Faraday Future: Significant clarification on changes in total share capital

Hello everyone, we would like to clarify and communicate some major doubts and misunderstandings of retail investors, misinterpretations by the media, and the malicious guidance of institutions with ulterior motives following the release of FF's 2023 annual financial report yesterday.

1. Why did the total share capital of FF increase tenfold overnight on stock trading software?

Regarding the increase in FF's total share capital from over 40 million shares to over 400 million shares, the technical reason is that due to the delayed release of the annual report, from the shareholder meeting documents earlier this year to the release of the annual report yesterday, there was no disclosure of updates to the share capital quantity, causing brokerage platforms to be unable to update the latest data, leading to the misunderstanding that the shares were "diluted tenfold overnight."

In fact, these shares were gradually issued in multiple batches over the past four months, and in reality, there has been no change in the number of shares held, the market value of holdings, or the percentage of holdings before and after the annual report was released.

2. Who were most of these shares issued to? Why were these shares issued?

As of May 10th this year, the company's total outstanding shares had reached nearly 400 million, with most of them being issued to existing institutional investors (specifically those who participated in this year's issuance). The financing corresponding to these convertible shares was mostly from convertible bonds they had invested in at least six months before conversion, and the company had previously made relevant overall disclosures.

As everyone knows, over the past six months, the company has experienced a very difficult situation of severe funding shortages. We couldn't even afford to pay rent in recent months, and we were on the verge of being evicted from the company headquarters we purchased at the beginning. These existing institutional investors have been continuously helping the company in its life-and-death moments. After selling the previously issued shares, they quickly injected most of the proceeds back into the company, saving it from delisting and bankruptcy.

At the same time, the company has taken a series of cost-cutting measures, including across-the-board salary reductions and even the lowest salaries, and everyone in the company has made great sacrifices to save the company. With the issuance of the aforementioned shares, everyone was able to work together with the institutional investors, giving the company a chance to be reborn today.

3. After the market trend that started on May 13th, did the company and its original institutional investors trade the nearly 400 million total outstanding shares issued by the company before May 10th?

Firstly, the company did not participate in the above-mentioned transactions. According to the financial report disclosure, the cash balance on May 23rd was $5 million, which also proves that the company did not engage in share arbitrage.

Secondly, according to the company's understanding, as of May 10th, the company's total outstanding shares had reached nearly 400 million, and the original institutional investors had sold all their shares into the secondary market in the past few months, so after May 13th, these investors could not have traded the aforementioned sharesAfter May 13th, many retail investors have expressed their willingness to voluntarily lock up their shares to support the company. In order to cherish the hard-won confidence of the shareholders, the company has made a firm decision to always stand with all retail investors. Since May 10th, the company has not accepted any new conversions.

Furthermore, in the future, unless we obtain approval from the shareholders' meeting to increase the total authorized shares, there will be no more new share issuances.

In the future, we will continue to uphold the interests of retail investors more firmly under the premise of legality and compliance. We believe that with the concerted efforts of retail investors from China and the United States, we will definitely overcome malicious short-selling, jointly promote FF's success, achieve industrial transformation, and create the greatest value for our shareholders.

Due to time constraints, we are clarifying the above issues today. Next, we will address a series of interactive Q&A sessions on other issues, and we hope that retail investors will continue to ask questions and provide suggestions.

Once again, heartfelt thanks to every retail investor and shareholder who supports FF