cash flow information
Cash paid for interest	$	12,721	$	5,837


	September 30, 2022
	As Previously Reported		Restatement Impacts		As Restated

Liabilities and stockholders’ equity
Current liabilities
Accrued interest	$	541	$	(418)	$	123
Total current liabilities	177,323		(418)		176,905
Total liabilities	253,361		(418)		252,943
Additional paid-in capital	3,603,368		16,913		3,620,281
Accumulated deficit	(3,322,685)		(16,495)		(3,339,180)
Total stockholders’ equity	287,323		418		287,741
Total liabilities and stockholders’ equity	$	540,684	$	—	$	540,684


	Three Months Ended September 30, 2022
	As Previously Reported		Restatement Impacts		As Restated
Operating expenses
Research and development	$	48,062	$	(480)	$	47,582
Sales and marketing	3,888		(65)		3,823
General and administrative	28,655		(104)		28,551
Loss on disposal of property and equipment	—		—		—
Total operating expenses	80,605		(649)		79,956

Loss from operations	(80,605)		649		(79,956)
Change in fair value measurements	(6,966)		5,202		(1,764)
Interest expense	(663)		418		(245)
Related party interest expense	(996)		—		(996)
Other (expense) income, net	(6,457)		—		(6,457)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net	(7,690)		(22,764)		(30,454)
Loss before income taxes	(103,377)		(16,495)		(119,872)
Income tax provision	—		—		—
Net loss	$	(103,377)	$	(16,495)	$	(119,872)

Per share information:
Net loss per Common Stock – Class A and Class B – basic and diluted	$	(0.30)	$	(0.05)	$	(0.35)
Weighted average Common shares outstanding – Class A and Class B – basic and diluted	346,575,508		—		346,575,508

Total comprehensive loss:
Net loss	$	(103,377)	$	(16,495)	$	(119,872)
Change in foreign currency translation adjustment	9,864		—		9,864
Total comprehensive loss	$	(93,513)	$	(16,495)	$	(110,008)


Supplemental disclosure of noncash investing and financing activities
Conversion of convertible note to equity	$	67,218	$	17,562	$	84,780


	Bridge Warrants		Notes Payable at Fair Value		Private Warrants		Obligation to Issue Registered Shares
Balance as of December 31, 2021	$	—	$	161,282	$	642	$	12,635
Additions	6,971		44,500		—		—
Changes in fair value measurements (as restated)	(2,285)		653		(326)		—
Payments of notes payable, including Payment Premium	—		(87,065)		—		—
Conversions of notes to common stock (as restated)	—		(72,420)		—		—
Reclassification of Private Warrants to Public Warrants	—		—		(186)		—
Reclassification of obligation to issue registered shares upon adoption of ASC 2020-06			—		—		(12,635)
Balance as of September 30, 2022	$	4,686	$	46,950	$	130	$	—


Note Name	Contractual Maturity Date	Contractual Interest Rates	Balance as of September 30, 2022		Interest Expense for the Three Months Ended September 30, 2022		Interest Expense for the Nine Months Ended September 30, 2022
Related party notes – China(1)	Due on Demand	18%	$	8,451	$	996	$	2,931
Related party notes – China various other	Due on Demand	—%	3,802		—		—
			$	12,253	$	996	$	2,931


	Nine months ended September 30, 2022
Note Name	Contractual Maturity Date	Contractual Interest Rates	Net carrying value at 12/31/2021		Fair Value Measurement Adjustments		Payment Premium		Cash Payment		Conversion into Class A Common Stock
March 1, 2021 Notes (1)	March 1, 2022	14%	$	56,695	$	(1,695)	$	—	$	(55,000)	$	—
August 26, 2021 Notes (1)	March 1, 2022	14%	30,924		(924)		2,065		(32,065)		—
June 2021 Notes (3)	October 31, 2026	0%	35,071		917		—		—		(35,988)
Optional Notes (3)	October 31, 2026	15%	31,934		(704)		—		—		(31,230)
PPP Loan (2)	April 17, 2022	1%	193		—		—		(193)		—
			$	154,817	$	(2,406)	$	2,065	$	(87,258)	$	(67,218)


	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Finance lease cost
Amortization of right-of-use assets	$	91	$	273
Interest on lease liabilities	169		520
Total finance lease cost	260		793

Operating lease cost	434		1,966
Variable lease cost	24		425
Total lease cost	$	718	$	3,184


Fiscal year	Operating Leases		Finance Leases
2022	$	1,289	$	643
2023	5,259		2,166
2024	5,482		1,757
2025	5,243		1,792
2026	5,197		1,828
Thereafter	12,173		1,864
Total	34,643		10,050
Less: Imputed Interest	13,516		1,326
Present value of net lease payments	21,127		8,724

Lease liability, current portion	$	2,487	$	1,807
Lease liability, net of current portion	18,640		6,917
Total lease liability	$	21,127	$	8,724


Year ended December 31,
2022	$	2,384
2023	2,695
2024	2,775
2025	2,859
2026	2,944
Thereafter	991
	$	14,648


Year ended December 31,
2022	$	2,574
2023	2,166
2024	1,757
2025	1,792
2026	1,840
Thereafter	1,864
	$	11,993


	September 30, 2022
	Authorized Shares	Issued Shares
Preferred Stock	10,000,000	—
Class A Common Stock	750,000,000	345,794,368
Class B Common Stock	75,000,000	64,000,588
	835,000,000	409,794,956


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	—
Granted	6,632,387	3.68
Exercised	—	—
Cancelled/forfeited	(469,181)	5.32
Outstanding as of September 30, 2022	6,163,206	$	3.56	9.55	$	—


	September 30, 2022		September 30, 2021
Risk-free interest rate:	2.46	%	0.79	%
Expected term (in years):	7.16		6.05
Expected volatility:	42.17	%	42.10	%
Dividend yield:	0.00	%	0.00	%


	September 30, 2022	September 30, 2021
Stock-based compensation awards – SI Plan	6,163,206	—
Stock-based compensation awards – EI Plan	25,272,474	32,137,760
Stock-based compensation awards – STI Plan	6,457,011	9,529,482
Restricted stock awards	—	1,364,018
Public Warrants	23,375,988	22,977,568
Private Warrants	276,131	674,551
ATW NPA Warrants	28,431,635	3,874,166
Bridge Warrants	42,342,839	—
Other Warrants	1,429,068	670,092
ATW NPA Notes	8,982,677	9,009,210
Bridge Notes	46,918,768	—
Make-Whole Amount	32,954,973	—
Total	222,604,770	80,236,847


	Payments Due by Period
	Total		2022 (3 months)		2023 - 2024		2025 - 2026		Thereafter
	(in thousands)
Operating lease obligations	$	34,643	$	1,289	$	10,741	$	10,440	$	12,173
Finance lease obligations	10,050		643		3,923		3,620		1,864
Related party notes payable	12,253		12,253		—		—		—
Related party accrued interest	12,760		12,760		—		—		—
Notes payable	56,207		8,914		2,687		44,606		—
Accrued interest (as restated)	123		123		—		—		—
Palantir license	41,667		2,667		19,500		19,500		—
Total contractual obligations	$	167,703	$	38,649	$	36,851	$	78,166	$	14,037