Company: PLSAY
Filing Date: 2025-04-23
Form Type: 20-F/A
Source: 0001884082-25-000005
Chunk: 198

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-04-23
Form: 20-F/A
Chunk 198
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 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 to Note 1 - Overview and basis of preparation for further details on the valuation methodology utilized to determine the fair value of the earn-out.

| As of January 1, 2022            |     | Earn-out Rights |         — |         |
|:---------------------------------|:----|:----------------|----------:|--------:|
| Earn-out rights issued           |     |                 | 1,500,638 |         |
| Change in fair value measurement |     |                 |  -902,068 |         |
| As of December 31, 2022          |     | $               |           | 598,570 |
| Change in fair value measurement |     |                 |  -443,168 |         |
| As of December 31, 2023          |     | $               |           | 155,402 |

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

|                                     |     | For the year ended December 31, 
 2023                            |         |     | 2022 |         |     | 2021 |   |
|:------------------------------------|:----|:--------------------------------|--------:|:----|:-----|--------:|:----|:-----|:--|
| Fair value change - Earn-out rights |     |                                 | 443,168 |     |      | 902,068 |     |      | — |

Volvo Cars Preference Subscription Shares

At the Closing of the BCA and pursuant to the Volvo Cars Preference Subscription Agreement, Volvo Cars agreed to subscribe for Preference Shares in the Parent in exchange for a cash payment of $ 588,826. The cash proceeds were used to pay down outstanding payables owed to VCC. Each