
	September 30, 2024
(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
Secured SPA Notes	Various	10%-15%	$	26,336	$	(4,146)	$	(1,976)	$	20,214
Unsecured SPA Notes*	Various dates in 2029	10%-15%	22,802		398		(2,350)		20,850
Junior Secured Notes	September 2029	10%	20,769		(11,341)		—		9,428
Collateralized loan	October 2028	28%	4,805		—		(419)		4,386
Notes payable – China other	Due on Demand	—%	4,950		—		—		4,950
Auto loans	October 2026	7%	58		—		—		58
			$	79,720	$	(15,089)	$	(4,745)	59,886

Less: Notes payable, current portion									(56,086)
Total: Notes payable, less current portion									$	3,800


	December 31, 2023
(in thousands)	Contractual Maturity Date	Contractual Interest Rates	Unpaid Principal Balance		Fair Value Measurement Adjustments		Original Issue Discount and Proceeds Allocated to Warrants		Net Carrying Value
Secured SPA Notes	Various	10%-15%	$	100,052	$	(15,501)	$	(10,319)	$	74,232
Unsecured SPA Notes*	Various dates in 2029	10%-15%	13,885		1,208		(2,613)		12,480
Notes payable – China other	Due on Demand	—%	4,898						4,898
Auto loans	October 2026	7%	82						82
			$	118,917	$	(14,293)	$	(12,932)	91,692
Less: Related party notes payable									(542)
Less: Notes payable, current portion									(91,150)
Total: Notes payable, less current portion									$	—

On August 14, 2022, the Company entered into a securities purchase agreement (as amended from time to time, the “Secured SPA”) with FF Simplicity Ventures LLC (“FFSV”) as administrative agent, collateral agent and purchaser, and certain additional purchasers (collectively the “Secured SPA Purchasers”) to issue and sell the Company’s senior secured convertible notes (the “Secured SPA Notes”). The Secured SPA Notes were subsequently amended multiple times throughout 2022 and 2023, as further described below.

On May 8, 2023, as further described below, the Company entered into a securities purchase agreement (as amended from time to time, the “Unsecured SPA”) with Metaverse Horizon Limited (“MHL”) and V W Investment Holding Limited (“V W Investment”) (MHL and V W Investment, together with the other purchasers, the “Unsecured SPA Purchasers”) to issue and sell $100.0 million aggregate principal of the Company’s senior unsecured convertible notes (the “Unsecured SPA Notes” and, together with the Secured SPA Notes, the “SPA Notes”). In August 2023, as further described below, the Company entered into the Unsecured Streeterville SPA (collectively included with the Unsecured SPA, Unsecured SPA Notes and SPA Warrants in

future references), as part of its issuance of the Unsecured SPA Notes. The terms of the Secured SPA Notes and Unsecured SPA Notes are generally the same, however, the Secured SPA Notes are secured by the grant of a second lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well as a guarantee by substantially all of the Company’s domestic subsidiaries.

The SPA Notes are generally subject to an original issue discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock at the conversion price (as defined in each SPA Note), subject to full ratchet anti-dilution price protection. The SPA Note conversion price equals the lesser of $5.24 or 90% of the volume-weighted average price (“VWAP”) of the common stock as of the previous trading day, which represents an amended, restated and reduced conversion price due to the full ratchet price protections.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the SPA Notes because the notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative. The Company expenses transaction costs to Changes in fair value of notes payable and warrant liabilities or Changes in fair value of related party notes payable and warrant liabilities, as applicable, in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

On August 2, 2024, the Company and the remaining holders of the SPA Notes entered into a Waiver Agreement (the “Waiver Agreement”), as more fully described below. The Waiver Agreement materially changed the conversion privileges of the SPA Notes. Prior to the parties entering into the Waiver Agreement, the principal balance of the SPA Notes converted into Class A Common Stock at a fixed price of $29.33, which represented an amended, restated and reduced conversion price due to the full ratchet price protections. The SPA Notes generally required interest to be paid on each conversion date and quarterly in cash or in shares of Class A Common Stock. Certain Unsecured and Secured SPA Notes required the payment of interest in cash or shares of Class A Common Stock at maturity. Unless earlier paid, the SPA Notes entitled the purchasers, at each conversion date, to an interest make-whole (a “Make-Whole Amount”), in a combination of cash or Class A Common Stock, at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity. The conversion price for the Make-Whole Amount was generally the greater of (a) the floor price, which was $435.84 immediately prior to the Waiver Agreement or (b) 90% of the lowest VWAP for the five consecutive trading days ending immediately prior to the conversion date. Certain Secured SPA Notes required the Interest Conversion Price to be the lesser of (1) the principal balance conversion price or (2) the greater of (a) the floor price, which was $435.84 or (b) 90% of the lowest VWAP for the five consecutive trading days ending immediately prior to the conversion date. When calculating the shares issuable upon conversion, the Make-Whole Amount was decreased by 50% of the original issue discount pertaining to such amount.

On February 3, 2023, the Company entered into a sixth amendment to the Secured SPA (the “Sixth Secured SPA Amendment”) with certain Secured SPA Purchasers, in which the Company agreed to sell up to $135.0 million in aggregate principal (the “Tranche C Notes”) with terms largely congruent to prior issuances and a $10,080.00 base conversion price subject to full ratchet anti-dilution price protection. Each applicable Secured SPA Purchaser had the option to purchase additional Secured SPA Notes on the same terms as the Tranche C Notes in an amount not to exceed 50% of the initial principal amount of the Tranche C Notes issued to each applicable Secured SPA Purchaser (the “Tranche D Notes”).

amount of new notes with a $8,568.00 base conversion price. In accordance with ASC 470-50, Debt—Modifications and Extinguishments, the change in conversion price qualified as an extinguishment because the change in the fair value of the conversion feature was substantial. Accordingly, the Company recognized a Loss on settlement of notes payable in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $3.0 million during the three months ended March 31, 2023, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the Secured SPA Notes.

Pursuant to the Sixth Secured SPA Amendment, the Company entered into an agreement with certain Secured SPA Purchasers (the “Exchange Agreement”) holding a total of 20,639 warrants to exchange them for an aggregate 9,426 warrants and convertible notes (the “Exchange Notes”) with a principal balance totaling $41.0 million. The issued warrants have terms that limit down-round ratchet clauses to price adjustments only. The Exchange Notes mature on February 3, 2025, bear interest at 11% per annum, have no original issuance discount, do not have a fixed price conversion, and convert using a VWAP calculation as described in the Exchange Agreement. The remainder of the terms of the Exchange Notes are largely congruent to the existing Secured SPA Notes, including most-favored nation rights. In connection with the Exchange Agreement, equity-classified warrants were exchanged for warrants that qualify for liability classification per ASC 480, Distinguishing Liabilities from Equity, and were reclassified from equity to Warrant liabilities during the period ended September 30, 2023 in an amount totaling $6.8 million (the “Warrant Exchange”). As a result of the transaction, the Company did not recognize a gain or loss in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the fair value of the instruments exchanged and received were approximately the same.

On March 23, 2023, the Company entered into a seventh amendment to the Secured SPA (the “Seventh Secured SPA Amendment”) with FFSV, as administrative agent, collateral agent and purchaser, Senyun International Ltd. (“Senyun”), and FF Prosperity Ventures LLC (“FF Prosperity”), pursuant to which the parties agreed to accelerate the funding timeline of Tranche C Notes in the amount of $40.0 million, and FFSV agreed to purchase additional Tranche B Notes in the amount of $5.0 million, in each case, subject to meeting certain conditions, in exchange for an agreement to increase the original issuance discount associated with such funding. As part of the Seventh Secured SPA Amendment, the Company agreed that the original issuance discount related to $25.0 million in principal amount of Tranche C Notes and Tranche B Notes would be 14% and 16%, respectively.

On May 8 and 9, 2023, the Company entered into amendments to the Secured SPA (collectively, the “Eighth Secured SPA Amendment”) with certain Secured SPA Purchasers. Pursuant to the Eighth Secured SPA Amendment, the parties agreed to amend the floor price of all outstanding Secured SPA Notes, including the Exchange Notes, from $2,016.00 to $960.00 and changed the exercise price of the remaining Secured SPA Notes and SPA Warrants from $10,080.00 to $8,568.00.

In accordance with ASC 470-50, Debt—Modifications and Extinguishments, the change in conversion price qualified as an extinguishment because the change in the fair value of the conversion feature was substantial. Accordingly, the Company recognized a Loss on settlement of notes payable in the Consolidated Statements of Operations and Comprehensive Loss during the three and nine months ended September 30, 2023 in the amount of $11.4 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes.

On May 8, 2023, the Company entered into the Unsecured SPA. The Unsecured SPA Notes were subject to an original issue discount of 10% and were convertible into shares of Class A Common Stock at an original fixed conversion price equal to $8,568.00, subject to anti-dilution protection. Interest on Unsecured SPA Notes was payable at conversion or at maturity. When calculating the shares issuable upon conversion, the converted amount was decreased by 50% of the original issue discount pertaining to such amount.

Unless earlier paid, the Unsecured SPA Notes entitled the Unsecured SPA Purchasers, at each conversion date, to a Make-Whole Amount, in a combination of cash or Class A Common Stock at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity based on an interest rate of 15% per annum. The conversion price of interest was the greater of (a) the floor price, $960.00 at inception (as adjusted for stock splits,

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the Unsecured SPA Notes because the notes included features, such as a contingently exercisable put option, that meet the definition of an embedded derivative. The Company expenses the transaction costs to Changes in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

On June 26, 2023, the Company entered into an amendment to the Unsecured SPA (the “First Unsecured SPA Amendment”). The First Unsecured SPA Amendment enabled the Unsecured SPA Purchasers to postpone or cancel any closing of their commitment to purchase the Unsecured SPA Notes if the Company had not issued a press release or other public announcement confirming that the second phase of the Company’s delivery plan had begun on or prior to August 31, 2023, within 15 calendar days of such date. The First Unsecured SPA Amendment did not change the cash flows of the Unsecured SPA and is accounted for prospectively with no gain or loss recognized. On August 9, 2023, the Company announced that it had completed the relevant processes and steps that were needed for the second phase of delivery to begin.

On June 26, 2023, the Company entered into a Joinder and Amendment Agreement (the “FFVV Joinder”) with FF Vitality Ventures LLC (“FFVV”), pursuant to which FFVV agreed that FFVV would exercise its option to purchase $20.0 million of Secured SPA Tranche B Notes, subject to certain closing conditions, including the delivery of a warrant to purchase shares of Class A Common Stock equal to 33% of FFSV’s conversion shares with an exercise price equal to $8,568.00. In addition, the parties agreed that if FFSV exercised its option to invest another $10.0 million of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock, then the Company would subsequently amend the Unsecured SPA whereby FFVV would invest another $20.0 million in new unsecured notes subject to terms substantially identical to those provided in the Unsecured SPA.

Pursuant to the FFVV Joinder, FFVV agreed to purchase Unsecured SPA Notes up to $40.0 million in eight installments. The floor price of the FFVV Unsecured SPA Notes and for each of the notes issued to FFSV (or its affiliates) under the Secured SPA was to be $480.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter). The funding at each closing was subject to various closing conditions, including: (a) an effective registration statement with respect to (i) the shares of Common Stock issuable upon exercise of the warrants issuable under the Unsecured SPA and (ii) the shares of Common Stock issuable pursuant to the FFVV Unsecured SPA Notes and (b) the Company having reserved the Required Reserve Amount (as defined in the FFVV Joinder) in full. In addition, FFVV had the option, for 12 months from June 25, 2023, to purchase Unsecured SPA Notes. FFVV agreed, on behalf of its affiliates, that FFSV may exchange any Tranche B Notes for either (x) Tranche D Notes, and/or (y) any Unsecured SPA Notes. This option was extended for 12 months from August 2, 2024 in connection with the Waiver Agreement.

On June 26, 2023, Senyun executed a Second Joinder and Amendment Agreement (the “Senyun Joinder”), pursuant to which Senyun agreed to exercise its option to purchase $15.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes. If Senyun had exercised its option to invest another $10.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the Stockholder Approval (as defined below), then the Company agreed that it would subsequently amend the Unsecured SPA Notes whereby Senyun would invest another $20.0 million. Senyun did not exercise this latter option.

On August 4, 2023, the Company entered into a Waiver and Amendment Agreement to the FFVV Joinder, pursuant to which FFVV agreed to waive any and all requirements of the Company to reserve shares of Common Stock for issuance pursuant to the SPA Notes or SPA Warrants and deferred any obligations of the Company to deliver any shares of Common Stock for issuance pursuant to the SPA Notes or SPA Warrants until the earlier of (x) September 30, 2023 and (y) the earlier of (I) the trading day immediately following the date of consummation of a reverse stock split of the Common Stock and (II) the 15th business day after the Company’s receipt of stockholder approval to increase the authorized shares of Common Stock. Further, if FFVV exercised its option to invest another $10.0 million of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the latest of (x) August 1, 2023, (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock and for purposes of Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5635 (to the extent needed) (the “Stockholder Approval”), and (z) six business days after the Company filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, then FFVV would have the right, at any time prior to the 30th day after the date of consummation of such funding, to invest another $20.0 million in Unsecured SPA Notes, subject to terms substantially identical to those provided for in the Unsecured SPA. FFVV did not exercise this option.

On August 4, 2023, the Company entered into a securities purchase agreement with Streeterville (the “Unsecured Streeterville SPA”), for $16.5 million aggregate principal amount of the Company’s senior unsecured promissory notes (the “Streeterville Note”) and a common stock purchase warrant (the “Streeterville Warrant”) to purchase up to 636 shares of Common Stock with an exercise price equal to $8,568.00 per share, subject to full ratchet anti-dilution price protection and other adjustments, and which are exercisable for seven years on a cash or cashless basis.

The Streeterville Note was subject to an original issue discount of $1.5 million. In addition, the Company paid Streeterville $0.2 million to cover Streeterville’s legal fees and other transaction costs incurred in connection with the purchase and sale of the Streeterville Note. The Streeterville Note was convertible into shares of Class A Common Stock, at an original conversion price equal to $8,568.00, plus an interest make-whole amount as described above for the Unsecured SPA, subject to certain adjustments including full ratchet anti-dilution price protection.

Streeterville has the option, from time to time for 12 months after the date of the Unsecured Streeterville SPA, to purchase up to $7.5 million in aggregate (or $15.0 million in aggregate with the Company’s consent) in additional convertible senior unsecured notes and warrants on the same terms as the Streeterville Note and the Streeterville Warrant. This option was extended for 12 months from August 2, 2024 in connection with the Waiver Agreement. Additionally, from the date of the Unsecured Streeterville SPA until the five-year anniversary of the date of the Unsecured Streeterville SPA, upon any issuance by the Company or any of its subsidiaries of Class A Common Stock or Class A Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (subject to certain exceptions set forth in the Unsecured Streeterville SPA) (each, a “Subsequent Financing”), if Streeterville owns at least $7.5 million principal amount of Streeterville Note (when aggregated with any affiliates of Streeterville), then Streeterville shall have the right to participate in the Subsequent Financing, for up to an amount such that Streeterville’s ownership of the Company remains the same immediately following such Subsequent Financing as its ownership immediately prior to such Subsequent Financing, pursuant to the procedures outlined in the Unsecured Streeterville SPA.

Pursuant to the Streeterville Note, the Company obtained stockholder approval, as required by the Nasdaq listing rules, with respect to the issuance of any shares of Class A Common Stock in excess of 19.99% of the issued and outstanding shares of Class A Common Stock (the “Issuance Cap”), the Conversion Shares (as defined in the Streeterville Note), the Warrant Shares (as defined in the Unsecured Streeterville SPA), and subject to any applicable Nasdaq rules, any shares of Common Stock issuable pursuant to the note and warrant issuable in connection with the reinvestment right set forth in the Unsecured Streeterville SPA in excess of the Issuance Cap. Such stockholder approval was obtained at a special meeting of the Company’s stockholders held on February 5, 2024.

During the six months ended June 30, 2024, the Company’s Board of Directors exercised its authority via a series of written consents (the “Unanimous Written Consents”) to adjust the principal conversion price of the SPA Notes as it considered desirable. The Board chose to reduce the principal conversion price from $29.33 to 105% of the listed market price of the Company’s Common Stock at the close of the trading day on which a conversion notice is delivered. The adjustments to the principal conversion price were temporary in nature and contractually concluded on June 30, 2024. The Company accounted for the modification of the SPA Notes prospectively with no gain or loss recorded in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. The actions of the Board in the Unanimous Written Consents did not trigger any full ratchet anti-dilution price protection in the Company’s debt and equity securities.

Pursuant to the Eleventh and Twelfth Secured SPA Amendments, the Company and the purchasers agreed to amend the restrictions on debt and liens under the Secured SPA Notes to permit the Collateralized Loan (as defined below) and the related liens on the collateral, as described below. Additionally, the agent for the Secured SPA Notes also agreed to subordinate the liens that secure the obligations under the Secured SPA Notes to the liens on the collateral granted to secure the obligations under the Collateralized Loan.

Prior to the Waiver Agreement, the Company had certain obligations under the SPA Notes to pay accrued and unpaid interest and the Make-Whole Amount in cash or shares in connection with conversions of such SPA Notes. In an effort to reduce the Company’s ongoing obligations pursuant to the SPA Notes and to encourage the continued conversion of the SPA Notes into shares of Common Stock, the Company entered into the Waiver Agreement, pursuant to which the Company agreed that for each conversion of any SPA Note on or after the effective date of the Waiver Agreement, the conversion price would be the lesser of (1) the conversion price then in effect, $29.33, subject to full ratchet anti-dilution price protection (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter) or (2) 90% of the VWAP of the Company’s Common Stock as of the trading day ended immediately prior to the time the conversion notice is delivered to the Company.

Additionally, pursuant to the Waiver Agreement, the holders agreed that accrued interest shall be due at maturity or conversion and that the Make-Whole Amount shall always equal zero, such that instead of receiving all the accrued and unpaid interest due under the SPA Notes through maturity, each holder of any SPA Note will receive, upon conversion or settlement, an amount in cash or shares equal to all accrued and unpaid interest accrued through the settlement date. The provisions of the Waiver Agreement will apply to all SPA Notes currently issued or issuable in the future pursuant to the Secured SPA and Unsecured SPA.

In accordance with ASC 470-50, Debt—Modifications and Extinguishments, the changes pursuant to the Waiver Agreement qualified as an extinguishment because the change in the fair value of the conversion feature was substantial. Accordingly, the Company recognized a Loss on settlement of notes payable in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss during the three and nine months ended September 30, 2024 in the amount of $2.8 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes.

During the twelve-month period ended December 31, 2023, the Company entered into multiple dilutive stock sale and purchase transactions, as discussed in Note 2, Liquidity and Capital Resources and Going Concern above that triggered the full ratchet anti-dilution price protections embedded in the SPA Notes and SPA Warrants. As a result, the fixed-price conversion price of the SPA Notes and exercise price of the SPA Warrants outstanding prior to such financings was reduced to a price equal to the price per share paid in the dilutive financings. Excluding the impact of the Conversion Price adjustments pursuant to the Unanimous Written Consents, which expired on June 30, 2024, the SPA Note conversion and SPA Warrant exercise price was $29.33 for SPA Notes that were issued prior to December 31, 2023 and generally, the Make-Whole Amount was calculated using the floor price, which was $435.84.

On September 5, 2024, the Company entered into the Junior Secured SPA. At issuance, the Junior Secured SPA Note conversion price equals the lesser of the stated conversion price, $5.24, or the greater of (1) the floor price, $1.05, or (2) the average VWAP of the common stock for the five previous trading days. The issuance of the Junior Secured SPA Note constituted a dilutive issuance, as the stated conversion price of $5.24 was less than the SPA Note conversion price and the SPA Warrant exercise price. Therefore, the issuance of the Junior Secured SPA Note triggered the full ratchet anti-dilution price protection in the SPA Notes and SPA Warrants, such that the fixed exercise price was reduced to $5.24.

During the nine months ended September 30, 2024, the Company received cash proceeds, net of original issue discounts, of $8.5 million pursuant to the commitments included in the SPA Notes. The Company received cash proceeds, net of original issue discounts, of $231.1 million in exchange for the issuance of the SPA Notes during the twelve months ended December 31, 2023. The Company incurred approximately $0.1 million and $0.2 million in transaction costs during the three and nine months ended September 30, 2024. The Company incurred zero and approximately $2.5 million in related transaction costs during the three and nine months ended September 30, 2023.

During the nine months ended September 30, 2024, and the twelve months ended December 31, 2023, the Company issued SPA Warrants to the Secured SPA Purchasers and Unsecured SPA Purchasers pursuant to both the Secured SPA and Unsecured SPA arrangements and in connection with the Warrant Exchange. As of September 30, 2024, there were 15,143 SPA Warrants outstanding and as of December 31, 2023, there were 13,906 SPA Warrants outstanding. The SPA Warrants are subject to anti-dilution ratchet price protection and are exercisable for 7 years from the date of issuance (see Note 11, Stockholders’ Equity). The Company may repurchase certain warrants for $0.01 per share if and to the extent the VWAP of the Class A Common Stock during 20 out of 30 consecutive trading days prior to the repurchase is greater than $144,000.00 per share, subject to certain additional conditions. There were no SPA Warrant exercises during the three or nine months ended September 30, 2024. During the twelve months ended December 31, 2023, the Secured SPA Purchasers exercised warrants to purchase 6,292 shares of Class A Common Stock issued pursuant to the SPA Notes, via both cash and cashless exercise.

On September 30, 2024 and 2023, the Company determined that the fair value of the SPA Notes was $41.1 million and $95.4 million, respectively. The fair value of the SPA Warrants on September 30, 2023 was $1.7 million. As of September 30, 2024, no SPA Warrants were classified as liabilities. The Company recorded a gain in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $10.9 million and $56.7 million for the three and nine months ended September 30, 2024, respectively, for the SPA Notes and SPA Warrants. The Company recorded a gain in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 in the amount of $22.3 million and $95.1 million, respectively, for the SPA Notes and SPA Warrants.

During the nine months ended September 30, 2024, SPA Notes with an aggregate principal amount of $96.3 million and a fair value of $44.9 million were converted into Class A Common Stock. During the nine months ended September 30, 2023, SPA Notes with an aggregate principal amount of $200.4 million and a fair value of $125.3 million were converted into Class A Common Stock. In connection with the conversions of the SPA Notes, the Company recognized a Loss on settlement of notes payable for the three and nine months ended September 30, 2024 in the amount of $56.4 million and $147.1 million, respectively, and three and nine months ended September 30, 2023 in the amount of $32.1 million and $207.7 million, respectively.

On September 5, 2024, the Company entered into the Junior Secured SPA with the Junior Secured SPA Investors. Pursuant to the Junior Secured SPA, the Junior Secured SPA Investors agreed to purchase Junior Secured SPA Notes, warrants, and incremental warrants for approximately $30.0 million, of which approximately $22.5 million was paid in cash and approximately $7.5 million was converted from a previous loan to the Company, in two closings. As of September 30, 2024, the Company had received $20.8 million of the commitments, and the remaining commitments were received by October 30, 2024.

The Junior Secured SPA Notes are convertible, along with any interest accrued, into shares of Class A Common Stock at the conversion price (as defined in each Junior Secured SPA Note), subject to full ratchet anti-dilution price protection. At issuance, the Junior Secured SPA Note conversion price equaled the lesser of the stated conversion price, $5.24, or the greater of (1) the floor price, $1.05, or (2) the average VWAP of the common stock for the five previous trading days.

The Junior Secured SPA Investors were given warrants (the “Junior SPA Warrants”) equal to 100% of the shares issuable upon conversion of the aggregate principal amount under the Junior Secured SPA Note funded. The Junior SPA Warrants are exercisable immediately with a term of five years and have an exercise price of $6.29, subject to full ratchet anti-dilution protection, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions. The Company issued to the placement agent for the transaction a warrant (the “Placement Agent Warrant”) identical to that of the Junior Secured SPA Investors for 202,768 shares of Common Stock, exercisable immediately at an exercise price of $6.29 subject to full ratchet anti-dilution price protection, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions. The Placement Agent Warrant had a fair value of $0.6 million at issuance, which is included as an expense in the Changes in fair value of notes payable and warrant liabilities, in accordance with the Company’s election to account for the Junior Secured SPA Notes at fair value, discussed below. Hereinafter the Placement Agent Warrant is included for discussion purposes with the Junior SPA Warrants since its form and terms are identical.

The Junior Secured SPA Investors were given an incremental warrant to purchase additional Junior Secured SPA Notes, up to amounts originally funded (the “Incremental Warrants”), at the same terms and conditions as the original Junior Secured SPA commitment. The Incremental Warrants are exercisable immediately on the date thereof with a term of one year to purchase the Junior Secured SPA Notes at an exercise price equal to the principal amount of the Junior Secured SPA Notes issued to the Junior Secured SPA Investor, subject to full ratchet anti-dilution price protection, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the Junior Secured SPA Notes because the notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative. The Company expenses transaction costs to Changes in fair value of notes payable and warrant liabilities or Changes in fair value of related party notes payable and warrant liabilities, as applicable, in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the nine months ended September 30, 2024, the Company received cash proceeds, net of original issue discounts, of $13.25 million pursuant to the commitments included in the Junior Secured SPA Notes. The Junior Secured SPA Notes were issued in 2024 and therefore there is no financial information to provide for the nine months ended September 30, 2023 or the twelve months ended December 31, 2023. The Company incurred approximately $0.6 million and $0.6 million in related

During the nine months ended September 30, 2024 the Company issued Junior SPA Warrants to the Junior Secured SPA Investors pursuant to the Junior Secured SPA Notes. As of September 30, 2024, there were 5,931,638 Junior SPA Warrants outstanding. The Junior SPA Warrants are subject to full ratchet anti-dilution price protection and are exercisable for five years from the date of issuance (see Note 11, Stockholders’ Equity). The Company may repurchase certain warrants for $0.01 per share if and to the extent the VWAP of the Class A Common Stock during 20 out of 30 consecutive trading days prior to the repurchase is greater than $12.58 per share, subject to certain additional conditions. There were no Junior SPA Warrant exercises during the three and nine months ended September 30, 2024.

On September 30, 2024, the Company determined that the fair value of the Junior Secured SPA Notes was $9.4 million and the fair value of the Junior SPA Warrants was $13.4 million. The Company recorded a loss in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $3.7 million for each of the three and nine months ended September 30, 2024 for the Junior Secured SPA Notes and Junior SPA Warrants.

During the nine months ended September 30, 2024, the Company issued unsecured convertible notes (the “Unsecured Convertible Notes”) to Senyun and MHL, in an aggregate principal amount of $28.9 million. The Unsecured Convertible Notes are due three months from the date of issuance, accrue interest at a rate of 4.27% per annum, and are convertible into either Class A Common Stock or into an SPA Note at the option of the holder. If conversion into Class A Common Stock is elected, the conversion price is the latest closing price of the Company’s Class A Common Stock on the conversion date. The Unsecured Convertible Notes are due on demand upon the occurrence of an event of default as defined in the notes.

The Company elected the fair value option afforded by ASC 825, Financial Instruments, with respect to the Unsecured Convertible Notes because the Company believes the Unsecured Convertible Notes will be exchanged into an SPA Note pursuant to the conversion right included within the notes. The SPA Notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative. The Company recorded a gain in Change in fair value of notes payable and warrant liabilities in the amount of $0.8 million in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 30, 2024 and a loss in the amount of $2.4 million for the nine months ended September 30, 2024 for the Unsecured Convertible Notes.

On July 11, 2024, the Company entered into a $4.9 million collateralized loan arrangement (the “Collateralized Loan”) with Utica Leaseco, LLC (“Utica”). Under the Collateralized Loan, the Company will pay Utica 51 monthly payments of $0.1 million and a balloon payment of $0.5 million at maturity for total remittances of $8.0 million. The stated rate of the loan is 0.00% but the effective interest rate is 28.00%. The effective interest rate represents the rate used to discount the future cash flows to their present value adjusted by the impact of approximately $0.4 million in costs paid to Utica and third parties in connection with the execution of the Collateralized Loan. The Collateralized Loan has a 4-year term. The monthly payments will be adjusted periodically based on fluctuations of the prime rate as determined by Renasant Bank. Beginning January 1, 2025 and on each July 1 and January 1 thereafter, if the prime rate has increased 0.25% in excess of 8.50% (the “Surcharge Base Rate”), then Utica will increase each monthly payment by 10% per month for each 0.25% increase in the Surcharge Base Rate (the “Surcharge Amount”). At each applicable date following the initial application of the Surcharge Amount, Utica shall adjust the monthly payment up or down for each 0.25% fluctuation in the Surcharge Base Rate. In no event shall the monthly payment reduce below the original amount.

After the payment in April 2026 and for the remaining term of the Collateralized Loan, the Company may terminate the Collateralized Loan by paying $0.5 million along with any monthly payments then due. Also upon termination the Company will be obligated to pay Utica’s reasonable expenses to affect the termination, all sales and transfer taxes and all fees payable to any governmental authority.

Under the Collateralized Loan, the Company has identified certain machinery, vehicles, equipment and/or other assets (the “Equipment”) that serve as collateral for the loan. The Company retains title to the Equipment, granting Utica a first priority security interest therein. The Collateralized Loan contains customary representations and warranties, covenants relating to the use and maintenance of the Equipment, indemnification and events of default. The Collateralized Loan further grants to Utica certain remedies upon a default, including the right to accelerate all payments for the remainder of the term, to recover liquidated damages, or to repossess and sell or otherwise dispose of the Equipment.

In connection with the execution of Collateralized Loan, the Company pre-paid the first two months’ rent, totaling $0.3 million, and paid various deposits to Utica in order to secure Utica’s reasonable access to the Equipment and to protect Utica from tax liens that may exist on the Equipment. The various deposits totaled $1.6 million, $1.5 million of which is included in Deposits and $0.1 million is included in Other current assets in the Condensed Consolidated Balance Sheets as of September 30, 2024. To the extent that the Company does not default on the arrangement and Utica does not need to utilize the various deposits to assert its rights under the Collateralized Loan, $0.1 million will be applied to payments due either upon early termination or maturity; $0.1 million will be returned to the Company upon provision of all filed UCC-3 terminations evidencing the removal of tax liens from the Equipment; and $1.4 million will be returned to the Company upon the relocation of the Equipment to the Company’s Hanford location.