Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 5

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 5
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 implement our business plan, which could cause us to discontinue our operations and/or seek protection from creditors.

The inclusion of a “going concern” explanatory paragraph in the auditor's report may only heighten these concerns about our financial viability and may discourage existing or new customers, suppliers, strategic partners, and other third parties from maintaining or entering into business relationships with us on terms that we find acceptable or at all, including by demanding the posting of additional standby letters of credit or surety bonds before engaging in business with us. We may also have difficulty in retaining and attracting employees as a result of these concerns.

In addition to the above, the working capital funding necessary to operate a new company, inclusive of SDV and EV products, is significant, and other similar companies have tried and failed over the last several years with billions of investment capital. While REE expects to benefit from its management’s experience, the technology it has developed to date, and the advantages offered by its UK Integration Center, REE does not expect to be profitable in the near term as REE invests in its business and REE cannot assure you that we will ever achieve or be able to maintain profitability in the future. We further cannot assure you that we will ever build capacity and/or ramp up our operations. Because we incur the costs and expenses from these efforts and other efforts before we receive any incremental revenue with respect thereto, if any, our losses in future periods will be significant. In addition, these efforts have been and may continue to be more expensive than we currently anticipate and these efforts may not result in sufficient revenue if customers do not purchase our products in sufficient volume, which would further increase our losses. Failure to become profitable may materially and adversely affect the value of your investment. If REE ever achieves profitability, it will be dependent upon the successful development and commercial introduction and acceptance of its products,, which may not occur. See “ Liquidity and Capital Resources” in Item 5. B. “Operating and Financial Review and Prospects”, below for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.

Servicing our Convertible Notes may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

As of December 31, 2024, $8.5 million in aggregate principal amount of our Convertible Notes was outstanding. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our Convertible Notes