Business Context and Reporting Period
Company: Faraday Future Intelligent Electric Inc. (FFAI)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Segments: AI Electric Vehicle (AIEV), Robotics, and Digital Assets (AIXC).
Operational Status: The Company is in the early stages of commercialization for its FX Series vehicles and Robotics products. It continues limited deliveries of the FF 91. The Company has consolidated AIxCrypto Holdings, Inc. (AIXC) since September 2025.
Key Financial Metrics
| Metric (in thousands) | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $512 | $316 |
| Cost of Revenue | $11,890 | $21,381 |
| Gross Profit (Loss) | $(11,378) | $(21,065) |
| Net Loss | $(42,317) | $(10,278) |
| Net Loss Attributable to FFAI | $(38,856) | $(10,278) |
| Cash and Cash Equivalents (End of Period) | $12,231 | $9,458 |
| Working Capital | $(76,006) | $(79,647) |
| Total Debt (Notes Payable) | $46,367 | $60,666 |
Note: Working Capital calculated as Total Current Assets ($41,903) minus Total Current Liabilities ($117,909).
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 62% to $0.5 million, driven by the first-time recognition of $0.2 million in automotive sales (FX Super One in U.A.E.) and $0.3 million in Robotics revenue.
- Cost Reduction: Cost of revenue decreased 44% to $11.9 million, primarily due to a $9.0 million reduction in depreciation expense following a $128.9 million impairment of property and equipment in Q3 2025.
- Operating Expenses: Total operating expenses increased to $24.5 million from $22.8 million. Sales and marketing expenses surged 114% to $5.6 million due to FX Super One launch activities. General and administrative expenses decreased 33% to $9.2 million due to legal fee reimbursements.
- Impairments: The Company recorded a $2.3 million impairment charge for intangible assets and goodwill, primarily related to the AIXC reporting unit.
- Digital Assets: A net loss of $1.9 million on digital assets was recorded, a new line item resulting from the consolidation of AIXC.
- Debt Conversions: Approximately $25.3 million of debt principal was converted into Class A Common Stock during the quarter, reducing the total notes payable balance.
Guidance, Outlook, Risks, and Contingencies
Going Concern Warning
Management has concluded that substantial doubt exists regarding the Company's ability to continue as a going concern for one year following the issuance of these financial statements. This is due to recurring operating losses, an accumulated deficit of $4.7 billion, and negative working capital of $76.0 million. The Company requires substantial additional funding to continue operations and advance production.
Liquidity and Financing
- Capital Raising: The Company relies on SPA Portfolio Notes, related party notes, and equity sales. As of March 31, 2026, $44.3 million remained to be funded under SPA Commitments, subject to closing conditions (e.g., share price thresholds).
- ATM Program: The Company is currently ineligible to access its At-The-Market (ATM) offering program until no earlier than December 1, 2026, due to late filing of the Q3 2025 10-Q.
- Subsequent Financing: Post-quarter, the Company secured $45.0 million in notes from Streeterville Capital and amended an agreement with Gold King Arthur Holding Limited for approximately $12.0 million.
Risks and Contingencies
- Legal Proceedings: The Company is involved in various legal matters, including disputes with suppliers (e.g., Tesca, Autokiniton) and former employees. Several matters have been settled or are in mediation.
- SEC Investigation: The SEC Division of Enforcement informed the Company in March 2026 that it does not intend to recommend an enforcement action regarding the 2021 PIPE and SPAC-related transactions.
- Internal Controls: Disclosure controls and procedures were deemed not effective as of March 31, 2026, due to a remaining material weakness related to the design and maintenance of formal accounting policies and procedures.
- Supply Chain: Significant reliance on China-based suppliers exposes the Company to U.S. import tariffs and supply chain disruptions.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $12.2 million cash balance against the projected burn rate and the timeline for securing the remaining $44.3 million in SPA commitments.
- Debt Conversion Terms: Review the specific conversion prices and anti-dilution provisions (full ratchet) of the SPA Portfolio Notes, as recent conversions have triggered significant dilution.
- Revenue Sustainability: Assess whether the initial FX Super One and Robotics sales are indicative of scalable revenue or one-time transactions, given the early commercialization stage.
- Internal Control Remediation: Monitor the progress of remediation for the material weakness in internal controls over financial reporting to ensure future filing timeliness and accuracy.
- Related Party Transactions: Scrutinize the terms and necessity of ongoing related party financing and service agreements (e.g., Chongqing debt restructuring, FFGP consulting fees).