Technology
Greenlane Renewables Announces Third Quarter 2024 Financial Results
Published
2 years agoon
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~Cash balance increased to $15.4 million; Streamlined corporate structure creates new foundation for further EBITDA improvement; Increased disclosure for Airdep reflects strength in business unit performance~
VANCOUVER, BC, Nov. 7, 2024 /CNW/ – Greenlane Renewables Inc. (“Greenlane” or the “Company”) (TSX: GRN) (FSE: 52G) (OTC: GRNWF) today announced its financial results for the third quarter ended September 30, 2024. For further information on these results please see the Company’s Condensed Consolidated Interim Financial Statements and Management’s Discussion and Analysis filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. All amounts reported are in Canadian dollars and in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) unless otherwise stated.
Third Quarter Highlights from Continuing Operations Include:
Revenue of $10.5 million;Gross profit of $3.4 million, Gross Margin1 before amortization of $3.6 million (34% of revenue);Adjusted EBITDA2 loss of $0.2 million;Net loss and comprehensive loss of $2.0 million;Sales Order Backlog3 of $14.3 million as at September 30, 2024;Cash and cash equivalents of $15.4 million and no debt, other than payables resulting from normal course operations, as at September 30, 2024.
“Greenlane’s third-quarter performance demonstrates our commitment to diligent completion of biogas upgrading system contracts, disciplined cost management and realizing operational efficiencies, leading to an increase in revenue over the same quarter last year and a substantial improvement in our cash balance and Adjusted EBITDA,” said Brad Douville, CEO of Greenlane. “We have adapted and implemented changes to our cost structure appropriate for the opportunities in front of us through a reduction in workforce. Our stated goal of achieving positive Adjusted EBITDA for the full year depended upon signing new biogas upgrading system contracts that have experienced delays associated with our customers’ final decisions to start construction. As a consequence, while we maintain our goal of positive Adjusted EBITDA, we have determined that it will not be achieved in 2024.”
“As recently announced, we have increased our service business by adding maintenance contracts that generate additional opportunities from Greenlane’s large installed customer base. Greenlane continued to expand its impact in RNG markets, completing over 20 biogas upgrading system projects in the last two years, over 145 in total. While uncertainties in customer project starts and competitive pressures continue to affect new biogas upgrader system sales, we are excited about Greenlane’s future. We are well-positioned to capitalize on the global push towards decarbonization, and our ongoing projects underscore our commitment to supporting a sustainable energy transition. We’re confident that our streamlined, agile organization will continue to make meaningful contributions to the RNG industry.”
Monty Balderston, CFO of Greenlane noted, “As of September 30, 2024, we had a cash balance of $15.4 million which was a 70% increase from June 30, 2024 driven by the conversion of accounts receivable to cash. We reported revenue of $10.5 million for Q3 2024, a 10% increase over Q3 2023. Our revenue growth was driven by both system sales and aftercare services. System sales contributed $8.5 million, while aftercare services grew to $2.0 million, reflecting increased demand for our support services. Greenlane’s Gross Margin before amortization for the third quarter of 2024 of 34% of revenue, or $3.6 million, benefited from the positive impact of $0.4 million related to the release of expired warranty provisions. Excluding the warranty impact, Gross Margin before amortization is 30%, which is higher than our overall third quarter of 2023 comparative period and second quarter 2024 financial performance as a result of higher aftercare service contribution to the revenue mix.”
“Furthermore, as we have completed three upgrader projects in Q3 2024 (10 upgrader projects in the first nine months of 2024) and realized operational efficiencies, together with experiencing delays in new system contract awards, we have reduced our general and administrative cost run rate by over 25%. We incurred a $0.5 million restructuring charge in the third quarter of 2024 related to the workforce reduction. We estimate the changes will result in a $5.0 million annual reduction in general and administrative costs. In addition, we incurred an impairment charge of $1.0 million on our outstanding notes receivable.”
“For our shareholders, we saw improvement in our Adjusted EBITDA, reducing our loss to $0.2 million from a $4.4 million loss in Q3 2023. Our net loss and comprehensive loss of $2.0 million was a 61% improvement from a net loss of $5.1 million in Q3 2023. Airdep has become a much more prominent part of our business due to its consistent and profitable growth. Accordingly, we are now including Airdep’s sales contracts in the Sales Order Backlog. As of September 30, 2024, Airdep contributed $5.9 million to our total Sales Order Backlog of $14.3 million,” added Balderston.
The Market Outlook
The International Energy Agency’s (“IEA”) Renewables report reflects optimism for the global renewables sector and calls for a worldwide effort to realize the potential of bioenergy and biofuels. For the first time in the IEA renewables market report series, the annual report features a special chapter on renewable fuels, including bioenergy, biogases, hydrogen, and e-fuels. The report says that “global demand for biogases (including both biogas and biomethane) is expected to accelerate, climbing an estimated 30% in the period 2024-2030 to reach almost 2,270 PJ (around 59 bcme) per year in 2030.”
The Brazilian market continues to advance its RNG directives with a new regulatory framework for biofuels. Brazil recently passed legislation representing a significant milestone for the biofuels sector in Brazil, including biogas and biomethane. Known as the Future Fuels Law (“Lei dos Combustíveis do Futuro”), the new legislation aims to promote the decarbonization of the country’s energy matrix, focusing on sectors such as transportation and mobility. The legislation includes programs like the National Program for the Decarbonization of Natural Gas Producers and Importers and Incentives for Biomethane, which are essential to reducing greenhouse gas emissions and fostering sustainable development in the gas sector.
The growth of the overall RNG industry continues. The Coalition for Renewable Natural Gas (or RNG Coalition) announced a major milestone of 433 RNG-producing facilities now operational across North America. This achievement represents a significant leap from just a year ago, when the North American RNG industry celebrated the establishment of 300 facilities, marking a remarkable 44% growth within just one year. In addition to currently operational facilities, there are 436 facilities in various stages of planning or construction, creating a robust pipeline of forthcoming projects.
Conference Call
The public is invited to listen to the conference call in real time by telephone today, November 7th, at 2:00 p.m. PT (5:00 p.m. ET). The public is invited to listen to the conference call in real time by telephone. To access the conference call by telephone, please dial: 1-800-717-1738 (North America toll-free) or 1-289-514-5100. Callers should dial in 5-10 minutes prior to the scheduled start time and ask to join the Greenlane Renewables conference call. The company is committed to enhancing its communication initiatives moving forward and is pleased to announce that the upcoming Q3 conference call will include an open forum for discussion with all participants.
Shortly after the conference call, the replay will be archived on the Greenlane Renewables website and replay will be available in streaming audio and a downloadable audio file.
SPECIFIED FINANCIAL MEASURES
Management evaluates the Company’s performance using a variety of measures, including “Gross Margin before amortization”, “Adjusted EBITDA” and “Sales Order Backlog”. The specified financial measures, including non-IFRS Accounting Standards measures and supplementary financial measures should not be considered as an alternative to or more meaningful than revenue, gross profit or net income. These measures do not have a standardized meaning prescribed by IFRS Accounting Standards and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS Accounting Standards. The Company believes these specified financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company. Management uses these specified financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS Accounting Standards when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.
Note 1 – Gross Margin before amortization is a non-IFRS Accounting Standard measure and is defined by the Company as gross profit before amortization of intangible assets and property and equipment.
Note 2 – Adjusted EBITDA is a non-IFRS Accounting Standard measure and is defined by the Company as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as adjustments for other income (expense), value assigned to Options and RSUs, impairment of intangible assets and goodwill, impairment of notes receivable, restructuring charge, strategic initiatives, transaction costs and non-recurring items.
Reconciliation of net loss and comprehensive loss to Adjusted EBITDA from Continuing Operations:
(in $000s)
Three months ended
September 30
2024
2023
Net loss and comprehensive loss
from continuing operations
(2,031)
(5,071)
Add (deduct):
Exchange difference on translating
foreign operations
(126)
186
Provision for income taxes
245
242
Restructuring charge
518
–
Other (income) loss
(59)
20
Foreign exchange (gain) loss
(25)
(306)
Finance income
(87)
(173)
Finance expense
36
14
Impairment of notes receivable
952
–
Share-based compensation
124
42
Amortization of office equipment
54
85
Amortization of property and equipment
84
43
Amortization of intangible assets
142
484
Adjusted EBITDA
(173)
(4,434)
Note 3 – Greenlane continually provides an update on its contracted system sales, which includes both Greenlane and Airdep branded products (“Sales Order Backlog”). Sales Order Backlog is a supplementary financial measure that refers to the balance of unrecognized revenue from sales contracts. The Company’s Sales Order Backlog is a snapshot in time which varies from period-to-period. The Sales Order Backlog increases by the value of new system sales contracts and is drawn down over time as these projects progress towards completion with amounts recognized in revenue (by reference to the stage of completion of each contract). Sales Order Backlog does not include deferred revenue from contracts in connection with aftercare services, given the smaller individual contract values, or royalties.
About Greenlane Renewables
Greenlane is driving change: accelerating the energy transition to a net-zero emissions economy. We are cleaning up two of the largest and most difficult to decarbonize sectors of the global energy system: the natural gas grid and commercial transportation. As a pioneer and leading specialist in biogas upgrading, we have been actively contributing to the decarbonization of our planet for over 35 years. The systems we provide transform biogas generated from organic waste into high-value grid-ready renewable natural gas (“RNG”). Our systems produce clean, low-carbon and carbon-negative RNG from organic waste sources including agriculture (such as dairy and hog manure), water resource recovery facilities, food waste, landfills, and sugar mills. Greenlane is the only biogas upgrading company offering and actively deploying the three main upgrading technologies: waterwash, pressure swing adsorption, and membrane separation, plus proprietary biogas desulfurization technology. Greenlane has delivered over 145 biogas upgrading systems into 19 countries, including some of the largest RNG production facilities in the world, and over 160 biogas desulfurization units. For further information, please visit www.greenlanerenewables.com
Forward Looking Information Advisory –
This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “expect”, “will”, “would”, “likely”, “could”, “plan”, “expects” or “is expected to”, “believe”, “continue to”, “remains” or “continually”, “is pursuing”, “proposed”, “aiming to” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen or that current events or conditions will continue or be repeated. The forward-looking information contained in this press release, includes, but is not limited to: that the addition of maintenance contracts to the service business will generate additional opportunities from Greenlane’s installed customer base; management’s estimates that workforce reduction will result in a $5.0 million annual reduction in general and administrative costs; IEA’s Renewables report forecasts that global demand for biogases is expected to accelerate by 30% in the period 2024-2030; that the Brazilian market continues to advance its RNG directives with new regulatory framework for biofuels and the continuing overall growth of RNG and the renewable RNG industry creating a robust pipeline of forthcoming projects. The forward-looking information contained herein is made as of the date of this press release and is based on assumptions management believes to be reasonable at the time such statements were made, including management’s perceptions of future growth, that regulatory developments in Canada, the US and other jurisdictions in which the Company conducts business will be favourable for the RNG industry; results of operations, operational matters, historical trends, current conditions and expected future developments, the state of competition in the RNG industry and competitors’ capabilities, that favourable legislative initiatives will have a positive impact on the pace of growth and the availability of financing in the RNG industry and will generate sales opportunities for Greenlane, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By their nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond Greenlane’s control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation risks relating to: that customers’ final decisions to commence construction may be delayed; the Company’s ability to win new contracts, and the timing and profitability of new contracts; the ability to realize anticipated costs savings; management’s efforts to monitor the Sales Order Backlog and take proactive steps to manage the business to achieve the desired outcomes; anticipated legislative changes and their implications for biogas upgrading equipment and the ability of legislation to affect the pace of growth and the flow of capital into the RNG industry; the plans, estimates and intentions of third parties in respect of intended transactions and activities to transition to clean energy; Greenlane’s financial performance, and impediments in delivering and advancing projects to be able to timely realize revenue reducing the sales backlog; RNG initiatives and projects of natural gas utilities being changed, delayed or canceled, the state of competition in the RNG industry; Greenlane’s position as a leading specialist in biogas upgrading and a trusted partner in the biogas upgrading industry. Additional risk factors can also be found in the Company’s Management Discussion and Analysis, its Annual Information Form and in its base shelf prospectus dated January 4, 2024, all of which have been filed under the Company’s SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
FINANCIAL OUTLOOK INFORMATION – This news release contains “financial outlook information” regarding Greenlane’s prospective revenue and results, which is subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above. Revenue and other estimates contained in this news release were made by Greenlane management as of the date of this news release and are provided for the purpose of describing anticipated changes, and are not an estimate of profitability or any other measure of financial performance. Investors are cautioned that the financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein. The Company’s revenues are largely derived from a relatively small number of biogas upgrader orders accounted for on a stage of completion basis over typically a nine to eighteen-month period. Timing of new contract awards varies due to customer-related factors such as finalizing technical specifications and securing project funding, permits and RNG off-take and feedstock agreements. Some contracts contain termination provisions that allow the customer to terminate with no penalty or with minimum prescribed threshold payments based on the length of time since the contract was entered into. Some projects have built-in pause periods to allow customers to complete concurrent activities such as civil work. As a result, the Company’s revenue varies from month to month and quarter-to-quarter. THE COMPANY QUALIFIES ALL THE FORWARD LOOKING STATEMENTS AND FINANCIAL OUTLOOK INFORMATION CONTAINED IN THIS NEWS RELEASE BY THE FOREGOING CAUTIONARY STATEMENTS.
Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this news release.
SOURCE Greenlane Renewables Inc.
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OASE+ and Elsevier Agree Next-Phase Read and Publish Agreement to Expand Open Access Publishing in Japan
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A new three-year term removes the annual cap on open access publishing under the Read and Publish agreement and extends eligibility beyond universities
TOKYO, Oct. 26, 2026 /PRNewswire/ — OASE+ (Open Access for Scholarly Empowerment +), the collective negotiating body established with Japanese government support to advance the country’s national open access policy, and Elsevier, a global leader in advanced information and decision support, have agreed a read-and-publish agreement covering 2027 to 2029.
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Notes to editors
A Read and Publish agreement combines, in a single contract, the subscription fees research institutions paid publishers for access to scholarly articles with the fees for publishing articles open access (article publishing charges, or APCs).
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About OASE+
OASE+ (Open Access for Scholarly Empowerment +) is a team supported by the Japanese government working to establish a collective bargaining framework, led by universities and other research institutions, for negotiations with academic publishers. Through discussions with global academic publishers, OASE+ aims to contribute to the realization of the Japanese government’s National Policy on Promoting Open Access to Publicly Funded Scholarly Publications and Scientific Data.
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About Elsevier
Elsevier is a global leader in advanced information and decision support. For over a century, we have been helping advance science and healthcare to advance human progress. We support academic and corporate research communities, doctors, nurses, future healthcare professionals, and educators across 170 countries in their vital work. We help impact makers achieve better outcomes with research and clinical-grade solutions built on the world’s leading evidence-based scientific and medical content, precision AI, and expert human assessment. We champion inclusion and sustainability, working with the communities that we serve. The Elsevier Foundation supports research and health partnerships around the world.
Elsevier is part of RELX, a global provider of information-based analytics and decision tools for professional and business customers. For more information, visit www.elsevier.com and follow us on social media @elsevierconnect.
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uSMART and PIVOT Fintech Introduce GlobalSave Portfolios Balanced Strategy on FollowSmart
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FFR to Hold Listing Ceremony and Investor Day on October 26; FFAI Announces Rescheduling of YT Jia’s Investor Weekly Report to October 26
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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.
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For more information, visit www.ff.com.
ABOUT FARADAY FUTURE
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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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