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LivePerson Announces Fourth Quarter 2023 Financial Results

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— Total Revenue of $95.5M, above the midpoint of our guidance range —

— Adjusted EBITDA above the midpoint of our guidance range  —

NEW YORK, Feb. 28, 2024 /PRNewswire/ — LivePerson, Inc. (NASDAQ: LPSN) (“LivePerson” the “Company”, “we” or “us”), the enterprise leader in digital customer conversations, today announced financial results for the fourth quarter ended December 31, 2023.

Fourth Quarter Highlights

Total revenue was $95.5 million for the fourth quarter of 2023, above the midpoint of our prior guidance and a decrease of 22.1% as compared to the same period last year driven by our exit of lower-margin and non-core business lines.

LivePerson signed 62 deals in total for the fourth quarter, consisting of 16 new and 46 existing customer contracts, including 3 seven-figure deals. Trailing-twelve-months average revenue per enterprise and mid-market customer increased 11.9% for the fourth quarter to $610,000, up from approximately $545,000 for the comparable prior-year period. Beginning with the second quarter of 2022, in order to provide a more consistent and meaningful measure of ARPC, we started calculating this metric using only B2B Core recurring revenue, which is consistent with the revenue base for calculating Net Revenue Retention.

“This is a critical time in LivePerson’s history, and I’m honored to be leading the company through its transformation by driving results through improved commercial and operational execution,” said CEO John Sabino. “There is a multi-billion dollar market opportunity ahead of us as we execute on our go-to-market strategy, lean into our product’s integration and orchestration capabilities, and strengthen our capital structure. I am excited to share that these operational initiatives are already underway, and I am confident they will place LivePerson on a path to profitable growth.”

“I’m excited to partner with John on the path ahead and I share the board’s confidence in his leadership,” said CFO and COO John Collins. “The rapid growth in our market, coupled with repeated validation of our product by customers, investors, and third party research, makes it clear that LivePerson has a compelling growth opportunity following the rebuild of its sales and customer success motion.”

Customer Expansion

During the fourth quarter, the Company signed 62 total deals for the quarter, including 3 seven-figure deals, 46 expansion & renewals and 16 new logo deals. New logo deals included:

A globally recognized designer;A major telecom services provider in Southeast Asia, through a partnership; andA leading personal loan provider, through a partnership.

The Company also expanded/renewed business with:

Several financial services companies including one of the world’s largest banks, a large U.K. financial services provider, a growing U.S. credit card issuer, a major U.S. credit union, and a large Australian retail bank; as well asA leading U.K. connectivity provider;A large U.S. luxury jewelry company; andA leading technology company.

Net Loss and Adjusted Operating Loss

Net loss for the fourth quarter of 2023 was $40.5 million or $0.48 per share, as compared to a net loss of $41.7 million or $0.55 per share for the fourth quarter of 2022.  Adjusted operating loss, a non-GAAP financial metric, for the fourth quarter of 2023 was $4.0 million, as compared to a $16.1 million adjusted operating loss for the fourth quarter of 2022. Adjusted operating loss excludes amortization of purchased intangibles and finance leases, stock-based compensation expense, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, gain on divestiture, leadership transition costs, contingent earn-out adjustments, IT transformation costs, acquisition and divestiture costs, interest (income) expense, and other (income) expense.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, for the fourth quarter of 2023 was $3.7 million as compared to an adjusted EBITDA loss of $5.2 million for the fourth quarter of 2022. Adjusted EBITDA excludes amortization of purchased intangibles and finance leases, stock-based compensation expense, depreciation, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, IT transformation costs, gain on divestiture, contingent earn-out adjustments, provision for income taxes, acquisition and divestiture costs, interest (income) expense, and other (income) expense.

A reconciliation of non-GAAP financial measures to GAAP measures has been provided in the financial tables included in this press release. An explanation of the non-GAAP financial measures and how they are calculated is included below under the heading “Non-GAAP Financial Measures.”

Cash and Cash Equivalents

The Company’s cash balance was $210.8 million at December 31, 2023, as compared to $391.8 million at December 31, 2022.

Financial Expectations

The following forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially from these forward-looking measures. The Company does not present a quantitative reconciliation of the forward-looking non-GAAP financial measures, adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP financial measures (or otherwise present such forward-looking GAAP measures) because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized. In particular, these non-GAAP financial measures exclude certain items, including amortization of purchased intangibles and finance leases, stock-based compensation expense, depreciation, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, gain on divestiture, contingent earn-out adjustments, provision for income taxes, IT transformation costs, acquisition and divestiture costs, interest (income) expense, and other (income) expense, which depend on future events that the Company is unable to predict. Depending on the size of these items, they could have a significant impact on the Company’s GAAP financial results.

For the full year 2024, we expect total revenue to range from $300M – $315M or (24)% to (20)% year over year (excluding $7.2M of Kasamba revenue generated in Q1 2023). In addition, we expect B2B Core recurring revenue to represent 92% of total revenue. For the full year 2024, we expect adjusted EBITDA to range from $15M to $26M, or a margin of 5.0% to 8.3%.

For the first quarter, we expect total revenue to range from $79M – $83M or (21)% to (17)% year over year (excluding $7.2M of Kasamba revenue generated in Q1 2023). We expect B2B Core recurring revenue to represent   92% of total revenue. For the first quarter, we expect adjusted EBITDA to range from $(2) to $2M, or a margin of (2.5)% to 2.4%.

For the tables below, year-over-year growth rates are on a like-for-like basis (excluding $7.2M of Kasamba contribution from Q1 2023). 

First Quarter 2024

Guidance

Revenue (in millions)

$79 – $83

Revenue growth (year-over-year)

(21)% – (17)%

Adjusted EBITDA (in millions)

$(2) – $2

Adjusted EBITDA margin (%)

(2.5)% – 2.4%

Full Year 2024

Guidance

Revenue (in millions)

$300 – $315

Revenue growth (year-over-year)

(24)% – (20)%

Adjusted EBITDA (in millions)

$15 – $26

Adjusted EBITDA margin (%)

5.0% – 8.3%

Disaggregated Revenue

Included in the accompanying financial results are revenues disaggregated by revenue source, as follows:

Three Months Ended
December 31,

Year Ended
December 31,

2023

2022

2023

2022

(In thousands)

Revenue:

Hosted services (1)

$           78,600

$           94,085

$         332,971

$       412,467

Professional services

16,868

28,392

69,012

102,333

Total revenue

$           95,468

$         122,477

$         401,983

$      514,800

(1)

On March 20, 2023, the Company completed the sale of Kasamba and therefore ceased recognizing revenue related to Kasamba effective on the transaction close date. Further, this sale eliminated the entire Consumer segment, as a result of which revenue is presented within a single consolidated segment. Hosted services includes $7.1 million for the year ended December 31, 2023 and $9.4 million and   $37.1 million for the three and twelve months ended December 31, 2022 respectively, relating to Kasamba.

Stock-Based Compensation

Included in the accompanying financial results are expenses related to stock-based compensation, as follows:

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

2022

(In thousands)

Cost of revenue

$                 577

$                 777

$           1,456

$              9,933

Sales and marketing

2,925

963

10,354

19,575

General and administrative

364

4,987

(5,706)

40,690

Product development

3,508

2,588

5,750

39,440

  Total

$              7,374

$              9,315

$         11,854

$         109,638

Amortization of Purchased Intangibles and Finance Leases 

Included in the accompanying financial results are expenses related to the amortization of purchased intangibles and finance leases, as follows:

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

2022

(In thousands)

Cost of revenue

$              4,966

$              4,646

$         18,691

$           18,434

Amortization of purchased intangibles

861

936

3,505

3,678

  Total

$              5,827

$              5,582

$         22,196

$           22,112

Supplemental Fourth Quarter 2023 Presentation

LivePerson will post a presentation providing supplemental information for the fourth quarter 2023 on the investor relations section of the Company’s web site at www.ir.liveperson.com.

Earnings Teleconference Information

The Company will discuss its fourth quarter of 2023 financial results during a teleconference today, February 28, 2024, at 5:00 PM ET. To participate via telephone, callers should dial in five to ten minutes prior to the 5:00 p.m. Eastern start time; domestic callers (U.S. and Canada) should dial 1-877-407-0784, while international callers should dial 1-201-689-8560, and both should reference the conference ID “13743243.”

The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company’s web site at www.ir.liveperson.com.

If you are unable to participate in the live call, the teleconference will be available for replay approximately two hours after the call. To access the replay, please call 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (international). Please reference the conference ID “13743243.” A replay will also be available on the investor relations section of the Company’s web site at www.ir.liveperson.com.

About LivePerson, Inc.

LivePerson (NASDAQ: LPSN)  is the enterprise leader in digital customer conversations. The world’s leading brands — including HSBC, Chipotle, and Virgin Media — use our award-winning Conversational Cloud platform to connect with millions of consumers. We power nearly a billion conversational interactions every month, providing a uniquely rich data set and AI-powered solutions to accelerate contact center transformation, supercharge agent productivity, and deliver more personalized customer experiences. Fast Company named us the #1 Most Innovative AI Company in the world. To talk with us or our AI, please visit liveperson.com.

Non-GAAP Financial Measures

Investors are cautioned that the following financial measures used in this press release and on our earnings call are “non-GAAP financial measures”: (i) adjusted EBITDA, or loss before provision for income taxes, interest (income) expense, other (income) expense, depreciation, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, IT transformation costs, gain on divestiture, acquisition and divestiture costs and other litigation, consulting and other employee costs; (ii) adjusted EBITDA margin, or loss before provision for income taxes, interest (income) expense, other (income) expense, depreciation, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, IT transformation costs, gain on divestiture, acquisition and divestiture costs and other litigation, consulting and other employee costs divided by revenue; (iii) adjusted operating loss, or operating loss excluding interest (income) expense, other (income) expense, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, IT transformation costs, gain on divestiture, acquisition and divestiture costs, and other litigation, consulting and other employee costs and (iv) free cash flow, or net cash provided by operating activities less purchases of property and equipment, including capitalized software.

Non-GAAP financial information should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present non-GAAP financial information because we believe that it is helpful to some investors as one measure of our operations.

Forward-Looking Statements

Statements in this press release and on our earnings call regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including but not limited to financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter and year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: strain on our personnel resources and infrastructure from supporting our customer base; our ability to retain existing customers and cause them to purchase additional services and to attract new customers; our ability to retain key personnel, attract new personnel and to manage staff attrition; our ability to successfully integrate past or potential future acquisitions; our ability to refinance our substantial indebtedness before it becomes due or to secure necessary additional financing on commercially reasonable terms, or at all; lengthy sales cycles; delays in our implementation cycles; payment-related risks; potential fluctuations in our quarterly revenue and operating results; limitations on the effectiveness of our controls; non-payment or late payment of amounts due to us from a significant number of customers; volatility in the capital markets; recognition of revenue from subscriptions; customer retention and engagement; our ability to develop and maintain successful relationships with partners, service partners, social media and other third-party consumer messaging platforms and endpoints; our ability to effectively operate on mobile devices; the highly competitive markets in which we operate; general economic conditions; failures or security breaches in our services, those of our third party service providers, or in the websites of our customers; regulation or possible misappropriation of personal information belonging to our customers’ Internet users; US and international laws and regulations regarding privacy data protection and AI and increased public scrutiny of privacy,security and AI issues that could result in increased government regulation and other legal obligations; ongoing litigation and legal matters; new regulatory or other legal requirements that could materially impact our business; governmental export controls and economic sanctions; industry-specific regulation and unfavorable industry-specific laws, regulations or interpretive positions; future regulation of the Internet or mobile devices; technology-related defects that could disrupt the LivePerson services; our ability to protect our intellectual property rights or potential infringement of the intellectual property rights of third parties; the use of AI in our product offerings or by our vendors; the presence of, and difficulty in correcting, errors, failures or “bugs” in our products; our ability to license necessary third party software for use in our products and services, and our ability to successfully integrate third party software; potential adverse impact due to foreign currency and cryptocurrency exchange rate fluctuations; additional regulatory requirements, tax liabilities, currency exchange rate fluctuations and other risks if and as we expand; risks related to our operations in Israel; potential failure to meeting service level commitments to certain customers; legal liability and/or negative publicity for the services provided to consumers via our technology platforms; technological or other defects that could disrupt or negatively impact our services; our ability to maintain our reputation; changes in accounting principles generally accepted in the United States; natural catastrophic events and interruption to our business by man-made problems; potential limitations on our ability to use net operating losses to offset future taxable income; and risks related to our common stock being traded on more than one securities exchange. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the Company’s reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important factors that could cause actual results to differ from those discussed in forward-looking statements.

 

LivePerson, Inc.

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

Unaudited

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

2022

Revenue

$          95,468

$        122,477

$      401,983

$        514,800

Costs, expenses and other:

Cost of revenue

39,818

46,402

142,823

184,699

Sales and marketing

32,365

46,464

125,677

214,027

General and administrative

21,554

28,473

91,619

120,625

Product development

29,859

37,120

124,792

193,688

Impairment of goodwill

—

—

11,895

—

Impairment of intangibles and other assets

5,015

—

7,974

—

Restructuring costs

6,665

2,018

22,664

19,967

Gain on divestiture

—

—

(17,591)

—

Amortization of purchased intangible assets

861

936

3,505

3,678

Total costs, expenses and other

136,137

161,413

513,358

736,684

Loss from operations

(40,669)

(38,936)

(111,375)

(221,884)

Other income (expense), net:

Interest income (expense), net

1,664

1,361

4,669

(352)

Other income (expense), net

1,043

(3,692)

10,434

(1,784)

Total other income (expense), net

2,707

(2,331)

15,103

(2,136)

Loss before provision for income taxes

(37,962)

(41,267)

(96,272)

(224,020)

Provision for income taxes

2,563

457

4,163

1,727

Net loss

$        (40,525)

$        (41,724)

$    (100,435)

$      (225,747)

Net loss per share of common stock:

Basic

$             (0.48)

$             (0.55)

$          (1.28)

$             (3.03)

Diluted

$             (0.48)

$             (0.55)

$          (1.28)

$             (3.03)

Weighted-average shares used to compute net loss per share:

Basic

83,610,995

75,538,133

78,593,274

74,509,404

Diluted

83,610,995

75,538,133

78,593,274

74,509,404

 

LivePerson, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

Unaudited

Year Ended December 31,

2023

2022

OPERATING ACTIVITIES:

Net loss

$      (100,435)

$      (225,747)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Stock-based compensation expense

11,854

109,638

Depreciation

32,557

32,284

Amortization of purchased intangible assets and finance leases

22,196

22,112

Amortization of debt issuance costs

4,043

3,778

Accretion of debt discount on convertible senior notes

—

—

Impairment of goodwill

11,895

—

Impairment of intangible and other assets

7,974

—

Change in fair value of contingent consideration

4,629

(8,516)

Gain on repurchase of convertible notes

(7,200)

—

Allowance for credit losses

3,319

5,644

Gain on divestiture

(17,591)

—

Gain on settlement of leases

—

(242)

Deferred income taxes

1,046

(1,161)

Equity loss in joint venture

2,264

—

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

1,457

(38)

Prepaid expenses and other current assets

(3,411)

(5,979)

Contract acquisition costs

4,992

(6,370)

Other assets

1,361

(153)

Accounts payable

(13,570)

12,050

Accrued expenses and other current liabilities

24,343

7,485

Deferred revenue

(3,169)

(12,341)

Operating lease liabilities

(523)

(2,638)

Other liabilities

(7,796)

8,093

Net cash used in operating activities

(19,765)

(62,101)

INVESTING ACTIVITIES:

Purchases of property and equipment, including capitalized software

(28,657)

(48,486)

Proceeds from divestiture

13,819

—

Payments for acquisitions, net of cash acquired

—

(3,430)

Purchases of intangible assets

(4,004)

(2,680)

Investment in joint venture

—

(2,264)

Net cash used in investing activities

(18,842)

(56,860)

FINANCING ACTIVITIES:

Principal payments for financing leases

(3,330)

(3,734)

Repurchase of common stock

—

(221)

Proceeds from issuance of common stock in connection with the exercise of options and ESPP

1,890

5,573

Payment for repurchase of convertible senior notes

(149,702)

—

Net cash (used in) provided by financing activities

(151,142)

1,618

Effect of foreign exchange rate changes on cash and cash equivalents

465

(3,980)

Net decrease in cash, cash equivalents, and restricted cash

(189,284)

(121,323)

Cash classified within current assets held for sale

10,011

(10,011)

Cash, cash equivalents, and restricted cash – beginning of year

392,198

523,532

Cash, cash equivalents, and restricted cash – end of year

$        212,925

$        392,198

 

LivePerson, Inc.

Reconciliation of Non-GAAP Financial Information to GAAP

(In Thousands)

Unaudited

Three Months Ended
December 31,

Year Ended

December 31,

2023

2022

2023

2022

Reconciliation of Adjusted EBITDA (Loss):

GAAP net loss

$         (40,525)

$         (41,724)

$    (100,435)

$      (225,747)

Add/(less):

Depreciation

7,705

10,870

32,557

32,284

Other litigation, consulting and other employee costs (1)

5,553

4,569

32,266

17,212

Restructuring costs (2)

6,665

2,018

22,664

19,967

Amortization of purchased intangibles and finance leases

5,827

5,582

22,196

22,112

Impairment of goodwill

—

—

11,895

—

Stock-based compensation expense (3)

8,525

9,315

10,187

109,638

Leadership transition costs

1,418

—

8,384

—

Impairment of intangibles and other assets

5,015

—

7,974

—

Contingent earn-out adjustments

(812)

52

4,629

(8,516)

Provision for income taxes

2,563

457

4,163

1,727

IT transformation costs (4)

3,576

—

3,576

—

Acquisition and divestiture costs

96

1,368

3,131

4,492

Interest (income) expense, net

(1,664)

(1,361)

(4,669)

352

Gain on divestiture

—

—

(17,591)

—

Other (income) expense, net (5)

(231)

3,640

(15,063)

10,300

Adjusted EBITDA (loss)

$             3,711

$           (5,214)

$         25,864

$         (16,179)

Reconciliation of Adjusted Operating Loss

Loss before provision for income taxes

(37,962)

(41,267)

(96,272)

(224,020)

Add/(less):

 Other litigation, consulting and other employee costs (1)

5,553

4,569

32,266

17,212

 Restructuring costs (2)

6,665

2,018

22,664

19,967

 Amortization of purchased intangibles and finance leases

5,827

5,582

22,196

22,112

 Impairment of goodwill

—

—

11,895

—

 Stock-based compensation expense (3)

8,525

9,315

10,187

109,638

 Leadership transition costs

1,418

—

8,384

—

 Impairment of intangibles and other assets

5,015

—

7,974

—

 Contingent earn-out adjustments

(812)

52

4,629

(8,516)

 IT transformation costs (4)

3,576

—

3,576

—

 Acquisition and divestiture costs

96

1,368

3,131

4,492

 Interest (income) expense, net

(1,664)

(1,361)

(4,669)

352

 Gain on divestiture

—

—

(17,591)

—

 Other (income) expense, net (5)

(231)

3,640

(15,063)

10,300

Adjusted operating loss

$           (3,994)

$         (16,084)

$         (6,693)

$         (48,463)

(1)

Includes litigation costs of $4.4 million and consulting fees and related costs of $1.2 million for the three months ended December 31, 2023. Includes litigation costs of $3.6 million, employee benefit costs of $0.5 million and consulting costs of $0.5 million for the three months ended December 31, 2022. Includes litigation costs of $28.0 million, consulting fees and related costs of $4.4 million, offset by sales tax liability reversals of $0.1 million for the year ended December 31, 2023. Includes litigation costs of $11.0 million, employee benefit costs of $1.6 million, consulting fees and related costs of $2.2 million, employee-related costs of $2.1 million and reserve for sales and use tax liability of $0.3 million for the year ended December 31, 2022.

(2)

Includes IT contract termination cost of $5.7 million and severance costs and other compensation related costs of $0.9 million for the three months ended December 31, 2023. Includes severance costs and other compensation related costs of $1.9 million and lease restructuring costs of $0.1 million for the three months ended December 31, 2022. Includes severance costs and other compensation related costs of $16.9 million and IT contract termination costs of $5.7 million for the year ended December 31, 2023. Includes severance costs and other compensation related costs of $19.5 million and lease restructuring costs of $0.4 million for the year ended December 31, 2022.

(3)

Excludes $1.7 million of accelerated stock-based compensation for the three months ended and year ended December 31, 2023 in connection with the CEO departure, as these costs are presented in leadership transition costs.

(4)

Includes IT infrastructure realignment costs related to consolidating and migrating data centers to the cloud. We expect these costs to continue in 2024. 

(5)

Includes $10.0 million of other income related to a litigation settlement, a $7.2 million gain related to convertible senior notes repurchases and losses related to the Company’s equity method investment during the year ended December 31, 2023. The remaining amount of other (income) expense, net fluctuation is attributable to currency rate fluctuations for the three months and year ended December 31, 2023. Includes $3.3 million of losses related to the Company’s equity method investment for the three months ended December 31, 2022. Includes $0.2 million of other income related to the settlement of leases, offset by $7.7 million of losses related to the Company’s equity method investment for the year ended December 31, 2022.

 

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

2022

Calculation of Free Cash Flow:

Net cash used in operating activities

$             4,537

$           17,370

$        (19,765)

$       (62,101)

Purchases of property and equipment, including capitalized software

(6,220)

(13,274)

(28,657)

(48,486)

Total Free Cash Flow

$           (1,683)

$             4,096

$        (48,422)

$     (110,587)

 

LivePerson, Inc.

 Consolidated Balance Sheets

(In Thousands)

Unaudited

December 31,
2023

December 31,
2022

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$         210,782

$         391,781

Restricted cash

2,143

417

Accounts receivable, net

81,802

86,537

Prepaid expenses and other current assets

26,981

23,747

Assets held for sale

—

30,984

Total current assets

321,708

533,466

Operating lease right-of-use asset

4,135

1,604

Property and equipment, net

119,325

126,499

Contract acquisition costs

37,354

43,804

Intangible assets, net

61,625

78,103

Goodwill

285,631

296,214

Deferred tax assets, net

4,527

4,423

Investment in joint venture

—

2,264

Other assets

1,208

2,563

Total assets

$         835,513

$      1,088,940

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$           13,555

$           25,303

Accrued expenses and other current liabilities

97,024

129,244

Deferred revenue

81,858

84,494

Convertible senior notes

72,393

—

Operating lease liabilities

2,719

2,160

Liabilities associated with assets held for sale

—

10,357

Total current liabilities

267,549

251,558

Convertible senior note, net of current portion

511,565

737,423

Operating lease liabilities, net of current portion

2,173

682

Deferred tax liabilities

2,930

2,550

Other liabilities

3,158

28,639

Total liabilities

787,375

1,020,852

Total stockholders’ equity

48,138

68,088

Total liabilities and stockholders’ equity

$         835,513

$      1,088,940

Investor Relations contact
ir-lp@liveperson.com

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SOURCE LivePerson

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Edvance and CWG Launch RealRelay Fintech, AI Agents for Finance with Trust Built First

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Edvance and CWG open RealRelay’s third vertical, bringing tested and rated AI agents to finance as MAS sets out how AI in the sector should be governed.

SINGAPORE, Oct. 19, 2026 /PRNewswire/ — On Oct. 17, Edvance International Holdings Limited (HKEX: 1410) (“Edvance”), through its wholly-owned Singapore subsidiary Paradise Matrix Pte. Ltd., and CWG Innovations Pte. Ltd. (“CWG”) today launched RealRelay Fintech, the third vertical on RealRelay.ai, the platform on which organisations build, test and run AI agents without writing code. The launch took place at a one-day youth AI event at Suntec Convention Centre, co-organised by the Digital Defence Alliance Singapore (DDAS) and CWG with the support of the National Youth Council (NYC).

The event was conceptualised, planned and developed by Mr Aaron Ang (linkedin.com/in/aaronangsg), Chief Commercial Officer of CWG, who leads the RealRelay project. Mr Ang built the day around one challenge. Participants were handed a simulated fraud case and asked to use agentic AI to find out what had happened. Within hours they had worked through tens of thousands of transaction records, traced the money, flagged the entries that did not add up and shown how they got there. The same job, done by hand, would take an audit team weeks. The event was graced by Mr Ong Kah Kuang, Assistant Chief Executive of the National Youth Council.

That is what RealRelay Fintech sets out to do. Work that is slow, manual and easy to get wrong, such as reconciling accounts, checking documents and finding the one record in a million that should not be there, becomes something an agent on the platform does accurately, in hours, with every step on record. Fraud detection is the clearest example, and it is where the fintech vertical begins. In finance, though, a fast answer counts for nothing unless the institution can trust it.

Trust comes first

Finance is the sector where trust in AI matters most, and Singapore has moved first. On 7 October the Monetary Authority of Singapore (MAS) issued its Guidelines on AI Risk Management. They cover every financial institution and every form of AI, agents included. Boards are expected to oversee AI risk, keep an inventory of each AI use, manage third-party AI and control the whole life cycle, from testing to monitoring. The guidelines take effect in October 2027. In August, MAS also committed S$220 million under FSTI 4.0 to get AI into the sector faster, including an AI Pathfinder track for solutions listed on PathFin.ai.

Every agent on RealRelay passes through the Trust and Control Layer. The platform’s own security agent tests it before it goes live and tests it again each time it changes. Permissions, logging, retention and access are controlled centrally, and every agent carries a risk rating that covers the data it can touch, the actions it can take and how it behaved under test. That rating, the agent inventory and the full log are the same things MAS now asks financial institutions to keep. The Trust and Control Layer draws on Edvance’s more than 20 years in cybersecurity.

Asked what the launch represents, Mr Ang said:

“Singapore has been clear about how it wants AI to enter finance. Innovate, but with trust and control in place from the start. We believe that is the next phase of fintech, and we built RealRelay Fintech on exactly that principle. The Trust and Control Layer is the foundation of the platform. Every agent is tested before it goes live, and the institution keeps full control over what it can see and do. When people can see that, they stop hesitating. That is how banks, funds and founders will actually put AI to work, and that is what we are here to make possible.”

What RealRelay Fintech does

At launch the vertical covers four areas of work.

Research and analysis. Agents that read filings, news and market data, run scenarios and produce forecasts with the reasoning shown.

Decision documents. Credit memos, investment committee packs, portfolio risk briefs and client review notes, drafted from a firm’s own data and templates.

Fraud, compliance and document checks. Agents that reconcile transactions, flag anomalies, check onboarding documents against policy and keep a record of every check.

Learning. A guided track for students and new joiners, using the same tools professionals use, at a price a student can afford.

Institutional deployments, including Singapore-hosted and on-premises options, are available on request.

Three verticals, one platform

RealRelay has two layers sitting on a Trust and Control Layer. The Token Exchange launched on 30 September 2026 and puts more than 300 mainstream AI models behind one subscription, routing each task to a suitable model at a lower cost than buying them separately. The Agentic Layer sits on top. Users describe what they need in plain language, assemble an agent from ready-made modules, test it and deploy it in one click, with no code. Three verticals run on these layers: education, cybersecurity and now fintech.

Education came first, and it is where the platform found its first users. At the APEX Bootcamp in September, students and young working adults with no technical background built working agents in two days. Interest from educational institutions has followed, and CWG is finalising details with these institutions to provide RealRelay and the full AI ecosystem around it to their students. Fintech now follows the same path, on the same layers and under the same controls.

What comes next

RealRelay Fintech will run a series of masterclasses in parallel with the Singapore FinTech Festival from 18 to 20 November 2026, and CWG is preparing its listing on PathFin.ai. Over 2027, the Trust and Control Layer will be mapped to the MAS guidelines so that an institution can take an agent’s test record straight into its own risk assessment. Agents built to individual institutions’ own policies and templates will follow.

For Edvance, fintech opens a subscription market where the buyers are large, regulated, and now required to show trust and control over the AI they use. Edvance is responsible for commercialising the platform and holds the intellectual property in its cybersecurity agents. The platform is owned and operated from Singapore, and the two companies are preparing to take it global, with partner talks under way and expansion plans already in place.

About Edvance International Holdings Limited

Edvance International Holdings Limited (HKEX: 1410) is a Hong Kong-headquartered value-added distributor of cybersecurity products and provider of cybersecurity services, with more than 20 years of experience in the market. Paradise Matrix Pte. Ltd. is Edvance’s wholly-owned subsidiary in Singapore. For more information, visit https://www.paradisematrix.sg.

About CWG Innovations Pte. Ltd.

CWG Innovations Pte. Ltd. is a Singapore company focused on AI solutions development and enterprise AI deployment. CWG is the operator of RealRelay.ai. For more information, visit https://www.cwgsg.ai.

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SOURCE CWG Innovations; Edvance International Holdings Limited; RealRelay

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140th Canton Fair Amplifies Visibility for Hundreds of Product Debuts, Connecting Innovation with Global Demand

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GUANGZHOU, China, Oct. 19, 2026 /PRNewswire/ — The 140th Canton Fair opened on October 15 and will be held in three phases. Over 700 New Collection events will take place, representing a 15% increase from the previous session. To share these innovations with a broader audience, the fair has introduced a range of initiatives designed to enhance product visibility and facilitate business connections.

Canton Fair New Collection Gallery Debuts

A dedicated Canton Fair New Collection Gallery has been introduced for the first time at the 140th Canton Fair. Located near the high-traffic platform connecting Area A and B, the gallery is divided into three sections: a product display area, a digital interactivity area and a business matching area.

Together, these sections create an integrated platform that combines product showcase and commercial matchmaking. The setup enables buyers and exhibitors to connect more efficiently, supporting on-site trade discussions and demand matching throughout the event.

Exhibition Meets Livestreaming

To help global buyers stay updated on emerging opportunities in real time, the Canton Fair is combining its physical exhibition with livestreaming programs. A series of featured broadcasts will highlight exhibition tours, product demonstrations and new product launches across a wide range of industries.

By extending product showcases beyond the exhibition floor, these livestreams provide international buyers with convenient access to the latest innovations and market trends regardless of their location.

Theme Release Events

The fair also hosts daily New Collection Theme Release events at the central platform between Area A and B. During Phase 1, featured themes include smart living appliances, service robots, low-altitude smart inspection, smart electronics, precision tools and green energy storage. These sessions provide exhibitors with additional opportunities to present newly launched products and engage directly with buyers from around the world.

As the Canton Fair continues to evolve alongside global trade, its expanded launch platforms, digital engagement initiatives and business matching services reflect a growing commitment to helping innovative products gain market exposure and accelerate commercial opportunities. By creating more touchpoints between exhibitors and buyers, the fair is bolstering a 70-year history as a gateway for international business collaboration in China and a leading product innovation showcase.

For more convenient attendance, please click here for pre-registration:
https://buyer.cantonfair.org.cn/register/buyer/email?source_type=16

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SOURCE Canton Fair

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FF EAI Robotics Ecosystem Inc. (FFR) Highlights Faraday Future Founder and Global CEO YT Jia’s Weekly Investor Update: Three New Product Offerings Launched; More Details on FFR’s Acquisition of FFAI’s Robotics Business and Independent Public Listing

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On October 26, FFR will hold its listing ceremony and first Investor Day at the Nasdaq Tower in New York, where management will share more about FFR’s strategy and business plans, with more details to follow soon.Two new EAI Devices launched including FF Nova—America’s first entry-level EAI humanoid robot under $2,500, and the second is Nova Mini, a humanoid robot for foundational Physical AI education, priced at $299, with the accompanying curriculum at $499.FF EAI launched two new education and developer training initiatives, the Physical AI Spark Program Curriculum and the Nova Reinforcement Learning Developer Program, while also opening enrollment for its developer community to help expand participation in its embodied AI ecosystem.

LOS ANGELES, Oct. 18, 2026 /PRNewswire/ — FF EAI Robotics Ecosystem Inc. (NASDAQ: FFR) (“FFR” or the “Company”), a U.S.-based Embodied AI (EAI) robotics company, today highlighted a weekly business update from YT Jia, Founder and Global CEO of Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI) (“Faraday Future” or “FF”). For purposes of attribution, references to “we,” “our,” and “FF” in the following transcript refer to FFAI and its robotics business, except where FFR named.

“Welcome to Weekly Report 77. This week, let’s start with some big news from FFR. On October 26, we will hold FFR’s listing ceremony and first Investor Day at the Nasdaq Tower in New York. Our management team will share more about our strategy and business plans. We’ll also have the chance to talk with investors face to face. To our stockholders and partners, we hope you can join us and help open this new chapter for FFR. Formal invitations to the event will go out tomorrow! Now, let me share what we’ve been working on this week.

This week, FFR and FFAI jointly launched three new offerings.

1. Two new EAI Devices. The first is FF Nova—America’s first entry-level EAI humanoid robot under $2,500. Your Physical AI lab in a backpack. The Nova device costs $2,490, and the Developer Skills Package is $390. The second is Nova Mini, our humanoid robot for foundational Physical AI education. The robot is priced at $299, and the accompanying curriculum is $499. With these additions, the “One-Brain Multi-Form Multi-Capability” FF EAI Robot World 2.0 we are building now includes more than 20 EAI Devices across 11 models, seven series, and three robot forms.

2. A new FF EAI Education Skills product—the “Physical AI Spark Program Curriculum.”

3. The Nova Reinforcement Learning Developer Program. We also opened enrollment in our developer community. 

Our EAI Brain and Developer Platform Cores also made two breakthroughs this week.

Regarding the EAI brain, The All-New Futurist now fully supports SONIC. That opens up more room for development and applications on more advanced robotics platforms. This is how our approach of combining in-house development with open collaboration is starting to deliver more value. 

On the Developer Platform side, we’ve made the NVIDIA SONIC data, models, and deployment solutions based on FF Master fully open source through GitHub and Hugging Face. What does that mean for developers? You now have a complete path from open-source research and testing algorithms to deploying robots and building solutions. And that path is open to universities, research institutions, and industry partners around the world, too. 

Over the past few days, we’ve received some questions from stockholders about FFR’s acquisition of FFAI’s robotics business and its independent public listing. Let me take a moment to clarify a few points and explain what this means. Giving the robotics business its own operations, financing, and public listing is much more than moving assets within FFAI. It fundamentally reshapes FFR and unlocks its value.  We see this as the starting point for a major breakthrough in business value and a faster release of value in the capital markets. Let me explain this in four areas.

One is a sharper strategic focus. We will concentrate our resources on delivering our “Four-Core Full-Stack AI” robotics strategy. Every dollar we invest, every decision we make, and every financing round will serve that goal. This focus will help us refine what we do, deepen our expertise, expand our scale, and strengthen our business.

Another is a clearer basis for valuation. With its own public listing as a pure-play robotics business, FFR can be valued directly against its industry peers. Its valuation will no longer be held back by other factors affecting FFAI.  Combined with continued deliveries at positive contribution margins, this gives FFR significant room to unlock value.

We will also have more transparent business results and cleaner financial statements. You will be able to see how each financing round translates into business performance. That transparency can help attract strategic investors and long-term capital. After closing, FFR will have almost no debt. Its balance sheet, income statement, and cash flow statement will be cleaner, making the company’s value easier to see.

The fourth area is lower funding needs and financing costs. FFR has seven unique advantages, including our “Four-Core Full-Stack AI” EAI technology and asset-light operating model. Building on these strengths, we aim to achieve positive operating cash flow no later than the third quarter of 2028. Until then, we expect to need no more than $150 million in total financing. 

For FFAI, once the transaction closes, we will remain FFR’s controlling and majority stockholder and continue to share in its potential future growth in value. As a Physical AI investment company following a Berkshire-style model, FFAI will share further business updates soon. We want to reward our stockholders for your continued support.

Over the years, we’ve received encouragement, faced ridicule, and taken harsh criticism, yet we’ve seldom felt the need to explain ourselves. Our passion for building a business is still there. It comes from working alongside people who share our vision, and driving change in the industry together. Failure itself doesn’t stop us. What stops us is losing the belief that we can try again. “Try again.” A message to myself, and to every entrepreneur who keeps going. Thank you for being part of this journey. See you next week.”

About FF EAI Robotics Ecosystem Inc. 

FF EAI Robotics Ecosystem Inc. (NASDAQ: FFR) (renamed from AIxCrypto Holdings, Inc. and AIXC, effective September 30, 2026) is a U.S.-based Embodied AI (EAI) robotics company that is in the process of acquiring the FF EAI Robotics business. Upon completion of the acquisition, the Company will focus on the research and development, manufacturing, commercialization, and deployment of intelligent robotic technologies, products, and industry solutions.  

The Company is committed to building a “Four-Core Full-Stack” AI ecosystem covering the full lifecycle of robotics, consisting of EAI Brain & Developer Platform, EAI Devices, Industry Productivity Solutions, and EAI Data Factory. Guided by the technology and product philosophy of “One Brain, Multi-forms, Multi-capabilities,” the Company aims to empower humanoid, biomimetic, and other robotic form factors through a unified EAI Brain, while continuously expanding their multi-task and multi-scenario capabilities. The ecosystem is designed to support the full robotics lifecycle, including R&D, deployment, data collection and training, operations, and commercial applications.  

The FF EAI Robotics business has already achieved commercial deliveries of humanoid and biomimetic robotic products. Through its multi-form-factor robotic products, EAI technology platform, closed-loop data capabilities, and industry solutions, the business continues to advance the scaled adoption of robotics across real-world applications. The Company also operates RoboShare, a robot-sharing and services platform designed to connect robotic assets, service capabilities, customer demand, and ecosystem partners, further strengthening its robotics commercialization and service ecosystem. 

For more information, visit www.ff.com. 

About Faraday Future 

Founded in 2014, Faraday Future (FF) is a U.S.-based Physical AI ecosystem company dedicated to reshaping the future of robotics and mobility solutions through AI innovation and technologies. FF focuses on two major product strategies within the Embodied AI (EAI) robotics business: EAI humanoid and bionic robots, and EAI automotive-focused robots. By building a “Four-Core Full-Stack AI” ecosystem of EAI Brain and Developer Platform, EAI Devices, Industry Productivity Solutions and EAI Data Factory, FF aims to create an evolutionary flywheel: scaled device delivery, data collection and training, continuous evolution of the EAI Brain, stronger product capability, and even larger-scale delivery and deployment. Through this flywheel, FF seeks to maximize its commercial value and lead to the advancement of Physical AI. For more information, please visit Faraday Future’s official website: https://www.ff.com/ 

FFR Forward-Looking Statements 

This communication, including any presentation, press release, investor materials or other document of which it forms a part (this “Communication”), contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, and other securities laws, regarding FF EAI Robotics Ecosystem Inc. (“FFR,” the “Company,” “us,” “our,” or “we”) and our industry. All statements, whether written or oral, other than statements of historical fact, including any financial projections and any statements regarding future events, our strategy, our transition to robotics operations, our plans for RoboShare, our digital asset disposition plans, the proposed acquisition of the FF EAI Robotics business, the projections referenced in this communication, our name and ticker change, any related financing, and the anticipated benefits and timing of the foregoing, our objectives, expectations, or anticipated actions or results, are forward-looking statements. You can often identify forward-looking statements by words such as “may,” “might,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” “likely,” or “continue,” or the negative of these terms or other similar expressions; the absence of these words does not mean a statement is not forward-looking. These statements reflect our current expectations and projections about future events as of the date of this Communication and are necessarily based on estimates and assumptions that, while considered reasonable by management, are inherently uncertain. FFR can give no assurance that such forward-looking statements or financial projections will prove to be correct. 

Actual results may differ materially from those expressed or implied by these forward-looking statements as a result of numerous risks and uncertainties, both general and specific, including, but not limited to: 

The proposed acquisition transaction and PIPE. The definitive agreements may be terminated in accordance with their terms, and the proposed transactions may not be completed on the terms described or at all; the conditions to closing, including the completion of FFAI’s internal restructuring of the robotics business, the execution of key employee agreements and other customary conditions, and the parties’ ability to satisfy them; the risk that the stockholder approval required under Nasdaq listing rules for the conversion of the preferred stock issued as consideration is not obtained or is delayed, and the effect of the conversion restrictions and the information statement process on the timing of conversion; the timing of the transaction and the costs of pursuing it; the issuance of a substantial number of shares as consideration and the resulting dilution to existing stockholders; the fact that the counterparty is our controlling stockholder, that it will hold a substantial majority of our outstanding shares following closing, that certain members of management serve both companies, and the conflicts of interest inherent in the transaction; the risk that the agreed valuations do not reflect the market value of our shares or of the acquired business; our dependence on the counterparty for transition, supply and support following any closing; the scope and enforceability of the non-competition and governance arrangements; the consequences of the transaction under Nasdaq listing rules, including the possibility that Nasdaq determines that the transaction requires us to satisfy initial listing requirements in connection with a business combination, change of control or change in the nature of our business; the risk that the PIPE financing, on which the transaction is not conditioned, is not completed on the anticipated terms or at all; the risk of litigation relating to the transaction; our ability to integrate and operate the acquired business; and the risk that the acquired business performs differently than anticipated. 

Projections. The projections referenced in this communication were prepared by FFAI management for the FF EAI Robotics business on a standalone basis and do not reflect our existing business, transaction-related expenses or the combined company. We have not independently verified them or adopted them as guidance. They were not prepared with a view toward public disclosure or toward compliance with the published guidelines of the Securities and Exchange Commission or the American Institute of Certified Public Accountants regarding prospective financial information, and no independent registered public accounting firm has examined, compiled or performed any procedures with respect to them, and none expresses an opinion or any other form of assurance with respect to them. The projections reflect estimates and assumptions that are inherently uncertain and subject to change, including through due diligence and the review of our special committee and its financial advisor. Actual results are likely to differ, and may differ materially. 

Liquidity, capital and going concern. Our limited cash and liquidity position and our history of operating losses and negative operating cash flow; substantial doubt regarding our ability to continue as a going concern, as described in our periodic reports; our need to obtain additional financing on acceptable terms or at all, and the substantial dilution to existing stockholders that additional financing may cause, including any financing completed in connection with the proposed transaction, which may not be completed or may be on less favorable terms than anticipated; our ability to fund operations pending and following the disposition of our digital asset positions; and our ability to satisfy the continued listing requirements of The Nasdaq Stock Market, including stockholders’ equity, minimum bid price and other applicable standards. 

Our strategic transition and the disposition of digital assets. Risks associated with a fundamental shift in our business strategy and the redeployment of resources from a digital asset treasury strategy to robotics operations; our ability to execute the disposition of our digital asset positions in an orderly manner and on acceptable terms; the risk that amounts realized on disposition are materially less than carrying value as a result of price volatility, market depth, execution timing, custody or transfer constraints, or other limitations; tax, accounting and regulatory consequences of the dispositions; the continued volatility and regulatory uncertainty associated with digital assets and cryptocurrencies during the wind-down period; the concentration of a substantial portion of our assets in a single equity investment, including an investment in a related party, and the illiquidity, valuation uncertainty, holding-period and transfer restrictions associated with that investment; and risks arising from our relationships and agreements with related parties and significant stockholders.  

Our robotics operations business. Our limited operating history in robotics operations and commercialization and the absence of a meaningful revenue history; the early stage of RoboShare and the risk that customer demand, repeat demand, pricing, utilization or unit economics do not develop as anticipated; our dependence on a small number of customers, on a single initial geographic market, and on individual events or engagements, and the risk that the loss of, or a change in the terms of, any such relationship has a disproportionate effect; our dependence on third-party robot owners, operators, suppliers, original equipment manufacturers and local partners, and on their willingness to make robots available on our platform; risks relating to the availability, cost, quality, maintenance, transport, insurance and technological obsolescence of robots and related equipment, and to supply chains, tariffs and trade measures affecting them; and our ability to expand into additional markets and to attract and retain participants on both sides of our marketplace. 

Operations, safety and liability. Risks of property damage, personal injury or death arising from the operation of humanoid robots, quadrupeds and other autonomous or semi-autonomous machines in proximity to performers, employees, guests and the public, including at live events and in uncontrolled environments; product liability, premises liability, negligence and related claims and the adequacy, scope, availability and cost of our insurance coverage and of contractual indemnities from customers, owners and suppliers; the allocation of responsibility among us, robot owners, venues, event producers and customers; permitting, licensing, occupational safety and event-specific regulatory requirements; and the reputational consequences of any safety incident. 

Technology, data and intellectual property. Systems, network, telecommunications or service disruptions, failures, defects or cyber-attacks; the performance, reliability and autonomy limitations of robotic systems and of the software, models and networks that support them; our collection, use, storage, transmission and protection of personal information, including images and any biometric or biometric-adjacent data captured in the course of robot deployments, and evolving privacy, biometric and artificial intelligence laws and regulations across the jurisdictions in which we operate or intend to operate; our ability to obtain, maintain, protect and enforce our intellectual property rights and to defend against third-party claims of infringement or misappropriation; and our reliance on third-party technology, platforms and licenses. 

Legal, regulatory and general. The regulated industries and jurisdictions in which we operate; current or future laws or regulations and new interpretations of existing laws or regulations, including those applicable to digital assets, robotics, autonomous systems, consumer protection, advertising and endorsements; the risk that our marketplace arrangements, or the manner in which they are described, are characterized differently than we intend by regulators or courts; the failure of counterparties to perform their contractual obligations; litigation, regulatory inquiries, investigations and enforcement actions, and their costs and outcomes; business, economic, market and capital-market conditions; competition in our industry; changes in market demand for, and the pricing of, our products and services; our ability to define, design and release new products and services in a timely manner that meet customer needs; our ability to attract, retain and motivate qualified personnel, including key management; our ability to manage our growth and our transition; and our ability to maintain effective internal control over financial reporting and disclosure controls and procedures. 

This list of factors is not exhaustive. Additional risks and uncertainties are described more fully in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2025, our Quarterly Reports on Form 10-Q, and our subsequent filings, which are available on the SEC’s website at www.sec.gov. Investors are urged to review the liquidity, capital resources and going concern disclosures contained in those reports.  

The forward-looking statements in this Communication speak only as of the date hereof. Except as required by law, neither FFR nor any other person undertakes any obligation to update or revise any forward-looking statement or financial projection set out herein, whether as a result of new information, future events or otherwise. This Communication is provided for informational purposes only, does not constitute an offer to sell or the solicitation of an offer to buy any security, and does not constitute investment, tax or legal advice or any investment recommendation, and does not take into account the investment objectives or financial situation of any person. FFR reserves the right to amend or replace the information contained herein, in whole or in part, at any time, and undertakes no obligation to notify any recipient thereof. Readers are cautioned not to place undue reliance on these forward-looking statements. This caution is made under, and these forward-looking statements are intended to be covered by, the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

FFAI FORWARD LOOKING STATEMENTS

Important factors that may affect actual results or outcomes include, among others: the Company’s ability to continue as a going concern and improve its liquidity and financial position; the Company’s ability to pay its outstanding obligations, which it currently lacks; the availability of sufficient share capital to meet its current obligations and execute on its strategy; the willingness of convertible debt investors to fund the Company; demand for the Company’s robotics products; competition in the robotics industry, which includes companies with far superior experience, funding and name recognition; the ability of the Company to build an EAI education ecosystem that serves both the B2C consumer market and the B2B institutional education market; the acceptance by teachers and students of the Company’s robotics products in the education market; the ability of the Company to expand into additional markets for its robotics products; the Company’s reliance on a single OEM for most of its robotics products; the Company’s reliance on Chinese OEMs for all of its robotics products; the possibility of the federal government banning imports of Chinese robotics products; the Company’s ability to get the planned robotics products to comply with all applicable U.S. rules and regulations; the ability of the robotics OEM to timely supply robotics to the Company; tariff uncertainty for imported products, particularly from China; the ability of the Company to close its transaction with FF EAI Robotics Ecosystem Inc. (FFR) for the sale of its robotics business; demand from automobile dealers for robotics products; the Company’s ability to homologate FX vehicles for sale; the Company’s ability to secure the necessary funding to execute on the FX strategy, which is substantial; the Company’s ability to secure an occupancy certificate covering all of its Hanford facility; the Company’s ability to remediate its material weaknesses in internal control over financial reporting and the risks related to the restatement of previously issued consolidated financial statements; the Company’s limited operating history and the significant barriers to growth it faces; the Company’s history of substantial losses and expectation of continued losses; the success of the Company’s payroll expense reduction plan; the Company’s ability to execute on its plans to develop and market its vehicles and the timing of these development programs; the Company’s ability to execute on its plans to enter the robotaxi and cybercab industries; the Company’s estimates of the size of the markets for its vehicles and cost to bring those vehicles to market; the rate and degree of market acceptance of the Company’s vehicles; the Company’s ability to cover future warranty claims; the success of other competing manufacturers; the performance and security of the Company’s vehicles; current and potential litigation involving the Company; the Company’s ability to receive funds from, satisfy the conditions precedent of and close on the various financings described elsewhere by the Company; the result of future financing efforts, the failure of any of which could result in the Company seeking protection under the Bankruptcy Code; the Company’s indebtedness; the Company’s ability to use its “at-the-market” program; insurance coverage; general economic and market conditions impacting demand for the Company’s products; potential negative impacts of a reverse stock split; potential cost, headcount and salary reduction actions may not be sufficient or may not achieve their expected results; circumstances outside of the Company’s control, such as natural disasters, climate change, health epidemics and pandemics, terrorist attacks, and civil unrest; risks related to the Company’s operations in China; the success of the Company’s remedial measures taken in response to the Special Committee findings; the Company’s dependence on its suppliers and contract manufacturer; the Company’s ability to develop and protect its technologies; the Company’s ability to protect against cybersecurity risks; and the ability of the Company to attract and retain employees, any adverse developments in existing legal proceedings or the initiation of new legal proceedings; the volatility of the Company’s stock price; the ability of the Company to maintain its stock price above $1.00; and the ability of the Company to maintain compliance with Nasdaq regulations for continued listing. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Company’s Form 10-Q for the quarter ended June 30, 2026, filed with the SEC on August 13, 2026; the quarter ended March 31, 2026, filed with the SEC on May 14, 2026; and Form 10-K filed with the SEC on March 31, 2026, and other documents filed by the Company from time to time with the SEC.

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SOURCE FF EAI Robotics Ecosystem Inc.

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