Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 75

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 75
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 and which may reduce any potential consideration received by REE in connection with such transaction(s).

REE received funding from the Israel Innovation Authority, or the IIA, to partially finance its research and development efforts in relation to its Softwheel know how and products. For clarity, REE previously operated under the name Softwheel Ltd. in connection with its original advanced in-wheel suspension technology segment. Reference to Softwheel herein is only with respect to such technology segment. Softwheel received approximately $1,215,000 under the IIA’s standard royalty-bearing programs and under the IIA’s “ Incubator” program. While the Company currently has no plans to use or monetize Softwheel know-how or products, and therefore does not expect to make royalty payments to the IIA in connection thereto in the near future, it remains subject to the Israeli Encouragement of Research, Development and Technological Innovation in Industry Law, 5744-1984, the IIA’s regulations, and the terms and the conditions of IIA’s programs, or collectively the Innovation Law. Among other terms and conditions, the Innovation Law restricts the Company’s ability to transfer, in any manner, know-how funded by the IIA, without the IIA’s prior approval. Transfer of such know-how outside of Israel may be subject to certain payments to the IIA of up to six times the amount of IIA funding and interest. Approval of transfer of IIA funded know-how to another Israeli company may be granted only if the recipient assumes the obligations under the Innovation Law and may be subject to royalty payments to the IIA. In addition, any change of control in REE, and any change of ownership that would cause a non-Israeli to become an “interested party” as defined in the Innovation Law (which includes any person who holds 5% in the Company or has a right to appoint a director), requires written notice to the IIA. Such non-Israeli interested party is required to sign an undertaking on a standard form required by the IIA, to comply with the rules and regulations applicable to IIA funding programs, including the restrictions and limitations on the transfer of IIA funded know-how. These terms and conditions may limit and/or delay the Company’s ability to engage in future transactions, including transactions that could qualify as a change in control of REE or direct investment, and may reduce the potential consideration received by REE in connection with such transaction(s), including, for example, a transaction that involves the transfer of IIA funded know-how