Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 6

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 6
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 or any future indebtedness we may incur depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business has not and may not in the future generate cash flow from operations sufficient to service our Convertible Notes and make necessary capital expenditures, or repay our outstanding indebtedness. If we are unable to generate cash flow, we may be required to adopt one or more alternatives, such as winding down or restructuring our business, selling assets, restructuring our Convertible Notes or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our Convertible Notes will depend, among other factors, on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our Convertible Note obligations. In the event of the occurrence of any of the above, it would likely qualify as an event of default under our Convertible Notes, unless otherwise waived by the holders thereof, consistent with the terms of such Convertible Notes, and thereby trigger the acceleration of a payment in an amount equal to one hundred thirty percent (130%) of the outstanding principal amount plus the accrued interest thereof on the date on which the first event of default occurred, together with all costs, including, without limitation, legal fees and expenses, of collection. There can be no assurance by REE that we have sufficient capital to make such a payment in the event that it should become due.

In addition, such Convertible Notes contain a full ratchet anti-dilution protection for any offering by us of our Class A Ordinary Shares (other than certain excluded issuances) at a price (as determined in accordance with the terms of the Convertible Notes) that is less than the then current conversion price following the issuance date. This in turn may limit our

Table of C ontents

ability to engage in equity financings. Moreover, upon the occurrence of the ratchet, the conversion price of the Convertible Notes will be automatically reduced to a price that is less than the then convert conversion price of the notes. Any future adjustments to the conversion price of the Convertible Notes may have a negative impact on the trading price of our Class A Ordinary Shares.

We may not have the funds necessary to settle conversions of our Convertible Notes in cash or to repurchase the notes upon a change in control transaction, and our future debt may contain limitations on our ability to pay cash upon