Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 205

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 205
---
000 5.09 1,571,710 4.42

In addition, on December 6, 2023, the Company entered into a subsequent SPA dated December 2, 2023, with a certain accredited investor, pursuant to which the Company agreed to issue and sell additional Notes in the principal amount of $ 750 5.74 130,662 5.74

Pursuant to the SPAs, the Notes have a five-year 10 1.02 1.15

The Notes include customary default provisions, which may result in accelerated repayment if an event of default occurs, including non-payment, covenant breaches, bankruptcy, adverse judgments, trading restrictions, or material adverse effects, as defined in the SPAs. As of December 31, 2024 and 2023, no events of default have occurred.

On December 23, 2024, the Company received a notice of conversion for $ 300 72,780 4.122

The Warrants to purchase up to 1,571,710 4.42 five-years 130,662 5.74 five-years

The Company determined that the Notes and the warrants are freestanding financial instruments since the instruments are legally detachable and separately exercisable. Then, the Company has evaluated the Notes for embedded derivatives required to be bifurcated and concluded that the conversion features and the redemption features should be bifurcated from the debt host since they are not clearly and closely related to debt host, they meet the definition of derivative instruments and no scope exception under ASC 815 is applicable for these features. Thus, the embedded features were bifurcated from the debt host and are accounted for at fair value through earnings. In addition, the Company has concluded that the warrants should be classified as liabilities, measured at fair value through earnings.

As such, the Company allocated the proceeds to the warrants and to the Notes based on their respective fair values with the remaining proceeds allocated to the debt host. The debt host is measured at its amortized cost using the effective interest method. As of the dates of the transactions, the amount allocated to the debt host was $ 589 1,883 680

F-33

Table of Contents

REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

U. S. dollars in thousands (except share and per share data