NOTE 16 — RELATED PARTY TRANSACTIONS

Lead Investor Agreement

In connection with the Subscription Agreement, the Company and Faraday Future Intelligent Electric Inc. entered into a Lead Investor Agreement. Pursuant to this agreement, Faraday committed to invest a minimum of $30 million in a Private Placement. The material terms of the Lead Investor Agreement include:

Actual proceeds from the Lead Investor Agreement from Faraday as well as several members of Faraday’s executive management team amounted to $34.2 million.

As part of the Lead Investor Agreement, YT Jia, the Global Chief Executive Officer of Faraday, contributed $4,000,000.

As part of the Lead Investor Agreement, Jerry Wang, the Global Executive Chairman of Faraday and Chief Executive Officer of AIXC, contributed $200,000.

There were no material changes to the Lead Investor Agreement during the three months ended June 30, 2026.

Transition Services Agreement

On September 30, 2025 the Company entered into a Transition Services Agreement with Faraday to provide support and management services. During the six months ended June 30, 2026, the Company was charged approximately $0.6 million in service fees under the Transition Services Agreement. The Company had a prepaid expense balance of $370,055 as of June 30, 2026.

The balance of charges dues under this agreement was $1.0 million as of December 31, 2025 and was classified under Related Party Payable on the consolidated balance sheet

Master Services Agreement

On June 3, 2026, the Company entered into a Master Services Agreement (“MSA”) with FFAI, a related party, pursuant to which the Company may provide consulting, advisory, operational, capital markets, technical, legal, and other support services to FFAI under separately executed statements of work. The MSA has an initial term of one year and automatically renews for successive one-year periods unless terminated in accordance with its terms. Compensation for services provided under the MSA is to be determined pursuant to individual statements of work and generally consists of reimbursement of direct personnel costs, allocated overhead, an 18% service fee, and certain direct expenses. No revenue was recognized under the MSA during the three and six months ended June 30, 2026.

Related Party Accrued Expenses

On October 2, 2025, the Company entered into an advisory agreement with Yueting (YT) Jia, a related party and significant stockholder, pursuant to which Mr. Jia serves as Chief Advisor. The agreement provides an annual advisory fee of $500,000, a target annual performance fee of $500,000, a one-time engagement fee of $300,000, and potential annual equity awards, subject to board approval and vesting conditions. The agreement has an initial term of three years. During the three and six months ended June 30, 2026, the Company recognized advisory service expenses under this agreement of $200,001and $400,002, respectively, and had related-party payables of $116,667 as of June 30, 2026.

On January 28, 2026, the Company entered into a consulting services agreement with FF Global Partners LLC effective as of November 1, 2025, a related party, under which FF Global provides strategic planning, capital markets advisory, blockchain and technology consulting, and operational support services. The agreement expires on December 31, 2026 and provides for a monthly consulting fee of $100,000, performance-based bonuses at the discretion of the Company’s management and Board of Directors, and reimbursement of certain approved business expenses. During the three and six months ended June 30, 2026, the Company recorded related-party consulting expenses of $300,000 and $600,000, respectively. As of June 30, 2026, $100,000 was outstanding and was classified under related party payable.

Parent Equity Held at Cost

During the six months ended June 30, 2026, the Company invested an aggregate of approximately $12.0 million in FFAI through GKA. Upon closing on April 15, 2026, the aggregate subscription amount, including accrued interest, was converted into FFAI Class A common stock and Series C Convertible Preferred Stock. The Company recorded the full aggregate subscription amount of $12.0 million as parent company equity held at cost, which remained the carrying value of the investment as of June 30, 2026. See Note 15 for further details regarding the investment transaction and related accounting treatment.

Warrants

On May 22, 2020, as a commitment fee, the Company issued warrants to Alpha for the purchase of common stock. As of December 31, 2024, 141 of these warrants remained outstanding and exercisable, and were able to be exercised in whole or in part, at any time before May 22, 2025. These warrants expired, and as of December 31, 2025, none of these warrants remain outstanding and exercisable. During years ended December 31, 2025 and 2024 there were no exercises of this warrant. This warrant was equity classified as of December 31, 2023 and was reclassified to warrant liabilities during the year ended December 31, 2024 (see Note 8 - Warrant Liabilities).

On December 22, 2022, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha a warrant to purchase 50,000 shares of the Company’s common stock. This warrant may be exercised by Alpha, in whole or in part, on or after June 22, 2023 and at any time before June 22, 2028, subject to certain terms and conditions described in the warrant. During the year ended December 31, 2024, Alpha partially exercised this warrant to purchase 31,998 shares respectively, of the Company’s common stock at a weighted average exercise price of $13.00, for total cumulative proceeds to the Company of $416,000. During the year ended December 31, 2025, there were no exercises of this warrant. This warrant is included in equity on the Company’s unaudited condensed consolidated balance sheets (see Note 14 – Stockholders’ Equity ).

On February 27, 2024, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha, a warrant to purchase 18,001 shares of the Company’s common stock, exercisable in whole or in part, until February 27, 2029, subject to certain terms and conditions described in the warrant. This warrant is presented on the balance sheet as an equity classified warrant.

On September 6, 2024 as a result of the down-round provision triggered by shares sold in a public offering, the above warrants were repriced from $13.00 per share exercise price to $6.50 per share exercise price. The company recognized an additional deemed dividend of $27,587, which represents the incremental fair value of the outstanding warrants as a result of the down-round provision. As the Company has an accumulated deficit, the deemed dividend was recorded as a reduction in additional paid-in capital, resulting in a net impact of zero to additional paid-in capital in the unaudited condensed consolidated statements of changes in stockholders’ equity. On April 28, 2025, as a result of the down-round provision triggered by the issuance of the 2025 Convertible Note, the warrant was repriced from an exercise price of $6.50 per share to an exercise price of $5.82 per share. No further down-round provisions were triggered by the July 28, 2025 private placement transaction or the Subscription Agreement as these warrants were at their contractual floor.

As a result of a partial voluntary conversion of the 2024 Alpha Debenture on September 9, 2024, the Company no longer had sufficient shares to settle the 2024 Alpha Warrant in full until shareholder approval was obtained, and a portion (2,314 warrant shares with a fair value of $14,997) was reclassified to liabilities (see Note 8 – Warrant Liabilities). Shareholder approval was subsequently obtained on October 25, 2024, and as of that date, the Company determined that shareholder approval resulted in equity classification for the warrant again and, accordingly, the Company remeasured the warrant liability to fair value, and reclassified to noncompensatory equity classified warrants.

During the three months ended June 30, 2026, there were no exercises of this warrant. This warrant is included in equity on the Company’s unaudited consolidated balance sheets (see Note 14 – Stockholders’ Equity).

As of June 30, 2026,  the exercise price of the 2022 Alpha Warrant was $6.50 per share, while the exercise price of the 2024 Alpha Warrant was $5.82 per share.

On April 12, 2024, in connection with the issuance of a debenture to Chen (see Note 9 – Convertible Debt), the Company issued a liability classified warrant to Chen to purchase 36,001 shares of common stock, exercisable until February 27, 2029. On September 6, 2024, as a result of a down-round provision triggered by shares sold in a public offering, the warrant was repriced from an exercise price of $13.00 per share to an exercise price of $6.50 per share. The warrant was initially liability classified due to an insufficient number of authorized shares to settle the warrant prior to the receipt of shareholder approval, which was subsequently obtained on October 25, 2024. As of that date, the Company determined that shareholder approval resulted in equity classification for the warrant and accordingly, the Company remeasured the warrant liability to fair value, and reclassified to noncompensatory equity classified warrants (see Note 14 – Stockholders’ Equity). The fair value of this warrant was $565,582 on the issuance date and $185,531 on the date of reclassification to equity. On April 28, 2025, as a result of the down-round provision triggered by the issuance of the 2025 Convertible Note, the warrant was repriced from an exercise price of $6.50 per share to an exercise price of $5.82 per share. No further down-round provisions were triggered by the July 28, 2025 private placement transaction or the Subscription Agreement as these warrants were at their contractual floor.