Faraday Future Intelligent Electric Inc. (NASDAQ:FFAI) ("Faraday Future", "FF" or the "Company"), a California-based global Embodied AI (EAI) ecosystem company, today announced that it has entered into Incremental Warrant Termination Agreements with each investor from its March 2025 convertible note financing (the "March 2025 Financing" and each such investor, a "March Investor"). With the support of all participating investors, the Company continues to make progress in reducing its debt and improving its capital structure.

Faraday Future Announced That It has Entered Into Incremental Warrant Termination Agreements With Each March 2025 Financing Investor as It Continues to Make Progress in Reducing Its Debt and Improving Its Capital Structure

Under the Termination Agreement, the Company has cancelled all 21,021,369 outstanding Incremental Warrants issued in the 1st to 3rd closings pursuant to the March 2025 Financing, permanently removing the potential dilution associated with their future exercise. Based on the current $5.00 conversion floor price for outstanding convertible notes issued pursuant to the March 2025 Financing, the exercise of these Incremental Warrants could have resulted in approximately 45% of potential maximum dilution. Along with the amendment agreement the Company entered into with each March Investor dated as of August 20, 2026, which eliminated the Company’s obligation to issue common warrants and incremental warrants at future March 2025 Financing closings, all common warrants and Incremental Warrants under March 2025 SPA have now been fully cancelled. On a fully diluted basis, the cancellation eliminates approximately 57.48% of the potential dilution associated with the March 2025 Financing, further reducing the Company’s dilution overhang and optimizing its capital structure.

Following the second quarter, the two optimization actions taken with respect to the liabilities arising from the March 2025 Financing are expected to directly reduce the approximately $5.794 million in fair-value-measured liabilities disclosed in the Company's previously reported second-quarter financial results. This reduction represents a meaningful improvement to the Company's balance sheet and liability profile.

"These Incremental Warrant Termination Agreements represent another concrete step in delivering on our commitment to capital value restoration and represents our latest action to reduce the Company’s potential dilution, reducing debt and optimizing our capital structure," said Jerry Wang, Executive Chairman of FF.