FFAI

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How FFAI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

81%

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187

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+4,155

words, now 47,024

New in FY2025

Important factors and risks that could cause actual results to differ materially from those in the forward-looking statements include, among others, the following: Risks Related to our Business and Industry • We do not have sufficient liquidity to pay our outstanding obligations and to operate our business and will likely file for bankruptcy protection if we are unable to access additional capital. • We have a limited operating history and face significant barriers to growth in the electric vehicle industry. • We have incurred substantial losses and anticipate we will continue to do so. • We expect our operating expenses to increase significantly. • Our financial forecasts rely in large part upon assumptions and analyses developed by management. • We have significant unfunded commitments from our investors. • MHL and V W Investment are purchasers of the Unsecured SPA Notes and are affiliates of FF Global and a longtime stockholder of our company, respectively, and such purchasers have limited assets. • We have incurred substantial indebtedness and may incur additional substantial additional indebtedness in the future, and we may be unable to refinance borrowings on terms that are acceptable to us, or at all. • The production and delivery of the FF 91 Futurist has experienced, and may continue to experience, significant delays. • Non-binding reservation deposits and other non-binding indications of interest may not be converted into binding orders/sales. • The success of our business depends on attracting and retaining a large number of consumers and maintaining strong demand for our vehicles, software and services. • We may not be able to accurately estimate the supply and demand for our vehicles. • We may have insufficient reserves to cover future warranty claims. • We have taken remedial measures in response to the Special Committee findings, which may be unsuccessful. • We were involved in an SEC investigation and may be subject to future investigations and legal proceedings related to the matters underlying the Special Committee investigation and other matters. • The market for the FF 91 Futurist is nascent and not established. • We depend on our suppliers, the majority of which are single-source suppliers. • Manufacturing the FF 91 at our California facility does not guarantee we will not incur significant production delays. • We have minimal experience servicing and repairing our vehicles. • Changes in U.S. and international trade policies may adversely impact our business and operating results. • We face competition from multiple sources, including new and established domestic and international competitors. • Our go-to-market and sales strategy will require substantial investment and commitment of resources and is subject to numerous risks and uncertainties. • We are pursuing multiple business strategies and expect to expand our development capabilities, and as a result, we may encounter difficulties in managing our multiple business units and our growth, which could disrupt our operations. • If we are unable to attract and/or retain key employees and Board members, officers and other individuals, our ability to compete could be harmed. • Vehicle defects may result in production and delivery delays, recall campaigns and/or increased warranty costs. • We may become subject to product liability claims that could harm our financial condition and liquidity. • Third-party claims of infringing or misappropriating intellectual property rights could be costly, time consuming and prevent us from developing or commercializing future products. • We have elected to protect some of our technologies as trade secrets rather than as patents. • We depend on our proprietary intellectual properties. • We are subject to stringent and changing laws, regulations and standards related to data privacy and security. • We are subject to cybersecurity risks relating to our various systems and software. • Our distribution model is different from the predominant current distribution model for automobile manufacturers and is subject to regulatory limitations on our ability to sell and service vehicles directly. • Our use of artificial intelligence technologies may not be beneficial to our business, and may cause our performance and reputation to suffer. • We and our suppliers may be subject to increased environmental and safety or other regulations and disclosure rules. • Increases in costs, disruption of supply or shortage of materials used to manufacture our vehicles, in particular for lithium-ion cells or electronic components, could harm our business. • We may not obtain/maintain sufficient insurance coverage, which could expose us to significant costs and disruption. • Yueting Jia's public image may adversely impact us. • Yueting Jia is subject to restrictions in China that may adversely impact our China strategy. • Yueting Jia and FF Global, over which Mr.
Risks Related to Investing in Cryptocurrency • The launch of central bank digital currencies (“CBDCs”) may adversely impact our business. • If we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated. • The cryptocurrency we hold is not insured and not subject to FDIC or SIPC protections. • Jerry Wang, the Global President of FF, and Koti Meka, the Chief Financial Officer of FF, serve as the Co-Chief Executive Officer and the Chief Financial Officer of AIXC, respectively.
Such appointment may cause them to devote less time to the Company.
Since inception, we have incurred cumulative losses from operations, negative cash flows from operating activities and had an accumulated deficit of $4.7 billion and $4.3 billion as of December 31, 2025 and 2024 , respectively.
Based on our recurring losses from operations since inception and continued cash outflows from operating activities, in our consolidated financial statements for the year ended December 31, 2025 we concluded that this circumstance raised substantial doubt about our ability to continue as a going concern within one year from the original issuance date of such financial statements.
Similarly, in their audit reports on the consolidated financial statements for the years ended December 31, 2025 and 2024 , our current and former independent registered public accounting firms included an explanatory paragraph stating that our recurring losses from operations and continued cash outflows from operating activities raised substantial doubt about our ability to continue as a going concern.
Our consolidated financial statements for the years ended December 31, 2025 and 2024 do not include any adjustments that may result from the outcome of this uncertainty.
As of the date that our consolidated financial statements for the year ende d December 31, 2025 , were issued, our management determined that FF would be required to obtain additional funding to continue as a going concern, resulting in there being substantial doubt about our ability to continue as a going concern.
We only recognized $0.5 million in revenue in 2025 .
We incurred a net loss of $397.1 million and $355.8 million for the years ended December 31, 2025 and 2024 , respectively.
Net cash used in operating activities was $107.6 million and $70.2 million for the years ended December 31, 2025 and 2024 , respectively.
The rate at which we incur costs and losses may increase significantly as we: • continue to develop the FF 91; • seek to execute on our FX strategy; • seek to execute on our AI strategy; • continue to develop and equip our manufacturing FF aiFactory California facility in Hanford, California; • build up inventories of parts and components; • develop and expand design, development, maintenance, servicing and repair capabilities; and • increase sales and marketing activities.
Pursuant to the Secured SPA Notes; 2023 Unsecured SPA Notes; Junior Secured SPA Notes; 2024 Unsecured SPA Notes, 2025 March Unsecured SPA Notes and 2025 July Unsecured SPA Notes (collectively known as the “SPA Portfolio Notes”) (each as defined in Note 8, Notes Payable to the Notes to Consolidated Financial Statements) has obtained commitments from several inve stors totaling $739.0 million in convertible note financing, subject to certain conditions.
A total $503.3 million under these commitments were funded as of December 31, 2025 with the remaining unfunded commitment of $49.5 million .
In aggregate, these investors have an option to invest an additional $467.0 million, of which $111.0 million had been funded as of December 31, 2025, with remaining optional funding of $40.5 million.
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 8, Notes Payable , in the Notes to the Consolidated Financial Statements contained in this Form 10-K) in accordance with the terms of the Secured SPA, with funding of 75% of such amount within five business days of the date of the Senyun Joinder and the remaining 25% of such amount within three business days thereafter, subject to certain conditions which have been satisfied.
MHL and V W Investment are purchasers of the Unsecured SPA Notes (as defined in Note 8, Notes Payable, in the Notes to the Consolidated Financial Statements contained in the Form 10-K) and are affiliates of FF Global and a longtime stockholder of our company, respectively, and such purchasers have limited assets.
If we further meaningfully delay additional production and delivery, potential consumers may lose confidence in us, and customers who have placed reservation deposits may them, harming our growth prospects.
Through December 31, 2025 , we had sold or leased only 16 FF 91 Futurist vehicles to user developers and employees.
Further, although we have engaged in marketing activities, as of December 31, 2025 , we had o nly 13,600 non-binding, fully refundable pre-orders for the FF 91 Futurist in the U.S. and China, under 500 non-binding, fully refundable pre-orders for the FX Super One and other non-binding indications of interest.
Commercializing the FF 91 Futurist and potential FX models, including FX Super One, will likely be a long process and depend on our ability to fund and scale up our productions, including through securing additional funding for our operations, the consummation of various third-party agreements and expanding marketing functions, as well as the safety, reliability, efficiency and quality of our vehicles, and the support and service that will be available.
(See Note 12, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements contained in this Form 10-K for more information regarding the findings and remedial actions relating to the Special Committee investigation.) There can be no guarantee that the Special Committee investigation revealed all instances of inaccurate disclosure or other deficiencies, or that other existing or past inaccuracies or deficiencies will not be revealed in the future.
On April 25, 2025, the Company disclosed the appointment of Mr.
Yueting Jia as Global Co-CEO, jointly leading the Company alongside Matthias Aydt, with a focus on advancing user ecosystem development, supply chain management, EV R&D, finance, legal, and China and Middle East operations.
We were involved in an SEC investigation and may be subject to future investigations and legal proceedings related to the matters underlying the Special Committee investigation and other matters, which may result in adverse findings, damages, the imposition of fines or other penalties, increased costs and expenses and the diversion of management’s time and resources.
We had previously voluntarily contacted the SEC in connection with the Special Committee investigation and cooperated fully with the SEC’s investigation.
We have incurred, and may continue to incur, significant legal, accounting and other professional services expenditures in connection any future SEC investigation, SEC inquiries, stockholder lawsuits and/or the DOJ inquiry.
Moreover, we rely on a single supplier for the majority of the components and engineering services required for our FX Super One.
If our suppliers experience any delays or stoppages in providing or developing necessary components or experience quality issues, or if they otherwise decide to cease doing business with us, we could experience further delays, including in homologating the FX Super One for the U.S.
Market, some of which may be significant, in delivering on our planned timelines.
We have not approved secondary sources for the key single-sourced components used in the FF 91 series and FX Super One.
Disruption in the supply of components, whether or not from a single-source supplier, could impair production until a satisfactory alternative supplier is found, which can be time consuming and costly.
Manufacturing the FF 91 at our leased FF aiFactory in California does not guarantee we will not incur significant production delays.
We plan to continue to build-out our leased FF aiFactory in California to support the production of the FF 91 series.
Escalated geographical tensions in key markets may result in declines in consumer confidence and spending, could have a material adverse effect on the Company’s operating results and development.
Events such as international hostilities (including the Russian invasion of Ukraine and war in the Middle East), terrorism, natural disasters or outbreaks of disease may suppress consumer spending and delay our development and deployment of our business in Middle East.
Recent escalations in hostilities involving Iran, as well as the risk of a broader regional conflict in the Middle East, have increased geopolitical uncertainty and volatility in the region.
The Middle East represents a significant market for the Company, and further deterioration in regional stability could adversely affect consumer confidence, and overall demand for our products in that market.
In addition, expanded military activity, sanctions, trade restrictions, shipping disruptions, port closures, airspace restrictions, or damage to critical infrastructure could disrupt the Company’s distribution channels, supply chain operations, logistics providers, and retail partners in the region.
Escalation of the conflict could also result in higher energy prices, currency volatility, inflationary pressures, or broader global economic instability, any of which could negatively impact consumer spending and the Company’s operating costs.

and 147 more.

Gone since FY2024

Important factors and risks that could cause actual results to differ materially from those in the forward-looking statements include, among others, the following: Risks Related to our Business and Industry • We do not have sufficient liquidity to pay our outstanding obligations and to operate our business and will likely file for bankruptcy protection if we are unable to access additional capital. • We have a limited operating history and face significant barriers to growth in the electric vehicle industry. • We have incurred substantial losses and anticipate we will continue to do so. • We expect our operating expenses to increase significantly. • Our financial forecasts rely in large part upon assumptions and analyses developed by management. • We have significant unfunded commitments from our investors. • MHL and V W Investment are purchasers of the Unsecured SPA Notes and are affiliates of FF Global and a longtime stockholder of our company, respectively, and such purchasers have limited assets. • We have incurred substantial indebtedness and may incur additional substantial additional indebtedness in the future, and we may be unable to refinance borrowings on terms that are acceptable to us, or at all. • The production and delivery of the FF 91 Futurist has experienced, and may continue to experience, significant delays. • Non-binding pre-orders and other non-binding indications of interest may not be converted into binding orders/sales. • The success of our business depends on attracting and retaining a large number of consumers and maintaining strong demand for our vehicles, software and services. • We may not be able to accurately estimate the supply and demand for our vehicles. • We may have insufficient reserves to cover future warranty claims. • We have taken remedial measures in response to the Special Committee findings, which may be unsuccessful. • We are involved in an SEC investigation and may be further subject to investigations and legal proceedings related to the matters underlying the Special Committee investigation and other matters. • The market for the FF 91 Futurist is nascent and not established. • We depend on our suppliers, the majority of which are single-source suppliers. • Manufacturing the FF 91 at our California facility does not guarantee we will not incur significant production delays. • We have minimal experience servicing and repairing our vehicles. • Changes in U.S. and international trade policies may adversely impact our business and operating results. • We face competition from multiple sources, including new and established domestic and international competitors. • Our go-to-market and sales strategy will require substantial investment and commitment of resources and is subject to numerous risks and uncertainties. • If we are unable to attract and/or retain key employees and Board members, officers and other individuals, our ability to compete could be harmed. • Vehicle defects may result in production and delivery delays, recall campaigns and/or increased warranty costs. • We may become subject to product liability claims that could harm our financial condition and liquidity. • Third-party claims of infringing or misappropriating intellectual property rights could be costly, time consuming and prevent us from developing or commercializing future products. • We have elected to protect some of our technologies as trade secrets rather than as patents. • We depend on our proprietary intellectual properties. • We are subject to stringent and changing laws, regulations and standards related to data privacy and security. • We are subject to cybersecurity risks relating to our various systems and software. • Our distribution model is different from the predominant current distribution model for automobile manufacturers and is subject to regulatory limitations on our ability to sell and service vehicles directly. • Our use of artificial intelligence technologies may not be beneficial to our business, and may cause our performance and reputation to suffer. • We and our suppliers may be subject to increased environmental and safety or other regulations and disclosure rules. • Increases in costs, disruption of supply or shortage of materials used to manufacture our vehicles, in particular for lithium-ion cells or electronic components, could harm our business. • We may not obtain/maintain sufficient insurance coverage, which could expose us to significant costs and disruption. • Yueting Jia's public image may adversely impact us. • Yueting Jia is subject to restrictions in China that may adversely impact our China strategy. • Yueting Jia and FF Global, over which Mr.
Since inception, we have incurred cumulative losses from operations, negative cash flows from operating activities and had an accumulated deficit of $4.3 billion and $4.0 billion as of December 31, 2024, and 2023 , respectively.
Based on our recurring losses from operations since inception and continued cash outflows from operating activities, in our audited consolidated financial statements for the years ended December 31, 2024, and 2023 , we concluded that this circumstance raised substantial doubt about our ability to continue as a going concern within one year from the original issuance date of such financial statements.
Similarly, in their audit reports on the consolidated financial statements for the years ended December 31, 2024, and 2023 , our current and former independent registered public accounting firms included an explanatory paragraph stating that our recurring losses from operations and continued cash outflows from operating activities raised substantial doubt about our ability to continue as a going concern.
Our consolidated financial statements for the years ended December 31, 2024, and 2023 do not include any adjustments that may result from the outcome of this uncertainty.
As of the date that our consolidated financial statements for the year ended December 31, 2024 , were issued, our management determined that FF would be required to obtain additional funding to continue as a going concern, resulting in there being substantial doubt about our ability to continue as a going concern.
We only recognized $0.5 million in revenue in 2024 .
We incurred a net loss of $355.8 million and $431.7 million for the years ended December 31, 2024, and 2023 , respectively.
Net cash used in operating activities was $70.2 million and $278.2 million for the years ended December 31, 2024, and 2023 , respectively.
The rate at which we incur costs and losses may increase significantly as we: • continue to develop the FF 91; • seek to execute on our FX strategy; • seek to execute on our AI strategy; • continue to develop and equip our manufacturing FF ieFactory California facility in Hanford, California; • build up inventories of parts and components; • develop and expand design, development, maintenance, servicing and repair capabilities; and • increase sales and marketing activities.
Pursuant to the Secured SPA Notes; 2023 Unsecured SPA Notes; Junior Secured SPA Notes; and 2024 Unsecured SPA Notes (collectively known as the “SPA Portfolio Notes”) (each as defined in Note 7, Notes Payable to the Notes to Consolidated Financial Statements) has obtained commitments from several inve stors totaling $614.5 million in convertible note financing, subject to certain conditions.
A total $405.3 million under these commitments were unfunded as of December 31, 2024 with the remaining unfunded commitment of $209.2 million.
In aggregate, these investors have an option to invest an additional $426.0 million, of which $50.9 million had been funded as of December 31, 2024, with remaining optional funding of $375.1 million.
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 the Consolidated Financial Statements contained in this Form 10-K) in accordance with the terms of the Secured SPA, with funding of 75% of such amount within five business days of the date of the Senyun Joinder and the remaining 25% of such amount within three business days thereafter, subject to certain conditions which have been satisfied.
MHL and V W Investment are purchasers of the Unsecured SPA Notes (as defined in Note 7, Notes Payable, in the Notes to the Consolidated Financial Statements contained in the Form 10-K) and are affiliates of FF Global and a longtime stockholder of our company, respectively, and such purchasers have limited assets.
If we further meaningfully delay additional production and delivery, potential consumers may lose confidence in us, and customers who have placed pre-orders may them, harming our growth prospects.
Through December 31, 2024, we had sold or leased only 16 FF 91 Futurist vehicles to user developers and employees.
Further, although we have engaged in marketing activities, as of December 31, 2024, we had only 299 non-binding, fully refundable pre-orders for the FF 91 Futurist in the U.S. and China, and other non-binding indications of interest.
Commercializing the FF 91 Futurist and potential FX models will likely be a long process and depend on our ability to fund and scale up our productions, including through securing additional funding for our operations, the consummation of various third-party agreements and expanding marketing functions, as well as the safety, reliability, efficiency and quality of our vehicles, and the support and service that will be available.
(See Note 11, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements contained in this Form 10-K for more information regarding the findings and remedial actions relating to the Special Committee investigation.) There can be no guarantee that the Special Committee investigation revealed all instances of inaccurate disclosure or other deficiencies, or that other existing or past inaccuracies or deficiencies will not be revealed in the future.
We are involved in an SEC investigation and may be further subject to investigations and legal proceedings related to the matters underlying the Special Committee investigation and other matters, which may result in adverse findings, damages, the imposition of fines or other penalties, increased costs and expenses and the diversion of management’s time and resources.
We had previously voluntarily contacted the SEC in connection with the Special Committee investigation and are cooperating fully with the SEC’s investigation.
The outcome is difficult to predict, and the SEC has expanded the scope of its investigation beyond that of the Special Committee.
In addition, the SEC may subject our directors, officers and employees to fines, penalties and other punitive actions.
At this stage, we are 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.
We have fully complied with and intend to continue to fully comply with the subpoenas.
We have incurred, and may continue to incur, significant legal, accounting and other professional services expenditures in connection with the Special Committee investigation, SEC investigation, SEC inquiries, stockholder lawsuits and the DOJ inquiry.
If our suppliers experience any delays or stoppages in providing or developing necessary components or experience quality issues, or if they otherwise decide to cease doing business with us, we could experience further delays, some of which may be significant, in delivering on our planned timelines.
We have not approved secondary sources for the key single-sourced components used in the FF 91 series.
Disruption in the supply of components, whether or not from a single-source supplier, could impar production until a satisfactory alternative supplier is found, which can be time consuming and costly.
Manufacturing the FF 91 at our leased FF ieFactory in California does not guarantee we will not incur significant production delays.
We plan to continue to build-out our leased FF ieFactory in California to support the production of the FF 91 series.
Our management and operational teams are based in the United States, China and the UAE.
We have experienced significant changes in the membership of the Board and senior management team, including the resignations of Ke Sun, Adam He and Li Han from their positions as members of the Board and various committees, as well as the resignation of FF China’s CEO, our Interim Chief Financial Officer, our Chief Accounting Officer, our Head of Human Resources, and our Interim Global General Counsel.
Yueting Jia, our founder and Chief Product and User Ecosystem Officer, is closely associated with our image and brand, and his public image may color public and market perceptions of our company.
Because of his position as our founder and his continuing role as our Chief Product and User Ecosystem Officer, as Founder Advisor to the Board (effective as of October 4, 2022), and, as of February 26, 2023, a Section 16 officer and an “executive officer” under Rule 3b-7 of the Exchange Act, Mr.
See “Note 11, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements for more information regarding the findings and remedial actions relating to the Special Committee investigation. • Mr.
Jia and the Global CEO, subject to processes and controls to be determined by the Board after consultation with our management.
Our remaining departments continue to report to the Global CEO.
Jia was disciplined by us in connection with the Special Committee investigation, and in light of the regulatory sanctions he has faced in China (as described above under “ – Yueting Jia, our founder and Chief Product and User Ecosystem Officer, is closely associated with our image and brand, and his public image may color public and market perceptions of us.

and 28 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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