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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A10-Q
Amendment No. 1
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2023
OR
☐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)
Delaware84-4720320
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareFFIEThe Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $11.50$920.00 per shareFFIEWThe 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 1,076,721,34256,616,338 shares of Class A common stock and 64,000,588800,008 shares of Class B common stock as of May 5,November 9, 2023.

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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 March 31, 2023, originally filed with the Securities and Exchange Commission (the “SEC”) on May 12, 2023 (the “Original Filing”), to restate certain information in the Company's previously issued consolidated financial statements and related disclosures for the period ended March 31, 2023. 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 September 30, 2022 (originally filed with the SEC on November 21, 2022).

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 September 30, 2022.

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 aforementioned error in its accounting for the conversion of the notes payable issued under its debt arrangements. During the course of correcting the aforementioned error, the Company identified an error in its accounting for the exercise of its liability-classified warrants that were previously issued in connection with the issuance of certain convertible notes payable under its debt arrangements. 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.

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,

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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.

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Table of ContentsFaraday Future Intelligent Electric Inc.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PagesPage
FARADAY FUTURE INTELLIGENT ELECTRIC INC.
Part I Financial InformationPART I. FINANCIAL INFORMATION
Item 1.
3
Condensed Consolidated Statements of Operations and Comprehensive Loss Loss for the Three Months Ended March 31, 2023 and 2022(Unaudited)
4
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022(Unaudited)
5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022(Unaudited)
79
911
Item 2.
1943
Item 3.
4362
Item 4.
4362
Part II Other InformationPART II. OTHER INFORMATION
Item 1.
4867
Item 1A.Risk Factors
4867
Item 2.
4873
Item 3.
4874
Item 4.
4874
Item 5.
4874
Item 6.
4975
5077

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PartPART I - Financial InformationFINANCIAL INFORMATION
ITEMItem 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)
(Unaudited)
March 31, 2023December 31, 2022
As RestatedAs RestatedSeptember 30, 2023December 31, 2022
AssetsAssetsAssets
Current assetsCurrent assetsCurrent assets
CashCash$31,769 $16,968 Cash$6,714 $16,968 
Restricted cashRestricted cash1,505 1,546 Restricted cash1,853 1,546 
InventoryInventory35,215 4,457 
DepositsDeposits55,405 44,066 Deposits62,556 44,066 
Other current assetsOther current assets14,717 21,946 Other current assets20,963 17,489 
Total current assetsTotal current assets103,396 84,526 Total current assets127,301 84,526 
Property and equipment, netProperty and equipment, net447,171 418,682 Property and equipment, net416,514 406,320 
Finance lease right-of-use assetsFinance lease right-of-use assets12,090 12,362 
Operating lease right-of-use assetsOperating lease right-of-use assets18,911 19,588 Operating lease right-of-use assets17,370 19,588 
Other non-current assetsOther non-current assets6,458 6,492 Other non-current assets6,252 6,492 
Total assetsTotal assets$575,936 $529,288 Total assets$579,527 $529,288 
Liabilities and stockholders’ equityLiabilities and stockholders’ equityLiabilities and stockholders’ equity
Current liabilitiesCurrent liabilitiesCurrent liabilities
Accounts payableAccounts payable$80,244 $91,603 Accounts payable$101,857 $91,603 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities66,980 65,709 Accrued expenses and other current liabilities68,446 65,709 
Warrant liabilitiesWarrant liabilities1,613 92,781 
Related party warrant liabilitiesRelated party warrant liabilities117 — 
Accrued interestAccrued interest25 189 
Related party accrued interestRelated party accrued interest— — Related party accrued interest139 — 
Bridge Warrants28,521 92,781 
Accrued interest25 189 
Operating lease liabilities, current portionOperating lease liabilities, current portion2,609 2,538 Operating lease liabilities, current portion3,755 2,538 
Finance lease liabilities, current portionFinance lease liabilities, current portion1,390 1,364 Finance lease liabilities, current portion1,442 1,364 
Related party notes payable9,201 8,964 
Related party notes payable, current portionRelated party notes payable, current portion8,830 8,964 
Notes payable, current portionNotes payable, current portion5,159 5,097 Notes payable, current portion4,929 5,097 
Total current liabilitiesTotal current liabilities194,129 268,245 Total current liabilities191,153 268,245 
Finance lease liabilities, less current portionFinance lease liabilities, less current portion6,209 6,570 Finance lease liabilities, less current portion5,475 6,570 
Operating lease liabilities, less current portionOperating lease liabilities, less current portion17,398 18,044 Operating lease liabilities, less current portion14,868 18,044 
Other liabilitiesOther liabilities9,758 9,429 Other liabilities10,783 9,429 
Related party notes payable, less current portionRelated party notes payable, less current portion2,945 — 
Notes payable, less current portionNotes payable, less current portion92,665 26,008 Notes payable, less current portion92,500 26,008 
Total liabilitiesTotal liabilities320,159 328,296 Total liabilities317,724 328,296 
Commitments and contingencies (Note 12)
Commitments and contingencies (Note 9)Commitments and contingencies (Note 9)
Stockholders’ equityStockholders’ equityStockholders’ equity
Class A Common Stock, $0.0001 par value; 1,690,000,000 and 815,000,000 shares authorized; 838,872,039 and 563,346,216 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively84 56 
Class B Common Stock, $0.0001 par value; 75,000,000 shares authorized; 64,000,588 shares issued and outstanding as of March 31, 2023 and December 31, 20226 6 
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, respectivelyClass 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, respectively3 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, respectivelyClass 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 capitalAdditional paid-in capital3,924,465 3,724,180 Additional paid-in capital4,128,990 3,724,241 
Accumulated other comprehensive gain2,950 3,505 
Accumulated other comprehensive incomeAccumulated other comprehensive income7,512 3,505 
Accumulated deficitAccumulated deficit(3,671,728)(3,526,755)Accumulated deficit(3,874,702)(3,526,755)
Total stockholders’ equityTotal stockholders’ equity255,777 200,992 Total stockholders’ equity261,803 200,992 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$575,936 $529,288 Total liabilities and stockholders’ equity$579,527 $529,288 
    
TheSee accompanying notes are an integral part of theseto unaudited Condensed Consolidated Financial Statements.
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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,
2023202220232022
Revenues
Auto sales$551 $— $551 $— 
Cost of revenues
Auto sales16,131 — 22,744 — 
Gross loss(15,580)— (22,193)— 
Operating expenses
Research and development21,593 47,582 104,670 259,741 
Sales and marketing5,318 3,823 18,082 16,207 
General and administrative24,023 28,551 67,598 89,069 
Loss on disposal of property and equipment— — 3,698 1,407 
Change in fair value of earnout liability(67)— 2,033 — 
Total operating expenses50,867 79,956 196,081 366,424 
Loss from operations(66,447)(79,956)(218,274)(366,424)
Change in fair value of notes payable and warrant liabilities17,571 (1,764)90,030 4,580 
Change in fair value of related party notes payable and related party warrant liabilities4,726 — 5,110 — 
Loss on settlement of notes payable(21,357)(30,454)(204,885)(30,454)
Loss on settlement of related party notes payable(10,756)— (17,248)— 
Interest expense(90)(245)(591)(5,119)
Related party interest expense(69)(996)(139)(2,931)
Other expense, net(1,624)(6,457)(1,922)(14,307)
Loss before income taxes(78,046)(119,872)(347,919)(414,655)
Income tax provision— — (28)(9)
Net loss$(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)$(100.26)
Diluted(3.78)(27.67)(23.28)(100.26)
Weighted average shares used in computing net loss per share of Class A and B Common Stock:
Basic20,647,430 4,332,194 14,944,452 4,135,984 
Diluted20,647,430 4,332,194 14,944,452 4,135,984 
Total comprehensive loss
Net loss$(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
March 31,
20232022
As Restated
Operating expenses
Research and development$57,808 $114,935 
Sales and marketing5,065 6,186 
General and administrative26,513 27,880 
Loss on disposal of property and equipment3,698 — 
Change in fair value of earnout liability2,764 — 
Total operating expenses95,848 149,001 
Loss from operations(95,848)(149,001)
Change in fair value of notes payable and warrant liabilities48,135 1,186 
Loss on settlement of notes payable(98,136)— 
Interest expense(292)(3,746)
Related party interest expense— (622)
Other income (expense), net1,168 (915)
Loss before income taxes(144,973)(153,098)
Income tax provision— — 
Net loss$(144,973)$(153,098)
Per share information (Note 15):
Net loss per Common Stock – Class A and Class B – basic and diluted$(0.20)$(0.48)
Weighted average common shares outstanding – Class A and Class B – basic and diluted721,566,030 322,211,392 
Total comprehensive loss:
Net loss$(144,973)$(153,098)
Change in foreign currency translation adjustment(555)(564)
Total comprehensive loss$(145,528)$(153,662)
TheSee accompanying notes are an integral part of theseto unaudited Condensed Consolidated Financial Statements.
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Faraday Future Intelligent Electric Inc.
Condensed Consolidated StatementsStatement of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Unaudited)
(in thousands,, except share and per share data)
(Unaudited)
Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive Gain
(Loss)		Accumulated DeficitTotal Stockholders’ Equity
Class AClass B
SharesAmountSharesAmount
As RestatedAs RestatedAs Restated
Balance as of December 31, 2022 (as restated)563,346,216 $56 64,000,588 $6 $3,724,180 $3,505 $(3,526,755)$200,992 
Conversion of notes payable and accrued interest into Class A Common Stock (Note 10) (as restated)223,539,619 22 — — 138,158 — — 138,180 
Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange (Note 10)— — — — (6,811)— — (6,811)
Reclassification of earnout shares liability to equity as part of authorized share increase— — — — 5,014 — — 5,014 
 Reclassification of liability for insufficient authorized shares related to stock options and RSUs (as restated)— — — — 8,978 — — 8,978 
 Stock-based compensation (as restated)— — — — 3,631 — — 3,631 
 Exercise of warrants (as restated)51,128,708 5 — — 51,271 — — 51,276 
 Exercise of stock options49,456 — — — 44 — — 44 
 Issuance of shares for RSU vesting808,040 1 — — — — — 1 
 Foreign Currency translation adjustment— — — — — (555)— (555)
 Net loss (as restated)— — — — — — (144,973)(144,973)
Balance as of March 31, 2023 (as restated)838,872,039 $84 64,000,588 $6 $3,924,465 $2,950 $(3,671,728)$255,777 

The
Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Accumulated DeficitTotal Stockholders’ Equity
Class AClass B
SharesAmountSharesAmount
Balance as of June 30, 202317,796,893 $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 Stock1,617,500 — — — 8,520 — — 8,520 
Reverse Stock split related round up share issuances163,885 — — — — — — 
Stock-based compensation— — — — 216 — — 216 
Issuance of shares for RSU vesting net of tax withholdings3,767 — — — (358)— — (358)
Foreign currency translation adjustment— — — — — (1,560)— (1,560)
Net loss— — — — — — (78,046)(78,046)
Balance as of September 30, 202331,764,093 $3 800,008 $— $4,128,990 $7,512 $(3,874,702)$261,803 
See accompanying notes are an integral part of theseto unaudited Condensed Consolidated Financial Statements.




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Faraday Future Intelligent Electric Inc.
Condensed Consolidated StatementsStatement of Stockholders’ Equity (Unaudited)
(in thousands, except share data)
Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive Income		Accumulated DeficitTotal Stockholders’ Equity
Class AClass B
SharesAmountSharesAmount
Balance as of December 31, 20227,041,828 $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 Stock1,617,500 — — — 8,520 — — 8,520 
 Reverse Stock split related round up share issuances163,885 — — — — — — — 
 Stock-based compensation— — — — 4,840 — — 4,840 
 Exercise of warrants639,109 — — — 51,276 — — 51,276 
 Exercise of stock options619 — — — 44 — — 44 
 Issuance of shares for RSU vesting net of tax withholdings32,330 — — — (458)— — (458)
 Cancellations(3,092)— — — — — — — 
 Foreign currency translation adjustment— — — — 4,007 — 4,007 
 Net loss— — — — — (347,947)(347,947)
Balance as of September 30, 202331,764,093 $3 800,008 $— $4,128,990 $7,512 $(3,874,702)$261,803 
See accompanying notes to unaudited Condensed Consolidated Financial Statements.
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Faraday Future Intelligent Electric Inc.
Condensed Consolidated Statement of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Unaudited)
(in thousands,, except share and per share data)
(Unaudited)

Commitment to Issue Class A Common StockCommon StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive Gain
(Loss)		Accumulated DeficitTotal Stockholders’ Equity (Deficit)
Class AClass B
SharesAmountSharesAmountSharesAmount
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 StockCommon StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Accumulated DeficitTotal Stockholders’ Equity (Deficit)
Class AClass B
SharesAmountSharesAmountSharesAmount
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 (Note 10)— 32,900 — — — — — — (20,265)(20,265)
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 (Note 4)— — 68,742,020 7 64,000,588 6 (13)— — — 
Stock-based compensation— — — — — — 3,347 — — 3,347 
Exercise of stock options— — 761,675 — — — 1,855 — — 1,855 
Foreign currency translation adjustment— — — — — — — (564)— (564)
Net loss— — — — — — — — (153,098)(153,098)
Balance as of March 31, 2022— $32,900 238,197,018 $24 64,000,588 $6 $3,487,415 $(7,509)$(3,077,614)$402,322 
See accompanying notes to unaudited Condensed Consolidated Financial Statements.

The
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Faraday Future Intelligent Electric Inc.
Condensed Consolidated Statement of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Unaudited)
(in thousands, except share data)

Commitment to Issue Class A Common StockCommon StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive Gain
(Loss)		Accumulated DeficitTotal Stockholders’ Equity (Deficit)
Class AClass B
SharesAmountSharesAmountSharesAmount
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)$287,741 
See accompanying notes are an integral part of theseto unaudited Condensed Consolidated Financial Statements.
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Table of Contents
Faraday Future Intelligent Electric Inc.
Condensed Consolidated StatementsStatement of Cash Flows (Unaudited)
(in thousands)
(Unaudited)
Three Months Ended
March 31,
20232022
As Restated
Cash flows from operating activities
Net loss$(144,973)$(153,098)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense1,103 4,853 
Stock-based compensation8,633 3,347 
Loss on disposal of property and equipment3,698 — 
Change in fair value measurement of related party notes payable and notes payable(79,462)(1,186)
Change in fair value measurement of warrant liability
31,327 — 
Change in fair value measurement of earnout liability2,764 — 
Amortization of operating lease right-of-use assets and intangible assets736 — 
Loss on foreign exchange653 894 
Non-cash interest expense34 2,319 
Loss on settlement of notes payable98,136 — 
Other661 108 
Changes in operating assets and liabilities:
Deposits(12,108)6,840 
Other current and non-current assets7,227 2,095 
Accounts payable(11,044)5,747 
Accrued expenses and other current liabilities(9,626)14,527 
Operating lease liabilities(542)(882)
Accrued interest expense(197)(7,928)
Net cash used in operating activities$(102,980)$(122,364)
Cash flows from investing activities
Payments for property and equipment(16,873)(44,398)
Net cash used in investing activities$(16,873)$(44,398)
Cash flows from financing activities
Proceeds from notes payable, net of original issuance discount131,800 — 
Proceeds from exercise of warrants4,079 — 
Payments of notes payable(6)(87,065)
Settlement of notes payable transaction costs(1,139)— 
Payments of finance lease obligations(335)(466)
Proceeds from exercise of stock options44 1,855 
Net cash (used in) provided by financing activities$134,443 $(85,676)
Effect of exchange rate changes on cash and restricted cash170 (653)
Net (decrease) increase in cash and restricted cash$14,760 $(253,091)
Cash and restricted cash, beginning of period18,514 530,477 
Cash and restricted cash, end of period33,274 277,386 
in thousands)








Nine Months Ended September 30,
20232022
Cash flows from operating activities
Net loss$(347,947)$(414,664)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense27,673 2,532 
Stock-based compensation8,906 9,144 
Loss on disposal of property and equipment3,698 1,407 
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(90,461)(4,580)
Change in fair value of earnout liability1,381 — 
Change in operating lease right-of-use assets    2,491 2,265 
Loss on foreign exchange218 2,484 
Loss on write-off of vendor deposits, net408 2,992 
Non-cash interest expense— 8,050 
Loss on settlement of notes payable204,885 30,454 
Loss on settlement of related party notes payable17,248 — 
Other1,008 324 
Changes in operating assets and liabilities:
Deposits(19,237)13,364 
Inventory(30,758)— 
Other current and non-current assets(3,415)(10,656)
Accounts payable13,838 27,467 
Accrued payroll and benefits— 9,372 
Accrued expenses and other current liabilities(23,332)(21,117)
Operating lease liabilities(1,838)(1,226)
Accrued interest expense(26)(12,721)
Net cash used in operating activities(240,370)(355,109)
Cash flows from investing activities
Payments for property and equipment(10,846)(112,099)
Net cash used in investing activities(10,846)(112,099)
Cash flows from financing activities
Proceeds from related party notes payable, net of original issuance discount19,782 — 
Proceeds from notes payable, net of original issuance discount208,650 40,050 
Proceeds from the sale of Common Stock, net of issuance costs8,520 — 
Proceeds from exercise of warrants4,074 1,728 
Payments of notes payable— (87,258)
Payment of notes payable issuance costs(2,489)(2,813)
Payments of finance lease obligations(1,016)(1,410)
Repurchase of Common Stock— (767)
Proceeds from exercise of stock options44 9,535 
Net cash provided by (used in) financing activities237,565 (40,935)
Effect of exchange rate changes on cash and restricted cash3,704 11,594 
Net decrease in cash and restricted cash(9,947)(496,549)
Cash and restricted cash, beginning of period18,514 530,477 
Cash and restricted cash, end of period$8,567 $33,928 
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Faraday Future Intelligent Electric Inc.
Condensed Consolidated StatementsStatement of Cash Flows (Unaudited)
(in thousands)
(i
n thousands)
(Unaudited)
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:
Three Months Ended
March 31,
20232022
Cash$31,769 $276,374 
Restricted cash1,505 1,012 
Total cash and restricted cash, end of period$33,274 $277,386 
Supplemental disclosure of cash flow information
Cash paid for interest$324 $10,040 
Supplemental disclosure of noncash investing and financing activities
Additions of property and equipment included in accounts payable and accrued expenses$17,249 $1,881 
Reclassification of liability for insufficient authorized shares related to stock options and RSUs8,979 — 
Reclassification of earnout shares liability to equity as part of authorized share increase5,014 — 
Conversion of notes payable and accrued interest into Class A Common Stock (as restated)138,180 — 
Issuance of SPA Notes pursuant to the Exchange Agreement (Note 10)41,000 — 
Issuance of SPA Warrants pursuant to the Exchange Agreement (Note 10)26,455 — 
Disposal of SPA Warrants and ATW NPA Warrants pursuant to the Exchange Agreement (Note 10)77,577 — 
Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange (Note 10)6,811 — 
Recognition of operating right of use assets and lease liabilities upon adoption of ASC 842 and for new leases entered into in 2022— 8,206 
The
September 30, 2023December 31, 2022
Cash and restricted cash
Cash$6,714 $16,968 
Restricted cash1,853 1,546 
Total cash and restricted cash$8,567 $18,514 
Nine Months Ended
September 30,
20232022
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 increase5,014 — 
Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares2,112 — 
Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares2,979 — 
Reclassification of August 25, 2023 earnout shares liability to equity due to authorized share increase1,381 — 
Reclassification of August 25, 2023 stock-based awards liability to equity due to authorized share increase2,043 — 
Conversion of related party notes payable and related party accrued interest into Class A Common Stock11,254 — 
Conversion of notes payable and accrued interest into Class A Common Stock114,073 — 
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 Warrants34,257 — 
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 payable34,124 — 
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 interest465 12,721 
See accompanying notes are an integral part of theseto unaudited Condensed Consolidated Financial Statements.
810

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(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 (the “Closing Date”), the Company consummated a business combination pursuant to an Agreementagreement and Planplan of Mergermerger 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. (“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”). 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 execution of the Merger Agreement, the Company entered into separate Subscription Agreementssubscription 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 76,140,000951,750 shares of Class A Common Stock (as defined below in this Note), for a purchase price of $10.00$800.00 per share with an aggregate purchase price of $761.4 million (“PIPE Financing”). Shares sold and issued in the PIPE Financing included registration rights. The closing of the Private Placementprivate 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 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 unaudited 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, its wholly-owned subsidiaries and all other entities in which the Company has a controlling financial interest, including the accounts of any Variable Interest Entity (“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.
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, 2022, included in the Company’s Form 10-K10-K/A filed with Securities and Exchange Commission (“SEC”)the SEC on March 9,August 21, 2023 (“Form 10-K”10-K/A”). Accordingly, the Condensed Consolidated Balance Sheet as of December 31, 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, 2022, included in the Form 10-K,10-K/A, except as described below.
Certain reclassifications have been made to prior periods inOur annual reporting period is the Consolidated Financial Statements and accompanying notes to conform with the current presentation. Buildings and Leasehold improvements within Property and Equipment, Net were previously presented separatelycalendar year. The results of operations for the yearnine months ended December 31, 2022. BeginningSeptember 30, 2023 are not necessarily indicative of the two lines were conformedresults to report these two balances together.be expected for the full year.
911

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
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 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; (v) fair value of options granted to employees and non-employees; (vi) fair value of warrants, and (vii) 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 under different assumptions, financial inputs, or circumstances.
Given the global economic climate, unpredictable nature and unknown duration of the COVID-19 pandemic, 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. 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.
Revenue Recognition

Automotive sales revenue was $0.6 million for the three and nine months ended September 30, 2023. Services and other revenue was immaterial for the three and nine months ended September 30, 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
12

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, 2023Nine Months Ended September 30, 2023
Accrued warranty- beginning of period$— $— 
Provision for warranty262 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 (“LCNRV”) and consists of raw materials, work-in-progress,work in progress, and finished goods. The Company primarily computes cost using standard cost, which approximates cost on the first-in, first-out (“FIFO”) basis. Net realizable value (“NRV”) 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. As of March 31, 2023, substantially all of
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 Company’s inventory balance is classifiedassets
13

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
lives, are charged to operating expense as raw materials. Inventoryincurred. 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 Other currentthe 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)
Buildings39
Building improvements15
Computer hardware5
Tooling, machinery, and equipment5 to 10
Vehicles5
Computer software3
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 unauditedCompany’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 Sheet.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
Forfeiture rate - Effective January 1, 2023, stock-based compensation expense is reduced for forfeitures only when they occur. This change of accounting policy resulted in the recognition of a cumulative increase of prior stock-based compensation expenses totaling $1.8 million, which was recorded in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023.
Income Tax
There was noThe income tax provision impact on(benefit) recognized in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended March 31,September 30, 2023 and 2022.2022 was immaterial. The difference in the Company’s effective tax rate from the federal statutory rate of 21% is primarily due to the ratio offull 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.
14

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 March 31,September 30, 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 March 31,September 30, 2023 and 2022, as the uncertain tax benefits only reduced the net operating losses. The Company does not expect the uncertain
10

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
tax benefits to have a material impact on its unaudited Condensed Consolidated Financial Statements within the next twelve months.
Recent Accounting Pronouncements
Recently issued accounting pronouncements not yet adoptedReclassifications
In December 2022,Certain reclassifications have been made to the FASB issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848) (ASU 2022-06). ASU 2022-06 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limitedprior period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2022-06 deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. ASU 2022-06 is effective as of December 21, 2022 through December 31, 2024. We continue to evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis.
2.    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 September 30, 2022.

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). Between 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 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 additional $95.1 million Loss on settlement of notes payable in the Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023 (and a corresponding $95.1 million increase in Additional paid-in capital as of March 31, 2023) 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 first quarter of 2023.

During the course of correcting the aforementioned error, the Company identified an error in its accounting for the exercise of its liability-classified warrants that were previously issued in connection with the issuance of certain convertible notes payable under its debt arrangements. Upon exercise of the warrants the Company did not properly reclassify the fair value of the warrant liabilities on each conversion date to Additional paid-in capital. Rather, the Company incorrectly recognized the extinguishment of the warrant liabilities as a gain in the Change in fair value of warrant liabilities in the Statement of Operations and Comprehensive Loss. Accordingly, the Company should have recognized an increase in Additional paid-in capital of $47.2 million as of March 31, 2023 with a corresponding impact on the Change in the fair value of warrant liabilities for the period then ended.

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 most significant of which is the Company’s $11.6 million understatement of Deposits with vendors and Inventory as of December 31, 2022 due to improperly recognizing such amount as Research and development expense during the fourth quarter of 2022 and subsequently correcting such error as
11

Faraday Future Intelligent Electric Inc.
Notes toaccompanying Condensed Consolidated Financial Statements
(Unaudited)
an out of period adjustment during to conform with the first quarter of 2023. The other immaterial errors impactingcurrent presentation. Inventory and Finance lease right-of-use assets are now separately presented in the Company’s financial statementsCondensed Consolidated Balance Sheets, as of March 31, 2023they were previously included in Other current assets and for the three months then ended relate to Change in fair value of earnout liability, Change in fair value of notes payable and warrant liabilities, Interest expense, Related party interest expense, Stock-based compensation expense, Other income (expense), net, Property and equipment, Accounts payable, Related party accrued interest, Accrued interest, Related party notes payable, Additional paid-in capital, Accumulated deficit, and weighted average shares outstanding. 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:net, respectively (see Note 4, Note 5, Deposits and Other Current Assets;Assets and Note 6, 5, Property and Equipment, Net;Net). In addition, the Buildings and Leasehold improvements within Property and equipment, net (see Note 8, Fair Value of Financial Instruments; Note 9, Related Party Notes Payable; Note 10, Notes Payable; Note 14, Stock-Based Compensation;5, Property and Note 15,Equipment, Net Loss per Share.

Presented below is a reconciliation from the) have been combined, as they were previously reported to the restated amounts as of and for the three months ended March 31, 2023. The amounts labeled “As Previously Reported” were derived from the Original Filing. The impacts topresented separately. On the Condensed Consolidated Statement of CommitmentCash 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 Issue154,437,500 (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.
All shares of Common Stock, Public Warrants, stock-based compensation awards, earnout shares and per share amounts contained in the Condensed Consolidated Financial Statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split. In addition, proportionate adjustments were made to the number of shares of Class A Common Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2023 as a resultissuable upon exercise or conversion of the restatement were due toCompany’s outstanding convertible debt securities and warrants, as well as the changes inapplicable exercise or conversion prices. See Note 10, Stockholders' Equity , and Note 11, Stock-Based Compensation, for further discussion regarding the Conversion of notes payable and accrued interest into Class A CommonReverse 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 three months ended March 31, 2023 as a result of the restatement.

Split.
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
March 31, 2023
As Previously ReportedRestatement ImpactsAs Restated
Assets
Property and equipment, net$446,524 $647 $447,171 
Total assets$575,289 $647 $575,936 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable$76,926 $3,318 $80,244 
Related party accrued interest140 (140)— 
Accrued interest2,505 (2,480)25 
Related party notes payable8,643 558 9,201 
Total current liabilities192,873 1,256 194,129 
Total liabilities318,903 1,256 320,159 
Stockholders’ equity
Additional paid-in capital3,723,446 201,019 3,924,465 
Accumulated deficit(3,470,098)(201,630)(3,671,728)
Total stockholders’ equity256,386 (609)255,777 
Total liabilities and stockholders’ equity$575,289 $647 $575,936 

12

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Condensed Consolidated Statement of Operations and Comprehensive Loss
Three Months Ended
March 31, 2023
As Previously ReportedRestatement ImpactsAs Restated
Operating expenses
Research and development$46,160 $11,648 $57,808 
Sales and marketing5,585 (520)5,065 
General and administrative27,584 (1,071)26,513 
Loss on disposal of property and equipment3,698 — 3,698 
Change in fair value of earnout liability— 2,764 2,764 
Total operating expenses83,027 12,821 95,848 
Loss from operations(83,027)(12,821)(95,848)
Change in fair value of notes payable and warrant liabilities94,917 (46,782)48,135 
Loss on settlement of notes payable(3,021)(95,115)(98,136)
Interest expense(4,651)4,359 (292)
Related party interest expense(140)140 — 
Other income (expense), net2,409 (1,241)1,168 
Income (loss) before income taxes6,487 (151,460)(144,973)
Income tax provision— — — 
Net income (loss)$6,487 $(151,460)$(144,973)
Per share information (Note 15):
Net income (loss) per share of Class A and B Common Stock attributable to common stockholders:
Basic$0.01 $(0.21)$(0.20)
Diluted(0.07)(0.13)(0.20)
Weighted average shares used in computing net income (loss) per share of Class A and B Common Stock:
Basic657,565,442 64,000,588 721,566,030 
Diluted988,638,662 (267,072,632)721,566,030 
Total comprehensive income (loss):
Net income (loss)$6,487 $(151,460)$(144,973)
Change in foreign currency translation adjustment(555)— (555)
Total comprehensive income (loss)$5,932 $(151,460)$(145,528)









13

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Summary of Restatement - Condensed Consolidated Statement of Cash Flows
Three Months Ended
March 31, 2023
As Previously ReportedRestatement ImpactsAs Restated
Cash flows from operating activities
Net income (loss)$6,487 $(151,460)$(144,973)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense1,103 — 1,103 
Stock-based compensation15,102 (6,469)8,633 
Loss on disposal of property and equipment3,698 — 3,698 
Change in fair value measurement of related party notes payable and notes payable(79,462)— (79,462)
Change in fair value measurement of warrant liability
(18,219)49,546 31,327 
Change in fair value measurement of earnout liability2,764 — 2,764 
Amortization of operating lease right-of-use assets and intangible assets736 — 736 
Loss on foreign exchange653 — 653 
Non-cash interest expense4,533 (4,499)34 
Loss on settlement of notes payable3,021 95,115 98,136 
Other338 323 661 
Changes in operating assets and liabilities:
Deposits(29,370)17,262 (12,108)
Other current and non-current assets6,368 859 7,227 
Accounts payable(10,367)(677)(11,044)
Accrued expenses and other current liabilities(9,626)— (9,626)
Operating lease liabilities(542)— (542)
Accrued interest expense(197)— (197)
Net cash used in operating activities$(102,980)$— $(102,980)
Three Months Ended
March 31, 2023
As Previously ReportedRestatement ImpactsAs Restated
Supplemental disclosure of noncash investing and financing activities
Conversion of notes payable and accrued interest into Class A Common Stock$46,296 $91,884 $138,180 
3.2.    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.
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 $3,671.7$3.9 billion and a cash balance of $6.7 million as of March 31,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 9,8, Related Party Notes PayableTransactions, and Note 10, Notes Payable), the sale of Preferred and Common Stock
1415

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
(see Note 13,7, Stockholders' EquityNotes Payable), the sale of Common Stock, and the net proceeds received from the Business Combination and the PIPE Financing (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 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 not recognized anyan 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 SLMDSmart Last Mile Delivery electric vehicle models that appeal to customers. Based onAs a result of certain management assumptions, including timely completion of certain testing and the 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 informed FF that they will bewere unable to meet FF’s timing requirements and, therefore, FF has updated the timing for the start of deliveries for its FF 91 vehicle. Based on the revised delivery plan, FF expects the first phase of thehas developed a three-phase delivery plan to begin atfor the end of May 2023, and the second phase of the three-phase delivery plan to begin at the end of the second quarter of 2023, followed by the third phase.FF 91 (the “Delivery Plan”). The first phase is the “Industry Expert Futurist Product Officer (FPO)(“FPO”) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) willare 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 vehicle will be deliveredvehicles to the FPO at the beginning ofduring the second phase. The second phase, which is the “FPO Co-Creation Delivery.” In thisthe second phase, FPO(s) will takeare taking possession of the FF 91 vehicle.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.Delivery,” In this third phase,in which, FF will deliver FF 91 vehicles to all spire users that payare expected to have paid in full for an FF 91 vehicle.vehicle at time of delivery.
The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to needneeds substantial additional financing to start the third phase of the delivery planDelivery Plan and is in discussions with additional potential investors to obtain such financing. As FF executes the three-phase delivery plan,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 Futurist 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.terms if at all. Further, there cannot be any assurance that FF will be able to secure additional funding, under reasonable commercial terms if at all, 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. Additionally, certain investors underSince August 14, 2022, pursuant to the SPA may not fund their commitments untilSecurities 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 increases the numberhas obtained commitments from several investors totaling $513.5 million in convertible note financing. A total of authorized shares$300.2 million under these convertible note financing commitments has been funded ($263.2 million net of its Class A Common Stockoriginal discount and registers the securities underlying the SPA Warrantstransaction 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 SPA Notes insatisfaction or waiver of certain conditions, including for a portion of such financing an effective registration statement.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 capital raising efforts are unsuccessful or significantly delayed, or if FF experienceexperiences prolonged material adverse trends in its business, FF’s production will be delayed or decreased, and actual use of cash, production volume and revenue for 2023 will vary from the Company’s previously disclosed forecasts, and such variances may be material. While FF is 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 the ongoing legal risks. Incremental capital needs beyond 2023 to
16

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 costs. Apart from the FF 91 series, substantial additional capital will be required to fund operations, research, development, design, and designmanufacturing efforts for future vehicles.
As part of the SPA, as amended (as defined in Note 10, Notes Payable), the Company has obtained commitments from several investors totaling $267.0 million in new convertible note financing and in committed forced warrant exercise proceeds, subject to certain conditions. A total of $220.3 million under these commitments has been funded to date, through which the Company has received $193.3 million (net of original discount and transaction costs). The right to force exercise of the Warrant Reserve (defined in Note 10, Notes Payable) expired upon the holders exercising their warrants during 2023. In February 2023, Senyun and a purchaser affiliated with ATW Partners LLC exercised 20% of their respective options to purchase additional senior secured notes and SPA Warrants (defined in Note 10, Notes Payable) of the Company under the same terms as the
15

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Incremental Notes (defined in Note 10, Notes Payable). The Company received aggregated gross proceeds of $38.0 million ($32.9 million net of original issuance discount and transaction costs) in exchange for such issuances.
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 underat FF’s option) of Class A common stock (“Class A Common Stock”)Stock to an affiliate of Yorkville, Advisors, subject to certain limitations, at the time of the Company’s choosing during the three yearthree-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 May 8,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 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 aon September 26, 2023 with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Purchase AgreementInc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC (the “Unsecured SPA”) with Metaverse Horizon Limited and V W Investment Holding Limited (the ”Unsecured SPA Purchasers”“Sales Agents”) to issueoffer and sell subjectup 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 satisfactionSales 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 certain closing conditions, $100.0 million1933, as amended. The aggregate principal amountcompensation payable to the Sales Agents is up to 3.5% of the Company’s senior unsecured convertible promissory notes. On May 10,gross sales price of the shares sold through the Sales Agents. During the three and nine months ended September 30, 2023, the Company receivedissued 780,000 shares of Class A Common Stock under the Sales Agreement for gross cash proceeds pursuant to the Unsecured SPA totaling $3.3of $1.3 million ($3.0 million netless placement agent fees of original issuance cost). The Unsecured SPA Purchasers committed to fund in eight subsequent closings fifteen days apart, subject to the satisfaction of certain closing conditions. In addition, any Unsecured SPA Purchaser may postpone or cancel any closing pursuant to the Unsecured SPA in its reasonable discretion if it reasonably determines, based on public information, that the first phase of the Company’s three-phase delivery plan as disclosed in public filings has not begun or will not begin prior to May 31, 2023 and/or the second phase of such delivery plan has not begun or will not begin prior to June 30, 2023, in each case within 15 calendar days of such deadline.$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 March 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 accurately estimate and control costs.
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 Company is exploring various funding and financing alternatives to fund its ongoing operations and to ramp up production, after start of production, including equipment leasing, construction financing of the Hanford,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.
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, and other potential impact of the COVID-19 pandemic. Refer to the section titled, “Risk Factors” in the Company’s Form 10-K for a full discussion of the risks associated with the COVID-19 pandemic. 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.general macroeconomic conditions.
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.objectives, and the Company will likely not be able to continue as a going concern.
1617

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
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.
As of and since December 31, 2022, the Company was and 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 such notes subsequently waived the default. Since April 2023, the Company was operating in compliance with all covenants related to debt agreements, however as of the date of issuance of the unaudited Condensed Consolidated Financial Statements the Company ishas been in breach of its debt agreement with Chongqing Leshi Small Loan Co., Ltd., a related party, with aan outstanding principal balance of $4.7$4.5 million. As a result of December 31, 2022,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 waswill be able to maintain sufficient authorized shares to fully settle all outstanding equity-linked financial instruments in default on the Bridge Notes. Subsequentshares.
3.    Inventory
(in thousands)September 30, 2023December 31, 2022
Raw materials (net of reserves)$33,839 $4,457 
Work in progress1,063 — 
Finished goods313 — 
Total inventory$35,215 $4,457 
The increase in inventory is due to the datestart of the Consolidated Financial Statements, the holders of the Bridge Notes waived the default.
4.    Variable Interest Entitiesproduction on March 29, 2023. The inventory reserve was $1.0 million and Joint Ventures
The The9 Arrangement
On March 24, 2019, the Company entered into a Joint Venture Agreement (“JVA”) with The9 Limited (“The9”). Pursuant to the JVA, the Company and The9 agreed to establish an equity joint venture in Hong Kong, which would in turn establish a wholly-owned subsidiary in China, intended to engage in the business of manufacturing, marketing, selling and distributing the planned Faraday Future Icon V9 model electric vehicle in China. The Company and The9 would each be 50% owners of the joint venture. The9 made a $5.0 million non-refundable initial deposit (“The9 Conditional Obligation”) to the Company to participate in the joint venture. The9 had the right to convert the initial deposit into various classes of stock in the Company. For accounting purposes, the deposit is a financial instrument that embodies a conditional obligation that the issuer may settle by issuing a variable number of shares. The9 Conditional Obligation was measured at fair value, was remeasured at each reporting period, and represented a Level 3 financial instrument under the fair value hierarchy (see Note 8, Fair Value of Financial Instruments). On November 22, 2020, the parties entered into an agreement to convert the initial deposit into 423,053 shares of Class A Common Stock of the Company, which were issued on February 23, 2021. Neither the Company nor The9 have made contributions to the joint venturezero as of March 31,September 30, 2023 and December 31, 2022, and it has yet to commence business activities.
The Geely Arrangement
In December 2020, the Company entered into a non-binding memorandum of understanding with Zhejiang Geely Holding Group Co., Ltd. (“Geely Holding”), which was also a subscriber in the PIPE Financing, pursuant to which the parties contemplate strategic cooperation in various areas including engineering, technology, supply chain, and contract manufacturing (“Geely JV”).
In January 2021, the Company and Geely Holding entered into a cooperation framework agreement and a license agreement (“Geely License”) that set forth the major commercial understanding of the proposed cooperation among the parties in the areas of potential investment into the Geely JV, engineering, technology, and contract manufacturing support. The foregoing framework agreement and the Geely License may be terminated if the parties fail to enter into the joint venture definitive agreement.
17
respectively.

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5.4.    Deposits and Other Current Assets (As Restated)
(in thousands)
Deposits:September 30, 2023December 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 assets9,703 3,052 
Total other current assets$20,963 $17,489 
Deposits and other current assets consist of the following (dollars in thousands):
Deposits:March 31, 2023December 31, 2022 (As Restated)
Deposits for research and development, prototype and production parts, and other (as restated)$52,436 $40,879 
Deposits for goods and services yet to be received (“Future Work”)2,969 3,187 
Total deposits$55,405 $44,066 
Other current assets:
Prepaid expenses$9,121 $14,437 
Inventory (as restated)4,049 4,457 
Other current assets1,547 3,052 
Total other current assets$14,717 $21,946 
During the three months ended March 31, 2023, the Company made deposits for research and developments (“R&D”) services,development, prototype and production parts, and other with its vendors, which supportare recognized and reported as Research and development expenses in the Company’s ongoing R&D effortsCondensed Consolidated Statement of Operations and operations. The Company expenses deposits as theComprehensive Loss when services are provided andor as prototype parts are received. In addition, during the three and nine months ended March 31,September 30, 2023, the Company made deposits for inventory and property and equipment items which are classified out of Deposits upon receipt of title.
In July 2022, the Company entered intoPrepaid expenses primarily consist of software subscriptions and insurance, and other current assets includes certain deferred expenses. As of September 30, 2023, Other current assets also includes an annual insurance policy for its directorsreceivable relating to a legal settlement with a corresponding liability recognized in Accrued expenses and officers (“D&O Policy”), which required itother current liabilities.
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Faraday Future Intelligent Electric Inc.
Notes to make a prepayment in the amount of $21,732, of which $5,433 was amortized to General and administrative expenses in the unauditedUnaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for three months ended March 31, 2023.Financial Statements
6.5.    Property and Equipment, Net (As Restated)
Property and equipment, net, consists of the following (dollars in thousands):
March 31, 2023 (As Restated)December 31, 2022 (As Restated)
Buildings and leasehold improvements$95,519 $19,778 
Computer hardware2,094 3,112 
Tooling, machinery, and equipment235,290 9,542 
Vehicles337 337 
Computer software4,125 4,212 
Construction in process (as restated)121,618 393,814 
Less: Accumulated depreciation(11,812)(12,113)
Total property and equipment, net$447,171 $418,682 
Depreciation expense related to property and equipment totaled $1.1 million and $0.8 million for the three months ended March 31, 2023 and 2022, respectively.
(in thousands)September 30, 2023December 31, 2022
Buildings and leasehold improvements$86,320 $5,598 
Computer hardware2,142 3,112 
Tooling, machinery and equipment265,760 9,542 
Vehicles669 337 
Computer software4,172 4,212 
Construction in process93,626 393,814 
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 $75.7 million to Tooling, machinery and equipment and Buildings and leasehold improvements, respectively, during the three months ended March 31, 2023. In the three months ended September 30, 2023, the Company made available for intended use another $30.7 million and $5.0 million of Tooling, machinery and equipment and Buildings and leasehold improvements, respectively.
18
Depreciation expense related to property and     equipment totaled $13.2 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively, and $27.5 million and $2.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
7.6.    Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities
(in thousands)September 30, 2023December 31, 2022
Accrued payroll and benefits$27,309 $20,502 
Accrued legal contingencies21,819 18,940 
Other current liabilities19,318 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 (dollars in thousands):
March 31, 2023December 31, 2022
Accrued payroll and benefits$25,481 $20,502 
Accrued legal contingencies16,000 18,940 
Engineering, design and testing services received not invoiced10,591 9,443 
Deposits from customers3,610 3,573 
Other current liabilities11,298 13,251 
Total accrued expenses and other current liabilities$66,980 $65,709 

In connection with the Palantir platform hosting arrangement entered into during 2021, the Company has accrued $3.0 million and $2.5 million as of March 31,September 30, 2023 and December 31, 2022, respectively, in other current liabilities and recorded $4.9 million and $2.5 million as of March 31, 2023 and December 31, 2022, respectively, in accounts payable. During the three months ended March 31, 2023 and 2022, the company recognized expense of $2.0 million related2022:
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 WarrantsNet
Carrying
Value
Secured SPA Notes (1)
Various10%-15%$113,376 $(20,945)$(13,567)$78,864 
Unsecured SPA Notes (1)*
Various dates in 202910%-15%20,073 133 (3,625)16,581 
Notes payable – China otherDue on Demand—%4,847 4,847 
Auto loansOctober 20267%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 Palantir hosting arrangement.
8.    Fair Value of Financial Instruments (As Restated)
Fair Value Measurements
The Company applies the provisions of ASC 820, Fair Value Measurement, which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. 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:
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.
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.Unsecured Streeterville SPA
19

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
Notes Payable
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 WarrantsNet
Carrying
Value
Secured SPA Notes (1)
October 27, 202810%$36,622 $264 $(10,878)$26,008 
Notes payable – China otherDue on Demand—%4,997 — — 4,997 
Auto loansOctober 20267%100 — — 100 
$41,719 $264 $(10,878)31,105 
Less: Notes payable, current portion(5,097)
Total: Notes payable, less current portion$26,008 
The Company has elected to measure certain notes payable at fair value. Specifically, the Bridge Notes (as defined below), issued pursuant to the SPA (as defined below), as amended as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 10, Notes Payable). The Company used a binomial lattice model and Black Scholes methodology to value various convertible notes payable. The significant assumptions used in the models 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.
Bridge Warrants
The Company has elected to measure the Bridge Warrants at fair value. 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. Fair value measurements associated with the liability-classified warrants represent Level 3 valuations under the fair value hierarchy.
SEPA
On November 23, 2022, the Company issued 789,016 Commitment Shares in satisfaction of the commitment fee agreed upon in the SEPA. During the period ended March 31, 2023 and as of the date of issuing the Condensed Consolidated Financial Statements, the Company did not direct Yorkville to buy any 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 $0.0 million as of March 31, 2023 and December 31, 2022.
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 on January 1, 2022, 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.
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.
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 $32.9 million.
The Company used the probability-weighted expected return method (“PWERM”) to determine the fair value of the obligation to issue registered shares. The PWERM framework is a scenario-based methodology that estimates the fair value of the obligation based upon an analysis of future values of the settlement of the obligation to issue shares, assuming various outcomes. The probability weightings assigned to certain potential scenarios were based on management’s assessment of the probability of settlement of the liability in cash or shares and an assessment of the timing of settlement. In the equity settlement scenario, the obligation valuation was based on the Company’s share price as of each valuation date. In the cash settlement scenario, the obligation valuation was based the cash payment that equates to the share price times total shares to be issued, discounted to each valuation date.
20

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Fair value measurements associated with the obligation to issue shares represent Level 3 valuations under the fair value hierarchy.
Private Warrants
The Private Warrants are classified as liabilities and the fair value is included in Other Liabilities, Less Current Portion on the Consolidated Balance Sheets. The Company valued the Private Warrants using a binomial lattice model. Inherent in a binomial lattice model are assumptions related to risk-free rate, annual dividend yield, expected warrant life, and volatility of the Company's stock. Changes in the fair value of the Private Warrants are recorded in Change in Fair Value Measurements in the Company’s Consolidated Statements of Operations and Comprehensive Loss. Fair value measurements associated with the Private Warrants liabilities represent Level 3 valuations under the fair value hierarchy.
Transfer of Private Warrants to Unaffiliated Third Parties
Upon transfer of Private Warrants to unaffiliated third-party purchasers on the open market, the transferred warrants become subject to identical terms to the Public Warrants (see Note 13, Stockholders' Equity). Therefore, upon their transfer the Company classified the warrants to APIC at their fair value of $0.0 million and $0.6 million, as of March 31, 2023 and December 31, 2022.
Liability Classified Instruments
From time to time, certain of the Company’s equity-linked financial instruments may be classified as derivative liabilities under ASC 815, Derivatives and Hedging, due to the Company having insufficient authorized shares to fully settle the equity-linked financial instruments in shares. See Note 13, Stockholders' Equity.
Recurring Fair Value Measurements
Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present financial assets and liabilities remeasured on a recurring basis by level within the fair value hierarchy (dollars in thousands):
March 31, 2023
Level 1Level 2Level 3
Liabilities:
Notes payable$— $— $92,665 
Private warrants— — 52 
Bridge warrants— — 28,521 
December 31, 2022 (As Restated)
Level 1Level 2Level 3
Liabilities:
Notes payable$— $— $26,008 
Accrued expenses and other current liabilities— — 6,227 
Private warrants— — 52 
Bridge warrants (as restated)— — 92,781 
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.
21

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the activity of Level 3 fair value measurements (dollars in thousands):
Bridge Warrants (As Restated)Notes
Payable, Bridge		Private WarrantsEarnout Shares LiabilityLiability for Insufficient Authorized Shares Related to Stock Options and RSUs
Balance as of December 31, 2022 (as restated)$92,781 $26,008 $52 $2,250 $3,977 
Additions33,266 122,409 — — — 
Net disposal pursuant to Warrant Exchange(16,506)— — — — 
Exercises of warrants(47,202)— — — — 
Change in fair value measurements(33,818)(16,031)— 2,764 — 
Extinguishment of Debt— 3,021 — — — 
Stock-based compensation expense— — — — 5,002 
Conversions of liability to Common Stock— — — (5,014)(8,979)
Conversions of notes to Common Stock— (42,742)— — — 
Balance as of March 31, 2023$28,521 $92,665 $52 $— $— 
9.    Related Party Notes Payable (As Restated)
The Company has been significantly funded by notes payable from 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 March 31, 2023 (dollars in thousands):
Note NameContractual
Maturity
Date		Contractual
Interest
Rates		Net
Carrying
Value (As Restated)		Interest Expense for the Three Months Ended March 31, 2023 (As Restated)Accrued Interest (As Restated)
Related party notes - China (as restated)December 31, 202312.0%$5,273 $— $—
Related party notes – China various otherDue on Demand—%3,928 — —
$9,201 $— $— 

Related party notes payable consists of the following as of December 31, 2022 (dollars in thousands):
Note NameContractual
Maturity
Date		Contractual
Interest
Rates		Balance
as of December 31, 2022 (As Restated)
Related party notes - China (as restated)December 31, 202312.0%$5,209
Related party notes – China various otherDue on Demand—%3,755 
$8,964 

Fair Value of Related Party Notes Payable Not Carried at Fair Value
22

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The estimated fair value of the Company’s related party notes payable not carried at fair value using inputs from Level 3 under the fair value hierarchy is $9.1 million and $8.7 million as of March 31, 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 March 31, 2023 were as follows (dollars in thousands):

Due on demand$3,928 
2023 (as restated)5,273 
$9,201 
The future scheduled principal maturities of related party notes payable as of December 31, 2022 were as follows (dollars in thousands):

Due on demand$3,755 
2023 (as restated)5,209 
$8,964 
FF Top Expense Reimbursements and Consulting Fees
On January 31, 2023, the Company entered into a supplemental agreement to the Preliminary Term Sheet (the “Term Sheet” and such supplemental agreement, the “Supplemental Agreement”) with FF Top Holding LLC (“FF Top”), pursuant to which the parties agreed, due to the high amount of FF Top’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 FF Top 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 FF Top $0.2 million on each of February 1, 2023, and on February 6, 2023. In addition, on April 8, 2023, the Company reimbursed FF Top for $0.1 million related to legal expenses incurred by FF Top in connection with Amendment No. 6 (as defined in Note 10, Notes Payable).
In early February 2023, FF Top 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 unaudited Condensed Consolidated Financial Statements were issued. FF Top 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 FF Global Partners LLC (“FF Global”), 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.
•(1) Assistance in developing its value returnSecured and management strategy.Unsecured SPA Notes
•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.
23

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
•Assistance in risk management strategy.
•Assistance in capability build up and operation strategy.
Either party may terminate this Agreement upon one month prior written notice to the other party. Upon any termination of this Agreement, the Company shall promptly pay Consultant any accrued but unpaid fees hereunder, and shall reimburse Consultant for any unreimbursed expenses that are reimbursable hereunder. In addition, FF Global is entitled for reimbursement for all reasonable and documented out-of-pocket travel, legal, and other out-of-pocket expenses incurred in connection with their services, which out-of-pocket expenses shall not exceed $0.1 million without the prior written consent of the Company. The Company paid $0.6 million to FF Global during the 2023 to date, pursuant to the Consulting Service Agreement.
Advertising Services Payable to Leshi Information Technology Co., Ltd. (“LeTV”)
The Company accrued a payable to LeTV within Accrued expenses and other current liabilities in the amount of $7.1 million and $7.0 million as of March 31, 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.
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 Warm Time from January 1, 2018 through March 31, 2022. Warm Time 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 CEO of the Company). According to the agreement between the parties, the Company paid Warm Time a monthly amount of $0.1 million 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 months ended March 31, 2023 and 2022, the Company paid to Warm Time $0.1 million for rent and business development services rendered to the Company and its executives.
As part of its relationship with the Company, Warm Time also served as the conduit for certain loans from Ocean View Drive Inc., an entity formerly controlled by Mr. Yueting Jia and now wholly owned by the spouse of Ruokun Jia, who is the former Assistant Treasurer of the Company and Mr. Yueting Jia’s nephew. The loans principal was repaid to the Company in prior years and accrued interest on such loans is outstanding as of March 31, 2023 and December 31, 2022 in the amount of $0.2 million.
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 March 31, 2023 and December 31, 2022, the Company has a receivable in the amount of $0.9 million from Ocean View which is recorded Deposits in the unaudited Condensed Consolidated Balance Sheet and Consolidated Balance sheet, respectively.
On February 9, 2023, the Company made a payment of approximately $0.2 million on behalf of Ocean View, an indemnified co-defendant, in connection with a seizure of funds related to the outstanding judgment in ongoing litigation, also involving Han’s San Jose Hospitality, LLC. Ocean View fulfilled its payment obligation under the settlement arrangement of such litigation, but the Company did not make its payment on the outstanding judgment which caused such seizure of funds of Ocean View. See Note 12, Commitments and Contingencies for more information. Following such seizure, the Company paid the outstanding judgment and all accrued interest. The payment remitted on behalf of Ocean View was recorded in Deposits in the unaudited Condensed Consolidated Balance Sheet as of March 31, 2023, the Company received the return of such indemnification payment in April 2023.
24

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
10.    Notes Payable (As Restated)
The Company has entered into notes payable agreements with third parties, which consists of the following as of March 31, 2023 and December 31, 2022 (dollars in thousands):
March 31, 2023
Note NameContractual
Maturity Date		Contractual
Interest
Rates		Unpaid Principal
Balance		Fair Value
Measurement
Adjustments		Original issue discount and proceeds allocated to warrantsNet
Carrying
Value		Interest Expense for the Three Months Ended March 31, 2023 (As Restated)Accrued Interest (As Restated)
Bridge Notes (as restated) (1)
Various10%-15%$165,034 $(37,937)$(34,432)$92,665 $— $— 
Notes payable – China otherDue on Demand—%5,065 — — 5,065 — — 
Auto loansOctober 20267%94 — — 94 2 — 
$170,193 $(37,937)$(34,432)$97,824 $2 $— 
December 31, 2022
Note NameContractual
Maturity Date		Contractual
Interest
Rates		Unpaid Principal
Balance		Fair Value
Measurement
Adjustments		Original issue discount and proceeds allocated to warrantsNet
Carrying
Value		Interest Expense for the Three Months Ended March 31, 2022 (As Restated)
Accrued Interest (As Restated)
Bridge Notes (as restated)(1)
October 27, 202810%$36,622 $264 $(10,878)$26,008 $— $— 
Notes payable – China otherDue on Demand—%4,997 — — 4,997 — — 
Auto loansOctober 20267%100 — — 100 — — 
$41,719 $264 $(10,878)$31,105 $— $— 
(1) On August 14, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”the Secured SPA with FF Simplicity Ventures LLC (“FFSV”) withas administrative agent, collateral agent,and purchaser and certain entities affiliated with ATW Partners LLC and RAAJJ Trading LLC (and together with Senyun, as defined below,additional purchasers (collectively the “Purchasers”“Secured SPA Purchasers”) to issue and sell the Company’s senior secured convertible notes (the “Bridge“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 (as increased on September 23, 2022 to $57.0 million,with a four year maturity, 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)six year.

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 purchasers, the ”Unsecured SPA Purchasers”) to issue and sell $100.0 million aggregate principal of the Company’s senior unsecured convertible notes (the “Unsecured SPA Notes”). 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 Bridgeterms of the Secured SPA Notes and Unsecured SPA Notes are generally the same, however, the Secured SPA Notes are secured by the grant of a second lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well as guarantee by substantially all of the Company’s domestic subsidiaries.
The SPA Notes are generally subject to an original issue discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock at a conversion price equal to $2.69 (or $2.2865 for the initial tranche) (“Conversion Price”)Price (as defined in each SPA Note), subject to a 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 BridgeSPA Notes bear interest ofat 10% per annum (or 15% if interest or settlement is paid in shares) payable quarterly and on each conversion date and on the maturity date in cash or in shares of Class A Common Stock. Unless earlier paid, the BridgeSPA Notes entitle the Purchasers,purchasers, at each conversion date, to an interest make-whole (“Make-Whole Amount”), in a combination of cash or Class A Common Stock, at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity based on an interest rate of 15% per annum.maturity. The conversion price of interestfor the Make-Whole Amount is the lessergreater of (a) the Conversion Pricefloor price, which is $3.63 as of September 30, 2023 or (b) 90% of the lowest VWAPvolume-weighted average price (“VWAP”) for the five consecutive trading days (“Interest Conversion Price”).days. When calculating the shares issuable upon conversion, the Make-Whole Amount shall be decreased by 50% of the original issue discount pertaining to such amount.
The Bridge 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.
Total commitments under the initial Secured SPA shallwere 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 “Form S-1 Effective Date”“Tranche B Notes”) (see Note 2, Liquidity and Capital Resources, for detailed discussion on commitments to 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 additional senior secured convertible notesshares of Class A Common Stock equal to 33% of the shares issuable upon conversion of the aggregate principal amount under similar terms for a total potential commitments of up to $300.0 million (“Tranche B Notes”).the SPA Notes funded.
The Company elected the fair value option afforded by ASCAccounting Standards Codification (“ASC”) 825, Financial Instruments, with respect to the BridgeSPA Notes because the notes include features, such as a contingently exercisable put option, which meetsmeet the definition of an embedded derivative. The Company expenses transaction costs to Changes in fair value of notes
120

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
embedded derivative. The Company expenses original issue discountpayable and transaction costs towarrant liabilities or Changes in fair value measurementsof related party notes payable and warrant liabilities, as applicable, in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss. The Company did not separately report interest expense attributable to the Bridge Notes accounted for pursuant to the fair value option in the Consolidated Statements of Operations and Comprehensive Loss because such interest was included in the determination of the fair value of the notes payable and changes thereto.
First Secured SPA Amendment
On September 23, 2022, the Secured SPA was amended (the “SPA“First Secured SPA Amendment”), pursuant to which the existing Secured SPA Purchasers agreed to accelerate their funding obligations, with $7.5 million aggregate principal amount (the “Third Bridge Notes”) being funded and issued on the same day, and the remaining $7.5 million aggregate principal amount (the “Fourth Bridge Notes”) being funded and issued on October 10, 2022.obligations. 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 to the same terms and conditions in the SPA as applicable to the Bridge Notes described therein.
Additionally, theFirst Secured SPA Amendment modified the conversion price of $25.0 million of principalto $84.00 per share. All of the Bridgeother terms and conditions of the Secured SPA Notes which were funded on August 14, 2022, to $1.05 per share. unchanged.
The Company evaluated the First Secured SPA Amendment in accordance with ASC 470-50, DebtDebt–Modifications and Extinguishments, and determined that it constitutes an extinguishment because the change in the fair value of the conversion pricefeature is substantial. Accordingly, the Company recognized a loss on extinguishment in Loss on extinguishment or settlement of related party notes payable notes payable and vendor payables in trust, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $7.7 million, calculated as the cumulative changedifference 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 fair value from initial recognition throughan aggregate principal amount of up to the date of amendment.$60.0 million in installments.
Third and Fourth Secured SPA Amendments to the SPA
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 BridgeSecured 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 amendmentThird 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 amendmentThird 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 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-wholeMake-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$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-wholeMake-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$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 amendmentFourth 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 amendmentFourth Secured SPA Amendment was accounted for prospectively with no gain or loss recorded in the Consolidated Statements of Operations and Comprehensive Loss.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 International Ltd. (“Senyun”) pursuant to which the conversion rate of notes totaling $19.0 million was lowered from $1.05$84.00 to $0.89$71.40 and future funding 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 for the year ended December 31, 2022 as the underlying debt instruments were extinguished on the
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
instruments were extinguished on the date the Senyun Amendment was entered into. During the three-months ended March 31, 2023 theThe Company remitted the shares to Senyun.Senyun in March 2023.
Sixth Secured SPA Amendment to the SPA
On February 3, 2023, the Company entered into Amendment No. 6 to the Secured SPA (“Amendment No. 6”(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 amount of the Company’s senior secured convertible notes (the “Tranche C Notes”) with terms largely congruent to prior issuances and $1.05a $84.00 base conversion price subject to full ratchet anti-dilution price protection. Each applicable Secured SPA Purchaser has the option to purchase additional convertible senior secured notes and warrantsSecured 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 sucheach applicable Secured SPA Purchaser pursuant to the terms of the SPA (the “Tranche D Notes”).
Pursuant to the Sixth Secured SPA Amendment, No. 6, certain outstanding Tranche ASecured 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 (each, a “Replacement Note”) with a $0.89$71.40 base conversion price. In accordance with ASC 470-50, DebtDebt— Modifications and Extinguishments, the change in conversion price qualifies as an extinguishment because the change in the fair value of the conversion pricefeature was substantial. Accordingly, the Company recognized a Loss on settlement of notes payable in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2023 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 notes.Secured SPA Notes.
Pursuant to the Sixth Secured SPA Amendment, No. 6 the Company entered into an agreement with certain Secured SPA Purchasers (“an Exchange(the “Exchange Agreement”) holding a total of 198,129,990 NPA Warrants and SPA Warrants2,476,625 warrants to exchange them for an aggregate 90,489,346 NPA Warrants and SPA Warrants1,131,117 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 issued senior secured convertible notes (the “Exchange Notes”) have terms largely congruent to existing SPA notes butExchange 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. PursuantThe 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 Bridge WarrantsWarrant liabilities during the period in the unaudited Condensed Consolidated Balance Sheet in a totalan amount oftotaling $6.8 million.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.Loss, as the fair value of the instruments exchanged and received were approximately the same.
Seventh Secured SPA Amendment to the SPA
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 entities affiliated with ATW PartnersFF 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 an entity affiliated with ATW Partners LLCFFSV 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 notesNotes was agreed to be 14% and 16%, respectively.
DuringEighth Amendment to the three months ended March 31,Secured SPA
On May 8 and 9, 2023, the Company entered into an eighth amendment to the Secured SPA (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 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, 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
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Loss in the amount of $11.4 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes.
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 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 grosswarrants 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 Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock, then the Company 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
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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.
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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 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, of $105.0 million and $34.0 ($92.6 million and $29.3 million net of original issuance costs)issue discounts, of $47.9 million and $228.4 million in exchange for the issuance of Tranche Cthe SPA Notes and Tranche B Notes,incurred approximately $0.3 million and $2.5 million in transaction costs during the three and nine months ended September 30, 2023, respectively. The Company also received gross proceeds of $10.0 million ($8.8 million net of original issuance costs) in exchange for the issuance of Tranche A Notes.
During the threenine months ended March 31,September 30, 2023, the Company issued to the Secured SPA Purchasers and Unsecured SPA Purchasers a total of 48,714,2772,225,118 warrants (“Bridge Warrants" or “SPA Warrants”). Upon their issuance,pursuant to both the Bridge WarrantsSecured SPA and Unsecured SPA arrangements and in connection with the Warrant Exchange. As of September 30, 2023 the warrants had an exercise price of $0.89 to $1.05$1.64 per share, subject to anti-dilution ratchet price protection, exercisable for seven years from the date of issuance (see Note 13,10, Stockholders' Equity). The Company may repurchase the Bridge Warrantscertain warrants for $0.01 per share if and to the extent the VWAP of the Company’s Class A Common Stock during 20 out of 30 trading days prior to the repurchase is greater than $15.0$15.00 per share, subject to certain additional conditions. During the threenine months ended March 31,September 30, 2023, the Secured SPA Purchasers exercised 35,314,752 Bridge Warrants. As of March 31, 2023, there were 93,571,419 Bridge Warrants outstanding.warrants to
On March 31, 2023 the Company determined that the fair value of the Bridge Notes and Bridge Warrants was $92.7 million and $28.5 million, respectively, resulting in a gain in Change in fair value measurements in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023 in the amount of $79.5 million and $18.2 million respectively.
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
Duringpurchase 639,109 shares of Class A Common Stock issued pursuant to the three months ended March 31,SPA Notes, via both cash and cashless exercise. As of September 30, 2023, total Bridge Notes principal of $61.6 million with athere were 1,654,726 warrants outstanding issued pursuant to the SPA Notes.
On September 30, 2023 the Company determined that the fair value of $42.7the SPA Notes and warrants was $95.4 million was converted to Additional paid-in capital, resultingand $1.7 million, respectively. The Company recorded a gain in a $95.1 million Loss on settlementChange in fair value of notes payable being recognizedand warrant liabilities in the Condensed Consolidated Statement of Operations and Comprehensive Loss duringfor the three and nine months ended September 30, 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 March 31,September 30, 2023 the Company entered into multiple dilutive stock sale and purchase transactions, as discussed in Note 2, . Total settlementLiquidity 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 notes payable transaction costs for the three months ended March 31,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 totaled $1.1 million.

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, was $4.9 millionapproximated their carrying value as of March 31,September 30, 2023 and December 31, 2022.2022, respectively.
Schedule of Principal Maturities of Notes Payable
The future scheduled principal maturities of notes payable as of March 31,September 30, 2023 are as follows (dollars in thousands):follows:
(in thousands)(in thousands)
Due on demandDue on demand$5,065 Due on demand$4,847 
20232023— 2023— 
20242024— 2024— 
2025202541,000 202541,000 
2026202694 202682 
20272027— 2027
ThereafterThereafter124,034 Thereafter89,126 
$170,193 $135,055 
11.    Leases8.    Related Party Transactions
Related Party Notes Payable
The Company determines if an arrangement is a lease at its commencement if the Company is both able to identify an assetreceives funding via notes payable from various parties, including related parties. These related parties include employees as well as affiliates of employees, affiliates, and conclude the Company has the right to control the identified asset. Leases are classified as financeother companies controlled or operating based on the principle of whether or not the lease is effectively a financed purchasepreviously controlled by the lessee. An ROU asset represents the Company’s right to use an underlying asset for the lease termfounder and a lease liability represents the Company’s obligation to make lease payments related to the lease. The Company recognizes operatingChief Product and finance lease ROU assets and liabilities at the commencement date based on the present value of lease payments over the lease term. The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options. The Company’s leases do not provide an implicit rate therefore, the Company uses its incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments. The incremental borrowing rate used is estimated based on what the Company would be required to pay for a collateralized loan for a similar asset over a similar term. The Company’s leases do not include any material residual value guarantees, 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 in the measurement and classification of a lease and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recorded in operating expenses on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. Amortization of ROU assets on finance leases is recorded on a straight-line basis within operating expenses in the unaudited Condensed Consolidated Statements of Operations. Interest expense incurred on finance lease liabilities is recorded in Interest expense on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Additionally, the Company does not separate lease and non-lease components. Operating leases are included in ROU assets, Operating leases liabilities, current portion and Operating lease liabilities, less current portion in the Company's unaudited Condensed Consolidated Balance Sheets. Finance leases are included in Property and equipment, net, Finance lease liabilities, current portion, and Finance lease liabilities, less current portion in the Company's unaudited Condensed Consolidated Balance Sheets.User Ecosystem Officer.
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
The Company’s lease arrangements consist primarilyRelated party notes payable consists 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-year periods.
Total lease costs for the three months ended March 31, 2023 and 2022 were (dollars in thousands):
Three Months Ended
March 31, 2023		Three Months Ended March 31, 2022
Finance lease cost
Amortization of right-of-use assets$91 $500 
Interest on lease liabilities96 177 
Total finance lease cost187 677 
Operating lease cost1,481 882 
Variable lease cost112 134 
Total lease cost$1,780 $1,693 
The following table summarizes future lease payments as of MarchSeptember 30, 2023:
(in thousands)Contractual
Maturity
Date		Contractual
Interest
Rates		Net
Carrying
Value
Related party notes – ChinaDecember 31, 202312.0%$5,071 
Related party notes – Unsecured SPAAugust 202910% - 15%2,945 
Related party notes – China various otherDue 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, 2023 (dollars in thousands):2022:
Fiscal yearOperating LeasesFinance Leases
2023 (nine months)$4,151 $1,292 
20245,4961,757
20255,2571,792
20265,2161,828
20272,8961,864
Thereafter9,284—
Total32,300 8,533 
Less: Imputed Interest12,293 934
Present value of net lease payments20,0077,599
Lease liability, current portion$2,609 $1,390 
Lease liability, net of current portion17,3986,209
Total lease liability$20,007 $7,599 

Supplemental information and non-cash activities related to operating and finance leases are as follows (dollars in thousands):
Three Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,323 $833 
Operating cash flows from finance leases96177
 Financing cash flows from finance leases335466
$1,754 $1,476 
Lease liabilities arising from new right-of-use assets
Operating leases$— $8,206 
Finance leases$— $— 
(in thousands)Contractual
Maturity
Date		Contractual
Interest
Rates		Net Carrying Value
Related party notes – ChinaDecember 31, 202312.0%$5,209 
Related party notes – China various otherDue on Demand—%3,755 
$8,964 
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)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 WarrantsNet
Carrying
Value
MHL - Unsecured SPA NoteAugust 202910% - 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 
20235,071 
20293,323 
$12,153 

28

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
As of March 31, 2023As of December 31, 2022
Weighted average remaining lease term (in years)
Operating leases6.26.4
Finance leases4.85.0
Weighted average discount rate
Operating leases15.6 %15.6 %
Finance leases5.0 %5.0 %
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
29

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated 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 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.
12.9.    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.
ClassAs of September 30, 2023 and Derivative ActionsDecember 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.
On December 23, 2021,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, was filedas amended (the “Exchange Act”). The Company denies all allegations but deemed a settlement to be in its best interest based on the United States District Court, Central Districtfacts and circumstances of California,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 and its former Chief Executive Officer and Chiefby the lead plaintiffs. On November 7, 2023, preliminary
30

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Officer, its current Chief Product and User Ecosystem Officer, as well asStatements
approval for the CFO of Legacy FF, three independent directors of PSAC, and the Co-CEOs of PSAC (the “Putative Class Action”).
On March 7, 2022, the following individuals were appointed as Lead Plaintiffs: Byambadorj Nomin, Hao Guojun, Peihao Wang and Shentao Ye. On the same date, Wolf Haldenstein and Pomerantz LLP were appointed as Co-Lead Counsel. Lead Plaintiffs filed an amended complaint on May 6, 2022.
On July 5, 2022,settlement was granted, consequently, the Company and all other Defendants filed a joint motion to dismiss the amended complaint. In their opposition, Plaintiffs withdrew their claim under Section 11 of the 1933 Securities Act. After complete briefing and a hearing on the motion, on October 20, 2022, the District Court issued its decision, denying in part and granting in part the Defendant’s motion to dismiss. The court found, among other things, that Plaintiffs had sufficiently pled a claim for violation of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 with respect to certain statements made in 2021 concerning Legacy FF’s receipt of 14,000 reservations for the FF 91 vehicle. The District Court also found, however, that Plaintiffs had failed to sufficiently plead a claim with respect to forward-looking statements made concerning the expected schedule for the production and delivery of the FF 91 vehicle. The District Court’s dismissal was without prejudice and leave to amend the complaint was granted. Defendants filed a motion for reconsideration of court’s ruling sustaining the claim under Section 14(a) of the 1933 Securities Act, which was denied on December 12, 2022.
On January 6, 2023, the plaintiffs declined to again amend their complaint to attempt to reallege the claims dismissed by the District Court. As a result, the amended complaint filed on May 6, 2022 is the operative complaintwill move forward with the exception of the voluntarily withdrawn and judicially dismissed claims, which include all claims against the Company’s former Chief Financial Officer and the three independent PSAC directors. The Company and other Defendants filed answers on February 10, 2023. The Company has asserted that the suit is without merit and stated its intention to vigorously defend the suit. Given the early stages of the legal proceedings, it is not possible to predict the outcome of the claims.settlement process.
OnDerivative Actions
In March 8 and March 21, 2022, respectively, two 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, and were subsequently consolidated. On May 24, 2022 those consolidated derivative actions were(“California Federal Derivative Action”). The California Federal Derivative Action was stayed pending resolution of certain proceedings in the Putative Class Action.putative class action. The stay was continuedexpired 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 15,21, 2023.
Additionally, in April 2022, and the cases currently remain active. Additionally, on April 11 and 25, 2022, respectively, two 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. Those actionsDelaware (the “Delaware Federal Derivative Actions”). The Delaware Derivative Actions were stayed pending resolution of certain proceedings in the Putative Class Action
6

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
putative class action and currently remain stayed. These lawsuits purport to assert
In June 2023, an additional putative derivative lawsuit alleging common law claims on behalf of the Company against various current and former officers and directors of the Company and Legacy FF.
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 “Court of Chancery”).
Given the Company, its former Global CEO and CFO, and its current Chief Product and User Ecosystem Officerearly 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 (the “Yun Class Action,”). On September 21, 2022, another verified stockholder class action complaint was filed in the Court of Chancery of the State of Delaware against, among others, FFIE, the Co-CEOs and independent directors of PSAC, and certain third-party advisors to PSAC,(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 subsequently consolidated actionand the complaint in the Cleveland Class Action was designated as the operative pleading (the “Consolidated Delaware Class Action”). On April 4,7 2023, Defendantsthe 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.
On September 19, 2022, a verified complaint was filed in the Court of Chancery of the State of Delaware against FFIE seeking to compel an annual general meeting of stockholders. The action was dismissed without prejudice on January 10, 2023.Palantir Technologies, Inc. (“Palantir”)
Additionally, on September 19, 2022, FF Global, an indirect stockholder of FFIE,In July 2023, Palantir filed a lawsuit in the Chancery Court of the State of Delawaredemand for arbitration against FFIE, seeking the removal of Ms. Susan Swenson and Mr. Brian Krolicki from the Board. On September 27, 2022, the case was dismissed without prejudice pursuant to an agreement between FF Global and FF Top (the “Heads of Agreement”). Shortly following the execution of the Heads of Agreement, FF Global began making additional demands of the Company which were beyond the scope of the terms contemplated by the Heads of Agreement and pertained to, among other things, the Company’s management reporting lines and certain governance matters. On September 30, 2022, FF Global alleged thatalleging the Company was in materialhas refused to make payments under the July 12, 2021 Master Subscription Agreement (“MSA”), asserting claims for breach of contract, breach of the spiritcovenant 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 Heads of Agreement. The Company believeslegal proceeding, it has complied withis not possible to predict the applicable termsoutcome of the Heads of Agreement, and disputes any characterization to the contrary. Such disputes divert management and Board resources and are costly. There can be no assurance that this or any other dispute between the Company and FF Global will not result in litigation. On October 3, 2022, Ms. Swenson and Mr. Scott Vogel, a member of the Board, tendered their resignation from the Board effective immediately. On October 3, 2022, Mr. Jordan Vogel also tendered his resignation from the Board effective on October 5, 2022 upon his receipt of a supplemental release pursuant to the Mutual Release. On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately.claims.
Governance Matters
Following the completion of the Special Committee investigation, the Company and certain of its directors and officers received numerous e-mail communications from a group of self-described “employee whistleblowers” and from various individuals and entities who represented themselves as current investors of the Company. These communications have included various allegations (including, for example, that certain directors have conspired to push the Company into bankruptcy for their own personal gain) and requests for certain organizational and governance changes. The Company engaged an independent law firm to conduct a thorough independent external investigation with respect to these allegations. The independent investigation found that all such allegations have been without merit. In September 2022, certain members of the Board received threats of physical violence and death threats, which the Company has referred to appropriate law enforcement authorities, including state and local police, the Federal Bureau of Investigation, the SEC, the DOJ and relevant international authorities.
Other Legal Matters
As of March 31, 2023 and December 31, 2022, the Company had accrued legal contingencies of $16.0 million and $18.9 million, respectively, recorded within Accrued expenses and other current liabilities for potential financial exposure related to ongoing legal matters, primarily related to breach of contracts and employment matters, which are deemed both probable of loss and reasonably estimable. For the legal matters involving third-party vendors, such as suppliers and equipment manufacturers, the Company recorded an accrual in Accounts payable in the 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.
During the year ended December 31, 2022, the Company settled a legal dispute for breach of lease under which the Company was named a co-defendant, in a civil action case filed in the Superior Court of the State of California for the County of Santa Clara by Han’s San Jose Hospitality, LLC, which was seeking damages including unpaid rent, future unpaid rent,
7

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
unpaid expenses, and unpaid taxes related to the lease for a total of $6.4 million. Pursuant to the settlement agreement, the Company agreed to pay $1.8 million in cash in January 2022 and an additional $3.4 million plus 5% interest in October 2022 and was liable for the remainder of the settlement, in the amount of $1.2 million, in the event the co-defendants failed to make the payment in January 2022. In January 2022, the Company made the initial settlement payment of $1.8 million and was relieved of the liability of $1.2 million. The Company failed to make the $3.4 million and interest payments in October 2022. On October 26, 2022, the plaintiff filed a motion to enforce the settlement agreement in the Superior Court of the State of California for the County of Santa Clara, seeking no material additional damages. On December 22, 2022, the court granted the plaintiff’s motion to enforce the settlement. As of December 31, 2022, the balance of $3.4 million was included in Accrued expense and other current liabilities on the Consolidated Balance Sheet. On January 3, 2023, the plaintiff served the parties notice of entry of the order. On January 19, 2023, the court issued judgment in the amount of approximately $3.5 million and a writ of execution. On February 9, 2023, the Company paid $3.6 million consisting of payment in full for the outstanding judgment and accrued interest. Additionally, the Company made a payment of approximately $0.2 million on behalf of an indemnified co-defendant in connection with money seized from such indemnified co-defendant’s bank account. Such indemnification payment was returned to the Company in April 2023.

On January 30, 2023, Riverside Management Group, LLC (“Riverside”) filed a verified 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 Agreementtransaction services agreement with the PSAC Sponsor, LLC, pursuant to which Riverside provided advisory services in connection with the PSAC/Legacy FF merger.LLC. The Company entered into a Stipulation and Order with Riverside under which it 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 stagesstage of the legal proceedings,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
31

Faraday Future Intelligent Electric Inc.
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
As previously disclosed onIn November 15, 2021, the Board established a special committee of independent directors (“Special Committee”) to investigate allegations of inaccurate Company disclosures, including those made in an October 2021 short seller report and whistleblower allegations, which resulted in 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 within 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:
made.
In connection with the Business Combination, statements made by certain Company employees to certain investors describing the role of Mr. Yueting 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 statements leading up to the Business Combination that it had received more than 14,000 reservations for the FF 91 vehicle were potentially misleading because only several hundred of those reservations were paid, while the others (totaling 14,000) were unpaid indications of interest.
●•The Company’s corporate culture failed to sufficiently prioritize compliance.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.
•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.
8•In preparing FFIE’s related party transaction disclosures, the Company failed to investigate and identify the sources of loans received from individuals and entities associated with Company employees.

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
●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.
 
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 JerryMr. Jiawei (“Jerry”) Wang, and withholding of information also affected the remedial action taken with respect toMr. Matthias Aydt.
  
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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Faraday Future Intelligent Electric Inc.
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 appointment of Susan Swenson, a former member of the Board, to the then newly created position of Executive Chairperson of FF.
●•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;Dr. Carsten Breitfeld, FF’s former Global CEO, reporting directly to Ms. Swenson and receiving a 25% annual base salary reduction;
●•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;
the removal of Mr. Jia as an executive officer, although continuing in his position as Chief Product & User Ecosystem Officer of FFIE. Certain dual-reporting arrangements were eliminated with respect to Mr. Jia, and he is required to report directly to Ms. Swenson, a non-independent director nominated by FF Top. Mr. Jia also received a 25% annual base salary reduction, and his role was limited from a policy-making position to focusing on (a) Product and Mobility Ecosystem and (b) Internet, Artificial Intelligence, and Advanced R&D technology. On February 26, 2023, after an assessment by the Board of the Company’s management structure, the Board approved Mr. Yueting Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Xuefeng processes and controls to be determined by the Board after consultation with the Company’s management. The Company’s remaining departments continue to report to Mr. Xuefeng. On February 26, 2023, after an assessment by the Board of the Company’s management structure, the Board the Board approved Mr. Yueting Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Xuefeng Chen, subject to processes and controls to be determined by the Board after consultation with the Company’s management. The Company’s remaining departments continue to report to Mr. Xuefeng Chen. 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;
933

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
●Matthias Aydt, then Senior Vice President, Business Development and Product Definition and a director of FFIE, and currently Senior Vice President, Product Execution and a director of FFIE, being placed on probation as an executive officer for a six-month period, during which period he remained a non-independent member of the Board, which probationary period has since ended;
●the appointment of Jordan Vogel as Lead Independent Director; certain changes to the composition of Board committees, including Brian Krolicki stepping down from his role as Chairman of the Board and Chair of the Nominating and Corporate Governance Committee and becoming a member of the Audit and Compensation Committees of the Board; Jordan Vogel stepping down from the Nominating and Corporate Governance Committee; and Scott Vogel becoming the Chair of the Audit Committee and the Nominating and Corporate Governance Committee of the Board;
●the suspension without pay of Jiawei (“Jerry”) Wang, FFIE’s 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 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).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 will report on a dotted line to the Chair of the Audit committee, and is looking to hire a Director of Risks and Internal Controls;
●the implementation of a comprehensive training program for all directors and officers regarding, among other things, internal FF policies;
●the separation of Jarret Johnson, FF’s Vice President, General Counsel and Secretary; and
●certain other disciplinary actions and terminations of employment with respect to other FF employees (none of whom is an executive officer).
As of the date of this Report,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.
However, Additionally, pursuant to the Heads of Agreement,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, including significant changes inactions.

SEC and DOJ Investigations

As previously reported, the composition ofCompany is subject to investigation by the Board and a change in Board leadership.
SubsequentSEC dealing with matters related to FFIE announcing the completion of the Special Committee investigation, on February 1, 2022, FFIE, certain membersthe Company’s transactions with Senyun, timing of the management team,Company’s deliveries, and employees of FFIE received a notice of preservationthe consulting and subpoena fromsales agreements with the stafffirst 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. FFIEFF 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 DOJDepartment 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.

10

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Palantir License
In July 2021, the Company and Palantir entered into a master agreementthe MSA that sets forth the terms of the Palantir’s platform hosting arrangement which is expected to be used as a central operating system for data and analytics. Palantir invested $25.0 million in the Company through the PIPE Financing and became a stockholder of the Company.arrangement. Under the platform hosting agreement,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 during the year ended December 31,in 2021. No payments were made during the three months ended March 31, 2023 and in 2022. 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 subscription agreementMSA represents a hosting arrangement that is a service contract. The Company recognizerecognizes hosting costs on a straight-line basis over the agreement term.
Unconditional Contractual Obligations
An unconditional contractual obligation is definedIn connection with the MSA, the Company has recorded $12.3 million and $2.5 million as an agreement to purchase goods or services that is enforceableof September 30, 2023 and legally binding (non-cancelable, or cancelable onlyDecember 31, 2022, respectively, in certain circumstances). AsAccounts payable and recorded $3.0 million as of MarchDecember 31, 2023, we estimate FFIE’s total unconditional contractual commitments, including purchases of inventory, tooling, machinery and equipment as well as items to be used2022 in research and development activities; lease minimum paymentsAccrued expenses and other contractual commitments, totaling $422.2current liabilities. During the three months ended September 30, 2023 and 2022, the Company recognized expense of $2.0 million which included $279.8and $2.0 million, for the year ended December 31, 2023, $74.8 million for the two years ended December 31, 2025, $21.7 million for the two years ended December 31, 2027 and $45.9 million thereafter.
The $279.8 million unconditional contractual obligations for the year ended December 31, 2023 included $245.7 million of open purchase orders. Although open purchase orders are generally considered enforceable and legally binding, some of the Company’s purchase orders gives it the option to cancel, reschedule and/or adjust its requirements based on its business needs priorrespectively, related to the deliveryMSA. During the nine months ended September 30, 2023 and 2022, the Company recognized expense of goods or performance of services$5.9 million and $5.9 million, respectively, related to inspect and reject products, for example, if they do not comply with its specifications. Obligations to purchase inventory and other commitments are generally expected to be fulfilled within one year.the MSA.
13.10.    Stockholders’ Equity
The number of authorized, issued and outstanding stock, were as follows:
March 31, 2023
Authorized
Shares		Issued and Outstanding Shares
Class A Common Stock1,690,000,000 838,872,039 
Class B Common Stock75,000,000 64,000,588 
Preferred Stock10,000,000 — 
1,775,000,000 902,872,627 

December 31, 2022
Authorized
Shares		Issued and Outstanding Shares
Class A Common Stock815,000,000 563,346,216 
Class B Common Stock75,000,000 64,000,588 
Preferred Stock10,000,000 — 
890,000,000 627,346,804 
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
11

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Company’s 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 (collectively “Common Stock”). The amendment authorizes the issuance of 10,000,000 shares of Preferred Stockpreferred 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 Company’sBoard. The Board of Directors. The Company’s Board of Directors areis 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 825,000,00020,312,500 to 900,000,000.26,750,000. 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.
A
34

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
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 815,000,00010,187,500 to 1,690,000,000,21,125,000, increasing the Company’s total number of authorized shares of Common Stock and preferred stockPreferred Stock from 900,000,00026,750,000 to 1,775,000,000.37,687,500. 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
35

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
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 March 31,September 30, 2023 are as follows:
Number of WarrantsExercise PriceExpiration Date
SPA Warrants1,654,726 $1.64Various through September 30, 2030
Ares warrants4,096,242 $1.64August 5, 2027
Public Warrants294,263 $920.00July 21, 2026
Private Warrants1,390 $920.00July 21, 2026
    Total6,046,621
Number of WarrantsExercise PriceExpiration Date
SPA Warrants93,571,419 $0.23 to $5.00Various through September 23, 2029
Other warrants29,454,593 $0.23August 5, 2027
Public Warrants23,540,988 $11.50July 21, 2026
Private Warrants111,131 $11.50July 21, 2026
    Total146,678,131
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.
12

Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The number of outstanding warrants to purchase the Company’s Class A Common Stock as of December 31, 2022 were as follows:
Number of WarrantsExercise PriceExpiration Date
SPA Warrants346,453,115 $0.23Various through September 23, 2029
ATW NPA Warrants(1)
76,804,450 $0.23Various through August 10, 2028
Other warrants29,454,593 $0.23August 5, 2027
Public Warrants(2)
23,540,988 $11.50July 21, 2026
Private Warrants(3)
111,131 $11.50July 21, 2026
   Total476,364,277
Number of WarrantsExercise PriceExpiration Date
SPA Warrants4,330,664 $18.40Various through September 23, 2029
ATW NPA Warrants(1)
960,056 $18.40Various through August 10, 2028
Ares warrants368,183 $18.20August 5, 2027
Public Warrants294,263$920.00July 21, 2026
Private Warrants1,390 $920.00July 21, 2026
   Total5,954,556
(1) The ATW NPA Warrants were fully exercised during the threenine months ended March 31,September 30, 2023, through which the Company received aggregatedaggregate proceeds of $0.3 million whichthat was recorded as an increase to Additional paid-in capital.
(2) During 2022, PSAC Sponsor transferred 563,420 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.
(3) The Private Warrants are recorded in Other liabilities, less current portion in the Consolidated Balance Sheets as of December 31, 2022.
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 815-40.815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. As a result of the
36

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
reclassification, the Company reclassified $2.2$2.3 million out of Additional paid-in capital into the Earnout liability, which is included in Other current liabilities onin the Condensed Consolidated Balance Sheet as of December 31, 2022.
As of December 31, 2022, the Company reclassified 53,820,670672,758 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 isare 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 onin 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 $5.0$1.4 million and the fair value of the Share-based payment liability of $9.0$2.0 million into Additional paid-in capital.
13

Faraday Future Intelligent Electric Inc.
Notes Refer to Condensed Consolidated Financial Statements
(Unaudited)
The $2.8 million increasethe table summarizing the activity of Level 3 fair value measurements in Note 12 for the Earnout liability from December 31, 2022 to February 28, 2023 was recognized as an expense in the Changechanges in fair value of earnoutthe Earnout liability during the three months ended March 31, 2023. The $5.0 million increase inand the Share-based payment liability from December 31, 2022recognized 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 February 28, 2023 was recognizedauthorize 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 stock-based compensation expense during the three months ended March 31,of September 30, 2023.
14.11.    Stock-Based Compensation
2021 Stock Incentive Plan (“2021 SI PlanPlan”)
In July 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 SI Plan”).Plan. The 2021 SI Plan allowedallows 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. TheAt 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 onby 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 date ofreserved for issuance of the unaudited Condensed Consolidated Financial Statements, the Board of Directors is evaluating the timing and extent of such increases. As of the effective date ofunder the 2021 SI Plan, no furtherthe 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 grantedoptions 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 March 31,September 30, 2023 and December 31, 2022, the Company had 19,987,6423,352,775 and 24,252,537303,156 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.
EISOP/SOD Incentive Plan
On February 1, 2018,23, 2023, the Board of Directors adoptedapproved the EquityCompany’s SOP/SOD Incentive Plan (“EIIncentive Plan”), under which the Board of Directors authorized the grant of up granting: (i) cash bonuses 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 toall active employees directors and non-employees.
STI Plan
Pursuant to the Special Talent Incentive Plan (“STI Plan”), the Board of Directors may grant up to 14,130,000 incentive and nonqualified stock options, restricted shares, unrestricted shares, restricted share units, and other stock-based awards for Legacy FF’s Class A Ordinary Stock to employees, directors, and non-employees.
The STI Plan does not specify a limit on the number of stock options that can be issued under the plan. Per the terms of the STI Plan,Company that began employment at the Company must reserve and keep available a sufficient number of sharesprior to satisfyDecember 31, 2022 upon the requirementscommencement of the STI Plan.
A summarystart of production of the Company’s stock option activity is as follows (dollars in thousands except weighted average exercise price):
Number of
Options		Weighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual Life (Years)		Aggregate
Intrinsic
Value
Outstanding as of December 31, 202235,687,240 $3.37 7.3$22 
Granted3,000,000 1.08 
Exercised(49,456)0.89 $10 
Cancelled/forfeited(2,455,912)3.37 
Outstanding as of March 31, 202336,181,872 $3.15 7.5$31 
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
1437

Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)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 assumptions used ingrant 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 Black-Scholes option pricing model are as follows:
Three Months Ended
March 31,
20232022
Risk-free interest rate:3.5 %1.6 %
Expected term (in years):8.67.0
Expected volatility:90.2 %43.5 %
Dividend yield:0 %0 %
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 March 31,September 30, 2023, the total remaining stock-based compensation expense for unvested stock options was $3.5$0.7 million, which is expected to be recognized over a weighted-average period of 2.752.85 years.
A summary•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 Company’s RSURSUs will vest ratably over four years. The PSUs will commence vesting upon the start of delivery of the FF 91 Futurist Alliance, and PSU activity is as follows:
SharesWeighted Average Fair Value
Outstanding as of December 31, 202217,869,663 $1.09 
Granted6,534,618 0.99
Released(1,145,334)1.24 
Forfeitures(2,504,083)1.10 
Outstanding as of March 31, 202320,754,864 $1.04 
The Company’s subsidiaries in China have employees who are citizens25% of People’s Republic of China (PRC). Pursuant to regulation Circular 78 and Circular 7 issued by the Central State Administration of Foreign Exchange of PRC (“SAFE”), the Company cannot release vested RSUs to it’s PRC citizen employees before they have completed the required SAFE registration with a dedicated account set up forsuch PSUs will vest on each of them to repatriate proceeds back to China under the SAFE. As a result, the outstanding RSU’s for the period ended March 31, 2023 and December 31, 2022, include 1,614,088 and 1,448,697 RSUsfirst four one-year anniversaries of the Company’s PRC citizens employees. These are unreleased RSUs as these employees have not completed the SAFE registration process.
vesting start date. As of March 31,September 30, 2023, the total remaining stock-based compensation expense for unvested RSUs and PSUsRSU’s was $8.0$1.7 million, which is expected to be recognized over a weighted-average period of 4.064.24 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 (dollars in thousands):Loss:
Three Months Ended
March 31,
2023 (As Restated)2022
Research and development$6,416 $1,622 
Sales and marketing760 374 
General and administrative1,457 1,350 
$8,633 $3,346 
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Research and development$(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 March 31,September 30, 2023 is $5.0a $0.7 million gain related to when the Company’s share-based payment awards were classified as liabilities from December 31, 2022July 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 February 28, 2023.
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)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, Fair Value Measurement, which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820, 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:
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.
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.
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.
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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
From time to time, certain of the Company’s equity-linked financial instruments may be classified as derivative liabilities under ASC 815, Derivatives and Hedging, due to the Company having insufficient authorized shares to fully settle the equity-linked financial instruments in shares. See Note 10, Stockholders' Equity .
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 1Level 2Level 3
Liabilities:
Warrant liabilities1
$— $— $1,730 
Notes payable1
— — 95,445 
1 Includes both related party and non-related party balances for the Company’s notes payable and warrant liabilities.
December 31, 2022
(in thousands)Level 1Level 2Level 3
Liabilities:
Warrant liabilities$— $— $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.
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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 LiabilityLiability for Insufficient Authorized Shares Related to Stock Options and RSUs
Balance as of December 31, 2022$92,833 $26,008 $2,250 $3,977 
Additions41,068 211,088 — — 
Net disposal pursuant to Warrant Exchange(16,506)— — — 
Exercises(47,202)— — — 
Debt extinguishments1,317 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 (As Restated)
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 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.
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 Condensed Consolidated Statements of Operations and Comprehensive 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.
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Faraday Future Intelligent Electric Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of Common Stock attributable to commonCommon Stock stockholders because their effect was anti-dilutive:
March 31, 2023 (As Restated)March 31, 2022Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Shares issuable upon conversion of SPA Notes and settlement of make-whole provisionsShares issuable upon conversion of SPA Notes and settlement of make-whole provisions89,569,362 1,110,705 89,569,362 1,110,705 
Shares issuable upon exercise of SPA WarrantsShares issuable upon exercise of SPA Warrants93,571,419 — Shares issuable upon exercise of SPA Warrants1,654,726 884,681 1,654,726 884,681 
Shares issuable upon conversion of notes and settlement of Make-Whole provisions311,952,117 9,009,210 
Other warrantsOther warrants29,454,593 4,544,258 Other warrants4,096,242 17,863 4,096,242 17,863 
Stock-based compensation awards – OptionsStock-based compensation awards – Options37,181,872 43,781,815 Stock-based compensation awards – Options428,081 473,659 428,081 473,659 
Stock-based compensation awards – RSUsStock-based compensation awards – RSUs20,131,111— Stock-based compensation awards – RSUs177,650 — 177,650 — 
Public warrantsPublic warrants23,540,988 22,977,568 Public warrants294,263 292,200 294,263 292,200 
Private warrantsPrivate warrants111,131 674,551 Private warrants1,390 3,452 1,390 3,452 
TotalTotal515,943,231 80,987,402 Total96,221,714 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, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited Condensed Consolidated Financial Statements.Statements.

Conversion of Notes Payable into Class A Common Stock
Tranche B SPA Funding
In April 2023, Senyun, a Purchaser affiliated with ATW Partners LLC and RAAJJ Trading LLC purchased additional senior secured notes and SPA Warrants of the Company. The Company received gross proceeds of $4.0 million ($3.6 million net of original issuance discount) in exchange for such issuances.

Tranche C SPA Funding
In April and May 2023, Senyun and a Purchaser affiliated with ATW Partners LLC purchased additional senior secured notes and SPA Warrants of the Company. The Company received gross proceeds of $15.0 million ($13.5 million net of original issuance discount) in exchange for such issuances.

Equity Awards
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Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On April 17, 2023, the Board granted, under the 2021 SI Plan, a total of 54,011 fully vested RSUs, with a grant date value of $0.35, to non-employee directors of the Company.
On April 27, 2023, the Board granted, under the 2021 SI Plan, a total of 386,574 RSUs, with a grant date value of $0.27, to certain employees of the Company.
Amendment No. 8 to the SPA
On May 8,Between October 2, 2023 and MayNovember 9, 2023, the Company amended the termsPurchasers converted portions of the SPA with Senyun, FF Simplicity and FF Prosperity (together, “ATW Parties”) (“Amendment No. 8”), pursuant to which: (i) the definition of Floor Price (as defined in each such Secured SPA Note), was amended from $0.21 to $0.10; (ii) Make-whole Interest shall be paid upon conversion of principal of the Secured SPA Notes; (iii) the conversion price for the Secured SPA Notes was amended from $1.05 to $0.89, subject to adjustment as set forth in the Secured SPA Notes; and (iv) the exercise price for the Secured SPA Warrants was amended from $1.05 to $0.89, subject to adjustment as set forth in the Secured SPA Warrants.
Unsecured Securities Purchase Agreement
On May 8, 2023, the Company entered into the Unsecured SPA with Unsecured SPA Purchasers to issue and sell, subject to the satisfaction of certain closing conditions, $100.0 million aggregate principal amount of the Company’s senior unsecured convertible promissory notes. The Unsecured SPA Purchasers committed to fund in eight subsequent closings fifteen days apart, subject to the satisfaction of certain closing conditions. In addition, any Unsecured SPA Purchaser may postpone or cancel any closing pursuant to the Unsecured SPA in its reasonable discretion if it reasonably determines, based on public information, that the first phase of the Company’s three-phase delivery plan as disclosed in public filings has not begun or will not begin prior to May 31, 2023 and/or the second phase of such delivery plan has not begun or will not begin prior to June 30, 2023, in each case within 15 calendar days of such deadline.
The Unsecured SPA Notes are subject to an original issue discount of 10%, accrue interest at 10% per annum, and are convertible$9.4 million notes payable into 10,570,266 shares of Class A Common Stock of the Company, at a conversion price equal to $0.89, plus an interest make-whole amount, subject to certain adjustments including full ratchet anti-dilution price protection. Each Unsecured SPA Note matures on the date that is six years.
Under the Unsecured SPA Notes, at each closing, the Unsecured SPA Purchaser is entitled to receive an Unsecured SPA Warrant registered in the name of such Unsecured SPA Purchaser to purchase up to a number of shares of Common Stock equal to 33% of such shares issuable to such Unsecured SPA Purchaser upon conversion of the aggregate principal amount under the Unsecured SPA Note funded at such closing, with an exercise price equal to $0.89 per share, subject to full ratchet anti-dilution price protection and other adjustments, and are exercisable for seven years on a cash or cashless basis.
Each Unsecured SPA Purchaser has the option, from time to time for 12 months after the date of the Unsecured SPA, to purchase additional convertible senior unsecured notes and warrants on the same terms as the Unsecured SPA Notes in an aggregate amount not to exceed 50% of the initial principalprinciple amount of the Unsecured SPA Notes issued to such Unsecured SPA Purchaser, subject to certain conditions.
On May 10, 2023, the Company received gross proceeds pursuant to the Unsecured SPA totaling $3.3 million ($3.0 million net of original issuance cost).
Note Conversions
Between April 1, 2023 and May 12, 2023 the Purchasers converted portions of an aggregate principal amount of $60.2$1.5 million of the SPA Notes at a conversion price of $1.05 to $0.14 per sharerelated party notes payable (MHL) into 299,648,7611,781,682 shares of Class A Common Stock.
Between April 1,Sale Leaseback Transaction
On October 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 FF ieFactory California and May 12,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 Purchasers converted portions of an aggregate principal amount of $3.3 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 Unsecured NotesFF ieFactory California. The new lease will be for a term of five years, with a monthly lease rate of $0.4 million, with a five-year extension option, and the Tenant has an option to purchase the fee interest in the FF ieFactory California at a conversion price of $0.89 to $0.14 per share into 23,691,100 shares of Class A Common Stock.
Authorized Shares
Asany time after the second year of the datelease term. Furthermore, the Tenant has a right of first offer to purchase the issuanceFF ieFactory California in the event Landlord desires to sell the FF ieFactory California.
Unsecured SPA Funding
In October 2023, VW and MHL funded an additional portion of Unsecured SPA Notes. The Company received net proceeds of $1.8 million in exchange for such issuance.
At-the-Market Funding
Pursuant to the unaudited Condensed Consolidated Financial Statements,Sales Agreement, the Company may not have sufficient remaining authorizedhas sold 14,273,045 shares of Class A Common Stock for a total gross proceeds of $16.6 million. The Company pays a fee of 3.5% of the gross sales price, to fulfill its obligation to issue shares upon exercisethe Sales Agents and received $16.1 million net of this fee.
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Faraday Future Intelligent Electric Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
all of the warrants and conversion of all of the notes issued or issuable under the 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. In order to have a sufficient number of authorized shares of common stock to issue to the Purchasers and/or Investors pursuant to the NPA and SPA, the Company may call a subsequent special meeting to obtain stockholder approval to further increase the Company’s authorized shares of common stock.



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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-K10-K/A filed on March 9,August 21, 2023 (“Form 10-K”10-K/A”), as updated by Part II, Item 1A of“Risk Factors” in this Report and “Cautionary Note Regarding 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 and10-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.
RestatementAvailability of Information
The accompanying Management’s DiscussionWe 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 effectExchange Commission (the “SEC”) as soon as reasonably practicable after we electronically file them with, or furnish them to, the correctionSEC. 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 indisclosing information and observations about the Company and its business which may be of interest or material to our previously reported consolidated financial statements as ofinvestors, material, non-public information, and for the three month period ended March 31, 2023. For additionalcomplying with our disclosure obligations under Regulation FD: Instagram, Facebook, X, LinkedIn, Youtube, FF App, WeChat, Weibo, Toutiao, Douyin, and Futu. The information and observations we post through these social media channels may be deemed material. Accordingly, investors should monitor the
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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 discussionmeans of these error corrections, referdisclosing 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, NotesSEC. 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.
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On July 21, 2021, 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 Agreementan agreement and Planplan 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 (the “Business Combination”).
Upon the consummation of the Business Combination, PSAC changed its name from Property Solutions Acquisition Corp. to Faraday Future Intelligent Electric Inc., and FF’s Class A common stock, par value $0.0001 per share (the Class A Common StockStock”) and Public Warrants287,220 public warrants (the “Public Warrants”) began trading on The Nasdaq Global Market (“Nasdaq”) under the ticker symbols “FFIE” and “FFIEW,” respectively.
With headquarters in Los Angeles, California, FF designs and engineers next-generation, intelligent, connected, electric vehicles. FF 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 PTFF Product and Technology Upgrade Generation 2.0 (PT Gen 2.0,2.0), team, and business model distinguish FF from its competitors:
•FF has designed and developed a breakthrough mobility platform — its proprietary 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 has designed and developed a breakthrough mobility platform — its proprietary VPA.
●•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.FF’s propulsion system provides a competitive edge in acceleration and range, enabled by an expected industry-leading inverter design, and propulsion system.
●•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 November 7, 2023, FF has been granted approximately 660 patents globally.FF’s advanced 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.
●•FF’s B2C (business-to-customer) passenger vehicle pipeline over the next five years is planned to include the FF 91 series, the FF 81 series, and the FF 71 series.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 May 5, 2023, FF has been granted approximately 660 patents globally.
●•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 electric vehicle to offer a highly-personalized, fully-connected user experience for driver and passengers. FF started production on the first FF 91 futurist and delivered the first FF 91 2.0 Futurist Alliance in the first half of 2023.FF’s B2C (business-to-customer) passenger vehicle pipeline over the next five years is planned to include the FF 91 series, the FF 81 series, and the FF 71 series.
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●•Subject to future financing, FF plans to 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 start production and deliveries of the FF 71 subsequent to production and deliveries of the 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 believes that the FF 91 Futurist will be the first ultra-luxury EV to offer a highly-personalized, fully-connected user experience for driver and passengers. FF announced the start of production of the FF 91 Futurist on March 29, 2023, and FF’s first production FF 91 Futurist vehicle came off the line on April 14, 2023. FF has
developed a three-phase delivery plan for the FF 91 Futurist. The first phase is expected to begin at the end of
May 2023, and the second phase is expected to begin at the end of the second quarter of 2023, followed by the third phase. The first phase is the “Industry Expert Futurist Product Officer (FPO) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) will pay in full for an FF 91 vehicle in order to reserve the vehicle and be trained in the use of the vehicle. The reserved FF 91 vehicle will be delivered to the FPO at the beginning of the second phase. The second phase is the “FPO Co-Creation Delivery.” In this second phase, FPO(s) will take possession of the FF 91 vehicle. The third phase is the “Full Co-Creation Delivery.” In this third phase, FF will deliver FF 91 vehicles to all spire users that pay in full for an FF 91 vehicle. FF expects to need substantial additional financing to start the third phases of the delivery plan and is in discussions with additional potential investors to obtain such 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. The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to need substantial additional financing to start the third phase of the delivery plan and is in discussions with additional potential investors to obtain such financing.
●Subject to future financing, FF plans to 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 start production and deliveries of the FF 71 subsequent to production and deliveries of the 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.
FF has adopted a hybrid manufacturing strategy consisting of its refurbished manufacturing facility in Hanford, California and a collaboration with Myoung Shin in South Korea. FF is also exploring other potential contract manufacturing options in addition to the contract manufacturing agreement in South Korea along with 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, with potential expansion to European markets.
Emerging Growth Company Status
Section 102(b)(1) of the JOBSJumpstart 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
On February 26, 2023, after an assessment by the Boardboard 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&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. Xuefeng Chen, subject to processes and controls to be determined by the Board after consultation with the Company’s management. The Company’s remaining departments continue to report to Mr. Xuefeng Chen. Based on the changes to his
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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 it operates in one operating segment and one reportable segment, as the co-CODM’s review financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Substantially all of the Company’s consolidated operating activities, including its long-lived assets, are located within the United States of America.U.S. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers.
ImpactOn September 16, 2023, Mr. Chen notified the Company of COVID-19 on FF’s Business (in thousands)
The residual effectshis decision to resign from his position as Global CEO of the COVID-19 pandemic continueCompany and as a member of the Board effective September 29, 2023. On September 21, 2023, the Board appointed Mattias Aydt to impact globalsucceed Mr. Chen as Global Chief Executive Officer and domestic economic conditions, which have affected our operations, our suppliers and other business partners.as a member of the Board, effective September 29, 2023. The impact of COVID-19 includes changes in consumer and business behavior, pandemic fears, market downturns, restrictions on business, and individual activities have created significant volatilitychange in the global economyCompany’s Global CEO has not impacted the Company’s prior determination that its co-CODM's are both its Global CEO and have led to reduced economic activity. Consequently, we have experienced increased levels of overall cost inflation and challenges within our supply chain. Such residual impact also continue to create 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.
Consumer trends that originated during the pandemic continue to persist and may also have long-lasting adverse impact on us. We cannot predict the extent and duration of such trends or their impact on us, which depend on many factors outside FF’s control. In addition, any future outbreaks or measures taken by government authorities in response to such outbreaks could adversely affect FF’s construction and manufacturing plans, sales and marketing activities, and business operations.
Any further delay to production will delay FF’s ability to produce and deliver the FF 91 and begin generating revenue. FF does not currently 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” in Item 1A 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, 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 of the Business Combination of all issued and outstanding Legacy FF Ordinary Stock into shares of Common Stock of FFIE 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
During the three months ended March 31, 2023, these additional milestones and events took place:
●Announced Faraday Future’s return to the Consumer Electronics Show, CES 2023, in Las Vegas, NV.
●Announced the shipment of one of the latest production-intent FF 91 Futurist testing vehicles to China for market testing and validation, including charging and infrastructure compatibility along with other hardware and software applications.
●Announced that FF is targeting a start of production date for its flagship FF 91 Futurist of March 30, 2023, assuming timely receipt of funds from the Company’s investors, at the Company’s Hanford California manufacturing facility, “FF ieFactory California.”
●Announced, on March 29, 2023, the start of production of FF’s flagship FF 91 Futurist at the Company’s Hanford
California manufacturing facility, “FF ieFactory California”.
In the period subsequent to March 31, 2023, these additional milestones and events took place:Founder.
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●Announced the completion of FF’s first production build vehicle, the FF 91 Futurist, which came off its
production line at FF ieFactory California on April 14, 2023.
●announced the launch of FF’s Generative AI Product Stack, which will be integrated in the Company’s flagship vehicle, the FF 91. FF is one of the first automotive manufacturers to integrate and demonstrate generative AI capabilities in a vehicle.
●Appointed Rich Schmidt as vice president of manufacturing. Mr. Schmidt will be responsible for leading all facets of FF’s production and manufacturing, focusing on the Hanford, CA manufacturing plant, FF ieFactory California. He will oversee the continued development, component tooling, and hiring related to the production of the FF 91. Mr. Schmidt succeeds Mathias Hofmann, FF’s Senior Vice President of Global Supply Chain.
●Announced 365 non-binding, fully refundable pre-orders as of May 5, 2023. Pre-orders are fully refundable, non-binding, paid deposits for the FF 91 Futurist vehicles available initially for sale to customers in the U.S. and China. FF 91 Futurist pre-orders require a $5,000 or $1,500 deposit, depending on the edition selected, for customers in the U.S. and up to CNY 50,000 or CNY 20,000 deposit, depending on the edition selected, for customers in China.
Recent Developments
Recent Governance Developments
●
As previously disclosed, from June to September 2022, FF and 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 from 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 and 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’ 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. 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 has complied with the applicable terms of the Heads of Agreement, and disputes any characterization to the contrary. Such disputes divert management and Board resources and are costly. There can be no assurance that this or any other dispute between the Company and FF Global will not result in litigation.
On October 3, 2022, Ms. Swenson and Mr. Scott Vogel, a member of the Board, tendered their resignation from the Board effective immediately. On October 3, 2022, Mr. Jordan Vogel also tendered his resignation from the Board effective on October 5, 2022 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 a director to fill the vacancy on the Board left by Ms. Swenson’s resignation. FF Top asserted the right to nominate a director 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 Annual Meeting 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.
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●On October 22, 2022, FFIE 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. Chad Chen (or a substitute nominee, as applicable), to the Board of Directors of the Company 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 so reasonably 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. 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.
●On November 26, 2022, the Board appointed Mr. Xuefeng Chen as Global CEO, effective as of November 27, 2022. Mr. Xuefeng Chen replaced Dr. Carsten Breitfeld, who was removed from the Global CEO position by the Board on November 26, 2022.
●On November 29, 2022, Mr. Robert Kruse, FF’s former Senior Vice President, Product Execution, resigned from the Company. On December 13, 2022, Mr. Matthias Aydt took on the role of Senior Vice President, Product Execution, effective immediately.
●On December 15, 2022, Mr. Lee Liu tendered his resignation from the Board, which resignation was effective on December 18, 2022. On December 18, 2022, Mr. Jie Sheng was appointed to the Board, effective immediately, following the resignation of Mr. Liu. On December 25, 2022, Mr. Edwin Goh tendered his resignation from the Board, which resignation was effective on December 26, 2022. On December 27, 2022, Ms. Ke Sun was appointed to the Board, effective immediately, following the resignation of Mr. Goh. Mr. Sheng and Ms. Sun are designees of FF Top pursuant to the Amended Shareholder Agreement. On December 26, 2022, Dr. Carsten Breitfeld tendered his resignation from the Board, which resignation was effective immediately. On December 27, 2022, Mr. Xuefeng Chen was appointed to the Board, effective immediately, following the resignation of Dr. Breitfeld. On January 20, 2023, Mr. Qing Ye tendered his resignation from the Board, which resignation was effective immediately. Mr. Ye remains a consultant of the Company as an independent contractor until November 18, 2023, at which time both parties will mutually reassess the relationship. On January 25, 2023, Mr. Chui Tin Mok was appointed to the Board, effective immediately, following the resignation of Mr. Ye. On March 9, 2023, Mr. Matthias Aydt tendered his resignation from the Board, effective upon the nomination and approval by the Board of a replacement director. On March 13, 2023, upon the recommendation of the Nominating and Corporate Governance Committee, the Board appointed Li Han to fill the vacancy on the Board due to Mr. Aydt’s resignation.
●On February 26, 2023, after an assessment by the Board of FF’s management structure, the Board approved Mr. Yueting Jia (alongside Mr. Xuefeng Chen) reporting directly to the Board, as well as FF’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments reporting directly to Mr. Jia. The Board also approved FF’s user ecosystem, capital markets, human resources and administration, corporate strategy and China departments reporting to both Mr. Jia and Mr. Xuefeng Chen, subject to processes and controls to be determined by the Board after consultation with the Company’s management. The Company’s remaining departments continue to report to Mr. Xuefeng Chen. 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.
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●On January 13, 2023, the Company entered into an Amended and Restated Shareholder Agreement (the “Amended Shareholder Agreement”) with FF Top and, solely for purposes of certain amendments to the Heads of Agreement, FF Global, which amended and restated the Shareholder Agreement, as amended by the Heads of Agreement. Pursuant to the Amended Shareholder Agreement, (a) FF Top has the right to nominate certain designees to the Board, (b) the Company agreed not to elect to be treated as a “controlled company” as defined under Nasdaq rules, (c) the Company agreed to cooperate with any written requests by FF Top relating to any pledge, hypothecation or grant of shares of Common Stock, (d) FF Top informed the Company that FF Top expects certain proposals to be submitted to Company stockholders for approval to amend provisions of the Company’s Amended and Restated Charter related to voting power of Class B Common Stock, FF Top designees to the Board and written consent of stockholders, (e) the Company agreed not to enter into any transaction or series of related transactions that would require a stockholder vote under Nasdaq Listing Rule 5635(d) (without giving effect to Section 5635(f) thereof) without FF Top’s prior written consent, which written consent shall not be unreasonably withheld, conditioned or delayed, (f) the Company agreed that investors under the SPA shall have the right to enter into any voting agreement or grant a voting proxy, at any time and on any terms, with or to FF Top with respect to any shares of Common Stock held by such investors, (g) FF Top agreed (i) to vote all shares of Common Stock that it beneficially owns in favor of an increase in the Company’s authorized shares of Class A Common Stock from 815.0 million to 1.69 billion (as such number may be adjusted due to any stock split, reverse stock split or other similar corporate action after January 13, 2023) at the next meeting of the Company’s stockholders held to consider such proposal (as such meeting may be adjourned or postponed) and (ii) not to transfer, convert or otherwise take any action that would result in the conversion of any shares of Class B Common Stock into Class A Common Stock of the Company prior to the Company’s receipt of stockholder approval for an increase in the number of authorized shares of Class A Common Stock in accordance with the foregoing, (h) (i) FF Top released and waived claims it or any other “FF Top Parties” (i.e., FF Top, FF Peak Holding LLC, a Delaware limited liability company, Pacific Technology Holding LLC, a Delaware limited liability company, FF Global and each of their affiliates, and their respective successors and assigns) may have had against the Company and the Company Parties (described below; such claims, the “FF Top Claims”) relating to matters occurring at any time after September 23, 2022 but prior to the execution of the Amended Shareholder Agreement (the “FF Top Release”), and (ii) the Company released and waived any and all claims it or any other “Company Parties” (i.e., the Company and each of the Company’s controlled affiliates, each individual currently serving as a director or on the management team of the Company or any of its controlled affiliates, and the respective successors and assigns of any of the foregoing) may have against FF Top Parties relating to any matters occurring at any time after September 23, 2022 but prior to the execution of the Amended Shareholder Agreement, and (i) the Company, FF Top and FF Global agreed that certain conditions in the Heads of Agreement have been satisfied, that there are no Definitive Documents (as such term is defined in the Heads of Agreement) beyond the Heads of Agreement and the Amended Shareholder Agreement, and to certain other amendments of the Heads of Agreement.
•Recent Financing Developments
●On August 14, 2022, FFIE entered into a definitive Securities Purchase Agreement with FF Simplicity and RAAJJ Trading LLC for $52.0 million of committed near-term convertible senior secured notes financing and the potential for an additional $248.0 million of incremental senior secured convertible notes financing to be funded within 90 days after the initial closing.
●On September 23, 2022, FFIE entered into Amendment No. 1 to the SPA and Convertible Senior Secured Promissory Notes, to amend, among other things (a) the 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.
●On September 25, 2022, FFIE entered into a Joinder and Amendment Agreement with Senyun, FF Simplicity and RAAJJ Trading LLC, for the purchase of up to $60.0 million under the SPA, subject to the completion of due diligence by the Company of Senyun and its financing sources.
●On October 24, 2022, FFIE entered into a Limited Consent and Third Amendment to the SPA (the “Third Amendment”) with FF Simplicity as administrative and collateral agent and purchaser, Senyun as purchaser, and RAAJJ Trading LLC as purchaser.
●On November 8, 2022, FFIE entered into a Limited Consent and Amendment to the SPA (the “Fourth Amendment”) with FF Simplicity as administrative and collateral agent and purchaser, Senyun as purchaser, and RAAJJ Trading LLC as purchaser.
●On December 28, 2022, FFIE entered into a Letter Agreement and Amendment to the SPA (the “Senyun Amendment”) with FF Simplicity as administrative and collateral agent and Senyun as purchaser.
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●On January 25,On August 4, 2023, FFIE entered into a Limited Consent and Amendment No. 5 to the SPA (the “Fifth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun as purchaser.
●On February 3, 2023, FFIE entered into an Amendment No. 6 to Securities Purchase Agreement (The “Sixth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun, FF Top, FF Simplicity, FF Prosperity, Acuitas and other purchasers.
●On March 27, 2023, FFIE entered into an Amendment No. 7 to Securities Purchase Agreement (The “Seventh Amendment”) with FF Simplicity as administrative, collateral agent and purchaser, and Senyun and FF Prosperity as purchasers.
●On May 9, 2023, FFIE entered into an Amendment No. 8 to Securities Purchase Agreement (The “Eighth Amendment”) with FF Simplicity as administrative, collateral agent and purchaser, and Senyun and FF Prosperity as purchasers.
●On May 8, 2023, the Company entered into a Securities Purchase Agreement (the “Unsecured SPA”) with Metaverse Horizon Limited and V W Investment Holding Limited, as purchasers (collectively with additional purchasers from time to time party thereto, the “Unsecured SPA Purchasers”), to issue and sell, subject to the satisfaction of certain closing conditions (as described further below), $100.0 million aggregate principal amount of the Company’s senior unsecured convertible promissory notes.
●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 (the “ATW 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 of October 9, 2020 (as amended from time to time, the “NPA,” and such convertible notes issued under the NPA, the “ATW NPA Notes”), into shares of Class A Common Stock, as follows below:
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 ATW Investors exercised 2,687,083 ATW NPA Warrants, each with an exercise price of $0.64 per share, into an equivalent number of shares of Class A Common Stock, resulting in net cash exercise proceeds to FFIE of $1.7 million.
●On September 27, 2022, the ATW Investors exercised 29,158,364 ATW NPA Warrants, each with an exercise price of $0.50 per share, on a cashless basis into 14,339,110 shares of Class A Common Stock.
●On September 27, 2022, the Board approved the issuance of 3,169,822 stock option awards, each exercisable into one share of Class A Common Stock, as part of the Company’s 2021 Stock Incentive Plan. Vesting terms include annual vesting in 25% increments from the vesting start date, 100% vesting as of the vesting start date, and vesting upon the start of production of the FF 91 Futurist.
●On October 10, 2022, FFIE entered into an exchange agreement with the ATW Investors, pursuant to which, on October 10, 2022, the ATW Investors exchanged $4.0 million 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, FFIE and the ATW Investors entered into an exchange agreement, pursuant to which, on October 19, 2022, the ATW Investors exchanged $2.7 million 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.
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●Between November 22, 2022 and February 28, 2023, FF Simplicity, Senyun and RAAJJ Trading LLC converted portions of the aggregate principal amount of the outstanding convertible notes of $68.9 million issued by the Company pursuant to the SPA at a conversion price of $0.23 to $1.05 per share into 258,909,938 shares of Class A Common Stock.
●Between November 22, 2022 and February 7, 2023, FF Simplicity, Senyun and RAAJJ Trading LLC exercised 43,874,615 SPA Warrants using exercise prices of $0.28 to $0.2275 per share into 39,647,862 shares of Class A Common Stock. Between December 15, 2022 and February 6, 2023, the ATW Investors exercised 28,597,331 NPA ATW Warrants using an exercise price of $0.2275 per share into 23,557,189 shares of Class A Common Stock.
●On November 14, 2022, FFIE announced entry into the SEPA with Yorkville, with an initial commitment of $200.0 million. Under the terms of the SEPA, FFIE has the right, but not the obligation, to issue and sell to Yorkville up to $200.0 million in shares Class A Common Stock subject to customary conditions including an effective registration statement for the resale of such shares. FFIE has the right to increase the $200.0 million commitment by up to $150.0 million in one or more installments. The shares will be sold to Yorkville at a discounted price of 97% of the three-day VWAP at the time of funding, and generally limited to one-third of FFIE’s trading volume during such time period. On December 8, 2022, FFIE filed with the SEC a registration statement on Form S-1 (File No. 333-268722) to register shares of Class A Common Stock to be issued under the SEPA. Such registration statement was declared effective by the SEC on March 22, 2023.
●
Between April 1, 2023 and May 12, 2023 the Purchasers converted portions of an aggregate principal amount of $60.2 million of the SPA Notes at a conversion price of $1.05 to $0.14 per share into 299,648,761shares of Class A Common Stock.
●
Between April 1, 2023 and May 11, 2023 the Purchasers converted portions of an aggregate principal amount of $3.3 million of the Unsecured Notes at a conversion price of $0.89 to $0.14 per share into 23,691,100 shares of Class A Common Stock.

Special Committee Investigation
As previously disclosed on November 15, 2021, the Board establishedappointed Mr. Lev Peker as 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 with 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 directionmember of the Executive Chairperson, reporting to the Audit Committee. In connection with the Special Committee’s reviewBoard and subsequent investigative work, the following findings were made:
In connection with the Business Combination, statements made by certain Company employees to certain investors describing the role of Mr. Yueting Jia, the Company’s founderas a member 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 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.
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●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.
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 Jerry Wang, and withholding of information also affected the remedial action taken with respect to Matthias Aydt.
Based on the results of the investigation, the Special Committee concluded that, except as described above, other substantive allegations of inaccurate FF disclosures that it evaluated, were not supported by the evidence reviewed. Although the investigation did not change any of the above findings with respect to the substantive allegations of inaccurate 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 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 & User Ecosystem Officer of FFIE. Certain dual-reporting arrangements were eliminated with respect to Mr. Jia, and he is required to report directly to Ms. Swenson, a non-independent director nominated by FF Top. Mr. Jia also received a 25% annual base salary reduction, and his role was limited from a policy-making position to focusing on (a) Product and Mobility Ecosystem and (b) Internet, Artificial Intelligence, and Advanced R&D technology;
●Matthias Aydt, then Senior Vice President, Business Development and Product Definition and a former director of FFIE, and currently Senior Vice President, Product Execution, being placed on probation as an executive officer for a six-month period, during which period he remained a non-independent member of the Board, which probationary period has since ended;
●the appointment of Jordan Vogel as Lead Independent Director; certain changes to the composition of Board committees, including Brian Krolicki stepping down from his role as Chairman of the Board and Chair of the Nominating and Corporate Governance Committee and becoming a member of the Audit and Compensation Committees of the Board; Jordan Vogel stepping down from the Nominating and Corporate Governance Committee; and Scott Vogel becoming the Chair of the Audit Committee and the Nominating and Corporate Governance Committee of the Board;
●the suspension without pay of Jiawei (“Jerry”) Wang, FFIE’s former Vice President, Global Capital Markets, who subsequently notified the Board of his decision to resign from FF on April 10, 2022;
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●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 implementation of a comprehensive training program for all directors and officers regarding, among other things, internal FF policies;
●the separation of Jarret Johnson, FF’s Vice President, General Counsel and Secretary; and
●certain other disciplinary actions and terminations of employment with respect to other FF employees (none of whom is an executive officer).
As of the date of this Report, 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. For instance, Ms. Swenson resigned from the Board on October 3, 2022. Moreover, effective on February 26, 2023, certain departments within the Company report to both Mr. Jia and Mr. Xuefeng 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. The Company’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments report directly to Mr. Jia, while the remaining departments continue to report to Mr. Xuefeng Chen. 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.
In addition to the above, the Company is strengthening its compliance policies and procedures, including the hiring of a Compliance Officer with the title of Deputy General Counsel (hired in March 2023), who will report on a dotted line to the Chair of the Audit Committee and a Director of Risks and Internal Controls. However there is no assurance can be provided that the remedial measures that continue to be implemented and additional actions by the Company to enhance its compliance policies and procedures will be implemented in a timely manner or at all, or will be successful to prevent inaccurate disclosures in the future. However, pursuant to the Heads of Agreement, FF has implemented certain governance changes that impact certain of the above-discussed remedial actions. On October 3, 2022, Ms. Swenson tendered her resignation from her role as both Executive Chairperson and member of the Board effective immediately. In addition, on October 3, 2022, Mr. Scott Vogel resigned from the Board effective immediately and Mr. Jordan Vogel resigned effective on October 5, 2022 upon his receipt of a supplemental release pursuant to the Mutual Release. On October 28, 2022, Mr. Brian Krolicki tendered his resignation from the Board effective immediately. On December 15, 2022, Mr. Lee Liu tendered his resignation from the Board, which resignation was effective on December 18, 2022. On December 18, 2022, Mr. Jie Sheng was appointed to the Board, effective immediately, following the resignation of Mr. Liu. On December 25, 2022, Mr. Edwin Goh tendered his resignation from the Board, which resignation was effective on December 26, 2022. On December 27, 2022, Ms. Ke Sun was appointed to the Board, effective immediately, following the resignation of Mr. Goh. Mr. Sheng and Ms. Sun are designees of FF Top pursuant to the Amended Shareholder Agreement. On December 26, 2022, Dr. Carsten Breitfeld tendered his resignation from the Board, which resignation was effective immediately. On December 27, 2022, Mr. Xuefeng Chen was appointed to the Board, effective immediately, following the resignation of Dr. Breitfeld. On January 20, 2023, Mr. Qing Ye tendered his resignation from the Board, which resignation was effective immediately. Mr. Ye remains a consultant of the Company as an independent contractor until November 18, 2023, at which time both parties will mutually reassess the relationship. On January 25, 2023, Mr. Chui Tin Mok was appointed to the Board, effective immediately, following the resignation of Mr. Ye. On March 9, 2023, Mr. Matthias Aydt tendered his resignation from the Board, effective upon the nomination and approval by the Board of a replacement director. On March 13, 2023, upon the recommendation of the Nominating and Corporate Governance Committee, the Board appointed Li Han to fill the vacancy on the Board dueand Audit Committee created by Mr. Adam (Xin) He’s resignation 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 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. Aydt’s resignation. On April 14, 2023, FF held its 2023 Annual Meeting and nominated directors for electionPeker as contemplated in the Heads of Agreement.
Subsequent to FFIE announcing the completiona member of the Special Committee investigation on February 1, 2022, FFIE, certain membersBoard and as a member of the management team, and employees of FFIE received a notice of preservation and subpoena from the staff of the SEC stating that the SEC had commenced a formal investigation relatingAudit Committee. In response to the mattersCompany’s notice, Nasdaq issued a letter to the Company on August 4, 2023 indicating that, wereeffective July 31, 2023, the subject of the
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Special Committee investigation. FFIE is cooperating fullyCompany no longer complies with the SEC’s investigation, including responding to multiple subpoenasNasdaq’s independent director 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 and other professional servicesaudit committee requirements as set forth in connection with the SEC investigation. At this stage, FF is unable to assess whether any material loss or adverse effect is reasonably possible asNasdaq Listing Rule 5605. As a result of the SEC’s investigation or estimateappointment of Mr. Peker as a member of the rangeBoard and as a member and chair of any potential loss. In addition, in June 2022, FF received a preliminary request for information from the DOJ in connectionAudit Committee, the Company regained compliance with the matters that wereboard independence requirements as set forth in Nasdaq Listing Rule 5605(b)(1) and the subjectaudit committee requirements as set forth in Nasdaq Listing Rule 5605(c)(2)(A).
•At a special meeting of the Special Committee investigation. FF has respondedCompany’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 Company’s outstanding common stock, par value $0.0001 per share (the “Common Stock”) at a range between 1-for-2 and 1-for-90, and a proposal stating that request and intends to fully cooperate with any future requests from the DOJ.

South Korea Contract Manufacturing
In February 2022,if a reverse stock split is implemented at a ratio of 1-for-8 or greater, the Company enteredwill 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 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 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 a definitive contract manufacturingone share of Common Stock, without any change in par value per share, and supply agreement with Myoung Shin Co., Ltd. (“Myoung Shin”), a South Korea-based automotive manufacturer and parts supplier, to manufacture the Company’s second vehicle, the FF 81. The agreement has an initial termauthorized shares of nine years from the startCommon Stock were reduced to 154,437,500, composed of production of the FF 81, which is scheduled as early as 2024. Pursuant to the agreement, Myoung Shin shall maintain sufficient manufacturing capabilities and capacity to supply FF 81 vehicles to the Company in accordance with the Company’s forecasts and purchase orders. The Company and Myoung Shin will each manufacture and supply certain FF 81 parts that Myoung Shin will use in the manufacture and assembly of FF 81 vehicles.
Financing Discussions and New Convertible Note and Warrant Financings
On March 29, 2023, FF announced the start of production of the FF 91 Futurist and, on April 14, 2023, FF’s first production FF 91 Futurist vehicle came off the line. Although FF has successfully obtained commitments since August 2022 from several investors totaling $267.0 million in convertible note financing, subject to certain conditions, and continues financing discussions with multiple parties, FF has experienced delays in securing additional funding commitments, 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. FF has developed a three-phase delivery plan for the FF 91 Futurist. The first phase is expected to begin at the end of May 2023, and the second phase is expected to begin at the end of the second quarter of 2023, followed by the third phase. The first phase is the “Industry Expert Futurist Product Officer (FPO) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) will pay in full for an FF 91 vehicle in order to reserve the vehicle and be trained in the use of the vehicle. The reserved FF 91 vehicle will be delivered to the FPO at the beginning of the second phase. The second phase is the “FPO Co-Creation Delivery.” In this second phase, FPO(s) will take possession of the FF 91 vehicle. The third phase is the “Full Co-Creation Delivery.” In this third phase, FF will deliver FF 91 vehicles to all spire users that pay in full for an FF 91 vehicle. The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to need substantial additional financing to start the third phase of the delivery plan and is in discussions with additional potential investors to obtain such financing.

The Company needs to raise additional capital to support the production and delivery of the FF 91 Futurist and satisfy its other capital needs. There is no assurance FF will be able to timely receive sufficient funding under existing 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. Further, there cannot be any assurance that FF will be able to develop the manufacturing capabilities and processes, or secure reliable sources of component supply to meet the quality, engineering, design or production standards, or to meet the required production volumes to successfully grow into a viable, cash flow positive business.
On August 14, 2022, FF entered into a definitive Securities Purchase Agreement (the “SPA”) with FF Simplicity Ventures LLC, an entity affiliated with ATW Partners LLC, and RAAJJ Trading LLC for $52.0 million of committed near-term convertible senior secured notes financing subject to certain conditions (which was increased on September 23, 2022 to $57.0 million, which increase was subsequently terminated upon the funding of the initial $10.0 million tranche of SPA Notes to Senyun, which occurred on October 27, 2022, another $10.0 million on November 15, 2022, and another $10.0 million in December 2022), and the potential for an additional $243.0 million of incremental senior secured convertible notes financing to be funded within 90 days after the initial closing. A committed amount of $52.0 million ($43.3 million net of original issue discount and transaction costs) has been funded to date. On September 23, 2022, FF and certain investors affiliated with ATW Partners LLC entered into a Warrant Exercise Agreement (the “Warrant Exercise Agreement”), pursuant to which, subject to the satisfaction of certain minimum trading price, minimum trading volume and certain other Equity Conditions (as described below), FF will have the right, exercisable on one or more occasions prior to January 23, 2023, to require the ATW Investors to
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exercise on a cash basis (each, a “Forced Exercise”) certain warrants held by the ATW Investors, in part, in exchange for newly issued(i) 147,875,000 shares of Class A Common Stock in an amount not to exceed (a) for any single Forced Exercise, $7.0 million in aggregate exercise price, and (b) for all Forced Exercises in the aggregate, the difference of (x) the maximum exercise price amount allowed under the Warrant Exercise Agreement (which is approximately $20.0 million) less (y) the aggregate exercise price of any voluntary exercises of the same warrants held by the ATW Investors after the date of the Warrant Exercise Agreement. The “Equity Conditions” are defined in the Warrant Exercise Agreement to include (among others): (a) the effectiveness of one or more registration statements under the Securities Act, (b) the availability of the Annual Report on Form 10-K contained in such registration statement(s) for the resale of the applicable Warrant shares, (c) the continued listing of(ii) 6,562,500 shares of the Company’s Class AB Common Stock, onpar value $0.0001 per share (the “Class B Common Stock”). No fractional shares of common stock were issued as a national securities exchange, (d) no occurrenceresult of any “Price Failure” (i.e., the VWAPReverse Stock Split. Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of thesuch fractional share.
The Class A Common Stock failingbegan 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 exceed $0.85 per share (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions)be traded on any two (2) trading days during the ten (10) trading day measurement period immediately precedingNasdaq Capital Market under the relevant determination date), subject to certain permitted adjustments,symbol “FFIEW” and (e) no occurrence of any “Volume Failure” (i.e., the aggregate daily dollar trading volume (as reported on Bloomberg) falling below $10.0 million on any two (2) trading days during the ten (10) trading day measurement period immediately preceding the relevant determination date).
On September 25, 2022, FFIE entered into a Joinder and Amendment Agreement with Senyun, FF Simplicity and RAAJJ Trading LLC,CUSIP number for the purchasewarrants remains unchanged. However, every 80 warrants are now exercisable for one share of up to $60.0 million under the SPA (with potential increase to $90.0 million), of which $35.6 million (net of original issue discount and transaction costs) has been funded to date. The initial $10.0 million tranche was funded on October 27, 2022, the second $10.0 million tranche was funded on November 15, 2022, and the third $10.0 million tranche was funded in parts on different dates in December 2022.
On October 24, 2022, FFIE entered into a Limited Consent and Third Amendment to the SPA with FF Simplicity as administrative and collateral agent and purchaser, Senyun as purchaser, and RAAJJ Trading LLC as purchaser.
On November 8, 2022, FFIE entered into a Limited Consent and Amendment to the SPA (the “Fourth Amendment”) with FF Simplicity as administrative and collateral agent and purchaser, Senyun as purchaser, and RAAJJ Trading LLC as purchaser.

On December 28, 2022, FFIE entered into a Letter Agreement and Amendment to the SPA (the “Senyun Amendment”) with FF Simplicity as administrative and collateral agent and Senyun as purchaser.

On January 25, 2023, FFIE entered into a Limited Consent and Amendment No. 5 to the SPA (the “Fifth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun as purchaser.
On February 3, 2023, FFIE entered into an Amendment No. 6 to Securities Purchase Agreement (The “Sixth Amendment”) with FF Simplicity as administrative and collateral agent and Senyun, FF Top, FF Simplicity, FF Prosperity, Acuitas and other purchasers. As of the date this Report, we have received $120.0 million ($106.1 million net of original issue discount and transaction costs) in Tranche C SPA Notes under the Sixth Amendment.

On March 23, 2023, the Company entered into an Amendment No. 7 to the SPA (the “Seventh Amendment”) with Senyun and entities affiliated with ATW Partners LLC, pursuant to which the parties agreed to accelerate the funding timeline of Tranche C Notes in the amount of $40.0 million, and an entity affiliated with ATW Partners LLC 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 original issuance costs associated with such funding. As part of the agreement, original issuance discount related to $25.0 million in principal amount of Tranche C Notes and Tranche B notes was agreed to be 14% and 16%, respectively.
On May 8, 2023, the Company entered into a Securities Purchase Agreement (the “Unsecured SPA”) with Metaverse Horizon Limited and V W Investment Holding Limited (the ”Unsecured SPA Purchasers”) to issue and sell, subject to the satisfaction of certain closing conditions, $100.0 million aggregate principal amount of the Company’s senior unsecured convertible promissory notes. On May 10, 2023 the Company received gross proceeds pursuant to the Unsecured SPA totaling $3.3 million ($3.0 million net of original issuance cost).
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 and/or convertible junior secured notes on the same terms as FF Simplicity Ventures LLC under the SPA.
FF will need further financing to support the ramp up and development of its sales and service systems for its flagship FF 91 vehicle and beyond. In particular, the Company is currently conducting due diligence on potential financing sources. This
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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. Additionally, certain investors under the SPA may not fund their commitments until the Company increases the number of authorized shares of its Class A Common Stock and registersat an exercise price of $920.00 per share.
•On September 16, 2023, Mr. Chen notified the securities underlying the SPA Warrants and SPA Notes in an effective registration statement.If we are unableCompany of his decision to raise sufficient additional funds in the near term, we 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.
FF’s cash needs after the start of productionresign from his position as Global CEO of the FF 91 Futurist will depend onCompany and as a member of the extentBoard effective September 29, 2023. On September 21, 2023, the Board appointed Mr. Mattias Aydt to which FF’s actual costs vary from FF’s estimatessucceed Mr. Chen as Global Chief Executive Officer and FF’s ability to control these costs and raise additional funds. Any challenges in supplier engagements, delays in ramping capacity or labor atas a member of the Hanford facility or for sales and service engagements, rising pricesBoard, effective September 29, 2023.
•On October 10, 2023, Ke Sun, a member of materials, or ongoing global supply chain disruptions may further increase the need for additional capital to produce and deliver the FF 91 series. In particular, recently, some suppliers have threatened to terminate their relationship withBoard notified the Company because of late payments or requested accelerated payments and other terms and conditionsher decision to resign as a resultdirector 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.effective immediately.
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 Production and Delivery
FF expects to derive revenue from sales of the FF 91 Futurist. The start of production of the FF 91 Futurist was announced on March 29, 2023, and FF’s first production FF 91 Futurist vehicle came off the line on April 14, 2023. FF has developed a three-phase delivery plan for the FF 91 Futurist. The first phase is expected to begin at the end of May 2023, and the second phase is expected to begin at the end of the second quarter of 2023, followed by the third phase. The first phase is the “Industry Expert Futurist Product Officer (FPO) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) will pay in full for an FF 91 vehicle in order to reserve the vehicle and be trained in the use of the vehicle. The reserved FF 91 vehicle will be delivered to the FPO at the beginning of the second phase. Delivery of the reserved FF 91 vehicle will occur at the beginning of phase two. The second phase is the “FPO Co-Creation Delivery.” In this second phase, FPO(s) will take possession of the FF 91 vehicle. The third phase is the “Full Co-Creation Delivery.” In this third phase, FF will deliver FF 91 vehicles to all spire users that pay in full for an FF 91 vehicle. The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to need substantial additional financing to start the third phase of the delivery plan and is in discussions with additional potential investors to obtain such financing.
The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to need 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 three-phase delivery plan, it plans to continue to move vehicles into production and off-the-line with high quality and high product power.
The FF 81, FF 71, and SLMD electric vehicle models are in various stages of planning or development and expected to be released after the FF 91 series depending on availability of adequate funding and other strategic factors.
Production and Operations
FF expects to continue to incur significant operating costs that will impact its future profitability, including research and developmentR&D expenses as it introduces new models and improves existing models; capital expenditures for the expansion of its manufacturing
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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.
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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.
RevenuesRevenue Recognition
FF is a development stage company and has not generated any revenue to date. FF’s anticipated introductionAutomotive Sales Revenue

We began the production of theour FF 91 Futurist its firstin 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 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 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 expectedallocated among the performance obligations in proportion to generate FF’s futurethe standalone selling price of our performance obligations. Our vehicle contracts do not contain a significant financing component.

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 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 distinct services being provided is treated as a reduction of revenue.

Customer Deposits
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 while otherrelated 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.
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Cost of Automotive Sales Revenue
Cost of automotive sales revenue includes direct and indirect materials, labor costs, manufacturing overhead, including depreciation costs of tooling and machinery, shipping and logistic costs, vehicle connectivity costs, and reserves for estimated warranty expenses. Cost of automotive sales revenues also includes adjustments to warranty expense.
Operating Expenses
Research and Development
Research and developmentR&D activities represent a significant part of FF’s business. FF’s research and developmentR&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 developmentR&D expenses consist of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for FF’s employees focused on research and developmentR&D activities, other related costs, depreciation, R&D services provided by co-creators, and an allocation of overhead. FF expects research and developmentR&D expenses to increase as FF continues to develop its vehicles. FF anticipates an increase in activitiesdecrease 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 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.
Non-operatingExpenses
Change in Fair Value Measurements
Change in fair value measurements consists of the losses and gains as a result of fair value measurements of certain financial instruments which FF records at fair value. Changes in fair value measurement of related party notes payable and
33

notes payable have decreased following the Business Combination as the majority of the liabilities converted to equity or were paid in cash.
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.
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.
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 Settlement of Notes Payable
Loss on settlement of notes payable consists of losses resulting from the settlement of notes payable as part of the Company’s ongoing financing activities.
Results of Operations (in thousands) (Unaudited)
To date, 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” in the Form 10-K, as updated in this Report for a full discussion on the risks and uncertainties related to costs.
Comparison of the Three Months Ended March 31, 2023 and 2022 (dollars in thousands)
Three Months Ended March 31,
2023 (As Restated)2022
Consolidated Statements of Operations
Operating expenses
Research and development$57,808 $114,935 
Sales and marketing5,065 6,186 
General and administrative26,513 27,880 
Loss on disposal of property and equipment3,698 — 
Change in fair value of earnout liability2,764 — 
Total operating expenses95,848 149,001 
Loss from operations(95,848)(149,001)
Change in fair value measurements48,135 1,186 
Interest expense(292)(3,746)
Related party interest expense— (622)
Other (expense) income, net1,168 (915)
Loss on settlement of notes payable(98,136)— 
Loss before income taxes(144,973)(153,098)
Income tax provision— — 
Net loss$(144,973)$(153,098)
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Research and Development
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Research and development$57,808 $114,935 $(57,127)(50)%
The decrease in research and development expense during the three months ended March 31, 2023 versus the same period in 2022 was primarily due to the decrease in engineering, design, and testing ("ED&T") services of $56,393 as the Company substantially completed R&D activities related to the FF 91 vehicle in 2022 and was focused on capitalizable activities attributable to Start of Production which was achieved on March 29, 2023; the decrease in personnel and compensation related expenses of $4,213 due to decreased 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; $1,422 decrease in professional services due to termination of consulting services in China and lower use of professional services in general as part of the above mentioned cost savings measures; partially offset by an increase in stock based compensation of $4,946 mostly related to the portion of stock options measured at fair value through the increase in authorized shares on February 28, 2023 and partially offset by a decrease in headcount coupled with a decreased in the Company’s stock price.
Sales and Marketing
Three Months Ended March 31,Change
20232022Amount%
Sales and marketing$5,585 $6,186 $(601)(10)%
The decrease in sales and marketing expense during the three months ended March 31, 2023 versus the same period in 2022 was primarily due to the decrease in personnel and compensation related expenses of $1,638, mainly attributable to a decrease in headcount and a decrease in marketing expense of $680 as part of cost saving measures implemented by the Company in light of its financial position and the focus on achieving Start of Production; partially offset by an increase in stock based compensation of $552 mostly related to the portion of stock options measured at fair value through the increase in authorized shares on February 28, 2023 and partially offset by a decrease in headcount coupled with a decreased in the Company’s stock price; and an increase in rent of $530 due to entering into new office leases agreements at the end of the first quarter of 2022 and; an increase in software subscription expense as the Company prepares the infrastructure for production.
General and Administrative
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
General and administrative$26,513 $27,880 $(1,367)(5)%
The decrease inGeneral 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 expense during the three months ended March 31, 2023 versus the same period in 2022 was primarily dueexpenses to the decrease in stock based compensationincrease as FF continues to grow its business.
Loss on Disposal of $228 mostly related to the portion of stock options measured at fair value through the increase in authorized shares on February 28, 2023,Property and partially offset by a decrease in headcount coupled with a decreased in the Company’s stock price; an increase in insurance expense of $3,648 due to increased premiums associated with a new D&O policy entered into in the third quarter of 2022; an increase of $628 due to entering into new office leases agreements at the end of the first quarter of 2022; and an increase in depreciation expense of $0 from increased capital expenditures related to Start of Production; partially offset by a decrease in professional service expense of $4,459 due to the conclusion of the Special Committee Investigation in 2022; and a decrease in personnel and compensation related expenses of $1,414 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.Equipment
Loss on disposal of property and equipment
35

Three Months Ended March 31,Change
20232022Amount%
Loss on disposal of property and equipment$3,698 $— $3,698 100 %
The increase relates to the abandonment of certain FF 91 Futurist program construction in loss of disposal on propertyprogress assets, primarily vendor tooling, machinery, and equipment, is due to the write offredesign of $3,698the related FF 91 components and implementation of certain constructionFF’s cost reduction program. Charges associated with disposals are recognized within operating expenses in process assets that are not expected to be used as partthe Condensed Consolidated Statements of Start of Production.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 earnout liability
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Change in fair value of earnout liability$2,764 $— $2,764 100 %
As of December 31, 2022, the Company reclassifiedBusiness Combination and classified them in Stockholders’ Equity (Deficit) since the earnout shares fromEarnout 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 liability classificationtime subsequent to the closing of the Business Combination, the Earnout Shares may be classified as a result ofderivative liabilities under ASC 815, Derivatives and Hedging, due to the Company having insufficient authorized shares to share-settlefully settle the earnout, which was previously determinedequity-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 be equity classified under ASC 815-40. As a result of the reclassification,such derivative liability classification were settled or the Company reclassified $2.2 million out of Additional paid-in capital into the Earnout liability, which is included in Other current liabilities on the Consolidated Balance Sheet as of December 31, 2022. On February 28, 2023, upon shareholder approval to increase the Company’s authorized shares, the Company hadhas sufficient authorized, unissued 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 expense in the Condensed Consolidated Statement of Operations and Comprehensive Loss.such contracts with shares.

Non-operatingExpenses
Change in Fair Value of (Related Party and Third Party) Notes Payable and Warrant Liabilities
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Change in fair value of notes payable and warrant liabilities$48,135 $1,186 $46,949 (3,959)%
The changeChange in fair value measurements forconsists of the three months ended March 31, 2023 is primarily due tolosses and gains as a result of fair value measurements of certain notes payable and warrants that were measuredwarrant liabilities which FF records at fair value in the comparative period in 2022 and were revalued during 2023 at predominantly lower fair values due to pricing inputs that use the market price of the Company’s Common Stock which has experienced a decline. Additionally, during the three months ended March 31, 2023, the Company recognized a gain in the change in fair value of warrant liabilities of $33.8 million. During the three months ended March 31, 2022, the Company did not have material liability-classified warrants with changes in fair value included in earnings.
Interest Expense
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Interest expense$(292)$(3,746)$3,454 92 %
The decrease in interest expense during the three months ended March 31, 2023 was primarily due to the Company’s repayment of $85.0 million of Ares notes payable principal and the conversion of $73.9 million of ATW NPA notes payable principal into the Company’s Class A Common Stock in the year ended December 31, 2022. The Company’s SPA Notes are carried at fair value and fluctuations in interest expense are included in the change in fair value of notes payable.value.
3648

Loss on Settlement of (Related Party and Third Party) Notes Payable
Loss on settlement of notes payable consists of losses resulting from the settlement of notes payable as part of the Company’s ongoing financing activities and losses incurred on modifications of the Company’s notes payable that qualify as an extinguishment pursuant to 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
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Related party interest expense$— $(622)$622 100 %
The decrease in relatedRelated party interest expense consists of interest expense on notes payable with related parties.
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.


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Results of Operations
Three Months Ended September 30,
(in thousands)20232022
Consolidated Statements of Operations
Revenues
Auto sales$551 $— 
Cost of revenues
Auto sales16,131 — 
Gross loss(15,580)— 
Operating expenses
Research and development21,593 47,582 
Sales and marketing5,318 3,823 
General and administrative24,023 28,551 
Change in fair value of earnout liability(67)— 
Total operating expenses50,867 79,956 
Loss from operations(66,447)(79,956)
Change in fair value of notes payable and warrant liabilities17,571 (1,764)
Change in fair value of related party notes payable and related party warrant liabilities4,726 — 
Loss on settlement of notes payable(21,357)(30,454)
Loss on settlement of related party notes payable(10,756)— 
Interest expense(90)(245)
Related party interest expense(69)(996)
Other expense, net(1,624)(6,457)
Loss before income taxes(78,046)(119,872)
Income tax provision— — 
Net loss$(78,046)$(119,872)
Revenues
Three Months Ended September 30,Change
(in thousands)20232022Amount%
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)20232022Amount%
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 31,29, 2023, as comparedthe 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
50

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)20232022Amount%
Research and development$21,593 $47,582 $(25,989)(55)%
The decrease in R&D expense is primarily due to the samereduction in engineering, design, and testing (“ED&T”) services of $11.9 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 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)20232022Amount%
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)20232022Amount%
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 $2.1 million.
Change in Fair Value of Earnout Liability
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Change in fair value of earnout liability$(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)20232022Amount%
Change in fair value of notes payable and warrant liabilities$17,571 $(1,764)$19,335 (1,096)%
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The Change in the fair value of notes payable and warrant liabilities is primarily due to a significant increase in the volume of outstanding notes payable and warrants accounted for at fair value when compared with the comparative period in 2022. As of September 30, 2022 the Company had $44.5 million of notes payable outstanding, compared with $130.1 million outstanding as of September 30, 2023, excluding the impact of mark to market valuation adjustments. Additionally, during the three months ended September 30, 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 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, 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)20232022Amount%
Change in fair value of related party notes payable and related party warrant liabilities$4,726 $— $4,726 NM*
*NM = not meaningful.
The Company did not have any related party notes payable or warrants that were re-measured at fair value during the three months ended September 30, 2022. In May 2023, the Company entered into Unsecured SPA Notes with MHL, who is a related party, and VW. On September 30, 2023, the related party Unsecured SPA Notes and warrant were revalued at a lower fair value than at their issuance due to pricing inputs that use the market price of the Class A Common Stock and debt discount rate which have experienced a decline.
Loss on Settlement of Notes Payable
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Loss on settlement of notes payable$(21,357)$(30,454)$9,097 (30)%
The decrease in the Loss on settlement of notes payable during the three months ended September 30, 2023 is primarily driven by a 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 $67.2 million in the prior period. The impact of the volume difference is offset by a larger loss on settlement per dollar of principal. The increase in the loss on settlement per dollar of principal is driven by the trailing-twelve-month trend of declines in the fair value of the Company’s notes payable driven by the change in the Company’s stock price over the period.
Loss on Settlement of Related Party Notes Payable
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Loss on settlement of related party notes payable$(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.




52


Interest Expense
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Interest expense$(90)$(245)$155 63 %
The decrease in Interest expense was primarily due to the Company’s repayment of $85.0 million of Ares notes payable principal and the conversion of $73.9 million of ATW NPA notes payable principal into the Class A Common Stock in the year ended December 31, 2022. The SPA Notes are carried at fair value and fluctuations in interest expense are included in the Change in fair value of notes payable.
Related Party Interest Expense
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Related party interest expense$(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, according to which it was agreed that a portion of principal and all outstanding accrued interest would bewas waived. The reduction in interest bearing debt and a lowered interest rate pursuant to the new agreement further contributed to this decrease.
Other (Expense) Income, Net
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Other (expense) income, net$1,168 $(915)$2,083 363 %
Three Months Ended September 30,Change
(in thousands)20232022Amount%
Other expense, net$(1,624)$(6,457)$4,833 75 %
The change in other (expense) income,Other expense, net of $2,083 was primarily due to a decrease in foreign currency transaction losses resulting from the revaluation of transactions denominated in currencies other than U.S. Dollars that are remeasured at the end of each period.
53

Nine Months Ended September 30,
(in thousands)20232022
Consolidated Statements of Operations
Revenues
Auto$551 $— 
Cost of revenues
Auto22,744 — 
Gross loss(22,193)— 
Operating expenses
Research and development104,670 259,741 
Sales and marketing18,082 16,207 
General and administrative67,598 89,069 
Loss on disposal of property and equipment3,698 1,407 
Change in fair value earnout liability2,033 — 
Total operating expenses196,081 366,424 
Loss from operations(218,274)(366,424)
Change in fair value of notes payable and warrant liabilities90,030 4,580 
Change in fair value of related party notes payable and related party warrant liabilities5,110 — 
Loss on settlement of notes payable(204,885)(30,454)
Loss on settlement of related party notes payable(17,248)— 
Interest expense(591)(5,119)
Related party interest expense(139)(2,931)
Other expense, net(1,922)(14,307)
Loss before income taxes(347,919)(414,655)
Income tax provision(28)(9)
Net loss$(347,947)$(414,664)
Revenues
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Auto Sales$551 $— $551 NM*
*NM = not meaningful.

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

Cost of Revenues
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
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
54

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 vehicle.
Research and Development
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
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 $3.6 million.
Sales and Marketing
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Sales and marketing$18,082 $16,207 $1,875 12 %
The increase in sales and marketing expense 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 expenses of $0.3 million due to a decrease in headcount as part of cost saving measures implemented by the Company in light of its financial position and a decrease of $0.3 million in stock-based compensation expense.
General and Administrative
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
General and administrative$67,598 $89,069 $(21,471)(24)%
The decrease in general and administrative expense was primarily due to 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 services expenses 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 third quarter of 2022 and an increase in remaining other miscellaneous expenses of $2.6 million.
Loss on Disposal of Property and Equipment
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
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, 2023 was primarily due to the 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.





55


Change in Fair Value of Earnout Liability
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
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 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 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, 2023.
Change in Fair Value of Notes Payable and Warrant Liabilities
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Change in fair value of notes payable and warrant liabilities$90,030 $4,580 $85,450 1,866 %
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 notes payable and warrants at predominantly lower fair values due to pricing inputs that use the market price of the Common Stock and debt discount rate, which have experienced a decline. As of September 30, 2022 the Company had $44.5 million of notes payable outstanding, compared with $130.1 million outstanding as of September 30, 2023, excluding the impact of mark to market valuation adjustments. Additionally, during the nine months ended September 30, 2022 the Company did not have material liability classified warrants with changes in fair value included in earnings. During the nine months ended September 30, 2023, the Company recognized a gain in the Change in fair value of 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, 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)20232022Amount%
Change in fair value of related party notes payable and related party warrant liabilities$5,110 $— $5,110 NM*
*NM = not meaningful.
The Company did not have any related party notes payable or warrants that were re-measured at fair value during the nine months ended September 30, 2022. In May 2023, the Company issued the Unsecured SPA Notes to MHL, who is a related party, and VW. On September 30, 2023, the related party Unsecured SPA Notes and warrants were revalued at a lower fair
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value than at their issuance due to pricing inputs that use the market price of the Class A Common Stock and debt discount rate which have experienced a decline.
Loss on Settlement of Notes Payable
Three Months Ended March 31,Change
2023 (As Restated)2022Amount%
Loss on settlement of notes payable$(98,136)$— $(98,136)N/M
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Loss on settlement of notes payable$(204,885)$(30,454)$(174,431)573 %
The lossincrease in the Loss on settlement of notes payable during the three months ended MarchSeptember 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, 2023 note holders converted $187.7 million of notes payable compared to $67.2 million in the prior period. The increase in the loss on settlement per dollar of principal is driven by the trailing-twelve-month trend of declines in the fair value of the Company’s notes payable driven by the change in the Common Stock price over the period.
Loss on Settlement of Related Party Notes Payable
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Loss on settlement of related party notes payable$(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 $18.7 million in exchange for 72,353,608 shares of Class A Common Stock and the Company recognized a Loss on settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt instrument.
Interest Expense
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Interest expense$(591)$(5,119)$4,528 88 %
The decrease in Interest expense was primarily due to the Company’s repayment of $85.0 million of Ares notes payable principal and the conversion of $73.9 million of ATW NPA notes payable principal into Class A Common Stock in the year ended December 31, 2023 is2022. The SPA Notes are carried at fair value and fluctuations in interest expense are included in the Change in fair value of notes payable.
Related Party Interest Expense
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Related party interest expense$(139)$(2,931)$2,792 (95)%
The decrease in Related party interest expense was due to an agreement, dated December 27, 2022, with Chongqing Leshi Small Loan Co., Ltd, a related party, according to which it was agreed that a portion of principal and all outstanding accrued interest was waived.
Other (Expense) Income, Net
Nine Months Ended September 30,Change
(in thousands)20232022Amount%
Other expense, net$(1,922)$(14,307)$12,385 (87)%
The change in Other expense, net was primarily due to a $95.1 million loss on settlementdecrease in foreign currency transaction losses resulting from the revaluation of SPA Notes due to their conversion into Class A Common Stock. Intransactions denominated in currencies other than U.S. Dollars that are remeasured at the prior period the Company did not have notes payable that settled at a loss.end of each period.
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Liquidity and Capital Resources
As describedGoing Concern
The Company has evaluated whether there are certain conditions and events, considered in the “Overview” section of this MD&A,aggregate, that raise substantial doubt about the COVID-19 pandemic impacted FF’sCompany’s ability to raise fundscontinue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued. Based on its recurring losses from operations since inception and may havecontinued 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 material adverse impact on future periods as FF preparesgoing 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 bringstrategic planning, engineering, design, and development of its vehicles to market, including itselectric 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 financingoperating activities, which fundand 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. 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,capital needs primarily through the pacenet proceeds received from capital contributions, the issuance of recoveryrelated party notes payable and notes payable (see Note 8, Related Party Transactions and Note 7, Notes Payable), the sale of economic activityCommon Stock, and the impact to consumers, allnet proceeds received from the Business Combination and a subscription agreement with certain investors (see Note 1, Nature of which are uncertainBusiness and difficult to predict. In addition, FF’s ability to raise additional funds is subject to a numberOrganization and Basis of other material risks and assumptions. Refer to the section titled “PresentationRisk Factors” in the Form 10-K for a full discussion of the risks associated with the COVID-19 pandemic.
As of March 31, 2023, the Company’s principal source of liquidity was cash on hand totaling $31.8 million, which was held for working capital and general corporate purposes.).
FF announced the start of production of its first electric vehicle, the FF 91 Futurist, on March 29, 2023 and FF’sannounced the delivery of its first productionelectric vehicle, the Ultimate AI TechLuxury FF 91 2.0 Futurist vehicle came off the lineAlliance, on AprilAugust 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. Based on certain management assumptions, including timely completion of certain testing and suppliers meeting our supply chain requirement, FF originally expected deliveries of the FF 91 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 Futurist.(the “Delivery Plan”). The first phase, is expected to begin at the end ofwhich began in May 2023, and the second phase is expected to begin at the end of the second quarter of 2023, followed by the third phase. The first phase is the “Industry Expert Futurist Product Officer (FPO)(“FPO”) Co-Creation Delivery.” In this first phase, the Industry Expert FPO(s) willare 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 reserved FF 91 vehicle will be delivered to the FPO at the beginning of the second phase. Delivery of the reserved FF 91 vehicle will occur at the beginning of phase two. The second phase, which is the “FPO Co-Creation Delivery.Delivery,” began in August 2023. In this second phase, FPO(s) will takeare taking possession of the FF 91 vehicle.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.Delivery,” In this third phase,in which, FF will deliver FF 91 vehicles to all spire users that payare expected to have paid in full for an FF 91 vehicle.
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vehicle at time of delivery.
The successful beginning of the second phase is contingent on receiving parts on our required timeframes and completion of requisite tests. Further, FF expects to needneeds substantial additional financing to start the third phase of the delivery planDelivery Plan and is in discussions with additional potential investors to obtain such financing. As FF executes the three-phase delivery plan,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 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.terms or at all. Further, there cannot be any assurance that FF will be able to develop the manufacturing capabilities and processes, or secure reliable sources of component supply to meet the quality, engineering, design or production standards, or to meet the required production volumes to successfully grow into a viable, cash flow positive business.
On March 29, 2023, FF announcedThe Company has continued financing discussions with multiple parties, but has experienced delays in securing additional funding commitments, which have exacerbated the start of production of the FF 91 Futuristsupply chain and liquidity pressures on April 14, 2023, FF’s first production FF 91 Futurist vehicle came off the line. 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 $267.0$513.5 million in convertible note financing and in committedfinancing. Additionally, the Company has received commitments totaling $20.0 million through forced warrant exercise proceeds, subject to certain conditions. A total of $220.3$300.2 million under these convertible note financing commitments has been funded to date ($193.3263.2 million net of original discount and transaction costs). Of theThe remaining balance of $46.7 million, an amount of $20.0$213.3 million is committedsubject to various conditions, including achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and contingent upon delivery of the FF 91 Futurist to the first batch of bona fide customers, and an amount of $15.0 million is expected to be funded within five business days after the 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 had the right to force the exercise of the warrants underlying the Warrant Reserve, as such term is defined in Note 13, Stockholders' Equity, in the notes to the unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2023 included elsewhere in this Report, for a total exercise price of $20.0 million in cash ($10.6 million remaining to be funded to the Company), upon the completion of certain milestones and conditions. The right to force exercise of the Warrant Reserve expired upon the holders exercising their warrants during 2023. In 2023 to date, Senyun, RAAJJ and a purchaser affiliated with ATW Partners LLC exercised their respective options to purchasereceived additional senior secured notes and the accompanying SPA Warrants of the Company. The Company receivedoptional funding - an aggregated gross proceeds of $38.0 million ($32.9 million net of original issuance discount) in exchange for such issuances.
Further, pursuant to the SEPA, the Company has the sole right, but not the obligation, to direct Yorkville from time to time to purchase up to $200.0 million of Class A Common Stock during the commitment period ending November 11, 2025, with an option to increase such amount to $350.0 million at FF’s option. On February 28, 2023, the stockholders approved, as is required by the applicable Nasdaq rules and regulations, advances of Class A Common Stock to be issued under the SEPA, including the issuance of any shares in excess of 19.99% of the issued and outstanding shares of Common Stock.
On May 8, 2023, the Company entered into the Unsecured SPA with the Unsecured SPA Purchasers to issue and sell, subject to the satisfaction of certain closing conditions, $100.0 million aggregate principal amount of the Company’s senior unsecured convertible promissory notes. On May 10, 2023 the Company received gross proceeds pursuant to the Unsecured SPA totaling $3.3 million ($3.0 million net of original issuance cost). The Unsecured SPA Purchasers committed to fund in eight subsequent closings fifteen days apart, subject to the satisfaction of certain closing conditions. In addition, any Unsecured SPA Purchaser may postpone or cancel any closing pursuant to the Unsecured SPA in its reasonable discretion if it reasonably determines, based on public information, that the first phase of the Company’s three-phase delivery plan as disclosed in public filings has not begun or will not begin prior to May 31, 2023 and/or the second phase of such delivery plan has not begun or will not begin prior to June 30, 2023, in each case within 15 calendar days of such deadline. See Note 16, Subsequent Events for more information regarding the UnsecuredSecured SPA.
FF has received third party beneficiary rights in equity commitment letters with FF Global and the sole stockholder of V W Investment Holding Limited to be able to compel the closing or seek damages subject to the limitations set forth therein. In the event of a breach by such investors of their obligations under their equity commitment letters with the Company, the Company may not be able to recover the damages caused by, or receive the funding due to, such breach.
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. Additionally, certain investors under the SPA may not fund their commitments until the Company increases the number of authorized shares of its Class A Common Stock and registers the securities underlying the SPA Warrants and SPA Notes in an effective registration statement. Furthermore, thereThere can be no assurance that FF wouldwill 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,
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Unsecured SPA, Unsecured Streeterville SPA or other debt or equity financing in a timely manner or on acceptable terms, if at all, and there is no assurance that the closing conditions under the Unsecured SPA would be satisfied.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,
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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 2023 will vary from our previously disclosed forecasts, and such variances may be material. While FF continues to be actively engaged in negotiations with potential financing sources, there is no guarantee that it will be able to raise further 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 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.
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 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 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 the Shelf Registration with the 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 an aggregate amount of $300.0 million in one or more offerings. The Shelf Registration provides an ability for the Company to 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 Rule 415 under the Securities Act of 1933. The aggregate compensation payable to the Sales Agents shall be 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 its Class A Common Stock under the Sales Agreement for gross cash proceeds of $1.3 million less placement agent fees of $0.1 million.
Despite the potential access to liquidity resulting from the SEPA, the Shelf Registration and the unfunded commitments from the Secured SPA and the Unsecured 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 March 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.
SinceThe Company is exploring various funding and financing alternatives to fund its formation, the Company has devoted substantial effortongoing 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 $3,671.7 million as of March 31, 2023. After the closingramp up production, including equipment leasing, construction financing of the Business CombinationFF 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 $991.0 million 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 1, Nature of Business and Organization and Basis of Presentation).
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 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.
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 or that the Company will be able to satisfy the closing conditions under its financing agreements. If events or circumstances occur such that the Company does not meet its strategic plans, the Company will be
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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.
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Significant Related Party Notes Payable and Notes Payable Facilities
TheAs 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 byin 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 fromto 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 Transactionsand Note 10, Notes Payable, in FF’s unauditedthe Condensed Consolidated Financial Statements.
Related party notes payable consistsAs of September 30, 2023, the following as of March 31, 2023 (dollarsCompany had outstanding $135.1 million in thousands):
Note NameContractual
Maturity
Date		Contractual
Interest
Rates		Balance
as of March 31, 2023 (As Restated)		Interest Expense for the Three Months Ended March 31, 2023 (As Restated)
Related party notes - China (as restated)December 31, 202312.0%$5,273 $— 
Related party notes – China various otherDue on Demand—%3,928 — 
$9,201 $— 

Schedule of Principal Maturities of Related Party Notes Payable (dollars in thousands):
The future scheduledaggregate principal maturities of related party notes payable as of March 31, 2023 were as follows (dollars in thousands):
Due on demand$3,928 
2023 (as restated)5,273 
$9,201 
Related party notes payable consists of the following as of December 31, 2022 (dollars in thousands):
Due on demand$3,755 
2023 (as restated)5,209 
$8,964 
The Company has entered into notes payable agreements with third parties, which consists of the following as of March 31, 2023 (dollars in thousands):

March 31, 2023
Note NameContractual
Maturity Date		Contractual
Interest
Rates		Unpaid Principal
Balance		Fair Value
Measurement
Adjustments		Original issue discount and proceeds allocated to warrantsNet
Carrying
Value		Interest Expense for the Three Months Ended March 31, 2023
Bridge Notes (1)
Various11%-15%$165,034 $(37,937)$(34,432)$92,665 $— 
Notes payable – China otherDue on Demand—%5,065 — — 5,065 — 
Auto loansOctober 20267%94 — — 94 2 
$170,193 $(37,937)$(34,432)$97,824 $2 
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December 31, 2022
Note NameContractual
Maturity Date		Contractual
Interest
Rates		Unpaid Principal
Balance		Fair Value
Measurement
Adjustments		Original issue discount and proceeds allocated to warrantsNet
Carrying
Value		Interest Expense for the three months Ended March 31, 2022 (As Restated)
Accrued Interest (As Restated)
Bridge Notes (as restated) (1)
October 27, 202810%$36,622 $264 $(10,878)$26,008 $— $— 
Notes payable – China otherDue on Demand—%4,997 — — 4,997 — — 
Auto loansOctober 20267%100 — — 100 — — 
$41,719 $264 $(10,878)$31,105 $— $— 
Schedule of Principal Maturities of Notes Payable
The future scheduled principal maturitiesamount of notes payable to 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, 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 to quantity, price and timing of March 31,delivery.
Sources of Liquidity
As of September 30, 2023, are as follows (dollarsthe 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 thousands):
Due on demand$5,065 
2023— 
2024— 
202541,000 
202694 
2027— 
Thereafter124,034 
$170,193 
Note 2, Liquidity and Capital Resources.
Cash Flow Analysis
Presented below is a summary of FF’s cash flows for the periods indicated (dollars in thousands):indicated:
Three Months Ended
March 31,		Nine Months Ended
September 30,
2023202220232022
Net cash provided by (used in)Net cash provided by (used in)Net cash provided by (used in)
Operating activitiesOperating activities$(102,980)$(122,364)Operating activities$(240,370)$(355,109)
Investing activitiesInvesting activities(16,873)(44,398)Investing activities(10,846)(112,099)
Financing activitiesFinancing activities134,443 (85,676)Financing activities237,565 (40,935)
Effect of exchange rate changes on cash and restricted cashEffect of exchange rate changes on cash and restricted cash170 (653)Effect of exchange rate changes on cash and restricted cash3,704 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 StatesU.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 developmentR&D associated with FF’s electric vehicles, corporate
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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 $(103.0) million and $(122.4)$240.4 million for the threenine months ended March 31,September 30, 2023 which were primarily related to ED&T services, compensation and 2022, 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 threenine months ended March 31,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 and contracted services totaling $12.5services.
Net cash used in operating activities was $355.1 million and compensation, benefits and related expenses totaling $26.3 million.for the nine months ended September 30, 2022. The largest components of FF’s cash used by operating activities during the threenine months ended March 31,September 30, 2022, were $33.6for professional and contracted services totaling $119.5 million, for wagescompensation, benefits and compensation related expenses totaling $95.3 million and $9.4 million for professional services. Other movements in both periods were related to changes in working capital.prepaid insurance totaling $21.7 million.
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Investing Activities
Net cash used in investing activities was $(16.9)$10.8 million and $(44.4)$112.1 million for the threenine months ended March 31,September 30, 2023 and 2022, respectively, and is related to the acquisition of fixed assets.
Financing Activities
NetFor the nine months ended September 30, 2023, net cash provided by (used in) financing activities was $134.4 million and $(85.7) million for$237.6 million. For the threenine months ended March 31, 2023, andSeptember 30, 2022, respectively.net cash used in financing activities was $40.9 million.
Net cash provided by financing activities during the threenine months ended March 31,September 30, 2023, primarily consists of $131.8$228.4 million in proceeds from notes payable, net of original issue discount, and $4.1 million in proceeds from the exercise of warrants, partially offset by $(1.1)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 threenine months ended March 31,September 30, 2022 primarily consists of $(87.1)$87.3 million in repayment of notes payable, including liquidation premiums, and $(0.5)$1.4 million in payments of finance lease obligations, partially offset by $1.9$9.5 million in proceeds from exercise of stock options.
Effect of Exchange Rate Changes on Cash and Restricted Cash
The exchange rates effect on Cashcash and Restrictedrestricted cash was $0.2$3.7 million and $(0.7)$11.6 million for the threenine months ended March 31,September 30, 2023 and 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. dollarDollar may positively or negatively affect FF’s operating results.
Off-Balance Sheet Arrangements
The 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, 2023 and 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 variabilityvolatility.
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Critical accounting estimates are defined as estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and volatility.
Accountinghave 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, and assumptions are evaluated on an ongoing basis, which are discussed in more detail underrefer to the section titled “Critical“Critical Accounting Policies and Estimates”Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations,, set forth in Part II, Item 7, of our 2022 Annual Report onthe Form 10-K filed on March 9, 2022, as well as in Note 1,10-K/A. Nature of Business and Organization and Basis of PresentationAs of the Notesdate of this report, there have been no changes to our critical accounting estimates described in the unauditedForm 10-K/A that have had a material impact on our Condensed Consolidated Financial Statements for discussion of estimatesand related to accounting pronouncements recently adopted.
For a description of FF’s significant accounting policies, seefootnotes.Note 1, Nature of Business and Organization and Basis of Presentation of the Notes to Consolidated Financial Statements included in the Form 10-K. 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.
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.
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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'sSEC’s rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive OfficerCEO 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 Chief Executive OfficerCEO and Chief Accounting Officer and Interim Chief Financial OfficerCFO (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 March 31,September 30, 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
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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.

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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. 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 agreementMerger 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 statementsConsolidated Financial Statements for the years ended December 31, 2021 and 2020 included in FF’s Annual Report on Form 10-K for the 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 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 FFIE’sFF’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022) and June 30, 2021 (as disclosed in Note 1 to FFIE’sFF’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022) related to notes
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payable, related party notes payable, accrued interest, related party accrued interest, interest expense, and related party interest 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
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Management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the material weaknesses. Since identifying the 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 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. Ms. Han’sMr. 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 Mr. Yueting Jia, FF’s founder, as an Executive Officer,executive officer, although he continued in his position as Chief Product &and User Ecosystem Officer of FFIE,FF, reporting to the Chairperson with his role limited to focusing on (a) Productproduct and Mobility Ecosystemmobility ecosystem and (b) Internet, Artificial Intelligence,I.A.I., and advanced R&D 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) reported directly or indirectly to the Global CEO of FF (previously Dr. Breitfeld and currently Mr. Xuefeng Chen)Aydt) indefinitely while the Board continues to evaluate the appropriate FF management reporting 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 to enhance internal reporting of related party transactions.

Our remediation activities are continuing during 2023, although certain of the remedial efforts described above are no longer applicable given recent developments. For instance, Ms. Swenson resigned from the Board on October 3, 2022.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, effective onas of February 26, 2023, certain departments within the Company report to both Mr. Jia and Mr. Xuefeng 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. The Company’s product, mobility ecosystem, I.A.I., and advanced R&D technology departments report directly to Mr. Jia, while the remaining departments continue to report to Mr. Xuefeng Chen. 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
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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 approvaladopting of Company-wide compensation policies;
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•hiring of a Compliance Officer with the title of Deputy General Counsel (hired in March 2023), who will reportreports on a dotted line to the Chair of the Audit Committee;committee; and
•engagedengaging an external consulting firm in April 2023 to work in the capacity of an internal audit function (engaged in March 2023), who will report on a dotted line to the Chair of the Audit committee.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:
•Continuingcontinuing 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;
•Designingdesigning 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;
•Designingdesigning and implementing controls for communicating and sharing information between legal, capital markets, and accounting to facilitate transactions being recorded timely and accurately;
•Designingdesigning 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;
•Designingdesigning and implementing controls to address the identification of and accounting for certain non-routine, unusual or complex transactions;
•Designingdesigning and implementing controls related to the identification and disclosure of certain arrangements and transactions with related parties;
•Continuingcontinuing 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
•Designingdesigning 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.
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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
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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
Other than as described in the preceding paragraphs, there have been no changes in internal control over financial reporting during the quarter ended March 31,September 30, 2023, that have materially affected, or are reasonably likely to materially affect, FF’s internal control over financial reporting.
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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 includeOther 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
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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
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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, therethe 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.

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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 disclosedprofile. 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
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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 Reportreported 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;
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●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, 2022S-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 Augustits 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
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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 changesbe 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 timecontinue building out its FF ieFactory in Hanford, California, to timesupport 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 filingsnew 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
NonePursuant 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
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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
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ITEM 6. EXHIBITS
Exhibit No.Description of ExhibitsIncorporation by Reference
3.1
3.2
10.13.3
4.1
4.2
10.1++
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
31.1*
31.2*
32.1**
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32.2**
101Inline XBRL Document Set for the unaudited Condensed Consolidated Financial Statements and accompanying notes to unaudited Condensed Consolidated Financial Statements
104Cover Page Interactive Data File - formatted in Inline XBRL and included in Exhibit 101
* Filed herewith.
** Furnished herewith.
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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 ChenMatthias Aydt
Name:Xuefeng ChenMatthias 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)
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