Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 95

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 95
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 associated with the employment of our R& D and engineering staff, including share-based compensation, third-party engineering consultants, development projects such as corners programs and component programs and program consumables. Such R& D expenses also include expenses related to the testing, validation and certification of our SDV vehicles, UK R& D tax credit and grants received for R& D programs and projects, costs associated with our properties, and depreciation of our fixed assets. We expect our research and development expenses to decrease as we move closer to mass production of our vehicles.

Table of C ontents

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of our costs associated with the employment of our non-engineering staff, including share-based compensation, legal, insurance, accounting and consulting expenses, travel and marketing expenses such as public relations activities and trade shows, costs associated with our properties, and depreciation of our fixed assets. We expect our selling, general and administrative expenses to increase as our overall activity levels increase over time once we start mass production of our vehicles.

Financial Income (Expenses), Net

Finance income (expenses), net consists primarily of change in fair value of derivatives liabilities, interest expenses and discount of convertible promissory notes and bank fees offset by interest income and foreign currency exchange gains or losses. Foreign currency exchange gains or losses are related to changes in the value of our non-U. S. denominated financial assets and liabilities, primarily cash and cash equivalents and operating lease liabilities related to our leased properties in Israel and the UK. Interest income consists of interest earned on our cash, cash equivalents, and short-term investments. We expect interest income to vary depending on our average investment balances and market interest rates during each reporting period. Derivative liabilities at fair value are related to our convertible promissory notes. Fair value of derivative liabilities is expected to vary depending on the change in stock price, volatility, risk-free rate, cost of debt and other inputs used for the fair value measurements. Interest expenses relate to the accrued interest on our short-term loans and our convertible promissory notes. Discount expenses relate to the amortization of the discount on our convertible promissory notes.

Table of C ontents

Results of Operations

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

The following table sets forth REE’s historical operating results for the periods indicated:

                                                    Year ended December 31,                                                                                   
                                                    2024                                        2023                     Change                    % Changes  
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