Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 396

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 396
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 in Parent triggers a higher price tranche prior to triggering a lower price tranche, all tranches below the tranche triggered are also triggered for (e. g., if tranche 5 is triggered, tranches 1 through 4 are also triggered). Additionally, in the event there is a change of control of the Group (i. e., there is a change in greater than 50% equity ownership of the Group) all five tranches are automatically triggered for issuance. The Former Parent’s contingent right to the earn-out tranches that are not triggered for issuance by December 23, 2028 will expire immediately.

The Group applied the provisions of IAS 32 and IFRS 9 in accounting for the contingent earn-out rights of the Former Parent. Under IAS 32 and IFRS 9, the contingent earn-out rights failed to meet the definition of equity because it could result in the issuance of a variable number of Class A Shares and Class B Shares in Parent and the triggering events are subject to price hurdles (i. e., a market condition) that are outside of the control of the Group. Instead, it meets definition of a derivative liability that is carried at fair value with subsequent changes in fair value recognized in the Consolidated Statement of Loss and Comprehensive Loss at each reporting date. However, since it provides value to owners of the Former Parent effectively in the form of a pro rata dividend, the fair value at the Closing of the BCA was charged to accumulated deficit.

The contingent earn-out rights require a valuation approach leveraging Level 3 inputs. Refer toNote 1 - Overview and basis of preparation for further details on the valuation methodology utilized to determine the fair value of the earn-out.

                                        Earn-out Rights               
  As of January 1, 2023                 $                    598,570  
  Change in fair value measurement      ( 443,168)                    
  As of December 31, 2023               $                    155,402  
  Change in fair value measurement      ( 126,624)                    
  As of December 31, 2024               $                     28,778  

The fair value change of earn-out rights are as follows:

                                           For the year ended December 31,                            
                                                                      2024         2023         2022  
 ──────────────────────────────────────────────────────────────────────────────────────────────────────
  Fair value change - Earn-out rights                              126,624      443,168      902,068