Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 289

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 15
Chunk 289
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ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, the "Exchange Act") as of December 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2024, due to the existence of material weaknesses in the Company’s internal control over financial reporting described below.

Remediation of Prior Year Material Weaknesses

During fiscal year 2024, with the oversight of the Audit Committee of the Board of Directors, the Company continued to implement its remediation plans to address the material weaknesses disclosed in our Annual Report on Form 20-F as of December 31, 2023. The Company has hired additional individuals with the requisite internal control, accounting and finance knowledge and experience to assist with the enhancement and implementation of internal control procedures.

In 2024, the Company implemented effective monitoring controls. Management hired a new Head of Internal Controls and expanded the Internal Controls Team. This led to timely completion of process walkthroughs, more regular testing of controls and continuous evaluation of the testing results individually and in the aggregate. Executive management was closely involved in the process. This allowed the Company to communicate all relevant internal control deficiencies in a timely manner to those parties responsible for taking corrective action, remediating the previously identified material weakness related to monitoring.

The Company has also remediated the material weakness related to “the review and approval of salary changes within the human resource system” by implementing an automated approval workflow in the human resource system.

Despite the progress noted above, there were several matters that hindered the Company’s ability to remediate other material weaknesses identified in the prior year: These included, but are not limited to, (i) revised financial statements for 2021 and 2022, delaying the filing of the 2023 Form 20-F until August 2024, (ii) workforce reduction in several departments, (iii) a new Chief Executive Officer and Chief Financial Officer joining the Company in Q4, and(iv) onboarding of the new hires.

While the remediation efforts during 2024 have improved our internal control over financial reporting and resulted in remediation of two of the material weaknesses identified as of