FFAI

Strategic Transformation Progress

• Completed the strategic upgrade from a three-in-one ecosystem to a four-core full-stack AI ecosystem, adding Industry Productivity Solutions and Developer Platform as the fourth core alongside EAI Brain, EAI Devices, and EAI Data Factory. All four pillars are now in active implementation.
• Established an initial closed-loop flywheel: EAI device deployment generates real-world scenario data to train the EAI Brain, which enables skill and solution upgrades that drive further device deployment for the EAI robotics business.
• Validated the core growth model and completed the transition from strategic framework development to scaled execution and commercial scenario deployment.

Technology Development

• Completed initial development of the core technology framework for the Embedded AI Robot Brain, covering AI interaction, vision language action (VLA) models, robotic manipulation, and whole-body motion control. The whole-body motion model achieved a 98% motion tracking success rate on standard simulation benchmarks.
• Completed initial basic capabilities for the universal teleoperation swarm control platform, reached key milestones for world model training on Dream Zero, and launched an official robot control app on the iOS App Store.
• Achieved steady progress in R&D aligned with NVIDIA's Sonic Roadmap for whole body motion control, with ongoing fine-tuning of VLA models on real robot data leveraging NVIDIA G-Route.

Commercial Operations

• Cumulative EAI device sales and shipments reached 242 units by the end of Q2 2026, growing to 394 units by the end of July 2026, with all shipments adhering to a strict payment-before-delivery standard.
• Launched the EAI Robotics Education Ecosystem for B2C and B2B education markets, and established California's first education innovation lab in partnership with leading academic institutions.
• Launched the FF EAI Robotics Open Source and Open Developer Platform with general and youth developer editions, growing the ecosystem to over 20 qualified active developer and industry partner organizations.
• The EAI Data Factory formed a complete commercial closed loop, generated initial sample payments, and is in ongoing price negotiations with a top-tier data client for a potential high-end order of over $400,000.
• Rolled out the Roboshare model that transforms sold robots into income-generating assets, lowering total cost of ownership for buyers and driving new terminal sales.
• Launched the three-phase "Built-in USA" acceleration program aligned with new FCC guidance, moving from localized AI platform to U.S. assembly and ultimately full U.S. manufacturing to comply with new regulatory requirements.

Financial and Capital Structure Improvements

• Q2 2026 net loss narrowed 69% year-over-year to $38.96 million, with cost of revenue falling 57% year-over-year to $11.54 million driven by structural cost optimization.
• Completed $20 million in debt resolution during Q2 2026, reducing total liabilities by $61 million year-over-year to $278 million. Excluding new funding liabilities, actual debt reduction exceeded $100 million.
• Secured $70 million in new institutional commitments during Q2 2026, providing sufficient capital runway to meet 2026 operational targets. Stockholders' equity remained positive at $1.41 million as of Q2 end.
• Cancelled ~5.36 million Class A warrants, bringing cumulative permanent warrant cancellations to ~49.9 million since December 2025 to streamline the capital structure and eliminate future dilution overhang.
• Completed a 1-for-150 reverse stock split that regained full Nasdaq compliance with the minimum bid price requirement to maintain the company's listing status.

• Updated full-year 2026 EAI robot shipment guidance upward to 2,000 units, driven by stronger-than-expected Q2 and early Q3 shipment momentum.
• Maintains a target to reduce total company liabilities to below $100 million within the next three to four quarters.
• Expects the EAI Data Factory to reach a monthly data collection capacity of 2,100 qualified real-world hours by the end of August 2026, 20,000 hours by the end of December 2026, and 50,000 total qualified hours for full-year 2026.
• Aims to expand the developer community to 200 members and grow the available robot skill portfolio to 100 skills by the end of 2026.
• Plans geographic expansion of industry productivity solutions across California, Texas, and the eastern U.S. within 2026.
• The EAI automotive business will only accelerate execution if sufficient dedicated funding is secured, with pace of development strictly aligned to partner progress and available capital.
• Management is exploring standalone financing and potential public listing for the robotics segment to unlock intrinsic value and reduce parent-level dilution.

Total company revenue for Q2 2026 was $836,000, a 1,500% year-over-year increase from $54,000 in Q2 2025 and a 64% sequential increase from $512,000 in Q1 2026. Cumulative total revenue for the first half of 2026 reached $1.35 million, up from $370,000 in the prior year period. 100% of Q2 2026 revenue growth was driven by the EAI Devices segment, which is already in commercial deployment and maintains positive product growth margins. The EAI Brain, EAI Data Factory, and Industry Productivity Solutions & Developer Platform segments are in early operational foundation stages, with no material revenue contribution yet reported for Q2 2026. The EAI automotive business remains a core segment, but no active commercial revenue was generated in Q2 2026.

• Forward-looking statements regarding commercial growth, technology development, and debt reduction are subject to risks and uncertainties that could cause actual results to differ materially from expectations, with detailed risk disclosures available in the company's SEC filings.
• The company still generates substantial net operating losses, and relies on external financing to fund operations, creating uncertainty around near-term liquidity and the ability to hit long-term operational targets.
• Potential future ICTS-related regulatory changes could create additional compliance costs or operational requirements that impact business performance.
• Legacy debt and historical capital structure burdens continue to weigh on the company's market valuation, and there is no guarantee that planned debt reduction will be completed on schedule or achieve the intended valuation improvement.
• The embodied AI robotics industry is rapidly evolving, and the company may not be able to maintain its early mover advantage against new entrants or larger established competitors.
• Dilution risk remains for existing common stockholders despite management's planned mitigation measures, as the company continues to rely on external financing to fund growth.

Q: What strategic opportunities does the FCC's new robotics policy create for the company?

A: The new FCC policy adds foreign-made advanced robotic equipment to its compliance list, raising costs and risks for non-U.S. suppliers and incentivizing collaboration with U.S.-based robotics firms. This policy aligns directly with Faraday Future's existing Built-in USA strategy, leveraging the company's status as the first U.S. firm with commercial deliveries of both humanoid and bio-inspired robots, with all core R&D and data operations conducted domestically. The company has launched a three-phase acceleration program to capitalize on the opportunity, already completing Phase 1 (foundational operational setup), and will now move to accelerated domestic assembly and ultimately full U.S. manufacturing of compliant robots.

Q: How does Faraday Future plan to maintain its first-mover advantage in the fast-growing embodied AI industry?

A: The company has built a self-reinforcing closed-loop flywheel ecosystem: device deployment generates real-world data, which improves the EAI Brain, which enables better products that drive further deployment. The company's 2026 2,000-unit shipment target will distribute robots across multiple use cases and geographies, generating high-quality real-world data that is critical for training competitive embodied AI models. Early shipment momentum has already built a growing data asset, and the new FCC policy opens a market window that will help the company accelerate market share gains and solidify its first-mover position ahead of new competitors.

Q: How will the company balance financing needs and share dilution before achieving positive operating cash flow?

A: Management is executing multiple measures to mitigate dilution, starting with operational optimization to grow revenue and tighten cost controls, reducing reliance on external financing over time. The company plans to shift its funding mix from convertible debt to equity structures where feasible, and is exploring standalone financing for the robotics segment to reduce dilution at the parent company level. The company is also implementing a $5 per share minimum conversion floor for 90% of outstanding convertible notes to cap maximum potential dilution from these instruments, aligning with a gradual shift from financing-driven growth to operating cash flow-driven growth.

Q: Why is the company targeting debt reduction at this stage of its robotics growth?

A: Legacy post-IPO automotive debt is constraining the valuation of the company's high-growth early-stage robotics business, which management believes has a higher intrinsic value than reflected in Faraday Future's current market capitalization. The debt reduction program runs on two parallel tracks, clearing historical operating liabilities and optimizing the capital structure through settlements, negotiations, and warrant cancellations. The target of cutting total liabilities to under $100 million in 3-4 quarters will create a cleaner balance sheet, allow the robotics business to operate without legacy burdens, and unlock the long-term intrinsic value of the business for stockholders.