Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 142

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 142
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 number of warrants to be exercised. Subject to the PFIC rules discussed below, the U. S. Holder would recognize capital gain or loss with respect to the Warrants deemed surrendered in an amount generally equal to the difference between (i) the fair market value of the Class A Ordinary Shares that would have been received in a regular exercise of the Warrants deemed surrendered, net of the aggregate exercise price of such Warrants and (ii) the U. S. Holder’s tax basis in such Warrants. In this case, a U. S. Holder’s aggregate tax basis in the Class A Ordinary Shares received would equal the sum of (i) U. S. Holder’s tax basis in the Warrants deemed exercised and (ii) the aggregate exercise price of such Warrants. A U. S. Holder’s holding period for the Class A Ordinary Shares received in such case generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Warrants and will not include the period during which the U. S. Holder held the Warrants.

Due to the absence of authority on the U. S. federal income tax treatment of a cashless exercise of warrants, including when a U. S. Holder’s holding period would commence with respect to the Class A Ordinary Share received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U. S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise of Warrants.

Subject to the PFIC rules described below, if REE redeems Warrants for cash pursuant to the redemption provisions described in Exhibit 2.6 to this Annual Report under the section entitled “Warrants” or if REE purchases Warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U. S. Holder, taxed as described above under “ - Sale, Exchange, Redemption or Other Taxable Disposition of Class A Ordinary Shares and Warrants.”

Possible Constructive Distributions

The terms of each Warrant provide for an adjustment to the number of Class A Ordinary Shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain events, as discussed in Exhibit 2.6 to this Annual Report under the section captioned “Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. A U. S