# EDGAR Filing Document

**Accession Number:** 0001843588
**File Stem:** 0001628280-26-035308
**Filing Date:** 2026-5
**Character Count:** 917361
**Document Hash:** 9650d9084f348453a8e2706112a514d5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-26-035308.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001628280-26-035308

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 105

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** REE Automotive Ltd.
- **CENTRAL INDEX KEY:** 0001843588
- **STANDARD INDUSTRIAL CLASSIFICATION:** MOTOR VEHICLES & PASSENGER CAR BODIES [3711]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** L3

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40649
- **FILM NUMBER:** 26981991

**BUSINESS ADDRESS:**
- **STREET 1:** KIBBUTZ GLIL-YAM
- **CITY:** KIBBUTZ GLIL-YAM
- **STATE:** L3
- **ZIP:** 4690500
- **BUSINESS PHONE:** 954 907 2231

**MAIL ADDRESS:**
- **STREET 1:** KIBBUTZ GLIL-YAM
- **CITY:** KIBBUTZ GLIL-YAM
- **STATE:** L3
- **ZIP:** 4690500

?xml version='1.0' encoding='ASCII'? ree-20251231

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 20-F** 

**(Mark One)**

□ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR** 

x **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended December 31, 2025**

**OR** 

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**OR** 

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

Commission file number 001-40649

![REE-Black-Transparent-Logo (JPG).jpg](ree-20251231_g1.jpg)

**REE Automotive Ltd.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Not Applicable**<br>(Translation of Registrant's name into English) | **Israel**<br>(Jurisdiction of incorporation or organization) |

---

**Kibbutz Glil-Yam 4690500, Israel**

(Address of principal executive offices)

**Daniel Barel, Chief Executive Officer**

**REE Automotive Ltd.**

**Kibbutz Glil-Yam 4690500, Israel**

**Tel: +972 (77) 899-5193**

**investors@ree.auto**

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Class A Ordinary Shares, without par value** | **REE** | **The Nasdaq Stock Market LLC** |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act:

**None** 

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

**None** 

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

**As of December 31, 2025, the registrant had 28,743,914 Class A Ordinary Shares, without par value, outstanding and 2,780,570 Class B Ordinary Shares, without par value, outstanding.**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes □ No ⌧

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes □ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer □ Accelerated filer □ Non-accelerated filer ⌧ <br>     <u>Emerging growth company</u> <u>⌧</u>

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

□

†The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on an attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15U.S.C. 7762(b)) by the registered public accounting firm that prepared or issued its audit report. □

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ⌧ International Financial Reporting Standards □ Other □ <br>   <u>issued by the International Accounting Standards Board</u>   

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

□ Item 17 □ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes □ No ⌧

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| | **[PART I](#ib754f8dbfd9a410ebea6292869b01926_16)** | |
| **[Item 1.](#ib754f8dbfd9a410ebea6292869b01926_19)** | **[Identity of Directors, Senior Management and Advisers](#ib754f8dbfd9a410ebea6292869b01926_19)** | [8](#ib754f8dbfd9a410ebea6292869b01926_19) |
| **[Item 2.](#ib754f8dbfd9a410ebea6292869b01926_22)** | **[Oﬀer](#ib754f8dbfd9a410ebea6292869b01926_22)[Statistics and Expected Timetable](#ib754f8dbfd9a410ebea6292869b01926_22)** | [8](#ib754f8dbfd9a410ebea6292869b01926_22) |
| **[Item 3.](#ib754f8dbfd9a410ebea6292869b01926_25)** | **[Key Information](#ib754f8dbfd9a410ebea6292869b01926_25)** | [8](#ib754f8dbfd9a410ebea6292869b01926_25) |
| **[Item 4.](#ib754f8dbfd9a410ebea6292869b01926_40)** | **[Information on the Company](#ib754f8dbfd9a410ebea6292869b01926_40)** | [57](#ib754f8dbfd9a410ebea6292869b01926_40) |
| **[Item 4A.](#ib754f8dbfd9a410ebea6292869b01926_55)** | **[Unresolved Staﬀ Comments](#ib754f8dbfd9a410ebea6292869b01926_55)** | [76](#ib754f8dbfd9a410ebea6292869b01926_55) |
| **[Item 5.](#ib754f8dbfd9a410ebea6292869b01926_58)** | **[Operating and Financial Review and Prospects](#ib754f8dbfd9a410ebea6292869b01926_58)** | [77](#ib754f8dbfd9a410ebea6292869b01926_58) |
| **[Item 6.](#ib754f8dbfd9a410ebea6292869b01926_76)** | **[Directors, Senior Management and Employees](#ib754f8dbfd9a410ebea6292869b01926_76)** | [95](#ib754f8dbfd9a410ebea6292869b01926_76) |
| **[Item 7.](#ib754f8dbfd9a410ebea6292869b01926_97)** | **[Major Shareholders and Related Party Transactions](#ib754f8dbfd9a410ebea6292869b01926_97)** | [114](#ib754f8dbfd9a410ebea6292869b01926_97) |
| **[Item 8.](#ib754f8dbfd9a410ebea6292869b01926_109)** | **[Financial Information](#ib754f8dbfd9a410ebea6292869b01926_109)** | [120](#ib754f8dbfd9a410ebea6292869b01926_109) |
| **[Item 9.](#ib754f8dbfd9a410ebea6292869b01926_118)** | **[The Oﬀer and Listing](#ib754f8dbfd9a410ebea6292869b01926_118)** | [122](#ib754f8dbfd9a410ebea6292869b01926_118) |
| **[Item 10.](#ib754f8dbfd9a410ebea6292869b01926_139)** | **[Additional Information](#ib754f8dbfd9a410ebea6292869b01926_139)** | [123](#ib754f8dbfd9a410ebea6292869b01926_139) |
| **[Item 11.](#ib754f8dbfd9a410ebea6292869b01926_172)** | **[Quantitative and Qualitative Disclosures About Market](#ib754f8dbfd9a410ebea6292869b01926_172) Risk** | [140](#ib754f8dbfd9a410ebea6292869b01926_172) |
| **[Item 12.](#ib754f8dbfd9a410ebea6292869b01926_175)** | **[Description of Securities Other than Equity Securities](#ib754f8dbfd9a410ebea6292869b01926_175)** | [141](#ib754f8dbfd9a410ebea6292869b01926_175) |
|  | **[PART II](#ib754f8dbfd9a410ebea6292869b01926_178)** | [142](#ib754f8dbfd9a410ebea6292869b01926_178) |
| **[Item 13.](#ib754f8dbfd9a410ebea6292869b01926_181)** | **[Defaults, Dividend Arrearages and Delinquencies](#ib754f8dbfd9a410ebea6292869b01926_181)** | [142](#ib754f8dbfd9a410ebea6292869b01926_181) |
| **[Item 14.](#ib754f8dbfd9a410ebea6292869b01926_184)** | **[Material Modifications to the Rights of Security Holders and Use of Proceeds](#ib754f8dbfd9a410ebea6292869b01926_184)** | [142](#ib754f8dbfd9a410ebea6292869b01926_184) |
| **[Item 15.](#ib754f8dbfd9a410ebea6292869b01926_187)** | **[Controls and Procedures](#ib754f8dbfd9a410ebea6292869b01926_187)** | [143](#ib754f8dbfd9a410ebea6292869b01926_187) |
| **[Item 16.](#ib754f8dbfd9a410ebea6292869b01926_190)** | **[\[Reserved\]](#ib754f8dbfd9a410ebea6292869b01926_190)** | [143](#ib754f8dbfd9a410ebea6292869b01926_190) |
| **[Item 16A.](#ib754f8dbfd9a410ebea6292869b01926_193)** | **[Audit committee financial expert](#ib754f8dbfd9a410ebea6292869b01926_193)** | [143](#ib754f8dbfd9a410ebea6292869b01926_193) |
| **[Item 16B.](#ib754f8dbfd9a410ebea6292869b01926_196)** | **[Code of Ethics](#ib754f8dbfd9a410ebea6292869b01926_196)** | [144](#ib754f8dbfd9a410ebea6292869b01926_196) |
| **[Item 16C.](#ib754f8dbfd9a410ebea6292869b01926_199)** | **[Principal Accountant Fees and Services](#ib754f8dbfd9a410ebea6292869b01926_199)** | [144](#ib754f8dbfd9a410ebea6292869b01926_199) |
| **[Item 16D.](#ib754f8dbfd9a410ebea6292869b01926_202)** | **[Exemptions from the Listing Standards for Audit Committees](#ib754f8dbfd9a410ebea6292869b01926_202)** | [145](#ib754f8dbfd9a410ebea6292869b01926_202) |
| **[Item 16E.](#ib754f8dbfd9a410ebea6292869b01926_205)** | **[Purchases of Equity Securities by the Issuer and Aﬃliated Purchasers.](#ib754f8dbfd9a410ebea6292869b01926_205)** | [145](#ib754f8dbfd9a410ebea6292869b01926_205) |
| **[Item 16F.](#ib754f8dbfd9a410ebea6292869b01926_208)** | **[Change in Registrant's Certifying Accountant](#ib754f8dbfd9a410ebea6292869b01926_208)** | [145](#ib754f8dbfd9a410ebea6292869b01926_208) |
| **[Item 16G.](#ib754f8dbfd9a410ebea6292869b01926_211)** | **[Corporate Governance](#ib754f8dbfd9a410ebea6292869b01926_211)** | [145](#ib754f8dbfd9a410ebea6292869b01926_211) |
| **[Item 16H.](#ib754f8dbfd9a410ebea6292869b01926_214)** | **[Mine Safety Disclosure](#ib754f8dbfd9a410ebea6292869b01926_214)** | [146](#ib754f8dbfd9a410ebea6292869b01926_214) |
| **[Item 16I.](#ib754f8dbfd9a410ebea6292869b01926_217)** | **[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ib754f8dbfd9a410ebea6292869b01926_217)** | [146](#ib754f8dbfd9a410ebea6292869b01926_217) |
| **[Item 16J.](#ib754f8dbfd9a410ebea6292869b01926_220)** | **Insider Trading Policy** | [146](#ib754f8dbfd9a410ebea6292869b01926_217) |
| **[Item 16K.](#ib754f8dbfd9a410ebea6292869b01926_223)** | **[Cybersecurity](#ib754f8dbfd9a410ebea6292869b01926_223)** | [146](#ib754f8dbfd9a410ebea6292869b01926_217) |
|  | **[PART III](#ib754f8dbfd9a410ebea6292869b01926_226)** | [149](#ib754f8dbfd9a410ebea6292869b01926_226) |
| **[Item 17.](#ib754f8dbfd9a410ebea6292869b01926_229)** | **[Financial Statements](#ib754f8dbfd9a410ebea6292869b01926_229)** | [149](#ib754f8dbfd9a410ebea6292869b01926_229) |
| **[Item 18.](#ib754f8dbfd9a410ebea6292869b01926_241)** | **[Financial Statements](#ib754f8dbfd9a410ebea6292869b01926_241)** | [149](#ib754f8dbfd9a410ebea6292869b01926_229) |
| **[Item 19.](#ib754f8dbfd9a410ebea6292869b01926_235)** | **[Exhibits](#ib754f8dbfd9a410ebea6292869b01926_235)** | [150](#ib754f8dbfd9a410ebea6292869b01926_235) |

---

**ABOUT THIS ANNUAL REPORT**

In this annual report on Form 20-F for the year ended December 31, 2025, or this Annual Report, the terms "REE," "we," "us," "our" and "the company" refer to REE Automotive Ltd. and its subsidiaries.

All references in this Annual Report to "Israeli currency" and "NIS" refer to New Israeli Shekels, the terms "dollar," "USD," "US$," or "$" refer to U.S. dollars and the term "British Pounds Sterling, "Great Britain Pound", or "GBP", or "£", refer to the form of currency in the United Kingdom, or the UK.

No material on our website forms any part of this Annual Report. References in this Annual Report to documents on our website are included as an aid to the location of such documents and such documents are not incorporated by reference.

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report and the documents incorporated by reference herein include certain forward-looking statements within the meaning of Section 27A of the United States, or U.S., Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include, but are not limited to, statements regarding REE or its management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "appear," "approximate," "believe," "continue," "could," "expect," "foresee," "intends," "may," "will," "might," "plan," "possible," "potential," "predict," "project," "estimate", "seek," "should," "would," "target" and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements in this Annual Report may include, among other things, statements about REE's strategic and business plans, technology, relationships, objectives and expectations for REE's business, the impact of trends on and interest in our business, intellectual property or product and its future results, operations and financial performance and condition.

These forward-looking statements are based on information available as of the date of this Annual Report and current expectations, forecasts and assumptions. Although REE believes that the expectations reflected in forward-looking statements are reasonable, such statements involve a number of known and unknown risks, uncertainties, assumptions, judgments and other factors, including the risks described below in the section titled "Item 3.D. Risk Factors" and elsewhere in this Annual Report, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. These factors are difficult to predict accurately and may be beyond REE's control. Forward-looking statements in this Annual Report speak only as of the date made and REE undertakes no obligation to update its forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for us to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.

Some factors that could cause actual results to differ include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to raise sufficient capital to finance its commercialization, operations, and business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to continue as a going concern if we are unable to generate sufficient revenues and/or raise additional capital, including through discussions with existing REE shareholders, which could prevent it from obtaining new financing on reasonable terms or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's inability to repay its Convertible Notes (defined below), including upon a repayment notice in connection with a change of control, due to insufficient cash flow from its business or to settle conversions of such Convertible Notes in cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to identify or develop and to consummate any strategic alternative transaction; uncertainties inherent in the strategic review process and whether we can achieve the potential benefits of any strategic alternative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to execute and successfully commercialize its current business plan; risks related to REE's pause in production of its vehicles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to maintain and advance relationships with current Tier 1 suppliers and strategic partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to transition its products into marketable products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to grow and scale production capacity through relationships with Tier 1 suppliers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Uncertainty regarding REE's estimated sales, expenses and profitability and underlying assumptions; REE's ability to generate revenue through royalty payments from a customer;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks relating to REE's significant shareholders having substantial influence over REE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's limited operating history and business model not being proven;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with REE's supply chain;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with plans for REE's initial commercial production and follow-on sales, including as a result of the impact from tariffs and REE's determination to delay production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's dependence on suppliers, some of which are single or limited source;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Development of the market for software-defined vehicles, or SDV, including with respect to the market for electric vehicles, or EVs, including risks relating to consumer acceptance of SDV technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Demand relating to its SDV platform from OEMs, technology companies, autonomous companies, fleets, and other businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks relating to the lack of a guarantee that OEMs will purchase our SDV products in any certain quantity or price even after a proof of concept, design win, and/or a prototype design collaboration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risk relating to significant delays between the time we achieve a design win until we may be able to realize revenue from the vehicle model;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks related to REE's customer's ability to either withdraw from the Definitive Agreement (defined below) with REE and/or meet certain agreement conditions in order to commence its project with REE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE and its suppliers, service providers, and strategic partners risks associated with cybersecurity, data security breach, failure of information security systems and privacy concerns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future sales of our securities by us and/or by existing material shareholders could cause the market price for our Class A Ordinary Shares (defined below) to decline;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Potential disruption of shipping routes due to accidents, political events, international hostilities and instability, piracy or acts by terrorists (including ongoing attacks by the Houthis in the Red Sea);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's operations in an industry that is new and rapidly evolving, and its use of estimates that are subject to significant uncertainty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Intense competition in the e-mobility space, including with competitors who have significantly more resources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks related to the fact that REE is incorporated in Israel and governed by Israeli law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to make continued investments in its business and technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Global macroeconomic and geopolitical risks, including inflation, interest rates, policy uncertainty (such as changes under the Trump Administration in the U.S, including with respect to tariffs and trade policy) and political unrest in Israel and ongoing armed conflict and regional instability in Israel and other parts of the Middle East, including in connection with the ongoing hostilities involving Israel and regional actors, which have resulted and may continue to result in disruptions to our operations, including due to employee absences related to military reserve duty, limitations on travel, and interruptions to business continuity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adverse conditions in the automotive industry and adverse global conditions, including macroeconomic, protectionist trade policies and tariffs, geopolitical uncertainty, and other events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fluctuations in interest rates, rising global inflation (including in connection with tariffs and trade wars), and foreign exchange rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The need to retain a highly-skilled technical workforce, including engineers and other highly qualified employees to further its goals, and in particular following reductions-in-force;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in laws and regulations that impact REE;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks related to product liability claims, legal and regulatory proceedings, commercial or contractual disputes, or lawsuits alleging infringement or misappropriation of intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to enforce, protect and maintain intellectual property rights and to defend itself from claims that it infringed on third party intellectual property rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other risks and uncertainties set forth in the section "Item 3.D. Risk Factors" in this Annual Report.

**MARKET AND INDUSTRY DATA**

This Annual Report includes market and industry data and forecasts that we have derived from publicly available information, various industry publications, other published industry sources and internal data and estimates. Industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable. Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management's understanding of industry conditions. Any estimates underlying such market-derived information and other factors could cause actual results to differ materially from those expressed in the independent parties' estimates and in our estimates.

**TRADEMARKS, TRADE NAMES AND SERVICE MARKS**

This Annual Report contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this Annual Report may appear without the® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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**Part I**

**Item 1. Identity of Directors, Senior Management and Advisers**

Not applicable.

**Item 2. Oﬀer Statistics and Expected Timetable**

Not applicable.

**Item 3. Key Information**

**A. [Reserved]**

**B. Capitalization and indebtedness.**

Not applicable.

**C. Reasons for the oﬀer and use of proceeds.**

Not applicable.

**D. Risk factors**

You should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 20-F. The risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant to an investment in our securities. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also harm us. If any of these risks materialize, our business, results of operations or financial condition could suffer, and the price of our Ordinary Shares could decline substantially.

**Summary Risk Factors**

Investing in our Class A ordinary shares, no par value per share, having one vote per share, or Class A Ordinary Shares, involves a high degree of risk, as fully described below. The principal factors and uncertainties that make investing in our Class A Ordinary Shares risky, include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** REE has a history of losses, and expects to continue to incur losses for the foreseeable future, and there is substantial doubt that we will have sufficient funds to satisfy our obligations through the next 12 months. As a result, REE will be unable to meet its future capital requirements, which will jeopardize its ability to continue its business operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Servicing our Convertible Notes (defined below) may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt. Additionally, we may not have the funds necessary to settle conversions of our Convertible Notes, including obligations that arise in connection with conversions, repayments, restructuring, strategic transactions, an asset sale, a merger, a change of control transaction or any other corporate event, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Convertible Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There can be no assurance that we will be successful in identifying and/or completing any strategic transaction, or that any such strategic transaction will result in any value for our shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's limited operating history may make evaluation of its business and future prospects difficult, increasing the risk of investment in REE. Its business model has not been proven, and any failure to obtain significant orders for its products would have an adverse effect on its operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Projections of REE's operational or financial performance relies in large part on inherently uncertain assumptions that may not materialize, which could cause actual results to differ significantly*.* We also operate in an industry that is new and rapidly evolving, and our estimates are subject to significant uncertainty.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our significant shareholders have influence and may be able to exert substantial influence over REE, including over decisions that require the approval of shareholders, and their interests may conflict with the interests of other shareholders, which could materially adversely impact REE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If the market for SDVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's future sales and operations in international markets may expose it to operational, financial and regulatory risks, including unfavorable regulatory, political, tax and labor conditions, which could negatively impact us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adverse global conditions and conditions in the automotive industry, along with cost increases, supply disruptions, and/or material shortages may negatively impact our financial results and/or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The commencement of our Definitive Agreement (defined below) is subject to certain conditions by the technology company that are beyond our control, and which may never occur, the nonoccurrence of which would have a significant adverse effect on our results of operations, financial condition, business, and the price of our Class A Ordinary Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our reservations include both binding orders and non-binding reservation and such non-binding reservations may not result in definitive purchase orders and/or agreements. Our prior binding and non-binding commercial vehicle reservations may no longer be binding or represent continued interest in our vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain of our future revenues depend on BorgWarner's (defined below) purchase of automotive components from our suppliers, which may never occur or which may result in a lower quantity purchased from any of our suppliers than expected, which could adversely affect the amount of royalty payments that we receive in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE is subject to other risks associated with our strategic partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There is no guarantee that our potential customers will purchase our SDV products in any certain quantity or at any certain price even after we achieve design wins, and there may be significant delays between the time we achieve a design win until we realize revenue from the vehicle model.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's products are in various stages of development and there are risks with developing such products into marketable products. If and when REE resumes production, its ability to induce follow-on sales following the initial sale of vehicles to our customers depends, in part, on its ability to prove that REE's products are to the full satisfaction of such customers and to establish and maintain confidence in REE's business prospects among such customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our market is both highly competitive against a large number of established competitors and new market entrants, and, with respect to EV in particular, one that is viewed more cautiously overall by the target customer-base.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE is subject to risks associated with the anticipated timing of REE's initial commercial production and subsequent increased commercial production. We currently do not have extensive experience servicing products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's development of an outsourced production business model, if and when REE resumes production, may not be successful, which could harm its ability to deliver its vehicles and recognize revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** If and when REE resumes production, REE would expect to depend on its suppliers, some of which were previously single or limited source suppliers, and if such suppliers would fail to deliver the components of REE's products in a timely manner or at all and at prices and in volumes acceptable to it, it could have a material adverse effect on its business, prospects and operating results*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** If and when we resume production, REE's production plan would likely relate to producing a certain number of vehicles in the U.S. Such production plan targets will be subject to a variety of risks, including the completion of

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REE's production tooling investment plan, sourcing materials and components from REE's suppliers on its agreed upon deadlines, securing sufficient funding, and global macroeconomic conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If OEMs or technology companies are unable to maintain and increase consumer acceptance of SDV technology, our business, results of operations, and financial condition would be adversely affected and our business would likely fail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pricing pressures, automotive original equipment manufacturers, or OEM, cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs may result in lower than anticipated margins, or losses, which may adversely affect REE's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our products rely on software and hardware that is highly technical, and if these systems contain errors, bugs, defects, or other vulnerabilities, or if we are unsuccessful in addressing or mitigating technical limitations in our systems, our business could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE may become subject to product liability claims, legal and regulatory proceedings, commercial or contractual disputes, or lawsuits alleging infringement or misappropriation of intellectual property rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE is dependent on its founders Daniel Barel and Ahishay Sardes, or Founders, and its success depends, in part, on its ability to retain key employees, qualified employees and management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If REE is unable for any reason to meet the continued listing requirements of Nasdaq, such action or inaction could result in a delisting of the Class A Ordinary Shares and result in the acceleration of the repayment of our Convertible Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE and its suppliers, service providers, and strategic partners are subject to cybersecurity and other risks with respect to each of their respective technology, systems, and software, which could prevent REE from effectively operating its business, or may cause harm to its business that may or may not be reparable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE may incur significant costs and expenses in connection with the protection and enforcement of its intellectual property rights, including but not limited to litigation costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our dual class structure has the effect of concentrating voting power.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Political, economic and military conditions in Israel could adversely affect REE's supply chain, business, operations, and ability to raise capital.

**Risks Related to REE's Finances**

***REE has a history of losses, and expects to continue to incur losses for the foreseeable future, and there is substantial doubt that we will have sufficient funds to satisfy our obligations through the next 12 months. As a result, REE will be unable to meet its future capital requirements, which will jeopardize its ability to continue its business operations.***

Since inception, REE has incurred, and expects that it will continue to incur for the foreseeable future, losses and negative cash flow, both of which are significant, until at least such time that it begins to generate significant margin from REE products, which may never happen. REE incurred net losses of $55.8 million and $111.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. REE's cash and cash equivalents were $14.2 million and $54.3 million (excluding our Credit Facility (as defined below) in the amount of $18 million, which expired as of December 31, 2025), for the years ended December 31, 2025 and December 31, 2024, respectively. The Company expects to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. Our ability to continue as a going concern will depend on our ability to consummate a strategic transaction, obtain additional financing (including through discussions with existing REE shareholders), attain further operating efficiencies, and/or generate future cash from operations. There are no assurances, however, that the Company will be successful in consummating any strategic transaction, obtaining an adequate level of financing, operating efficiencies, or generating the future cash that is needed for its operational activities. These conditions raise substantial doubts about the Company's ability to continue as a going concern. As of May 4, 2026, our cash position was approximately $4.9 million in cash and cash equivalents. Absent any potential strategic transaction, additional revenues, further cost-reduction measures or additional funding, we currently estimate that our existing financial resources will be sufficient to fund our projected operating costs and expected cash

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requirements into, but not beyond, the middle or the end of the second quarter of 2026. Management is actively pursuing additional financing opportunities, including through discussions with existing shareholders, as well as a strategic transaction(s) and further cost-reduction initiatives in order to extend the Company's liquidity runway. A strategic transaction may include the sale of assets, subsidiaries, intellectual property, business lines and/or a change-of-control transaction, However, there can be no assurance that such efforts will be successful or available on acceptable terms. If we are unable to continue as a going concern by obtaining additional funding, consummating a strategic transaction(s), generating additional revenues and/or further reducing costs, we may need to significantly curtail or modify our operations and strategic plans. This may include substantially changing our corporate structure, seeking bankruptcy or insolvency protection, or taking some other action(s). The values that we may receive for our assets in a strategic transaction(s), liquidation, insolvency, or dissolution could be significantly lower than the values reflected in our financial statements. Our financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should we be unable to continue as a going concern. Any of the above may be pursued under time constraints or financial pressure and may not maximize shareholder value. Given our limited liquidity runway, we have been required to pursue one or more of these alternatives on an accelerated basis, which has limited our negotiating leverage and may have adversely affected the terms of any such transaction.

In addition, in connection with the above, our UK subsidiary has undergone an administration process as part of its corporate wind down, and one or more remaining subsidiaries may become subject to insolvency, restructuring or similar proceedings independent of the parent company. Such proceedings could result in loss of control over key assets, termination of contracts, loss of employees, or cross-defaults under our financing arrangements. The occurrence of such events at the subsidiary level could materially and adversely affect our consolidated financial condition, results of operations and ability to continue as a going concern.

Our ability to continue our business, including as a going concern, is dependent on our ability to significantly reduce our operating costs and/or to obtain the necessary financing and/or the receipt of cash revenues from customers to meet our obligations and repay our liabilities arising from the ordinary course of business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time. In particular, REE may not be able to timely secure additional financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing shareholders could experience varying levels of dilution, depending on the circumstances, including in connection with the anti-dilution provisions under our Convertible Notes. Any debt financing or credit facilities obtained by REE in the future could involve restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for REE to obtain additional capital, to pursue business opportunities, and which can result in harsh consequences in the event of a default, such as a potential lender taking over control of our business or our business assets. If we are unable to obtain adequate financing or financing on terms satisfactory to us and in the amounts needed when we require them, we will not be able to operate our business and will need to significantly modify or terminate our operations, restructure or sell our business and/or seek protection from creditors.

Discussions with potential customers may range from several months to several years and there is no guarantee that such efforts will be successful, or successful within the timeframe that is financially helpful to REE due to its current financial condition and going concern. Because we incur the costs and expenses from these efforts and other efforts before we receive any revenue with respect thereto, if any, our losses in future periods will continue be significant, despite our cost mitigation efforts including our reduction-in-force and negotiated resolutions of outstanding obligations with certain suppliers, among other measures. Moreover, our business developments 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 for several years or in sufficient volume, which would further increase our losses. Even where our efforts are successful, we cannot guarantee with any certainty that such projects will include any upfront cash revenues or that any payment amount received would be sufficient to allow us to meet our obligations and/or repay our liabilities arising from the ordinary course of business operations when they become due. If we are unsuccessful in any of the above, our business, financial condition and results of operations will be materially and adversely affected, and we will need to significantly modify or terminate our operations, seek to sell our assets and/or business, or seek protection from our creditors.

Additionally, any inability to fund our business could cause our customers, suppliers, strategic partners, or other third parties to decrease the amount of business they do with us, demand any deferred payments earlier, or terminate their relationship with us, or we could default on our outstanding Notes. Any of the above may permit our creditors to enforce remedies against us, including by demanding immediate repayment or seeking to take control of our business, and could cause us to consider reducing, discontinuing, or selling operations or seeking protection from creditors. Any of the foregoing would materially and adversely harm REE's business, financial condition and results of operations, and the value of our Class A Ordinary Shares, which could cause us to discontinue our operations and/or seek protection from creditors.

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Moreover, the "going concern" in our financial statements 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 key employees and attracting employees as a result of these concerns. For a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern, see Item 5.B. "Operating and Financial Review and Prospects" of this Annual Report, and Note 1 "General" to the financial statements included as part of this Annual Report.

***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, 2025, the outstanding principal amount of our Convertible Notes was $8.5 million, and the aggregate outstanding balance, including accrued interest, was $10.3 million. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our Convertible Notes or any future indebtedness we may incur depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business has not and may not in the future generate cash flow from operations sufficient to service our Convertible Notes and make necessary capital expenditures, or repay our outstanding indebtedness, including upon a repayment notice from Convertible Note holders in connection with a change of control. If we are unable to generate cash flow, we may be required to adopt one or more alternatives, such as winding down or restructuring our business, or selling assets such as through REEUK's (defined below) administration process, restructuring our Convertible Notes or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our Convertible Notes will depend, among other factors, on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our Convertible Note obligations. In the event of the occurrence of any of the above, it would likely qualify as an event of default under our Convertible Notes, unless otherwise waived by the holders thereof, consistent with the terms of such Convertible Notes, and thereby trigger the acceleration of a payment in an amount equal to one hundred thirty percent (130%) of the outstanding principal amount plus the accrued interest thereof on the date on which the first event of default occurred, together with all costs, including, without limitation, legal fees and expenses, of collection. There can be no assurance by REE that we have sufficient capital to make such a payment in the event that it should become due. Moreover, for the sake of clarity, in the event of a sale of all or a part of REE's assets, such as through REEUK's administration process, or in connection with our strategic transaction process, any potential proceeds therefrom would likely be applied toward the repayment of such Convertible Notes and would likely not accrue any value to our shareholders, which would further diminish the value our Class A Ordinary Shares. In certain scenarios, our creditors may seek to enforce their rights, including through foreclosure on assets, appointment of receivers, or other remedies, which could result in a loss of control of all or part of our business.

In addition, such Convertible Notes contain a full ratchet anti-dilution protection for any offering by us of our Class A Ordinary Shares (other than certain excluded issuances) at a price (as determined in accordance with the terms of the Convertible Notes) that is less than the then current conversion price following the issuance date. This in turn may limit our ability to engage in equity financings. Moreover, upon the occurrence of the ratchet, the conversion price of the Convertible Notes will be automatically reduced to a price that is less than the then convert conversion price of the notes. Any future adjustments to the conversion price of the Convertible Notes may have a negative impact on the trading price of our Class A Ordinary Shares.

***We may not have the funds necessary to settle conversions of our Convertible Notes, including obligations that arise in connection with conversions, repayments, restructuring, strategic transactions, an asset sale, a merger, a change of control transaction or any other corporate event, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Convertible Notes.***

Holders of our Convertible Notes have the right to require us to repay all or any portion of their notes upon the occurrence of a change of control transaction, as defined in the Convertible Notes, at a repurchase price equal to an amount equal to the then outstanding principal amount (together with all accrued and unpaid interest, liquidated damages and any other amounts that may become due under the Convertible Notes as at the date of such election), or to request a conversion into Class A Ordinary Shares for the full amount of the then outstanding principal amount (together with all accrued and unpaid interest, liquidated damages and/or any other amounts that may become due under the Convertible Notes as at the date of such election). In addition, upon conversion of the Convertible Notes, unless we elect to deliver solely shares to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Convertible Notes being converted. We may not have enough available cash or be able to obtain financing at the time we are required to make repayments or conversions of these Convertible Notes. In addition, our ability to repay our Convertible Notes, or to pay cash upon conversions of such notes may be limited by law, by regulatory authority or by

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agreements governing our future indebtedness. Our failure to repay our Convertible Notes at a time when the repayment is required or to pay any cash payable on future conversions of such notes as required would constitute a default. Such failure could also lead to a default under agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay such Convertible Notes or make cash payments upon conversions of such notes.

Moreover, in the event the conditional conversion feature of our Convertible Notes is triggered, holders of such notes will be entitled to convert such notes at any time during specified periods at their option. If one or more holders elect to convert such notes, unless we elect to satisfy our conversion obligation by delivering solely our Class A Ordinary Shares we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert such notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of such notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

***We are reviewing strategic alternatives and there can be no assurance that we will be successful in identifying and/or completing any strategic transaction, or that any such strategic transaction will result in any value for our shareholders.***

On May 1, 2026, we announced that our Board of Directors has been reviewing strategic alternatives to maximize shareholder value, including but not limited a potential sale of the Company or all or a portion of its assets, a merger or other strategic business combination, a reverse merger, strategic partnership(s), licensing opportunities, or other strategic transactions. The Company's management and Board of Directors have devoted significant time and resources to identifying and evaluating potential strategic alternatives, and the strategic review process continues alongside our current business. REE may be unable to identify strategic alternatives to maximize shareholder value, and even if we enter into a binding agreement, there is no guarantee that a transaction will be consummated, and even if executed and consummated, such strategic alternatives may not enhance shareholder value or our financial position. For example, in the event that all or a portion of our assets are sold in connection with our strategic process, a significant portion or all of the proceeds from such transaction may be required to satisfy the Company's outstanding liabilities and obligations, including our Convertible Notes, and as a result, our shareholders may receive limited or no value from such transaction. We have incurred and expect to continue to incur, substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives. There can be no assurance that any potential transaction or other strategic alternative if consummated, will provide greater value to our shareholders than that reflected in the current price of our Class A Ordinary Shares and it may significantly dilute existing shareholders. Even if a definitive agreement is executed in connection with the strategic review process, the consummation of such a transaction would be subject to various closing conditions, including shareholder approval, which may not be obtained. If a proposed transaction is not approved by our shareholders or otherwise fails to close, our share price may decline, we may experience increased volatility in our share price and we might incur substantial costs and management distraction without realizing any benefits. Additionally, any such strategic transaction may require us to incur non-recurring or other charges, may increase our near-and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results. The timing, structure, scope and outcome of the strategic review process are uncertain, and our Board of Directors may determine at any time to suspend, modify or terminate the process.

The strategic review process is also disruptive to our business operations. The attention of our management team and other employees has been, and may continue to be, diverted from day-to-day operations and the execution of our business strategy while the review process is ongoing. In addition, uncertainty regarding the outcome of the process may adversely affect our ability to retain and motivate key employees, including members of management and employees who are critical to our operations. Uncertainty surrounding the strategic review may also cause our customers, partners, suppliers and other business counterparties to delay, defer or reconsider their business relationships with us, which could negatively affect any potential revenue, operating results and growth prospects. In addition, the process may result in substantial costs, including advisory, legal and other professional fees, regardless of whether any transaction is ultimately completed.

Moreover, we do not intend to make any further announcements regarding the review of strategic alternatives unless and until our Board of Directors determines further disclosure is appropriate or necessary. Accordingly, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to our future could cause the price of our Class A Ordinary Shares to fluctuate significantly. If we are unable to complete a strategic transaction of the nature described above, we could experience a reduction in the price of our Class A Ordinary Shares and we may be unable to obtain additional financing, which could result in a slowdown of our operations, further reductions-in-force, or other restructuring or bankruptcy protection efforts.

***REE is exposed to the risk of write-downs on the value of its inventory and other assets.***

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REE records write-downs for product inventories that have become obsolete, exceed anticipated demand, or where the cost exceeds the net realizable value. REE also reviews long-lived assets and inventory for impairment whenever events or circumstances indicate that the assets may not be recoverable. If REE determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value. In 2025, REE affected a one-time inventory write-off of $15.9 million and may incur additional write-downs, write-offs, impairments and other charges in the future, which may be material and may materially adversely affect REE's results of operations.

***REE may not be able to accurately estimate demand for its products, which could result in a variety of inefficiencies in its business and hinder its ability to generate revenue. If REE fails to accurately predict the demand for its products, it could incur additional costs, experience delays, or result in our inability to implement our current business plan and the need to discontinue our operations, restructure our business, and/or seek protection from creditors.***

It is difficult to predict REE's future revenues and appropriately budget for its expenses, and REE may have limited insight into trends that may emerge and affect its business. REE is required to provide forecasts of its demand to its suppliers several months or years prior to the scheduled delivery of products to its customers. Currently, there is no historical basis for making judgments on the demand for REE's products or its ability to develop, produce, and deliver products, or REE's profitability in the future. If REE overestimates its requirements, its suppliers may have excess inventory, which indirectly would increase REE's costs. If REE underestimates its requirements, its suppliers may have inadequate inventory, which could interrupt the sale of its products and result in delays in shipments and revenues. In addition, lead times for materials and components that REE's suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time. If REE fails to order sufficient quantities of product components in a timely manner, the delivery of products to its potential customer base could be delayed, which would harm REE's business, financial condition and operating results.

***REE will need to improve its operational and financial systems to support its expected growth, increasingly complex business arrangements and rules governing revenue and expense recognition and any inability to do so will adversely affect REE's billing and reporting.***

To manage the expected growth of its operations and increasing complexity, REE will need to improve its operational and financial systems, procedures, and controls and continue to increase systems automation to reduce reliance on manual operations. Any inability to do so may affect REE's billing and reporting. REE's current and planned systems, procedures and controls may not be adequate to support its complex arrangements and the rules governing revenue and expense recognition for its future operations and expected growth. Delays or problems associated with any improvement or expansion of REE's operational and financial systems and controls could adversely affect REE's relationships with its potential customer base, cause harm to its reputation and brand and could also result in errors in its financial and other reporting.

***REE's insurance strategy may not be adequate to protect it from all business risks and losses.***

In the ordinary course of business, REE may become subject to claims resulting from employment disputes, property, casualty, products liability, accidents, acts of God, cyber liability, and other claims similar to other companies with our risk profile that are normal and customary in the market and in our industry. In connection therewith, REE uses commercially reasonable efforts to protect itself and its activities against such losses and risks and in such amounts as are prudent and customary in the businesses in which it and its subsidiaries are engaged. In connection therewith, REE has obtained insurance policies covering commercial general liability, workers' compensation and directors' and officers' insurance policies. Such insurance policies are subject to various deductibles, policy limits, and exclusions that may impact our ability to have coverage for a specific risk. Additionally, if and when REE resumes production, it would plan to maintain an appropriate level of insurance coverage that is proportionate to the number of vehicles sold. Despite such efforts, REE may not successfully strike the appropriate balance of sufficient insurance coverage to address the specific risk and/or loss, and in some cases, REE may not be insured against certain types of claims. Additionally, the policies that REE does have may include significant deductibles, and REE cannot be certain that its insurance coverage will be sufficient to cover all future claims against REE. A loss that is not covered by insurance and/or exceeds policy limits may require REE to pay substantial amounts, which could adversely affect REE's financial condition and operating results. Further, insurance coverage may not continue to be available to us, or, if available, may be at a significantly higher cost, based on insurance market conditions, our specific industry, and/or a change in our risk profile.

The successful assertion of one or more large claims against REE that exceeds its available insurance coverage, or results in changes to its insurance policies (including premium increases or the imposition of large deductible or co-insurance

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requirements), could have an adverse effect on its business. In addition, REE cannot be sure that its existing insurance coverage will continue to be available on acceptable terms or that REE's insurers will not deny coverage for future claims.

**Risks Related to REE's Business**

***REE's limited operating history may make evaluation of its business and future prospects difficult, increasing the risk of investment in REE.***

REE faces risks and challenges as a company with a limited operating history. REE has a limited operating history in the automotive technology industry on which investors can base an evaluation of its business, operating results and prospects. Since REE is in the process of commercializing its SDV technological products, it is difficult to predict REE's future revenues, if any, and expenses, and REE has limited insight into trends that may emerge and affect its business. There is no assurance that customers and potential customers will purchase REE's products in volumes sufficient to achieve profitability. Market conditions, many of which are beyond REE's control and subject to change could impact demand for REE's products and ultimately REE's success. These include general economic conditions, the availability and terms of financing, civil discourse throughout the globe, effects and impact of climate change and global warming, regulatory requirements and incentives, competition and the pace and extent of vehicle electrification. Therefore, there can be no assurance at this time that REE will be able to implement its current business plan, generate revenues, operate profitably or will have adequate working capital to meet its obligations (i) as they become due, (ii) upon the occurrence of an acceleration of our obligations to repay indebtedness even if we make all principal and interest payments when due if we breach certain covenants or warranties, or (iii) upon the early termination of any agreement with a supplier or strategic partner. Any of the following would have an adverse impact on our business, financial condition, and ability to continue as a business.

***REE's business model, strategy, and primary business may be subject to change from time-to-time due to, among other reasons, circumstances relating to our products, production, customers, financial condition, the automotive industry, technology industry, macroeconomic and geopolitical conditions, and/or the market, among other reasons.***

REE's business model, strategy, and/or primary business may be subject to change from time-to-time due to, among other reasons, circumstances relating to our products, production, customers, financial condition, the automotive industry, technology industry, macroeconomic and geopolitical conditions, and/or the market, among other reasons. In the event of such change, we may enter into a business that we have limited or no experience in, and our customers, suppliers, strategic partners, and/or other third parties may decrease the amount of business they do with us and/or terminate their relationship with us, which, in turn, may cause us to consider reducing, discontinuing, or selling operations or seeking protection from creditors. In the event of such terminations, we may have to pay significant termination fees in connection with the termination of our agreements. Additionally, such a change in business would likely qualify as an event of default under our Convertible Notes and Warrants, unless otherwise waived by the holders consistent with the terms therein, and thereby trigger, with respect to the Convertible Notes, the acceleration of a payment in an amount equal to one hundred thirty percent (130%) of the outstanding principal amount plus the accrued interest thereof on the date on which the first event of default occurred, together with all costs, including, without limitation, legal fees and expenses, of collection.

Such change, among others, can also result in the sale of a significant amount of our Class A Ordinary Shares by our investors, which would significantly increase the volatility of our Class A Ordinary Shares. Such sales may, among other consequences, significantly decrease our ordinary share price, which may make it more difficult to comply with the Minimum Bid Price Requirement (as defined below), which could lead to the delisting of our Class A Ordinary Shares from Nasdaq, harming the liquidity of our shares and the ability for share capital appreciation. Any of the foregoing would materially and adversely harm REE's business, financial condition and results of operations, and would likely prevent us from implementing any business plan, leading us to discontinue our operations, restructure our business, and/or seek protection from creditors. In addition, in the event of any change in our current business plan or primary business, it would impact our business projections and/or assumptions as further described in our risk factor titled "*Projections of REE's operational or financial performance relies in large part on inherently uncertain assumptions that may not materialize, which could cause actual results to differ significantly*", including our expected gross profits from our anticipated newer activities compared to our prior activities, and we may not at all be successful in such new activities. If any of this were to occur, it would damage our reputation, and negatively affect our operating results and likely result in the failure of our business.

***Projections of REE's operational or financial performance relies in large part on inherently uncertain assumptions that may not materialize, which could cause actual results to differ significantly.***

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Any forecasts provided by REE represent management's estimate of future performance at the time they are made. These forecasts are based on numerous assumptions and subject to a variety of risks and uncertainties, including assumptions about projected operating expense, the level of demand for REE's products, the performance of REE's products, the projected bill of materials for REE's products and the bill of materials breakeven, EBITDA positive assumptions, the projected gross margin achievable upon sale of REE's products, the development and commercialization of REE's products, potential market and sector opportunities, the selection and purchase of REE's products by customers and by segment, and growth in the various markets that REE is targeting and, if and when REE resumes production, the production capacity of any integration center. These assumptions represent REE's best estimates but may prove inaccurate and there can be no assurance that the actual results will be in line with REE's expectations. In addition, whether actual operating and financial results and business development will be consistent with REE's expectations and assumptions as reflected in forecasts depends on a number of factors, many of which are beyond REE's control, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extent to which projections of operating expenses will reflect the actual operating expenses and sale of REE products in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extent to which REE can actualize the value proposition of REE products including, but not limited to, cost efficiencies related to its business model with limited capital expenditure requirements and projected total cost of ownership, and, if and when REE resumes production, the availability of mission-specific vehicles that maximize cabin and storage space on a smaller overall footprint;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extent to which growth of e-mobility markets and continued shift in consumer preference will conform with projections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if and when REE resumes producing its vehicles, the extent to which REE's projected bill of materials conform with the actual bill of materials upon start of production, deviation from which could negatively impact the projected total cost of ownership or projected gross margin;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• supply chain disruptions and shortages of raw materials, parts, components and systems, including relating to our SoC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if and when REE returns to producing its vehicles, the projected total cost of ownership is based upon a number of projected factors based on management expectations, the deviation from which could negatively impact the actual total cost of ownership offered to potential customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• partnerships with upfitters to build finished SDVs, if and when REE resumes producing its vehicles; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• whether REE can obtain sufficient capital to sustain and grow its business.

In addition to these risks, other unknown or unpredictable factors could also adversely affect REE's financial or operating performance. In the event that actual results materially differ from REE's projected financial information or if REE adjusts its projections in future periods, REE's share price could be materially adversely affected.

***REE may not succeed in controlling the costs associated with its operations and we may therefore not be able to implement our current business plan and may need to discontinue our operations, restructure our business, and/or seek protection from creditors.***

REE has incurred, and expects to continue to incur losses that have and will impact its profitability, including research and development expenses, sales and distribution expenses as REE builds its brand and markets its products, and general and administrative expenses, including costs related to employees, internal systems, and operating as a public company. It also continues to invest significant resources to retain key employees and to develop our intellectual property portfolio and brand. Additionally, if and when we resume production, the production of vehicles will require significant capital to develop and grow that product and to produce and scale the production of vehicles, including maintaining a supply chain, developing and assembling REE products, ramping up the production and assembly of REE products, and building future integration centers. REE's ability to become profitable in the future will not only depend on its ability to successfully sell its products, but also to control its costs. If REE is unable to accomplish any of the following then we may not be able to achieve profitable operations: efficiently design, source parts, assemble, sell and distribute its products, or successfully engineer the conversion of traditional vehicles to SDVs based upon REE's technology.

Moreover, because various items in our supply chain are, and may continue to be, subject to tariffs, we have experienced significant increases in our vehicle production. As a result, we delayed our vehicle production and expect such tariffs (including the surrounding uncertainty therefrom) to continue to significantly impact our business, operations, and vehicle production goals. If and when we return to the production of our vehicles and are unable to pass the costs of such tariffs on to our customer/end-user base or otherwise mitigate such costs, or if demand for our vehicles decreases due to the higher

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cost, our results of operations and overall financial performance could be materially adversely affected. Moreover, on September 15, 2024, we entered into a Supply Chain Management Services Agreement with Samvardhana Motherson International Limited, or Motherson, which among other items, includes services to optimize our supply chain for cost efficiencies, supplier development and management, part development cost management, contract and purchase order management, and supply chain management. If and when we resume production, the inability to optimize and manage our supply chain may result in operational inefficiencies and higher costs (including with respect to sourcing parts) across our supply chain, which could impact our ability to achieve profitability. Additionally, if and when we resume production, we may need to manage and communicate with our suppliers ourselves, which would likely add time, cost, and create resource constraints, including the reallocation of our employees from other efforts within our business, and which could strain our resources and/or create significant interruptions and inefficiencies within our supply chain. Such circumstances would likely have a material adverse effect on our operations and business. In addition, our financial condition, including our going concern, and any restructuring or strategic transaction process may further impact our ability to maintain these supplier and partner relationships, which could exacerbate such disruptions.

***If the market for SDVs does not develop as REE expects or develops slower than REE expects, its business prospects, financial condition, and operating results may be adversely affected.***

REE's growth depends upon (i) the adoption of SDVs by OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, mobility as a service, or MaaS, providers and autonomous drive companies, (ii) its ability to sell products that meet their needs and, (iii) if and when REE resumes production, on REE's ability to produce and assemble its vehicles. The entry of SDV products into the market is a relatively new development and is characterized by rapidly changing technologies and evolving government regulation, industry standards and customer views of the merits of using SDVs in their businesses. As part of REE's sales efforts, REE must demonstrate, if and when applicable, to OEMs, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, MaaS providers and autonomous drive companies the savings during the life of the vehicle and the lower total cost of ownership, or TCO, of vehicles built on the REE's technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the TCO of the vehicle over its expected life, which includes the initial purchase price and ongoing operating and maintenance costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability and terms of financing options for purchases of vehicles and, for EVs, financing options for battery or fuel cell systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability of tax and other governmental incentives, where applicable, to purchase and operate EVs and future regulations requiring increased use of nonpolluting vehicles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fuel prices, including volatility in the cost of diesel or a prolonged period of low gasoline and natural gas costs that could decrease incentives to transition to EVs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• corporate sustainability initiatives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• EV quality, performance and safety (particularly with respect to lithium-ion battery packs or fuel cells);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the quality and availability of service for the vehicle, including the availability of replacement parts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the limited range over which EVs may be driven on a single charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased competition with other companies also developing zero-emission electric and autonomous vehicles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to charging stations and related infrastructure costs, and standardization of EV charging systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• electric grid capacity and reliability; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• macroeconomic factors.

If, in weighing these factors, OEMs, delivery and logistic fleets, dealers, new mobility players, MaaS providers and autonomous drive companies determine that there is not a compelling business justification for purchasing EVs, particularly those built on products by REE, then the market for EVs may not develop as REE expects or may develop more slowly than REE expects, which would adversely affect REE's business, prospects, financial condition and operating results.

In addition, the reduction, elimination or selective application of tax and other governmental incentives and subsidies resulting from policy changes (including any related impacts from actions by the Trump Administration with respect to EV), or the reduced need for such subsidies and incentives due to the perceived success of the EV, fiscal tightening or other reasons may result in the diminished competitiveness of the EV industry generally or EVs built on the REE products in particular, which could in turn adversely affect REE's business, prospects, financial condition and operating results.

Further, REE cannot assure that the current governmental incentives and subsidies available for purchasers of EVs will remain available. More specifically, executive orders by the Trump Administration indicate reversals from the Biden Administration's policy directives as it relates to clean energy and EVs. This policy shift may reduce governmental incentives and subsidies for EVs, which may impact customer demand and our future growth prospects. Moreover, the actions by the Trump Administration have and may continue to face legal challenges that could delay or alter their implementation, and create uncertainty. Any new policies that are in contrast to the policies of the Biden Administration introduce uncertainty into the current regulatory environment, which may affect our business, prospects, financial condition, results of operations, and cash flows.

***Adverse conditions in the automotive industry could have adverse effects on REE's results of operations.***

REE's business is directly affected by and significantly dependent on business cycles and other factors affecting the global automobile industry. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, tariffs and trade wars, consumer confidence, fuel costs, fuel availability, environmental impact, governmental incentives and regulatory requirements and political volatility, especially in energy-producing countries and growth markets. In addition, automotive production and sales may be affected by REE's current and potential customers', suppliers', dealers' and strategic partners' ability to continue operating in response to challenging economic conditions and in response to regulatory requirements and other factors. Specific to the electric vehicle segment in the automotive industry, challenges may arise due to a variety of factors, including an increase in the costs of certain components or parts of electric vehicles, caused by supply chain disruptions and shortages of raw materials, U.S. tariffs (including but not limited to with respect to China-sourced lithium-ion batteries), market participants over-promising and under-delivering on their production capabilities and the slow deployment and resulting availability of charging networks for electric vehicles. Any significant adverse change in any of these factors may result in a reduction in automotive sales and production by REE's current and potential customers, suppliers, dealers and strategic partners and could have a material adverse effect on REE's business, results of operations and financial condition. Additionally, REE's expenses, including its cost of production, have risen, and may continue to rise, in response to tariffs, which have, and may continue to have, an adverse effect on REE's business, results of operations and financial condition.

***REE's future sales and operations in international markets may expose it to operational, financial and regulatory risks, including but not limited to unfavorable regulatory, political, tax and labor conditions which could negatively impact the business.***

REE faces risks associated with its international operations, including potentially unfavorable regulatory, political, tax and labor conditions, which could adversely affect its business, financial condition, and operating results. REE currently operates or has subsidiaries in Israel, the U.S., the UK, Germany, and Japan has been marketing and/or taking reservations for its products in the U.S., Canada, in certain EU countries, Japan, and India. These operations, subsidiaries, and/or sales are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions, as applicable. Additionally, if REE receives additional funding, it may expand its sales activity internationally to markets outside of North America. However, any such expansion may require REE to make significant expenditures, which may include the hiring of local employees and establishing facilities, in advance of generating any revenue. REE is also subject to a number of risks associated with international business activities that may increase its costs, impact its ability to sell its products and require significant management attention. These risks include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conforming REE's products to various international regulatory, safety, emissions, certification and homologation requirements where its products are marketed or sold;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• challenges related to the development, construction and operation of integration centers, along with the ability to produce REE products therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulty in staffing and managing foreign operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties securing customers in new jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to foreign government taxes, regulations and permit requirements, including foreign taxes that REE may not be able to offset against taxes imposed upon it in Israel, and foreign tax and other laws limiting REE's ability to repatriate funds to Israel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on the distribution of earnings, dividends, or capital from foreign jurisdictions to Israel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to fluctuations in foreign currency exchange rates, including the NIS/U.S. dollar rate, which in the past year has had a meaningful impact on our non-U.S. dollar denominated expenses due to the devaluation of the U.S. dollar against other currencies, and interest rates, including risks related to any interest rate swap or other hedging activities REE may undertake;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disruptions in global or regional supply chains and international shipping;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to tariffs, trade restrictions, duties, or other governmental measures, including those that may be imposed by Israel or other foreign governments, or in response to changing trade policies, such as U.S. tariffs on specified countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with differing and potentially more stringent labor laws and employment regulations outside of Israel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing diplomatic, trade, and geopolitical relationships that may adversely impact REE's ability to operate or sell in certain markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• political instability, war, natural disasters, or terrorism in key markets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• macroeconomic volatility or weakness in foreign markets, which could reduce demand for REE's products.

If REE fails to successfully manage these risks, its business, prospects, operating results and financial condition could be materially and adversely affected.

***Adverse global conditions, including macroeconomic, protectionist trade policies and tariffs, geopolitical uncertainty, and other events may negatively impact our financial results.***

Global conditions, dislocations in the financial markets, or inflation could adversely impact our business. In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased trade tariffs and trade disputes, rising inflation, instability in the global credit markets, banks and financial institutions entering receivership or becoming insolvent, supply chain weaknesses, instability in the geopolitical environment and increasing tensions, including between China and Taiwan and between the U.S. and Iran, and other political tensions, and foreign governmental debt concerns. Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets, which may adversely affect our business. For example, the trade policies of the Trump Administration differ from those of the Biden Administration and have led, and likely will continue to lead, to the renegotiation and/or termination of certain existing bilateral or multi-lateral trade agreements. In addition, tariffs have been, and will likely continue to be, imposed by the Trump Administration, and additional trade restrictions could be implemented on a broad range of products, geographic regions, or raw materials. For example, in 2025, a significant increase in tariffs on exports to the United States, including tariffs specifically related to the automotive industry, were announced together with other changes to U.S. trade policy, and

other nations announced retaliatory tariffs and trade policy changes in response to them. We cannot predict the timing, duration, scope or extent of any future changes to such tariffs and trade policies, or of other tariffs or trade-related actions.

Such tariffs and trade actions have increased the cost of our products and may cause stagnation in demand for them in the

future. Tariffs and trade wars, or the threat thereof, between the U.S. and countries such as China, Canada, Mexico, the UK, the EU and other countries has disrupted global supply chains, raised our supply costs, and has adversely affected our ability to execute key elements of our strategy. This can also impede the transition to electric vehicles and/or delay the implementation of economic competitiveness policies. More specifically, we purchase various battery types for our products from certain suppliers based in China, which is more subject to risks associated with international trade conflicts between the U.S. and China, particularly with respect to tariffs and export and import controls and laws.

Because various items in our supply chain are, and may continue to be, subject to tariffs, we had experienced significant cost increases with respect to our vehicle production, which we believe were unexpected, unforeseeable, and unpreventable. As a result, we delayed our vehicle production and expect such tariffs (including the surrounding uncertainty therefrom) to continue to significantly impact our business, operations, and vehicle production goals. If and

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when we return to the production of our vehicles, and are unable to pass the costs of such tariffs on to our customer/end-user base or otherwise mitigate such costs, or if demand for our vehicles decreases due to the higher cost, our results of operations and overall financial performance could be materially adversely affected.

Moreover, although REE does not operate in Russia and Ukraine, and there are no plans to launch in either market in the near future,the ongoing conflict between Russia and Ukraine creates geopolitical uncertainty, increased sanctions, and other potential impacts on the global economic environment and may impact customer behavior and disrupt the production of, delivery and overall supply chain or our ability to commercialize REE's products, which could make it difficult for REE to forecast its financial results. The uncertainty surrounding these conditions and the current, and potentially expanded, scope of international sanctions against Russia may cause unanticipated changes in customers behavior and may impact operations of our suppliers. Sanctions have also created supply constraints and driven inflation that has impacted, and may continue to impact, REE's operations and could create or exacerbate risks facing REE's business.

While REE's "Tier 1" supplier contracts prohibit certain items sourced from sanctioned countries including Russia, vehicle production is a complex process, with thousands of components sourced from all over the world. There can be no assurance, therefore, that there will not be some components sourced from suppliers subject to sanctions compliance with respect to Russia nor that the resulting disruption to the supply chain due to such sanctions will not have an adverse impact on REE's business and results of operations.

In the event geopolitical tensions deteriorate further or fail to abate, additional governmental sanctions may be enacted that could adversely impact the global economy, banking and monetary systems, markets, and the operations of REE and its suppliers.

In addition, REE may not be able to access a portion of its existing cash, cash equivalents and investments due to market conditions. If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, REE's ability to access its existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on its business and financial condition.

***If and when we resume production, we may have difficulty successfully resuming our production.***

During May 2025, due to what we believe to be unforeseen and unpreventable circumstances surrounding U.S. tariffs and trade policy, among other factors, we paused the production of our vehicle products. If and when we resume production, our ability to do so would depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions, and we may experience difficulty and/or delays in sourcing suppliers and a contract manufacturer in order to produce our P7 lineup, including, where applicable, finding replacement suppliers, maintaining customer interest in our products, and reestablishing relationships with suppliers and partners. The production pause has had and, may continue to have (if we are unable to successfully resume such production under those circumstances), an adverse impact on our business, financial condition, and ability to continue as a business.

**Risks Related to REE's Strategy**

***REE's business model has not been proven and any failure to obtain significant orders for its products would adversely affect our operating results, business, or reputation, resulting in substantial liabilities that may exceed its resources.***

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expects to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. Any investment in REE is therefore highly speculative and could result in the loss of an investor's entire investment.

***Our reservations include orders that were previously considered binding and non-binding reservations, and due to the duration of our production pause, we cannot guarantee that such orders or reservations remain enforceable, valid, or reflective of current customer intent, and such non-binding reservations may not result in definitive purchase orders and/or agreements and the majority of our reservation value is dependent upon our counterparty to the Definitive Agreement (as defined below).***

Our reservations include both binding and non-binding reservations. For example, on March 18, 2025, we announced our entry into a memorandum of understanding with a global technology company developing and marketing new mobility solutions for passenger and freight transport, or the March MOU. On August 15, 2025, we entered into a definitive agreement with such counterparty, or the Definitive Agreement, which was binding upon execution but subject to certain conditions precedent to commencement of commercial activities, which could potentially generate $770 million in revenue over the next five years. In addition to the potential revenues associated with the Definitive Agreement, we currently have an additional $137 million in reservations, which includes reservations for production that extends beyond 2025. Thus, as of the date of this Annual Report, we have approximately 30 counterparties in various industries representing approximately 6,200 reservations valued at approximately $908 million, out of which $770 million is attributable to the Definitive Agreement. There can be no guarantee that any such reservations or agreements, including the Definitive Agreement, will result in realized revenues, binding purchase orders, or long-term commitments, and the failure to do so would have a material adverse effect on REE's business, prospects, financial results and results of operations. Although the Definitive Agreement is binding, its commencement remains subject to certain conditions precedent, and there can be no assurance that such conditions will be satisfied, that commercial activities will commence, or that the Definitive Agreement will result in expected orders or revenues. If the Definitive Agreement does not commence, is terminated, or does not result in expected orders or revenues, it would significantly reduce our reservation value. In addition, any event of bankruptcy, insolvency, or general downturn in the business of the counterparty to the Definitive Agreement or in its respective industry more generally may significantly reduce our reservation value and expected revenues which would have an adverse impact on our business, results of operations, reputation, and long term prospects with respect to the viability of our business.

In addition, given the duration of our production pause and our current inability to fulfill orders, we cannot guarantee that any reservations or orders, whether previously considered binding or non-binding, remain enforceable, valid, or reflective of current customer intent, and such reservations may be cancelled, modified or not honored. Accordingly, our reported reservation value may not be indicative of actual future revenues and should not be relied upon as a measure of demand for our products.

In addition, while we intend to sell our SDV products to counterparties, including OEMs, such relationships do not necessarily produce long-terms contracts with definitive agreement for purchases. Instead, executed written agreements with these counterparties typically provide that we will provide our SDV products to such counterparties pursuant to standard purchase orders under our general terms and conditions, pursuant to which they are generally not obligated to purchase our solutions in any certain quantity or at any certain price. For the foreseeable future, our business, results of operations, and financial condition is and may continue to be significantly dependent on a limited number of counterparties, including the counterparty to the Definitive Agreement, and any reduction, delay or failure in expected orders from such counterparties would materially adversely affect us..

In the future, our counterparties and potential customers may decide not to purchase our products, may purchase fewer of our SDV products than previously anticipated, or may alter their purchasing patterns, and OEMs may discontinue incorporation of our products in their vehicle models, including as a result of a transition to in-house solutions or solutions provided by our competitors, or their individual or aggregate production levels may decline due to a number of factors, including supply chain challenges and macroeconomic conditions. Further, the amount of revenue attributable to any single counterparty, or our counterparty concentration generally, may fluctuate in any given period. The loss of one or more counterparties, a reduction in sales to any counterparty, the discontinued or decreased incorporation of our products by any OEM, or our inability to attract new counterparties, including OEMs, would significantly negatively impact our revenue and adversely affect our business, results of operations, and financial condition and may result in our company seeking protection from creditors as part of a bankruptcy proceeding.

***Our prior binding and non-binding commercial vehicle reservations may no longer be binding or represent continued interest in our vehicles.***

On May 15, 2025, we announced a pause of our commercial vehicle production. Due to such pause, we cannot guarantee that our $137 million in binding and non-binding commercial vehicle reservations continue to be binding or that any of our prior customers will confirm their reservations, if and when we resume production.

***The commencement of our Definitive Agreement is subject to certain conditions by the leading technology company that***

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***are beyond our control, and which may never occur, the nonoccurrence of which would have a significant adverse***

***effect on our results of operations, financial condition, business, and the price of our Class A Ordinary Shares.***

On August 15, 2025, we converted the March MOU into the Definitive Agreement, which became binding and effective upon its execution. However, while the Definitive Agreement became effective upon execution, its commencement date will occur only upon the satisfaction of certain conditions precedent. To-date, REE has completed all actions required to trigger the commencement date, and the remaining conditions precedent in order to trigger the commencement date must be satisfied solely by the counterparty and are outside of REE's control. Each party also has a contractual right to withdraw from the Definitive Agreement, which neither party has triggered to-date, but if either party did utilize such right, it would likely prevent the realization of expected revenues under the agreement. Following the occurrence of the Definitive Agreement's commencement date, and subject to the implementation of the Definitive Agreement, we expect to generate up to approximately $107 million over an expected two-year development period, with payments structured on a phased, milestone-based basis, including an initial payment upon the commencement date and additional payments tied to development progress. The Definitive Agreement also contemplates a potential subsequent production phase, which would be subject to the successful completion of the development phase and the negotiation and execution of a separate serial supply and after-market agreement. The failure to commence the Definitive Agreement for any reason, the withdrawal therefrom, and/or the failure to receive the initial payment each respectively have, or would have, a significant adverse impact on the Company's results of operations, financial condition, business, and price of REE's Class A Ordinary Shares.

***Certain of our future revenues depend on BorgWarner's purchase of automotive components from our suppliers, which***

***may never occur or which may result in a lower quantity purchased from our supplier than expected, which could***

***adversely affect the amount of royalty payments that we receive.***

Under the BorgWarner MOU, we are entitled to certain royalty payments upon BorgWarner's purchase of specific automotive components from our suppliers. We cannot guarantee that BorgWarner will purchase any automotive components from any of our suppliers, or that it will purchase components from such suppliers of a sufficient quantity for

REE to generate meaningful royalty revenues from the use of our suppliers. Likewise, we cannot control or guarantee BorgWarner's sales performance, including without limitation, its expectations as to the market demand for such components or BorgWarner's continued desire to use our suppliers' components for future sales. Similarly, each of the

components are produced by third party suppliers that are not under REE's control. We therefore cannot guarantee that

such supplier's quality will continue to meet BorgWarner's quality standards, which could effect whether BorgWarner will

seek to purchase components from such supplier(s). We likewise cannot guarantee that such suppliers will timely delivery

components to BorgWarner in order to support the latter's sales activities. Any failure by BorgWarner to effectively market

and/or sell such component(s), or any failure by our suppliers to deliver the components to BorgWarner when requested,

would lower the amount of any potential royalty revenue that REE could derive from BorgWarner, which would adversely

affect our business, results of operations and financial condition. Also, to the extent that the terms and conditions change

following any conversion of our BorgWarner MOU into a definitive agreement, our business, results of operations and

financial condition could be materially affected.

***There is no guarantee that our potential customers will purchase our SDV products in any certain quantity or at any certain price even after we achieve design wins, and there may be significant delays between the time we achieve a design win until we realize revenue from the vehicle model.***

Achieving design wins is not a guarantee of revenue, and our sales may not correlate with the achievement of additional design wins. In particular, contracts with OEM customers typically do not require them to purchase products in any certain quantity or at any certain price, and any potential sales could be less than forecasted if a vehicle model for which we achieve a design win is unsuccessful, including for reasons unrelated to our products, if an OEM decides to discontinue or reduce production of a vehicle model or of the use of our products in a vehicle model, or if we face downward pricing pressure.

Moreover, pricing estimates are made at the time of a request for quotation by an OEM, so that worsening market or other conditions between the time of a request for quotation and an order for our SDV products may require us to sell our products for a lower price than we initially expected. We may attempt to have OEMs commit to certain volumes on a quarterly or shorter basis, however there is no guarantee that OEMs will enter into definitive agreements in the first place and in particular, agreements that contain such conditions. We may also face pricing pressures from OEMs as a result of their restructuring, consolidation, and cost-cutting initiatives or as a result of increased competition. In addition, there may be step-downs in pricing over periods of production as volumes ramp up. If we are unable to generate sufficient cost savings or introduce products at higher price points to offset price reductions, then our business, results of operations, and financial condition would be adversely affected.

Furthermore, our products are technologically complex, incorporate many technological complexities, and are typically subject to an initial proof-of-concept followed by significant testing, and OEMs generally must make significant

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commitments of resources to test and validate our products before including them in any particular vehicle model. The integration cycles of our products with an OEM can take several years after a design win, depending on the OEM and how efficiently we can integrate our SDV products into their systems and vehicles. These integration cycles therefore may result in our investment of resources prior to realizing any revenue from a vehicle model, except with respect to NRE fees generated in connection therewith. An OEM may choose to cancel production of the vehicle model for which we achieved the design win or cancel or postpone the vehicle model. Our SDV products, in particular, control an entire vehicle's functions including engine, transmission, safety, steering, navigation, acceleration, and braking and therefore must be integrated effectively with the vehicle developed by the OEM and we may be unable to achieve the requisite level of interoperability in a vehicle model for our SDV products to be implemented even after a design win.

In connection with our design wins, we would further expect to receive preliminary estimates from OEMs of their anticipated production volumes for the models relating to those design wins. Those estimates may be revised significantly by the OEMs, potentially multiple times, and may not be representative of future production volumes associated with those design wins, which could be significantly higher or lower than estimated. Furthermore, long development cycles or vehicle model cancellations or postponements would adversely affect our business, results of operations, and financial condition.

***The success of our SDV products will depend on their effective deployment and operation by third parties.***

The success of our SDV products will depend on our customers and strategic partners, effectively deploying and operating our products in the future, and their failure to do so may result from factors outside our control. As part of our go-to-market strategy, we expect to market our SDV products to OEMs and technology companies, among others. Even if we are successful in entering into definitive agreements with such customers, such third parties may terminate our partnerships with them, including as a result of a change in its internal development strategy. Any failures by third parties to effectively deploy and operate our SDV products, or the termination of our relationships with any such third parties, would adversely affect our business, results of operations, and financial condition.

***If and when REE resumes production, REE's ability to induce follow-on sales following the initial sale of vehicles to our customers depends, in part, on its ability to prove that REE's products are to the full satisfaction of such customers and to establish and maintain confidence in REE's business prospects among such customers and others within its industry.***

REE previously received initial orders for both the P7-C and P7-S. If and when REE resumes production, such orders may present an opportunity for potentially receiving additional follow-on orders in the future that could be more meaningful and impactful from a financial perspective. Customers, suppliers, dealers and strategic partners may be less likely to purchase REE's products if it does not timely deliver products in accordance with the technical specifications or if the customers do not believe that REE's business will succeed or that its operations, including providing such partners with maintenance and service through qualified supplier support operations, which has yet to be established, for many years. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with REE if they are not convinced that its business will succeed. Accordingly, to build, maintain and grow its business, REE must establish and maintain confidence among customers, dealers, suppliers, analysts and other parties with respect to its ability to execute, its liquidity (including under the current going concern) and business prospects. Maintaining such confidence may be particularly difficult as a result of many factors, including REE's limited operating history, its financial condition under the current going concern, others' unfamiliarity with its products, uncertainty regarding the future of electric vehicles (including bankruptcies or restructurings by Nikola Corp., Arrival S.à r.l, Fisker Inc., and Lion Electric Inc., which make the EV market in general, and REE in particular, appear more speculative and less of a solidified alternative to ICE vehicles) any delays in scaling production, delivery and service operations to meet demand, competition and REE's production and sales performance compared with market expectations. Many of these factors are largely outside of REE's control, and negative perceptions about REE's business prospects, would likely harm its ability to receive follow-on orders. In addition, a significant number of new electric vehicle companies have recently entered the automotive industry, which is an industry that has historically had significant barriers to entry and a high rate of failure. If these new entrants or other manufacturers of electric vehicles go out of business, such as those described above, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including REE, and further challenging customer, dealer, supplier and analyst confidence in REE's business prospects.

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***REE is subject to risks associated with strategic partners.***

REE's existing agreements and MOUs and REE's ability to engage with definitive agreements with current and potential suppliers, dealer or strategic partners are and will be subject to a number of risks with respect to operations that are outside REE's control, any of which may materially and adversely affect REE's business and prospects. REE could experience delays to the extent its current and potential suppliers, dealers or strategic partners do not continue doing business with REE (including as a result of our production pause or going concern), meet agreed upon timelines, achieve operational efficiencies, experience capacity constraints or otherwise are unable to deliver components or produce products as expected. For example, REE and Motherson entered into a Supply Chain Management Services Agreement where Motherson agreed to provide services relating to development, management, and optimization of our supply chain, along with supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration. If and when we resume production, the inability to optimize and manage our supply chain may result in operational inefficiencies and higher costs (including with respect to sourcing parts) across our supply chain, which could impact our operations, business, and financial condition. Additionally, we may need to manage and communicate with our suppliers ourselves, which would likely add time, cost, and create resource constraints, including the reallocation of our employees from other efforts within our business, and which could strain our resources and/or create significant interruptions and inefficiencies within our supply chain. Such circumstances would likely have a material adverse affect on our operations and business.

In addition, our financial condition and any restructuring or strategic transaction process may adversely effect our relationships with current and potential counterparties and/or customers, suppliers and strategic partners. Such parties may delay, limit or terminate engagements with us, demand additional protections, or refrain from entering into new agreements due to concerns regarding our financial stability.

There is also risk of disputes with current and potential suppliers, dealers and strategic partners, and REE could be affected by adverse publicity related to its current and potential suppliers, dealers or strategic partners whether or not such publicity is related to their collaboration with REE. REE's ability to successfully build a premium brand could also be adversely affected by perceptions about the quality of REE's suppliers, dealers or strategic partner's products or other products produced by the same suppliers or strategic partners. In addition, although REE intends to be involved in material decisions in the supply chain and manufacturing process, given that REE also will rely on its current and potential suppliers, dealers and strategic partners to meet its quality standards, there can be no assurance that REE will be able to maintain high quality standards for its products. Furthermore, REE will also be exposed to risk associated with sharing its proprietary information with any such third party.

***If and when REE resumes production, REE will operate in a market that is both highly competitive against a large number of both established competitors and new market entrants, and, with respect to EV in particular, one that is viewed more cautiously overall by the target customer-base.***

Both the automobile industry generally, and the EV segment in particular, are highly competitive, and REE competes for sales with both internal combustion engine, or ICE, vehicles and EVs. Many of REE's current and potential competitors have significantly greater financial, technical, production, marketing and other resources than REE does and may be able to devote greater resources to the design, development, production, distribution, promotion, sale and support of their products. On the one hand, REE has observed and continues to expect competition for EVs to continue due to present demand

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continuing globalization, and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service, and financing terms. On the other hand, there have been several EV competitors that have declared bankruptcy or have engaged in restructuring, such as Nikola Corp., Arrival S.à r.l, Fisker Inc., and Lion Electric Inc., which makes the EV market in general, and REE in particular, appear more speculative and less of a solidified alternative to ICE vehicles. As a result, potential customers have been and may continue to be more cautious when considering the purchase of REE's products, including with respect to transitioning their fleets from ICE to our software-defined vehicles.

Lower demand and/or heavy competition for that demand may lead to lower vehicle unit sales and increased unsold inventory, which may result in downward price pressure and adversely affect REE's business, financial condition, operating results, and prospects.

***REE operates in a market that is highly competitive against other technology companies and OEMs seeking to create their own in-house SDV technology solutions.***

The drive by wire and software defined vehicle market are highly competitive, and we expect they will become even more competitive in the future. Our future success will depend on, among other things, our ability to continue developing superior advanced technology to remain competitive with our existing and any new competitors. Competition is based on, among other things, cost efficiency, reliability, the ability to develop and deploy increasingly complex technologies that provide for vehicle, passenger, and pedestrian safety in compliance with existing and future regulations, the ability to gather or access large validation datasets in order to train the required software and to continuously harvest new data in real-time, the ability to cost-effectively deploy hardware, the ability to integrate technologies and hardware with overall vehicle design and production, adoption by OEMs, and the ability to develop and maintain strategic relationships with other participants in the automotive industry.

A growing number of established and new technology companies and automobile manufacturers have entered, or will enter our target market. Some of our competitors have significantly greater or better-established resources than we do to devote to the design, development, manufacturing, distribution, promotion, sale, and support of their SDV technology. Automakers who seek to develop their own in-house solutions may also become indirect competitors. Some OEMs that may incorporate our products may decide to design in-house solutions to replace our SDV products that they currently implement. In addition, other Tier 1 suppliers may be developing or may in the future develop competing solutions. Additional competitors that could emerge include large technology companies that are resource rich and able to deploy such resources to compete, as well as companies that are able to develop products that may not require the datasets upon which our technologies currently rely while still achieving the same effectiveness of algorithms. Such competition could enter into agreements with the customers that we intend to target and if we fail to win OEM design competitions, then our business, results of operations, and financial condition would be adversely affected and our business would likely fail.

***REE may not be able to compete successfully in the market as a result of rapid changes in software-defined technology and/or EV technology and the entrance of new and existing, larger manufacturers into both the software-defined vehicle and EV space.***

REE's products are being designed for use with, and depend upon, existing vehicle technology. As new companies and larger, existing vehicle manufacturers enter both the SDV and EV space, REE may lose any technological advantage it may have had in the marketplace and suffer a decline in its position in the market. As technologies change, REE plans to upgrade or adapt its products to continue to provide products with the latest technology. However, REE's products may become obsolete or REE's research and development efforts may not be sufficient to adapt to changes in or to create the necessary technology to effectively compete. As a result, REE's potential inability to adapt and develop the necessary technology may harm REE's competitive position.

***Information about us posted to social media platforms may be inaccurate or adverse to our interests, each of which may harm our business, financial condition and results of operations.***

There has been a recent marked increase in the use of social media platforms and similar channels that provide individuals with access to a broad audience of consumers and other interested persons. The availability and impact of information on social media platforms is virtually immediate and many social media platforms publish user-generated content without filters or independent verification as to the accuracy of the content posted. Consumers can and do use social media platforms to post information that is critical about businesses and products. Even isolated incidents involving us or our products could erode the trust and confidence of consumers and damage our brand image and reputation and could lead to the loss of goodwill with consumers and strategic partners, especially if such incidents result in adverse publicity, governmental investigations, product recalls, or litigation. Information posted about us may be adverse to our interests and may harm our business, financial condition and results of operations, even if it is inaccurate. Further, disclosure of our non-

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public information by our employees or others, whether intentional or unintentional, through social media could lead to unfavorable publicity, regulatory inquiries, or loss of informational value.

**Risks Related to Development and Production of REE's Products**

***REE's products are in various stages of development and there are risks associated with developing such products into marketable products.***

REE's products are in various stages development. In order to reach commercialization, REE's products must undergo further design, validation, verification testing, and/or product homologation. There is no guarantee that REE will be successful in commercializing any of its products into marketable products. There can be no guarantee that the testing of REE's products will proceed according to schedule or that REE products will withstand rigorous additional testing, if and when applicable. The development of REE's products is and may be subject to risks including, but not limited to, risks associated with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's ability to complete the final product design process on time, if at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability for REE's products to withstand rigorous testing and validation, including as set by external assessors over time, if and when applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of REE's products to meet existing or future automotive industry standards; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of X-by-Wire Control technology to achieve widespread market acceptance.

***REE is subject to risks associated with the anticipated timing of REE's initial commercial production and subsequent increased commercial production.***

In May 2025, REE announced a pause in the production of its vehicles. This created instability in our supply chain, including delays to and from suppliers, contract terminations and/or threats thereof, and with respect to one supplier, a prolonged arbitration in connection thereto, which was ultimately settled, while creating a backlog of parts, components, and already assembled demonstration vehicles that needed to be stored at our cost for an unknown period of time. It may likewise cause our counterparties, strategic partners, or other third parties to decrease the amount of business they do with us or terminate their relationship with us including from Authorized Dealers that have already placed initial orders for our P7 products. Such pause may have caused and may further potential customers, including OEMs, to reconsider entering into agreements with us, including where they believe that we may no longer be a reliable partner or financial sound partner. Any of the foregoing could materially and adversely harm REE's business, financial condition and results of operations, including by adversely affecting our ability to implement our current business plan, which could cause us to discontinue our operations, restructure, and/or seek protection from creditors.

If and when REE resumes production, it does not know whether its suppliers or strategic partners will be able to develop efficient, automated, low-cost production capabilities and processes and reliable sources of component supply, that will enable REE to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully deliver REE's products on an anticipated timeframe, or at all. Even if REE and its suppliers and strategic partners are successful in developing the initial production processes, developing future high volume production capability, and reliably sourcing the component supply, REE does not know whether it will be able to do so in a manner that avoids significant delays and cost overruns, including those that result from factors beyond its control such as problems with suppliers and strategic partners or dealing with force majeure events (which include tariffs from the Trump Administration and retaliatory measures by its trading partners), or that meets its products commercialization schedules or that satisfies the requirements of its potential customer base. Any failure to develop such production processes and capabilities within REE's projected costs and timelines could have a material adverse effect on its business, prospects, financial condition and operating results.

***If and when REE resumes production, REE's development of an outsourced production business model may not be successful, which could harm its ability to deliver products and recognize revenue.***

If and when REE resumes production, its vehicle business would depend on its ability to develop, produce and assemble its products. REE had previously outsourced the production of its products in collaboration with a contract manufacturer (*i.e.*, Roush Industries), strategic partner (*i.e*., Motherson), and strategic suppliers. If and when REE resumes production, REE would need to establish a plan with respect to where to assemble its products, which may include an outsourced integration center. Similarly, if and when REE resumes production, if REE is unable to negotiate and finalize all of its agreements with suppliers and/or strategic partners and have sufficient working capital to support its expected production, including any future initial deliveries, it will not be able to produce any products and will not be able to generate any revenue in

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connection therewith, or the products may become more expensive to deliver with a higher bill of materials, which would have a material adverse effect on its business, prospects, operating results and financial condition.

Additionally, if and when REE resumes production, if REE engages suppliers and/or strategic partners that experience delays, disruptions, capacity constraints or quality control problems in their manufacturing operations, it could delay product shipments or result in them being rejected. REE's potential customers and dealers could also consequently elect to change product demand. These disruptions would negatively impact REE's revenues, competitive position and reputation. In addition, REE suppliers and strategic partners may rely on certain state tax incentives that may be subject to change or eliminated in the future (including as a result of policy changes under the Trump Administration), which could result in additional costs and delays in production. Further, if REE is unable to successfully manage its relationship with its suppliers and strategic partners, the quality and availability of its products may be harmed. REE's suppliers, counterparties and/or customers and strategic partners could, under some circumstances, decline to accept new purchase orders from or otherwise reduce their business with REE. If REE's suppliers and strategic partners would stop producing REE's products for any reason or reduce production capacity, REE may be unable to replace the lost production capacity on a timely and comparatively cost-effective basis, which would adversely impact its operations.

REE's reliance on its suppliers and strategic partners, exposes it to a number of risks that are outside its control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the production of certain components that will require significant costs related to non-recurring engineering and tooling costs incurred by REE's suppliers and strategic partners the extent of which is currently unknown;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to control production yield and unexpected increases in production costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interruptions in shipments if a suppliers or strategic partners are unable to complete production in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to control quality of finished products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to control delivery schedules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to control production levels and to meet minimum volume commitments to REE's potential customer base;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to maintain adequate production capacity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to secure adequate volumes of acceptable components at suitable prices or in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to accurately assemble products within specified design tolerances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays by REE in delivering final component designs to its suppliers and strategic partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• its inability to implement a sufficient number of integration centers in order to meet demand for REE products on time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if applicable, inability to effectively manage a global network of integration centers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other delays, backlog in production and research and development of new models, and cost overruns.

If and when REE resumes production, REE's ability to produce products of sufficient quality and appeal to its current and potential customer base on schedule and on a large scale is unproven, and the business plan is still evolving. REE may be required to introduce new products models and enhanced versions of existing models. To-date, REE has limited experience, as a company, producing, marketing and selling its products and therefore cannot assure you that it will be able to meet customer expectations. Any failure to develop such production processes and capabilities within any projected costs and timelines would have a material adverse effect on its business, prospects, operating results and financial condition and could result in our inability to implement our business plan, which would result in the failure of our business and/or the restructuring of our business.

REE does not currently have any plans to establish production facilities of its own, and therefore the failure to establish long-term agreements with suppliers and strategic partners, coupled with sufficient working capital, would significantly hinder REE's ability to produce its products. In addition, the production facilities of REE's potential and strategic partners may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, flooding, fire and power outages, or by health epidemics, which may render it difficult or impossible for REE to produce its products for some period of time. The inability to produce REE's products or the backlog that could develop if the production facilities of its suppliers and strategic partners are inoperable for even a short period of time, including due to delays caused by our

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working capital needs, may result in the loss of customers, potential customers, harm REE's reputation, and/or result in the failure of our business and the need to seek protection from our creditors and/or the restructuring of our business.

***If and when REE resumes producing its vehicles, such products will likely make use of lithium-ion battery cells, which can be dangerous in certain circumstances, including but not limited to the possibility that such cells may catch fire or vent smoke and flame.***

If and when REE resumes producing, the fuel source for REE's vehicles will likely make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While REE has taken measures to enhance the safety of its designs, a field or testing failure of its products could occur in the future, including due to a high-speed crash, which could subject REE to lawsuits, product recalls, redesign efforts, or even meritless claims, all of which would be time-consuming and expensive and could harm our brand image. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve REE's products, could seriously harm its business and reputation.

In addition, REE's suppliers and strategic partners are expected to store a significant number of lithium-ion cells at their facilities. Any mishandling of battery cells may cause disruption to the operation of such facilities. A safety issue or fire related to the cells could disrupt operations or cause production delays. Such damage or injury could lead to adverse publicity and potentially a safety recall. Moreover, any failure of a competitor's EV or energy storage product may cause indirect adverse publicity for REE and its products. Such adverse publicity could negatively affect REE's brand and harm its business, prospects, financial condition and operating results.

***The efficiency of battery usage in EVs declines over time, which may negatively impact potential customers' decisions with regards to purchasing REE's vehicles, if and when REE resumes producing such products.***

The cells used in EV battery modules degrade slowly over time, influenced primarily by the age of the cells and the total energy throughput over the life of the EV. This cell degradation results in a corresponding reduction in the vehicle's range. If and when REE resumes production, REE anticipates that the range of its vehicles utilizing such EV batteries will decline over time as the batteries deteriorate. Other factors such as usage, time and stress patterns may also impact the battery's ability to hold a charge, which would decrease REE's vehicles range before needing to recharge. Such battery deterioration and the related decrease in range may negatively influence potential customer decisions, which would negatively affect REE's operating results and financial condition.

***If OEMs or technology companies are unable to maintain and increase consumer acceptance of SDV technology, our business, results of operations, and financial condition would be adversely affected and our business would likely fail.***

Our business success and future operating results will depend on the ability of OEMs and technology companies to obtain consumer acceptance for drive-by-wire vehicles. There is no assurance that either can achieve these objectives. Market acceptance of drive-by-wire depends upon many factors, including regulatory requirements, evolving safety standards, costs, and driver preferences. Market acceptance of drive-by-wire may also be adversely affected by safety incidents involving drive-by-wire products, even if the incidents do not involve our specific SDV technology. We cannot be sure that drive-by-wire will achieve market acceptance on a timeline that is consistent with our expectations or development and production plans. Market acceptance of our drive-by-wire also depends on the ability of market participants to resolve technical challenges for increasingly complex drive-by-wire technology in a timely and cost-effective manner. Consumers will also need to be made aware of the advantages of our drive-by-wire, such as the advantages of our offerings compared to competing technologies, including current vehicle control methods. If consumer acceptance of drive-by-wire technology does not increase, our business, results of operations, and financial condition would be adversely affected and our business would likely fail.

***We operate in an industry that is new and rapidly evolving, and our estimates are subject to significant uncertainty.***

We are pursuing opportunities in markets that are undergoing rapid changes, including technological and regulatory changes, and it is difficult to predict the timing and size of the opportunities. For example, SDV technology and drive-by-wire require complex technology and are subject to uncertainties with respect to, among other things, the rate of consumer acceptance and the impact of current or future regulations. Because these systems depend on inputs from many companies, commercialization of our SDV products could be delayed or impaired on account of certain technological components of our or others not being ready to be deployed in vehicles. Regulatory, safety or reliability developments, many of which are outside of our control, could also cause delays or otherwise impair commercial adoption of these new technologies, which will adversely affect our growth. While we have achieved FMVSS certification on our P7-C vehicle, we cannot provide any guarantee that such certification could be extended to vehicles incorporating our drive-by-wire products.

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We expect to make certain estimates and forecasts concerning our industry and of our current and anticipated future products based on industry publications and reports or other publicly available information as well as our internal estimates and expectations. These estimates and forecasts will involve a number of assumptions and limitations, and are subject to significant uncertainty, and you are cautioned not to give them undue weight as they may be incorrect or flawed in assumptions. Industry surveys and publications generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy and completeness of the included information. We do not expect to independently verify such third-party sources. Similarly, we expect that any internal estimates and forecasts would be based on a variety of assumptions, including assumptions regarding market acceptance of SDV technology in general, and drive-by-wire in particular, and the manner in which this new and rapidly evolving market will develop. While we expect any such assumptions and the data underlying our estimates and forecasts to be reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our expected estimates and forecasts may prove to be incorrect. If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, the expected margins or addressable market, among other items, for our SDV products may be smaller than we estimate or fail entirely to come to fruition, our future growth opportunities and sales growth may be smaller than we may estimate and/or may never come to fruition, and our business, results of operations and financial condition would be significantly adversely affected.

Our future financial performance will depend on our ability to make timely investments in the correct market opportunities. If one or more of these markets experience a shift in customer or prospective customer demand, then our SDV products may not compete as effectively, if at all, and they may not be incorporated into vehicles. Given the evolving nature of the markets in which we operate, it is difficult to predict OEM or technology company demand for any of our SDV products or the future growth of the markets in which we operate. Even if the market for drive-by-wire grows substantially, there is no guarantee that demand for our SDV products will correlate with that growth, including if we fail to effectively pursue such opportunities. There is also no guarantee that our business will be successful simply because of what we will estimate to be the expected market for our SDV products. If demand does not develop or if we cannot accurately forecast customer demand, then the size of our markets, inventory requirements or our future business, results of operations, and financial condition would be adversely affected and our business would likely fail.

**Risks Related to REE's Suppliers**

***If and when REE resumes production, REE would expect to depend on its suppliers, including but not limited to body manufacturers and battery providers, some of which were previously single or limited source suppliers, and if such suppliers would fail to deliver the components of REE's products in a timely manner or at all and at prices and in volumes acceptable to it, it could have a material adverse effect on its business, prospects and operating results.***

If and when REE resumes production,, REE would expect to rely on suppliers and strategic partners for the provision and development of many of the components and materials used in its products. While REE plans to obtain components from multiple suppliers and strategic partners whenever possible, certain components used in its products were previously purchased by REE from single suppliers with respect to each particular component. REE's suppliers and strategic partners may not be able to meet their product specifications and performance characteristics, which would impact REE's ability to achieve its product specifications and performance characteristics as well. Additionally, REE's suppliers and strategic partners may be unable to obtain required certifications for their products for which REE may expect to use or provide warranties that are necessary for REE's solutions. If our suppliers fail to deliver the components and materials used in our products in a timely manner or if its suppliers decide to create or supply a competing product, REE's business could be adversely affected. REE has less negotiating leverage with suppliers than larger and more established automobile manufacturers and may not be able to obtain favorable pricing and other terms. While REE believes that it may be able to establish alternate supply relationships and can obtain or engineer replacement components for its prior single source components, REE may be unable to do so in the short term, or at all, at prices or quality levels that are favorable to REE, which could have a material adverse effect on its business, prospects, financial condition and operating results.

REE expects to purchase various types of equipment, raw materials and manufactured component parts from its suppliers or strategic partners. If these suppliers or strategic partners experience substantial financial difficulties, cease operations, or otherwise face business disruptions, REE may be required to provide substantial financial support to ensure supply continuity or would have to take other measures to ensure components and materials remain available. Any disruption could affect REE's ability to deliver products and could increase REE's costs and negatively affect its liquidity and financial performance.

***REE's business could be harmed by increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells.***

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REE and its suppliers may experience increases in the cost of or a sustained interruption in the supply or shortage of commodities, raw materials and other inputs used by REE and its suppliers in their businesses and products, such as steel, lithium-ion battery cells and semiconductors, which could adversely affect REE's future profitability or REE's ability to timely execute its current business plan. The prices for these materials fluctuate and the available supply of these materials may be unstable, depending on market conditions, fluctuations in global demand, including as a result of increased production of EVs by REE's competitors, geopolitical risk, including tariffs by certain countries, and other economic and political factors. Additionally, if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production to us, or face other challenges such as insolvency, it may reduce our access to components and require us to search for new suppliers. if and when we resume production, the unavailability of any component or supplier could result in production delays, idle assembly facilities, product design changes and loss of access to important technology and tools for producing and supporting our products, as well as impact our ability to fulfill our obligations under customer contracts. Any such increase, supply interruption or shortage could materially and negatively impact REE's business, prospects, financial condition and operating results.

***If and when we resume production, our production plan could relate to producing a certain number of vehicles in the U.S. Such production plan targets would likely be subject to a variety of risks, including the completion of REE's production tooling investment plan, sourcing materials and components from our suppliers on their agreed upon deadlines, securing sufficient funding, our financial condition, the outcome of any strategic or restructuring actions, and global macroeconomic conditions.***

If and when we resume production, our business plan could relate to producing a certain number of vehicles in the U.S. However, such production plan could rely on our ability to complete our production tooling investment plan, securing materials from our suppliers on its agreed upon deadlines and securing sufficient funding primarily for working capital purposes. Our ability to execute on any such production plan will depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions. If we are unable to complete our production tooling investment plan, if our suppliers face delays in delivering materials to us from their expected timelines, or other delays occur, we may not meet our production plan timing or at all. In addition, our production plan may rely on our ability to finance the required working capital needs by raising sufficient funds, and therefore if we are unable to secure sufficient funding, we may not meet any of our production targets that we set. Not meeting these production targets could materially and negatively impact our business, prospects, financial condition and operating results has caused and may cause us to wind down our business, restructure our business, and/or seek protection from creditors.

**Risks Related to REE's Future Sales**

***We invest significant effort and money seeking customer, including OEM, selection of our products and there can be no assurance that these efforts will result in the selection of our products, including for use in production models. If we fail to obtain a purchase order or achieve a design win after incurring substantial expenditures in these efforts, our future business, results of operations, and financial condition would be significantly adversely affected and likely result in us having to wind down, restructure our business and/or seek creditor protection.***

We invest significant effort and money from the time of our initial contact with an OEM, to the time when an OEM, can choose our products and/or technology to be incorporated into one or more specific vehicle models to be produced by the OEM. This selection process is known as a "design win". We could expend significant resources pursuing, but fail to achieve, a design win. After a design win, it is typically difficult for a product or technology that did not receive the design win to displace the winner until the OEM issues a new request for quotation because an OEM will generally not change complex technology already integrated in its systems until a vehicle model is revamped. In addition, the firm with the winning design may have an advantage with the OEM going forward because of the established relationship between the winning firm and the OEM, which would make it more difficult for that firm's competitors to win the designs for other production models. If we fail to win a significant number of OEM design competitions in the future, then our business, results of operations, and financial condition would be adversely affected and our business would likely fail.

Similarly, with respect to other target customers, many of these potential customers could be dealers and large multinational corporations with substantial negotiating power relative to it and, in some instances, may have internal solutions that are competitive to REE's products. These large, multinational corporations also have significant development resources that may allow them to acquire or develop independently, or in partnership with others, competitive technologies. Meeting the technical requirements and obtaining purchase orders from any of these companies will require a substantial investment of REE's time and resources. REE cannot assure you that such efforts will result in definitive purchase orders from these or other companies or that it will generate meaningful revenue from the sales of its products to these types of

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customers. If REE's products are not selected by these customers or if these corporations develop or acquire competitive technology in lieu of our products, it will have an adverse effect on REE's business, its prospects and results of operations may be adversely affected.

***Discontinuation, lack of commercial success, or loss of business with respect to a particular product model for which REE is a significant supplier could reduce REE's sales and adversely affect its profitability.***

If REE is able to secure design wins and its products are included in OEM, technology company, or other customer vehicles, it expects to enter into supply agreements with the relevant customers. Market practice dictates that these supply agreements typically require REE to supply a customer's requirements for a particular vehicle model or product. These contracts can have short terms and/or can be subject to renegotiation, sometimes as frequently as annually, all of which may affect product pricing, and may be terminated by REE's potential customers at any time. Therefore, even if REE is successful in obtaining design wins and the systems into which its products are integrated are commercialized, the discontinuation of, the loss of business with respect to, or a lack of commercial success of a particular vehicle model for which REE is a significant supplier could mean that the expected sales of REE's products will not materialize, which may materially and adversely affecting its business.

***Pricing pressures, automotive OEM cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs may result in lower than anticipated margins, or losses, which may adversely affect REE's business.***

Cost-cutting initiatives adopted by REE's customer base often result in increased downward pressure on pricing. REE expects that its future agreements with automotive OEMs may require step-downs in pricing over the term of the agreement or, if commercialized, over the period of production. In addition, REE's automotive OEM customers are expected to reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions. Automotive OEMs also possess significant leverage over their suppliers, including REE, because the automotive component supply industry is highly competitive, serves a limited number of customers and has a high fixed cost base. Accordingly, REE expects to be subject to substantial continuing pressure from automotive OEMs, Tier 1 suppliers as well as dealers to reduce the price of its products. It is possible that pricing pressures beyond REE's expectations could intensify as automotive OEMs pursue restructuring, consolidation and cost-cutting initiatives. If REE is unable to generate sufficient cost savings in the future to offset price reductions, its gross margin and profitability would be adversely affected.

***If and when REE resumes production, the average selling prices of REE's products could decrease rapidly over the life of the products, which may negatively affect REE's revenue and gross margin.***

If and when REE resumes production, REE expects the average selling prices of its products generally to decline as its customer base seeks to commercialize EVs built on the REE products at prices low enough to achieve market acceptance. In order to sell products that have a falling average unit selling price and maintain margins at the same time, REE would need to continually reduce products and production costs. To manage production costs, REE must engineer the most cost-effective design for its products. In addition, REE would likely need to continuously promote initiatives to reduce labor cost, improve worker efficiency, reduce the cost of materials, use fewer materials and further lower overall product costs by carefully managing component prices, inventory and shipping cost. REE also would likely need to continually introduce new products with higher sales prices and gross margin in order to maintain its overall gross margin. If REE is unable to manage the cost of older products or successfully introduce new products with higher gross margin, its revenue and overall gross margin would likely decline.

***The automotive industry and our technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies may adversely affect the demand for our electric vehicles.***

If and when we resume production of our products, such vehicles may be adaptable from battery cells to certain alternative technologies as an energy source, however we may be unable to keep up with, or be compatible with, technological changes, including alternatives to electricity as an energy source and, as a result, our competitiveness may suffer. Specifically, developments in alternative technologies, such as advanced diesel, ethanol, fuel cells, or compressed natural gas, or improvements in the fuel economy of an internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Any failure by us to successfully react to changes in alternative technologies could materially harm our competitive position and growth prospects. Similarly, in the event that certain alternative technologies are developed that are incompatible with our vehicles as an energy source, it could materially harm our competitive position and growth prospects.

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**Risks Related to REE's Quality**

***REE's products rely on software and hardware that is highly technical, and if these systems contain errors, bugs, defects, or vulnerabilities, or if REE is unsuccessful in addressing or mitigating technical limitations in its systems, REE's business could be adversely affected and it may result in a decrease in the demand for REE's products and harm our reputation.***

REE's products rely on software and hardware that is highly technical and complex that will require modification and updates over the life of the products. In addition, REE's products depend on the ability of such software and hardware to store, retrieve, process and manage large amounts of data. REE's software and hardware may contain, errors, bugs, inadequate, inaccurate, biased or otherwise flawed data or algorithms used to train certain proprietary software, security vulnerabilities or other errors, failures, or other issues of not functioning in accordance with their specifications or as expected, or other vulnerabilities, and REE's systems are subject to certain technical limitations that may compromise REE's ability to meet its objectives. Some errors, bugs or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use, including as commercialized and deployed by customers and/or end-users. Errors, bugs, vulnerabilities, design defects or technical limitations may be found within REE's software and hardware. Although REE attempts to remedy any issues it observes in its products as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of REE's potential customer base. Additionally, if REE is able to deploy updates to the software addressing certain issues and REE's over-the-air update procedures fail to properly update the software, REE's customer base would then be responsible for installing such updates to the software at designated service centers and their software will be subject to these vulnerabilities until they do so. If REE is unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in its software and/or hardware, REE may suffer damage to its reputation, loss of customers, loss of revenue or liability for damages, any of which could adversely affect REE's business and financial results. More specifically, publicity regarding claims involving our technology can also have an adverse effect on our reputation and the reputation for SDV technology and X-by-Wire product, which could decrease consumer demand for vehicles incorporating these technologies. Further, enhanced publicity surrounding such claims may also increase the regulatory scrutiny of our products, which could have a material adverse effect on our ability to complete our business plans.

***REE may become subject to product liability claims, relating to, among other things, actual or alleged defects in our products, or if our products actually or allegedly fail to perform as expected, which could harm its financial condition and liquidity if it is not able to successfully defend or insure against such claims.***

REE may become subject to product liability claims, even those without merit, which could harm its business reputation, prospects, operating results, and financial condition. Alleged or actual defects in any of our products could result in adverse publicity for us, warranty claims, litigation against us, legal expenses and damages, our customers never being able to commercialize technology incorporating our products, negative publicity for our customers, and other consequences. Errors, defects, and/or security vulnerabilities could result in serious injury to, or death of, the end users of vehicles incorporating our products, or those in the surrounding area, including as a result of traffic accidents and collisions. If that is the case, we could by subject to litigation and would incur significant additional development costs and product recall, repair, or replacement costs. If any of our products are or are alleged to be defective, and we or our customer issues a recall, we may be required to participate in all or part of the recall involving such product(s). The automobile industry experiences significant product liability claims and REE faces inherent risk of exposure to claims in the event its products and/or technology do not perform as expected or malfunction in a manner that causes personal injury or death Similarly, as a technology provider related to, among other things, preventing traffic collisions and other accidents through our SDV technology and proprietary software, we could be subject to litigation for traffic collisions or other accidents, even if our products or their features or the failure thereof did not cause any particular traffic collision or accident. This may also be the case where an accident occurs involving one of our SDV products, which are built autonomous ready, where autonomous features installed by another company were engaged, particularly because such autonomous features are the subject of significant public attention, especially in light of NHTSA's Standing General Order (as amended on April 24, 2025) requiring reports regarding certain crashes involving vehicles with advanced driver assistance systems, which includes motor vehicle and equipment manufacturers of which REE may be included under. REE's risks in this area are particularly pronounced given it has limited field experience with its products. While we may use disclaimers, limitations of liability, and similar provisions in our agreements, there is no assurance that any or all of these provisions will prove to be effective barriers to product liability claims with respect to our products. Moreover, a product liability claim could generate substantial negative publicity about REE's products and business and inhibit or prevent commercialization of other future product, which would have a material adverse effect on REE's brand, business, prospects and operating results. To the extent that REE has insurance coverage, it might not be sufficient to cover all potential product liability claims. Product liability, warranty, and recall costs, whether in excess of REE's coverage, or outside of REE's coverage, would

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have an adverse effect on our business, results of operations, and financial condition. In addition, product liability claims present the risk of protracted litigation, legal fees, and diversion of management's attention from the operation of our business, even if our defense of these claims is ultimately successful. Our insurers may also discontinue our insurance coverage or be unable or unwilling to pay a claim. REE may also not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if it does face liability for its products and is forced to make a claim under its policy. A successful product liability claim against REE could require REE to pay a substantial monetary award, which could have a material impact on our financial condition, operations, and business and could result in our business needing to seek protection from our creditors, wind down, or restructure.

***REE does not currently have extensive experience servicing its products. If REE is unable to address the service requirement of its potential customers, its business may be materially adversely affected.***

REE plans to work with strategic partners to provide predictive maintenance scheduling through smart service and maintenance artificial intelligence, or AI, in combination with over-the-air updates that seek to ensure maintenance is not performed on a standard schedule, but rather before a part will fail, which is expected to offer significant savings for unnecessary part replacements and drastically reduce downtime. There is no guarantee that REE will be successful in developing the necessary technology to actualize predictive maintenance scheduling. In addition, servicing of REE SDV technology products may primarily be carried out through third parties, including OEM appointed service centers. Although such third parties may have experience in servicing other products, they will initially have limited experience in servicing REE SDV products, which may include REEcorners and/or zonal architecture ECUs. There can be no assurance that REE will adequately address the service requirements of its potential customer and/or dealer base (if and when it resumes production of vehicles) to their satisfaction, or that REE and such third parties will have sufficient resources to meet these service requirements in a timely manner as the volume of products REE delivers increases. In addition, with respect to its vehicle products specifically, if and when produced, if REE is unable to roll out and establish a widespread service network that complies with applicable laws, user satisfaction could be adversely affected, which in turn could materially and adversely affect REE's reputation, sales, results of operations, and prospects.

***REE may be subject to risks associated with autonomous driving and SDV technology, including but not limited to technical malfunctions, regulatory obstacles, and/or product liability.***

REE's products are being designed to be compatible with autonomous control. Autonomous driving technologies are subject to risks, including market acceptance, which depends upon many factors, including regulatory requirements, evolving safety standards, costs, and driver preferences, and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on users, as well as other drivers on the roadways, who may not be accustomed to using or adapting to such technologies. We cannot be sure that autonomous driving will achieve market acceptance. To the extent accidents associated with REE's products that are used with autonomous controls occur, REE could be subject to liability, negative publicity, government scrutiny and further regulation. Any of the foregoing could materially and adversely affect REE's results of operations, financial condition and growth prospects.

Autonomous driving technology is also subject to considerable regulatory uncertainty as the law evolves to catch up with the rapidly evolving nature of the technology itself, all of which are beyond REE's control. Currently, we believe that there are no Federal Motor Vehicle Safety Standards that relate to the performance of autonomous technology and no widely accepted uniform standards to certify autonomous technology and its commercial use on public roads. However, NHTSA has established recommended guidelines, including its Standing General Order (as amended on April 24, 2025) requiring reports regarding certain crashes involving vehicles with advanced driver assistance systems and proposed a regulation for autonomous vehicles. Certain states have legal restrictions on such vehicles, and many other states are considering them. Autonomous driving laws and regulations are expected to continue to evolve in numerous states in the U.S., which increases the likelihood of a patchwork of complex or conflicting regulations or may delay products or restrict autonomous features and availability, which could adversely affect our business. Autonomous products that may be integrated into REE products also may not achieve the requisite level of autonomous compatibility required for certification and rollout to consumers or satisfy changing regulatory requirements, which could require REE to redesign, modify and/or update its products in order to be compatible with autonomous products.

**Risks Related to REE's Employees**

***REE is dependent on its founders Daniel Barel and Ahishay Sardes.***

REE is dependent on the services of Daniel Barel, co-founder, director and Chief Executive Officer, and Ahishay Sardes, its co-founder, director and Chief Technology Officer. Mr. Barel and Mr. Sardes are significant influences and drivers of

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REE's business plan, product development, and technology. Without either of these two officers, we may not have the ability to execute our business plan and/or identify and pursue new opportunities and products. The loss of either could significantly delay or prevent the achievement of our development and strategic objectives. For example, while our shareholders approved amended terms of employment for both Mr. Barel and Mr. Sardes at a special general meeting on November 13, 2025, or the Meeting, both Mr. Barel and Mr. Sardes agreed to defer payment of the special cash bonus for the year 2024 until the earlier to occur of: (a) the Company receiving accumulated cash proceeds exceeding $12 million at any time after the shareholder approval of each proposal at such Meeting, or (b) the consummation of a merger, acquisition or other "Change of Control" transaction (excluding a complete liquidation or dissolution of the Company), each as determined by the Board of Directors in its discretion. If either Mr. Barel or Mr. Sardes were to discontinue his service to REE for any reason, including due to a lack of compensation for services rendered to REE (including the deferred bonus payment), or if the reputation of Mr. Barel or Mr. Sardes is adversely impacted by personal actions or omissions or other events within or outside either's control, it would have a significant material adverse effect on our business, product development, and technology.

***REE's success depends, in part, on its ability to retain key employees, qualified employees and management.***

REE's success depends, in part, on its ability to retain its key personnel. The unexpected loss of or failure to retain one or more of its key employees could affect its business. If and when REE seeks to hire employees, REE's success may also depend, in part, on its ability to identify, hire, attract, train and develop other highly qualified personnel. Because REE's products are based on different technology than traditional internal combustion engine vehicles, including through the use of proprietary software driving control, individuals with sufficient training in technology, engineering, coding, or EVs (if applicable) may not be available, and as a result, REE may need to expend significant time and expense training any employee that it hires. Competition for individuals with experience designing, producing and/or servicing this technology and vehicles incorporating this technology, including EVs or their related technology, parts and products was previously intense, and REE may not be able to attract, integrate, train, motivate or retain additional highly qualified personnel in the future, if and when it seeks to hire employees. In addition, sustained declines in our share price and/or lower share performance relative to competitors has negatively impacted REE's appeal as an employer, harmed employee morale, increased employee turnover and/or reduced the retention value of REE's share-based compensation. If and when REE seeks to hire employees, the failure to attract, integrate, train, motivate and retain any additional employees could materially adversely harm its business and prospects.

***We have undertaken several reductions-in-force over the past several years in an effort to reduce our operating expenses and in order to align our headcount with our business needs. Any headcount reduction may not result in anticipated savings, could result in total costs and expenses and attrition that are greater than expected and could disrupt our business operations and ability to service and staff future projects.***

Over the past several years, along with other cost reductions, we have lowered our operating expenses through reductions in-force. Specifically, in 2023 we undertook a targeted reduction in headcount of approximately 11% of the Company's workforce. In 2024, we sought to more closely align our employee headcount with our business plan, resulting in an approximately 16% reduction over the course of the year. In 2025, as part of our overall cost-reduction, we undertook another headcount reduction. Since May 2025, through additional reductions-in-force and follow-on employee attrition, our workforce has decreased by approximately 70%, as of May 14, 2026. REE may take additional steps to lower its expenses, including additional reductions-in-force in an effort to better manage its operational expenses and to potentially explore future options for the Company.

We may not realize, in full or in part, the anticipated benefits, savings and improvements in our operational expenses from

our reductions-in-force because of unforeseen difficulties, delays or unexpected costs, including costs associated with employee termination and, if applicable, litigation. If we are unable to realize the expected operational efficiencies and cost

savings from these reductions, our operating results and financial condition would be significantly adversely affected. Additionally, the recent reductions-in-force have adversely effected our ability to staff certain projects, and we may need to hire or rehire staff should any such projects materialize. In addition, reductions-in-force yield unintended consequences and costs, including additional attrition beyond the reduction amount, distraction to our employees, reduced employee morale, and adverse effects on our reputation as an employer. Such consequences may also occur following any increased workload on our remaining employees with respect to our day-to-day operations and additional cost reduction measures that impact our employees. Any attrition by our employees would further adversely effect our operational capabilities and may adversely effect our capabilities with respect to certain projects. Such reductions-in-force may also make it more difficult for us to hire new employees in the future and may limit the anticipated benefits from the reduction in-force. Such reductions harm our ability to attract and retain qualified management, engineering, and other personnel who are critical to our business operations. Any failure to attract or retain qualified personnel could prevent us from successfully

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commercializing our products and building our business, which would ultimately significantly affect our business, financial conditions, business operations, and the price of our Class A Ordinary Shares.

***REE's business may be adversely impacted by the labor and union activities of its own employees, as well of those of any of its potential affiliates, business partners, suppliers, or otherwise related entities.***

Although none of REE's employees are currently represented by a labor union, it is common throughout the automobile industry for many employees to belong to a union, which can result in higher employee costs and increased risk of work stoppages. REE may also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers, trucking and freight companies, shipping yards, and docks, and work stoppages or strikes organized by such unions could have a material adverse impact on REE's business, financial condition or operating results.

**Risks Related to Litigation & Regulation**

***REE's previous financial and operational projections with respect to its P7 lineup relied in part on existing and future regulations and incentive programs supporting EV adoption.***

There has been growth in the adoption of environmentally driven regulations and incentive programs with low and zero emission targets with the automotive industry being among the most impacted industries. Such measures encourage local and national governments to implement various forms of rebates and credits for the purchase of an EV. In addition, regulations in certain cities, states and countries are also encouraging a shift away from, or in some cases banning entirely, fossil fuel-powered vehicles, with many of the earliest of these regulations targeted at buses, trucks and delivery vehicles. REE's financial and operational projections with respect to our P7 lineup include the continued growth in existing and similar regulations and incentive programs to accelerate the adoption of EV technology into the wider market. There is no guarantee that such regulations and incentive programs will be successful in encouraging adoption of EV technology. Additionally, any unavailability, reduction, or elimination of government and economic incentives and credits because of policy changes, or the reduced need for such incentives and credits due to the perceived success of EVs, policy shifts, or other reasons, may result in the diminished competitiveness of the alternative fuel and EV industry generally or our vehicles (if and when we resume production of them), software and services in particular. Additionally, federal, state, and local laws may impose additional barriers to EV adoption, including additional costs. Any of the foregoing could materially and adversely affect the growth of the alternative fuel automobile markets and our business, prospects, financial condition, results of operations, and cash flows. For example, on January 20, 2025, President Donald Trump signed an executive order titled "Unleashing American Energy" that paused certain disbursements of funds appropriated through the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act, which may have direct implications on the policies and regulations that impact the automotive and transportation industries. This order seeks to rescind waivers granted by the Environmental Protection Agency, or EPA, for California's zero emission vehicle regulations with a focus on eliminating any "electric vehicle mandates" and terminating "state emission waivers that function to limit sales of gasoline-powered vehicles", and modifying and/or eliminating specified GHG standards. Consequently, the availability of certain tax credits or other government incentives and our ability and that of our customers and competitors to benefit from these credits and incentives remain uncertain at this time. Moreover, the development of an alternative fuel besides electricity that results in low or no emissions may shift the focus of such regulations and incentive programs away from EV technology. If new regulations and/or such tax credits and/or other incentives are negatively impacted, decreased, and/or discontinued, the growth of the EV market generally, including our software-defined P7 vehicles specifically (if and when they are produced), and REE's business, prospects, financial condition and operating results could be materially and adversely affected.

***REE may encounter obstacles outside of its control that slow the adoption of its technology in the market, including but not limited to regulatory requirements or infrastructure limitations.***

While REE's products are subject to substantial regulation under federal, state and local laws, REE believes that its products are in compliance with all current applicable laws. Continued compliance with these regulations could be burdensome, time consuming, and expensive. However, to the extent the laws change, new laws are introduced, or if REE introduces new products in the future, some or all of its products may not continue to comply with applicable international, federal, state or local laws, and require change.

REE's products are subject to environmental and safety federal and state regulations, including regulations promulgated by the EPA, the National Highway Traffic and Safety Administration and various state agencies, and certification required for

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each new model year in some cases. The risks, delays, and expenses incurred in connection with these compliance activities and with obtaining approval can be substantial.

In addition, REE's P7 products involve a novel design and new technology, including locating critical vehicle components (steering, braking, suspension, powertrain and control) into the area between the chassis and the wheel and X-by-Wire control technology, which, excluding the U.S., may not meet existing safety standards or require modification in order to comply with various regulatory requirements. In particular, X-by-Wire technology in general has not received significant regulatory attention globally (excluding in the U.S.). More specifically, in 2023, we achieved EPA approval in the U.S. for our P7-C electric trucks. In January 2024, we announced that we became the first OEM to certify a commercial truck controlled fully by-wire to the FMVSS standards. In addition, subsequent to year-end, we achieved CARB certification. Despite our successful U.S. approvals and/or certifications, there is no guarantee that a vehicle incorporating REE's X-by-Wire technology will receive regulatory approval including in the U.S. or internationally, and there is no guarantee that REE's X-by-Wire control technology will comply with any relevant regulations that are put in place in the future. Compliance with regulatory requirements is expensive, at times requiring the replacement, enhancement or modification of equipment, facilities or operations. There can be no assurance that REE will be able to profit with respect to each of its product sales when offsetting any increased costs of complying with future regulatory requirements.

***REE is subject to various environmental laws and regulations that could impose substantial costs on its business and cause delays in building its production facilities.***

REE's operations are and will be subject to international, federal, state and local environmental laws and regulations, including laws relating to the use, handling, storage, disposal of and human exposure to hazardous materials. Environmental and health and safety laws and regulations can be complex, and REE has limited experience complying with them. Moreover, REE expects that it will be affected by future amendments to such laws or other new environmental and health and safety laws and regulations, including their respective enforcement or the enforcement policy associated therewith, which may require REE to change its operations, potentially resulting in a material adverse effect on its business, prospects, financial condition and operating results. These laws can give rise to liability for administrative oversight costs, cleanup costs, property damage, bodily injury, fines and penalties. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and penalties, third-party damages, suspension of production or a cessation of REE's operations.

Contamination at properties REE will own or operate, REE formerly owned or operated or to which hazardous substances were sent by REE, may result in liability for REE under environmental laws and regulations, including, but not limited to, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages to natural resources. The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on REE's financial condition or operating results.

In addition, we are subject to certain requirements and voluntary expectations regarding environmental social, and governance, or ESG, matters from various governmental and self-regulatory organizations, including the Securities and Exchange Commission, or the SEC, and Nasdaq. Recent regulatory developments include the SEC's new climate-related disclosure rule (Final Rule 33-11275), currently stayed pending litigation, and California's Climate Corporate Data Accountability Act (SB-253) requiring disclosure of greenhouse gas (GHG) emissions. These regulations, along with voluntary ESG initiatives we may undertake in response to stakeholder expectations, could result in increased expenses and management attention. The collection, measurement, and reporting of ESG information, including GHG emissions data, can also be costly and complex, particularly given the lack of harmonized reporting standards across jurisdictions. Any failure to meet regulatory requirements or stakeholder expectations, whether mandatory or voluntary, could impact our reputation, relationships with stakeholders, and access to capital markets.

We may also be affected by market responses to climate change and broader ESG considerations, including efforts to reduce GHG emissions. Compliance with varying requirements across jurisdictions adds operational complexity and potential costs. The accuracy, adequacy, and completeness of our ESG disclosures, whether required by regulation or voluntarily provided, present operational, reputational, financial, and legal risks.

***REE, its suppliers, and strategic partners are or may be subject to substantial regulation and unfavorable changes to, or failure by REE or its suppliers and strategic partners to comply with any such regulations could substantially harm REE's business and operating results.***

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REE's products, and the sale of motor vehicles including EVs in general, are subject to substantial regulation under international, federal, state, and local laws. REE expects to incur significant costs in complying with these regulations. Regulations related to the EV industry and alternative energy are currently evolving and REE faces risks associated with changes to these regulations.

To the extent the laws change, REE's products may not comply with applicable international, federal, state or local laws, which would have an adverse effect on its business. Compliance with changing regulations including the enforcement policy associated therewith, could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, REE's business, prospects, financial condition and operating results would be adversely affected.

Internationally, there may be laws in jurisdictions REE has not yet entered or laws it is unaware of in jurisdictions it has entered that may restrict its sales or other business practices. Even for those jurisdictions REE has analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with REE's ability to sell products could have a negative and material impact on its business, prospects, financial condition and results of operations.

***REE may become involved in legal and regulatory proceedings and commercial or contractual disputes, which could have an adverse effect on its profitability and consolidated financial position.***

REE may be, from time to time, involved in litigation, regulatory proceedings and commercial or contractual disputes that may be significant. These matters may include, without limitation, disputes with REE's suppliers and strategic partners and its customer and dealer base, intellectual property claims, shareholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and VAT disputes and employment and tax issues. Such contract disputes with suppliers may result from our production pause with respect to our performance of contract obligations. Such dispute may result in protracted litigation. For example, on August 27, 2025, Schwab filed a demand for arbitration with the American Arbitration Association in Michigan, against REE and its U.S. subsidiary alleging a failure to pay all required outstanding amounts. REE counterclaimed alleging mismanagement, price increases, mistakes, and unjustified requests for payment advances along with a failure to deliver under the terms of the contract. Such claims were subsequently settled by the relevant parties on April 16, 2026. In addition, REE could face in the future a variety of labor and employment claims against it, which could include but is not limited to general discrimination, wage and hour, privacy, ERISA or disability claims. In such matters, government agencies or private parties may seek to recover from REE very large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or seek to limit REE's operations in some way. These types of lawsuits could require significant management time and attention or could involve substantial legal liability, adverse regulatory outcomes, and/or substantial expenses to defend. Often these cases raise complex factual and legal issues and create risks and uncertainties. For example, in December 2022, a lawsuit was filed alleging that REE and its U.S. based subsidiaries stole certain trade secrets and requested, *inter alia*, monetary damages in an amount of no less than $2.6 billion and exemplary damages in the amount of no less than $5.2 billion. For more information, see "Item 8: Financial Information—Legal Proceedings". On August 26, 2024, the U.S. District Court W.D. Texas, Austin Division, or the District Court issued an order adopting the recommendation of the Report and Recommendation of U.S. Magistrate Judge Susan Hightower, granting REE's motion to dismiss for *forum non conveniens* and ordering the clerk of the court to close the case. On September 26, 2024, the OSR Group filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit, appealing the District Judge's adoption of the Report and dismissal of the case for *forum non conveniens*. On October 10, 2025, the Court of Appeals affirmed the District Court's decision dismissing the OSR Group's claim for forum non conveniens. On November 12, 2025, the Fifth Circuit denied OSR's petition for rehearing. On February 10, 2026, the deadline for OSR to seek appellate review before the U. S. Supreme Court expired. To our knowledge, OSR did not file a motion requesting an extension of time to pursue such review. Such lawsuits in general, if ultimately successful, could have a material adverse impact on REE's operating results and consolidated financial position.

In addition, shortly prior to REEUK entering into administration in the United Kingdom, certain REEUK employees were transferred to REE Software UK, a newly organized entity in the United Kingdom. Following the appointment of an administrator, it is expected that such administrator will seek to sell any or all of REEUK's assets to one or more third parties, in order to maximize recoveries for creditors and to wind down any remaining operations of REEUK, including the termination of any remaining employees. As a result, REE Software UK, and potentially REE, may become subject to labor and employment litigation from terminated employees with respect to unfair dismissal or failure to comply with information and consultation obligations. In addition, REE may become subject to litigation from suppliers of REEUK with respect to outstanding contract obligations. Any such litigation, if ultimately successful, could have a material adverse impact on REE's operating results and consolidated financial position.

***If we encounter contractual disputes or dispute of other natures with our suppliers, strategic partners and other third parties, our business, financial condition and results of operations may be adversely affected.***

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We deal with and enter into contracts with our suppliers, strategic partners and other third parties in our ordinary course of business. If we encounter contractual disputes with our suppliers, strategic partners and other third parties or other claims by such parties, our business, financial condition and results of operations may be adversely affected. The contractual terms between us and our suppliers, business partners or other third parties vary depending on various factors, including our business needs, among others. The terms of such contracts are generally negotiated on a case-by-case basis and are commercially reasonable at the time they are entered into. From time to time, there has been, and may continue to be, contractual disputes between us and suppliers, strategic partners and/or other third parties relating to our business. For example, we were previously subject to an arbitration proceeding with Schwab following its arbitration demand against REE and its U.S. subsidiary alleging a failure to pay all required outstanding amounts. REE counterclaimed alleging mismanagement, price increases, mistakes, and unjustified requests for payment advances along with a failure to deliver under the terms of the contract. Such claims were subsequently settled by the relevant parties on April 16, 2026.

We may face challenges in enforcing these contracts, particularly in circumstances where there are differing interpretations of applicable law and contract terms. Enforcement of such contract matters can be time-consuming, divert management and employee attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our operations, business, results of operations and/or financial condition.

Any such disputes may not only be costly and time-consuming to solve, but may also harm our reputation, subject us to contractual liabilities or significant settlement amounts, or otherwise adversely affect our business, financial condition and results of operations.

***REE is subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. As a result, REE may face criminal liability and other serious consequences for violations of such laws, which could harm its business.***

REE is or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which it conducts or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit REE and its officers, directors, employees and business partners acting on its behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a "foreign official" for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental "commercial" bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect REE's business, results of operations, financial condition and reputation. REE's policies and procedures designed to ensure compliance with these regulations may not be sufficient and its directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which it may be held responsible.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject REE to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect REE's business, results of operations, financial condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact REE's business and investments in its shares.

***The intended tax effects of REE's corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions and on how REE operates its business.***

REE is incorporated in and a tax resident in Israel. REE currently has subsidiaries in the UK, Germany, the U.S. and Japan. If REE succeeds in growing its business, REE expects to conduct increased operations through its subsidiaries in various countries and tax jurisdictions, in part through intercompany service agreements between REE and its subsidiaries. In that case, REE's corporate structure and intercompany transactions, including the manner in which REE develops and uses its intellectual property, will be organized so that REE can achieve its business objectives in a tax-efficient manner and in compliance with applicable transfer pricing rules and regulations. If two or more affiliated companies are located in different countries or tax jurisdictions, the tax laws and regulations of each country generally will require that transfer

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prices be the same as those between unrelated companies dealing at arm's length and that appropriate documentation be maintained to support the transfer prices. While REE believes that it operates in compliance with applicable transfer pricing laws and intends to continue to do so, its transfer pricing procedures are not binding on applicable taxing authorities.

Significant judgment is required in evaluating REE's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. For example, REE's effective tax rates could be adversely affected by changes in foreign currency exchange rates or by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations. In addition, its effective tax rate and the availability of any tax holidays could be adversely affected if REE does not obtain favorable tax rulings from certain taxing authorities. As REE intends to operate in various countries and taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes conflicting interpretations by taxing authorities of these jurisdictions. It is not uncommon for taxing authorities in different countries to have conflicting views, for instance, with respect to, among other things, the manner in which the arm's length standard is applied for transfer pricing purposes, or with respect to the valuation of intellectual property.

In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. REE continues to assess the impact of such changes in tax laws and interpretations on its business and may determine that changes to its structure, practice, tax positions or the manner in which it conducts its business are necessary in light of such changes and developments in the tax laws of the jurisdictions in which REE operates. Such changes may nevertheless be ineffective in avoiding an increase in its consolidated tax liability, which could adversely affect its financial condition, results of operations and cash flow.

If taxing authorities in any of these countries were to successfully challenge REE's transfer prices as not reflecting arm's length transactions, they could require REE to adjust its transfer prices and thereby reallocate its income to reflect these revised transfer prices, which could result in a higher tax liability to REE. In addition, if the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, potentially resulting in double taxation. If taxing authorities were to allocate income to a higher tax jurisdiction, subject REE's income to double taxation or assess interest and penalties, it would increase REE's consolidated tax liability, which could adversely affect its financial condition, results of operations and cash flow.

**Risks Related to Being a Public Company**

***REE's management has limited experience operating a public company, and thus its success in such endeavors cannot be guaranteed.***

REE's executive officers have limited experience managing a publicly traded company, interacting with public company investors and complying with the complex laws pertaining to public companies in the U.S.. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could require the devotion of a significant amount of their time to these activities, which will result in less time being devoted to the management and growth of the company, and could also result in increased costs due to hiring consultants to assist with compliance of public company laws, rules and regulations. REE had also hired additional employees since becoming a public company has upgraded its finance and accounting systems to an enterprise system suitable for a public company, and a delay could impact its ability or prevent it from timely reporting its operating results, timely filing required reports with the SEC and complying with Section 404 of the Sarbanes-Oxley Act. The development and implementation of the standards and controls necessary for REE to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. REE may not yet have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S., and it is possible that REE will be required to further expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

***If REE is unable for any reason to meet the continued listing requirements of Nasdaq, such action or inaction could***

***result in a delisting of the Class A Ordinary Shares and result in the acceleration of the repayment of our Convertible***

***Notes.***

On July 3, 2025, we reported the receipt of a letter from Nasdaq, notifying us that, based upon the closing bid price of our Class A Ordinary Shares for the 30 consecutive business days from May 15, 2025 to June 27, 2025, we no longer met the $1.00 per share minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) requirement under Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement. Nasdaq's continued listing rules require that listed securities maintain a minimum bid price of $1.00 per share, and that a failure to meet such requirement exists if the deficiency

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continues for a period of 30 consecutive business days or more. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), Nasdaq provided us with 180 calendar days, or until December 29, 2025, to regain compliance with the Minimum Bid Price Requirement. To regain compliance with such requirement, our Class A Ordinary Shares must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days, however such period can be extended by up to 20 consecutive business days at the discretion of Nasdaq. In the event that we do not regain compliance by December 29, 2025, Nasdaq would notify us that our Class A Ordinary Shares are subject to delisting, at which point we would expect to have an opportunity to request a second 180-day period to cure the deficiency, provided that we continue to meet the continued listing requirement for the market value of our publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement. To be eligible, the Company would also need to provide further written notice of its intention to cure the deficiency during the second compliance period, such as by effecting a reverse stock split, if necessary. If however it appears to Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice that REE's Class A Ordinary Shares will be subject to delisting. At such time, we could appeal any delisting decision to a Nasdaq Hearings Panel. REE requested an extension of 180-days to cure the Minimum Bid Price Requirement from Nasdaq on December 29, 2025, which Nasdaq granted on December 30, 2025.

Under the extension, REE has until June 29, 2026 to meet the Minimum Bid Price Requirement. We cannot assure you that we will be able to regain compliance with the Minimum Bid Price Requirement, including through a reverse share split. Our failure to meet this requirement would likely result in our Class A Ordinary Shares being delisted from Nasdaq. We and our securities holders could be materially adversely impacted if our Class A Ordinary Shares are delisted from Nasdaq. In particular:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the price of our Class A Ordinary Shares will likely decrease as a result of the loss of market efficiencies

associated with Nasdaq;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•holders may be unable to sell or purchase our Class A Ordinary Shares when they wish to do so;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we may become subject to shareholder litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we may lose the confidence of our large investors, suppliers, customers, and employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we may have fewer business development opportunities and limited options with respect to obtaining financing

for our continuing operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we may lose media and analyst coverage; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•we would likely lose any active trading market for our Class A Ordinary Shares, as our securities may then only be traded on one of the over-the-counter markets, if at all.

In the event of a delisting, REE can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its Class A Ordinary Shares to become listed again. In addition, delisting would constitute a fundamental change or event of default under our Convertible Notes, which would trigger the acceleration of a payment in an amount equal to one hundred thirty percent (130%) of the outstanding principal amount plus the accrued interest thereof on the date on which the first event of default occurred, together with all costs, including, without limitation, legal fees and expenses, of collection. There can be no assurance by REE that we have sufficient capital to make such a payment in the event that it should become due. See our risk factor "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 described under Item 3.D. of this Annual Report.

***Our significant shareholders have influence and may be able to exert substantial influence over REE, including over decisions that require the approval of shareholders, and their interests may conflict with the interests of other shareholders, which could materially adversely impact REE as a public company and our shareholders' investment in our company.***

Among other investors, M&G Investment Management Limited and its affiliates, or M&G, along with Motherson Group have reported beneficially owning significant amounts of our Class A Ordinary Shares (including through the exercise of our Warrants or Convertible Notes in the case of M&G, subject to its 19.99% beneficial ownership blocker) in benficial ownership filings with the SEC. As a result, in addition to other investors, these shareholders and their affiliates may have influence over the management and affairs of our Company and, if they were to decide to act either alone or together with other shareholders, could have the ability to significantly influence matters submitted to our shareholders for approval, notwithstanding REE's dual class structure, and in particular in circumstances where the holders of Class B Ordinary Shares are not aligned. For example, such shareholder(s) may encourage, cause or seek to cause REE to consider or explore extraordinary corporate transactions including a merger, reorganization or going-private transaction that could result in the de-listing or de-registration of our Class A Ordinary Shares, sales or acquisitions of assets or businesses, changes to our

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capitalization or dividend policy, or other material changes to our business or corporate structure. Such shareholders may also utilize rights pursuant to the provisions of the Companies Law to demand, where applicable, to call an extraordinary general meeting of shareholders at which the removal of some or all of our then-incumbent directors and the election of its nominees in their stead would be on the agenda. In this regard, M&G and Motherson have already pursued discussions with REE regarding the designation of a representative on our board of directors, culminating, in the case of Motherson, with it obtaining a representative on REE's board of directors.

Success in obtaining a board seat gives a shareholder influence over the management and policies of REE and enables it to influence our operations for its own interests, which may be to the detriment of our other shareholders. The interests of one or more of these shareholders may not always coincide with, and in some cases may conflict with, the best interest of REE's business and the interests of our other shareholders. These shareholders' significant ownership in, and influence over, us may also discourage others from making an equity investment in us. In particular, this concentrated voting control limits other shareholders' ability to influence corporate matters, including control of the composition of our board of directors and our corporate strategies. Such concentration may also make some transactions or corporate decisions more difficult or impossible without their support, or more likely with such shareholder(s)' support.

There can be no assurances that either M&G and/or Motherson, among other investors, either alone or together with others, will not attempt one of the above-mentioned actions in a manner that our board of directors believes is not in the best interest of our shareholders. Such future actions may require us to devote significant additional resources and time that would otherwise be directed at our business and operations or may demotivate current executives and discourage other executives from joining REE. Any of the above actions could cause the price of our Class A Ordinary Shares to decline, depending on investors' perceptions of such shareholder(s)' actions and influence, including due to the perception that conflicts of interest may exist or arise. Any of the above actions, can also result in the transition of REE to a private company and a loss of liquidity and capital appreciation for your Class A Ordinary Shares, each of which would have a material adverse impact on the ownership of your Class A Ordinary Shares and our business and operations.

***If securities and industry analysts do not publish research or reports about REE's business or publish negative reports about its business, REE's share price and trading volume may suffer.***

The trading market for the Class A Ordinary Shares in the past has been, and may continue to be, influenced by the research and reports that securities or industry analysts publish about REE or its business. REE does not have any control over such analysts and cannot provide any assurance that analysts will continue to cover REE or provide favorable coverage. If one or more of the analysts who cover REE downgrade REE's shares or change their opinion of REE's shares, REE's share price would likely decline. If one or more of these analysts cease coverage of REE or fail to regularly publish reports on REE, REE could lose visibility in the financial markets, which could cause its share price or trading volume to decline.

***If REE grows rapidly and expands into multiple global markets, there is a risk that it will fail to maintain an effective system of internal controls and its ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected. REE may identify material weaknesses in its internal controls over financing reporting which it may not be able to remedy in a timely manner.***

As a public company, REE operates in an increasingly demanding regulatory environment, which requires it to comply with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the regulations of Nasdaq, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for REE to produce reliable financial reports and are important to help prevent financial fraud. Commencing with its fiscal year ended December 31, 2021, REE performed system and process evaluation and testing of its internal controls over financial reporting to allow management to report on the effectiveness of its internal controls over financial reporting in its Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.

The process of building and maintaining its accounting and financial functions and infrastructure requires significant additional professional fees, internal costs and management efforts. REE has implemented an internal system to combine the management of its financial, accounting and other functions. However, such a system requires REE to complete many processes and procedures for the effective use of the system or to run its business using the system, which may result in substantial costs. Any disruptions or difficulties using the system could adversely affect REE's controls and harm its business. Moreover, such disruption or difficulties could result in unanticipated costs and diversion of management's attention. In addition, REE may discover additional weaknesses in its system of internal financial and accounting controls

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and procedures that could result in a material misstatement of its financial statements. REE's internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If REE is unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if it is unable to maintain proper and effective internal controls, REE may not be able to produce timely and accurate financial statements. If REE cannot provide reliable financial reports or prevent fraud, its business and results of operations could be harmed, investors could lose confidence in its reported financial information and REE could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

***REE has incurred and expects to continue to incur increased costs as a result of its operation as a public company, and its management will be required to devote substantial time and resources to employing compliance initiatives in order to confirm with the regulatory requirements applicable to public companies.***

REE has incurred and expects to continue to incur significant legal, accounting and other expenses as a public company that it did not incur as a private company, and these expenses may increase even more after if and when REE is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, REE is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. REE's management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, REE expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs may contribute to an increase in REE's net loss. For example, REE expects these rules and regulations to make it more difficult and more expensive for it to obtain director and officer liability insurance and it may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. REE cannot predict or estimate the amount or timing of additional costs it may incur to respond to these requirements. The impact of these requirements could also make it more difficult for REE to attract and retain qualified persons to serve on its board of directors, its board committees or as executive officers.

**Risks Related to REE's Information Security**

***In order to enter into production of its products, REE must develop complex software and technology systems in coordination with its suppliers, service providers, and strategic partners. REE can provide no guarantee that such systems will be successfully developed and/or integrated.***

REE's products use a substantial amount of third-party and in-house software codes and complex hardware to operate. The development of such advanced technologies is inherently complex, and REE coordinates with its suppliers, service providers, and strategic partners in order to reach production for its products. Defects and errors may be revealed over time and REE's control over the performance of third-party services and systems may be limited. Thus, REE's potential inability to develop the necessary software and technology systems may harm its competitive position.

REE may rely on suppliers and strategic partners, to develop a number of emerging technologies for use in its products, including lithium-ion battery technology. Certain of these technologies are not today, and may not ever be, commercially viable. There can be no assurances that REE's suppliers and strategic partners will be able to meet the production timing and volume requirements to support its current business plan. In addition, the technology may not comply with the cost, performance useful life and warranty characteristics REE anticipates in its current business plan. As a result, REE's business could be significantly impacted and REE may incur significant liabilities under warranty claims which could adversely affect its business, prospects, and results of operations.

***REE is subject to stringent and changing privacy laws, regulations and standards, information security policies and contractual obligations related to data privacy and security. REE's actual or perceived failure to comply with such obligations could harm its business. Such legal requirements are evolving, uncertain and may require improvements in, or changes to, REE's policies and operations.***

REE expects to face significant challenges with respect to information security and privacy, including the storage, transmission and sharing of confidential information. Following the sale of REE SDV technology to counterparties/customers, EEE would expect to collect, store, transmit and otherwise processes data from products, customers, employees

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and others as part of its business and operations, which may include personal data or confidential or proprietary information. REE also works with suppliers and strategic partners that would collect, store and process such data on its behalf and in connection with its products.

REE has adopted strict information security policies and deployed advanced measures to implement the policies, including, among others, advanced encryption technologies, and continues to update systems and deploy additional measurers as REE grows. REE also considers the guidance provided by recognized frameworks established by the Israel National Cyber Directorate, ISO 27001, ISO 21434, ISO 9001, and other applicable industry standards to establish, implement, maintain and continually improve its information security management system. However, advances in technology, an increased level of sophistication and diversity of REE's products and services, an increased level of expertise of hackers, new discoveries in the field of cryptography or others can still result in a compromise or breach of the measures that REE uses. If REE is unable to protect its systems, and hence the information stored in its systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause a loss, give rise to REE's liabilities to the owners of confidential information or even subject it to fines and penalties. In addition, complying with various laws and regulations could cause REE to incur substantial costs or require it to change its business practices, including its data practices, in a manner adverse to REE's business.

In addition, REE may need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S., Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation, or GDPR, which became effective on May 25, 2018 and the State of California adopted the California Consumer Privacy Act of 2018, or CCPA, which became effective in January 2020. Both the GDPR and the CCPA impose additional obligations on companies regarding the handling of personal data and provides certain individual privacy rights to persons whose data is stored. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under the GDPR) and regulations can be costly and may place restrictions REE's business and the manner in which it interacts with its customers. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against REE, and misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against REE by governmental entities or others, and damage to its reputation and credibility, and could have a negative impact on revenues and profits.

Significant capital and other resources are required to protect against information security breaches or to comply with REE's privacy policies or privacy-related legal obligations and additional significant resources may be required to alleviate problems caused by such breaches in the event that they occur. The resources required increase over time as the methods used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. In addition, if and when REE resumes production, REE intends to log certain data about each vehicle's use in order to provide vehicle diagnostics and servicing on its vehicles. REE's customers and/or future customers may object to the use of this data, which may increase REE's vehicle maintenance costs, including as a result of the need to obtain vehicle servicing at a service center rather than automatically over-the-air, or may cause more limited customer servicing due to the absence of real-time data from customer vehicles that have opted out , each of which can harm REE's business prospects.

Any failure or perceived failure by REE to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, could cause REE's potential customer base to lose trust in REE and could expose REE to legal claims. Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and other online services generally and decrease demand in the last-mile and mid-market delivery markets, which may reduce the number of orders REE receives. Moreover, if a compromise of data were to occur, REE may become liable under its contracts with other parties and under applicable law for damages and incur penalties and other costs to respond to, investigate and remedy such an incident. REE's systems, networks and physical facilities could be breached or personal information could otherwise be compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce REE's employees to disclose information or user names and/or passwords. Third parties may also exploit vulnerabilities in, or obtain unauthorized access to, products, systems, networks and/or physical facilities utilized by REE's service providers and vendors. There can be no assurance that any security measures that REE or its suppliers and strategic partners have implemented will be effective against current or future security threats.

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. REE may not be able to monitor and react to all developments in a timely manner. For example, the CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with

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potentially severe statutory damages and private rights of action. The CCPA requires covered businesses to provide new disclosures to California residents, provide them new ways to opt-out of certain disclosures of personal information, and allow for a new cause of action for data breaches. As REE expands its operations, the CCPA may increase REE's compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the U.S. Other states have begun to propose similar laws. Compliance with any applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and REE may be required to put in place additional mechanisms to comply with such laws and regulations.

REE has privacy policies and other documentation regarding its collection, processing, use and disclosure of personal information and/or other confidential information. Although REE endeavors to comply with its published policies and other documentation, REE may at times fail to do so or may be perceived to have failed to do so. Moreover, despite its efforts, REE may not be successful in achieving compliance if REE's employees, contractors, service providers or vendors fail to comply with its published policies and documentation. Such failures can subject REE to potential local, state and federal action if they are found to be deceptive, unfair, or misrepresentations of its actual practices. Claims that REE has violated individuals' privacy rights or failed to comply with data protection laws or applicable privacy notices even if REE is not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm its business.

***REE and its suppliers, service providers, and strategic partners are subject to cybersecurity and other risks with respect to each of their respective technology, systems, and software and any material failure, weakness, interruption, cyber event, incident or breach of security in connection with the foregoing could prevent REE from effectively operating its business, or may cause harm to its business that may or may not be reparable.***

We seek to adhere to the industry's best practices by implementing security controls, including ISO 27001, and by establishing measures to manage and reduce the risks associated with engaging third-parties, including suppliers, service providers, and strategic partners, cybercrime continues to escalate. Notwithstanding the above, threats posed by malware, viruses, hacking, social engineering attacks, and especially ransomware attacks are increasingly common. These threats pose significant risks and have a considerable impact. Specifically, REE is at risk for interruptions, outages and breaches of its: (a) operational systems, including business, financial, accounting, product development, data processing or, if and when applicable, production processes, owned by REE, its suppliers, service providers, and/or strategic partners; (b) facility security systems, owned by REE, its suppliers, service providers, and/or strategic partners; (c) transmission control modules or other in-product technology, owned by REE, its suppliers, service providers, and/or strategic partners; (d) the integrated software in REE's products; or (e) customer data that REE processes, its suppliers, service providers, and/or strategic partners process on its behalf. In addition, some of our employees work remotely, which increases our cybersecurity risk, creates data accessibility concerns, and makes us more susceptible to security breaches or business disruptions. REE's systems are vulnerable to damage or interruption from, among others, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunications failures (including the internet), viruses, denial or degradation of service attacks, ransomware, social engineering schemes, insider theft or misuse or other attempts to harm REE's systems. Such interruption, outage and/or breach incidents could: materially disrupt REE's operational systems, including planned over-the-air update capabilities; result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of employees, potential customers, suppliers, service providers, and strategic partners, or others; jeopardize the security of REE's facilities; or affect the performance of in-product technology and the integrated software in REE's products.

We also use and/or rely upon third-party technology, software, and systems in various contexts, including, without limitation, cloud services, single-sign on platforms, email, word processing, back-office support, payment processing, cybersecurity, and other functions. These third-party providers, as applicable, process, store, and/or transmit data of our employees, suppliers, strategic partners, and customers, and, as applicable, are otherwise used to help operate and/or monitor our technology and our business. Any incident affecting the infrastructure and/or systems of these third parties that is caused by cyber-attacks, natural disasters, fire, flood, severe storm, earthquake, power loss, telecommunications failures (including internet failures), terrorist or other attacks, regional epidemics or global pandemics, and other similar events beyond our control could negatively affect our business operations. There can also be no assurance that any security measures that such third-parties have implemented for their systems and, where applicable, our systems, will be effective against current and/or future security threats, or that such third parties will properly monitor both their technology and systems and, where applicable our systems, and alert us of an ongoing threat or issue, when necessary or required. For example, we are aware that one of our third party's systems was penetrated in the past, which has not had a material impact on REE to-date.

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Likewise, we cannot guarantee that the third party software and/or systems that we use will not cause outages and/or other issues across our information technology systems along with their systems. For example, one of our service provider's software updates caused significant temporary outages to its customers' systems resulting in significant interruptions of their business operations. REE was not materially impacted from such event to-date. Although we strive to reduce the risk associated with such third parties, our ability to monitor and control these third-parties is limited. As a result, we may fail to conduct proper due diligence, adequately monitor their compliance, fail to receive notification of a cyber event, or may fail to discover their failure to comply with these requirements. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, or prospects.

In addition, we outsource all of the infrastructure relating to our cloud solution to Amazon Web Services, or AWS, which is our sole provider of these services and hosts our platform and many of the internal programs that we use to operate our business. We rely solely upon AWS to ensure the uninterrupted operation of our cloud-based infrastructure, including in connection with our in-vehicle services and functionality, when and if such products are integrated into a vehicle. This cloud is designed to utilize data connectivity to monitor performance and timely capture opportunities to enhance on-the-road performance and for safety and cost-saving preventative maintenance. Therefore, any significant disruption of, limitation of our access to, or other interference with our use of AWS' cloud services would negatively impact our operations and would likely seriously harm our business. In an effort to mitigate certain risks, the cloud services we receive from AWS include design features and elements designed to prevent or minimize service disruption, including a disaster recovery service and the use of distinct server farms in separate locations for hosting our platform and services, either one of which is capable of supporting our platform and services without material interruption even in the event of a failure at the other, corresponding server farm. Nevertheless, a prolonged service disruption affecting our cloud-based solution could negatively impact our ability to conduct our operations and could damage our reputation with current and potential customers, expose us to liability, or otherwise harm our business.

Any transition of the cloud services currently provided by AWS to another cloud services provider could require significant time and expense and could disrupt or degrade our operations during such a transition. Our business relies on the availability of our cloud, and there would likely be significant interruption in our operations in the event that we are not able to access our cloud or encounter difficulties in doing so. If AWS increases pricing terms, terminates or seeks to terminate our contractual relationship, establishes more favorable relationships with our competitors, changes or interprets its terms of service or policies in a manner that is unfavorable with respect to us or fails to agree to renew our contract or enter into a new contract on terms that are acceptable to us, our business, financial condition, revenue, results of operations or cash flows may be harmed.

Moreover, there are inherent risks associated with developing, improving, expanding and updating REE's current systems, such as the disruption of REE's data management, procurement, production execution, finance, supply chain and sales and service processes. These risks may affect REE's ability to manage its data and inventory, procure parts or supplies or assemble (if and when REE resumes production), deploy, deliver and service its products, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. REE cannot be sure that these systems upon which it relies, including those that it relies upon from third parties, will be effectively implemented, maintained or expanded as planned. If REE does not successfully implement, maintain or expand these systems as required, its operations may be disrupted, its ability to accurately and timely report its financial results could be impaired, and deficiencies may arise in its disclosure controls and procedures, including its internal control over financial reporting, which may impact REE's ability to certify its disclosures and financial results. Moreover, REE's proprietary information or intellectual property could be compromised or misappropriated and its reputation may be adversely affected. If these systems do not operate as REE expects them to, REE may be required to expend significant resources to make corrections or find alternative sources for performing these functions. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, or prospects.

***Any unauthorized control or manipulation of the information technology systems in REE's products could result in loss of confidence in REE and its products and harm REE's business.***

REE's X-By-Wire technology contains complex information technology systems. Such technology controls each of the various functions in our products including steering, braking, suspension, powertrain and control. REE's hardware and software products are also outfitted with built-in data connectivity capabilities to accept and install periodic remote updates from REE, when made available, to improve or update the functionality of its products. REE has designed, implemented and tested security measures intended to prevent cybersecurity breaches or unauthorized access to its information technology networks, its technology products and their systems, and intends to implement additional security measures as necessary. However, hackers or other types of criminals may attempt to physically or through online means gain

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unauthorized access to such products or systems to modify, alter and use such networks, products and systems to gain control of, or to change, REE's products' functionality, user interface and performance characteristics, or to gain access to data stored in or generated by the products. In addition, with respect to product-related data products that we may offer, including increased vehicle connectivity and over-the-air updates, such products may increasingly be subject to cyber threats. Hackers may attempt to infiltrate, steal, corrupt, or manipulate the data that we store on our AWS cloud, which could also result in our in-vehicle systems malfunctioning when connected to such cloud or the loss of control by a driver of a vehicle in favor of such hacker and his/its commands. In particular, REE's systems affect the control of various vehicle functions including engine, transmission, safety, steering, navigation, acceleration, and braking. We have designed, implemented, and tested security measures intended to prevent unauthorized access to these systems. However, hackers may attempt in the future to gain unauthorized access to modify, alter, and use such systems to gain control of, or to change, the functionality, user interface and performance characteristics of vehicles incorporating our technology, or to gain access to data stored in or generated by the vehicle. In addition, as we transition to offering products that involve cloud-based solutions, including over-the-air updates, such products may increasingly be subject to cyber threats. Any unauthorized access to or control of our technology, including our proprietary software, or their systems, or any unauthorized access to or loss of end user data, could result in risks to end users, including a loss of vehicle control, which we may be unable to reestablish, or failure of our systems, any of which could have material adverse effects on our business, legal claims or proceedings. Vulnerabilities could be identified in the future and REE's remediation efforts may not be successful. Any unauthorized access to or control of REE's products or their systems could result in personal injury and/or death along with legal claims or proceedings, including in cases where there is a loss of data. Any of the above could materially negatively affect REE's brand and harm its business, prospects, financial condition and operating results. In addition, regardless of their veracity, reports of unauthorized access to REE's products, their systems or data, as well as other factors that may result in the perception that REE's products, their systems or data are capable of being "hacked," could materially negatively affect REE's brand and harm its business, prospects, financial condition and operating results.

**Risks Related to REE's Intellectual Property**

***REE may incur significant costs and expenses in connection with the protection and enforcement of its intellectual property rights, including but not limited to litigation costs.***

REE relies on a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyrights, trademarks, intellectual property licenses, and other contractual rights to establish and protect its rights in its technology. Despite REE's efforts to protect its proprietary rights, third parties may attempt to copy or otherwise obtain and use REE's intellectual property or seek court declarations that they do not infringe upon its intellectual property rights. Monitoring unauthorized use of REE's intellectual property is difficult and costly, and REE has taken or may take steps in an effort to reduce misappropriation. From time to time, REE may have to resort to litigation to enforce its intellectual property rights, which could result in substantial costs and diversion of its resources.

The protection of REE's intellectual property rights is important to its future business opportunities. However, the measures REE takes to protect its intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• as noted below, some of the patent applications REE files may not result in the issuance of patents at least in some of the applicable jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope of REE's patents that may subsequently be granted may not be broad enough to protect its proprietary rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• patents are territorial and provide rights only in jurisdictions in which patents are granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's issued patents may be challenged or invalidated by third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's employees or business partners may breach their confidentiality, non-disclosure and non-use obligations to REE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• third parties may independently develop technologies that are the same or similar to REE's;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• current and future competitors may circumvent or otherwise design around REE's patents.

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Patent, trademark, and trade secret laws vary significantly throughout the world. For example, a number of countries do not protect intellectual property rights to the same extent as the laws of the U.S. Failure to adequately protect REE's intellectual property rights could result in its competitors offering similar products, potentially resulting in the loss of some of REE's competitive advantage and a decrease in its revenue which, would adversely affect its business, prospects, financial condition and operating results.

Also, while REE has registered and applied for trademarks in an effort to protect its investment in its brand and goodwill with customers, competitors may challenge the validity of those trademarks and other brand names in which REE has invested. Such challenges can be expensive and may adversely affect REE's ability to maintain the goodwill gained in connection with a particular trademark.

***Lawsuits alleging infringement or misappropriation of intellectual property rights of third parties could be both costly and time consuming and could prevent REE from developing or commercializing its future products.***

Companies, organizations, or individuals, including REE's competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with REE's ability to make, use, develop, sell, lease or market its products which could make it more difficult for REE to operate its business. From time to time, REE may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge REE to take licenses. For example, in December 2022, a lawsuit was filed alleging that the REE and its U.S. based subsidiaries have stolen certain trade secrets and requested, *inter alia*, monetary damages in an amount of no less than $2.6 billion and exemplary damages in the amount of no less than $5.2 billion. Such lawsuit was ultimately dismissed for *Forum Non Conveniens*, which was later affirmed on appeal in the U.S. Court of Appeals for the Fifth Circuit*.* For more information, see "Item 8: Financial Information—Legal Proceedings". REE's applications and uses of trademarks relating to its design, software or artificial intelligence technologies could be found to infringe upon existing trademark ownership and rights. In addition, if REE is determined to have infringed upon a third party's intellectual property rights, it may be required to do one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cease selling, licensing, or incorporating certain components into, or using products or offering goods or services that incorporate or use the challenged intellectual property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pay substantial damages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redesign its products or other goods or services; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish and maintain alternative branding for its products and services.

In the event of a successful claim of infringement against REE and REE's failure or inability to obtain a license to the infringed technology or other intellectual property right, REE's business, prospects, operating results and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

***Patent applications submitted by REE to the relevant authorities may not result in granted patents or may require modification in order to obtain approval.***

REE cannot be certain that it is the first inventor of the subject matter to which it has filed a particular patent application, or if it is the first party to file such a patent application. If another party has disclosed the same subject matter, REE may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, REE cannot be certain that the patent applications that it files will issue, or that its issued patents will afford protection against competitors with similar technology. In addition, REE's competitors may design around REE's issued patents, which may adversely affect its business, prospects, financial condition or operating results.

REE cannot assure that it will be granted patents pursuant to its pending applications. Even if REE's patent applications succeed and it is issued patents, it is still uncertain whether these patents will be contested, circumvented, invalidated, or renewed in the future. In addition, the rights granted under any issued patents may not provide REE with meaningful protection or competitive advantages. The claims under any patents that issue from REE's patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to REE's. The intellectual property rights of others could also bar REE from licensing and exploiting any patents that issue from its

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pending applications. Numerous patents and pending patent applications owned by others exist in the fields in which REE has developed and are developing its technology. These patents and patent applications might have priority over REE's patent applications and could subject its patent applications to invalidation. Finally, in addition to those who may claim priority, any of REE's existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable.

***REE may be subject to damages resulting from claims that either it or any of its employees wrongfully used or disclosed alleged trade secrets of their employees' former employers or that they allegedly violated certain covenants, such as non-compete agreements, to which REE or its employees may have been previously or currently bound.***

Many of REE's employees were previously employed by other technology or automotive companies or their suppliers. REE may be subject to damages resulting from claims that it or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. For example, in December 2022, a lawsuit was filed alleging that the REE and its U.S. based subsidiaries have stolen certain trade secrets and requested, *inter alia*, monetary damages in an amount of no less than $2.6 billion and exemplary damages in the amount of no less than $5.2 billion. For more information, see "Item 8: Financial Information—Legal Proceedings". Litigation may be necessary to defend against these claims. If REE fails in defending such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent REE's ability to commercialize its products, which could severely harm its business. Even if REE is successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

***In addition to patented technology, REE relies on its unpatented proprietary technology, trade secrets, processes and knowledge.***

REE relies on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that REE believes is best protected by means that do not require public disclosure. REE generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties. However, REE may fail to enter into the necessary agreements, and even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of its proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. REE has limited control over the protection of trade secrets used by its suppliers and strategic partners and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, REE's proprietary information may otherwise become known or be independently developed by its competitors or other third parties. To the extent that its employees, consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for REE, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope of REE's proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position. Furthermore, laws regarding trade secret rights in certain markets where REE operates may afford little or no protection to its trade secrets.

REE also relies on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these security measures will not be breached or provide adequate protection for its property. There is a risk that third parties may obtain and improperly utilize REE's proprietary information to its competitive disadvantage. REE may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce its intellectual property rights.

***The terms of funding received from the Israel Innovation Authority require us to satisfy certain conditions that may limit and/or delay our ability to engage in certain transactions and which may reduce any potential consideration received by REE in connection with such transaction(s).***

In the past, Softwheel Ltd. (which later changed its name to REE Automotive Ltd.) received funding from the Israel Innovation Authority, or the IIA, to partially finance its research and development efforts in relation to its Softwheel legacy wheelchair and bicycle wheel suspension technology and products. For clarity, REE previously operated under the name Softwheel Ltd. in connection with its original advanced in-wheel suspension technology segment. Reference to Softwheel herein is only with respect to such technology segment. Softwheel received approximately $1,215,000 under the IIA's standard royalty-bearing programs and under the IIA's "Incubator" program. The Company currently has no plans to use or monetize Softwheel know-how or products and believes that REE's current technology and products and intellectual

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property were not developed using, do not incorporate and do not rely upon any such Softwheel technology or other IIA-funded know-how.Therefore, REE does not expect to make royalty payments to the IIA in connection with its current products or technology in the near future, including in connection with any potential strategic transaction. Notwithstanding the above, REE remains subject to the Israeli Encouragement of Research, Development and Technological Innovation in Industry Law, 5744-1984, and related IIA rules and regulations. As a result, the IIA may determine that a particular transaction involves the transfer of IIA funded know-how, which, if not successfully rebutted, could subject such transaction to the IIA's prior approval in accordance with the Innovation Law that restricts the Company's ability to transfer, in any manner, know-how funded by the IIA, without the IIA's prior approval. Transfer of such know-how outside of Israel may also be subject to certain payments to the IIA of up to six times the amount of IIA funding and interest. Approval of transfer of IIA funded know-how to another Israeli company may be granted only if the recipient assumes the obligations under the Innovation Law and may be subject to royalty payments to the IIA. In addition, any change of control in REE, and any change of ownership that would cause a non-Israeli to become an "interested party" as defined in the Innovation Law (which includes any person who holds 5% in the Company or has a right to appoint a director), requires written notice to the IIA. Such non-Israeli interested party is required to sign an undertaking on a standard form required by the IIA, to comply with the rules and regulations applicable to IIA funding programs, including the restrictions and limitations on the transfer of IIA funded know-how. These terms and conditions may limit and/or delay the Company's ability to engage in certain potential transactions, including in connection with its strategic transaction process, and may reduce the potential consideration received by REE in connection with such transaction(s), including, for example, a transaction that involves the transfer of IIA funded know-how outside of Israel by any amounts that REE is required to pay to the IIA.

***The terms of funding received from the Israel-U.S. Binational Industrial Research and Development could require us in certain instances to satisfy certain conditions, including the receipt of prior approval and/or repayment of certain amounts, in connection with certain transactions.***

In the past, REE received grants from the Israel-U.S. Binational Industrial Research and Development, or BIRD, in connection with the development of Softwheel products, totaling approximately $747,000. For clarity, REE previously operated under the name Softwheel Ltd. in connection with its original advanced in-wheel suspension technology segment. Reference to Softwheel herein is only with respect to such technology segment. Currently, the Company has abandoned, and does not utilize, market, exploit, or sell any BIRD funded product, any related IP and/or technology and any derivative of any of the foregoing, and the Company further believes that none of the foregoing are incorporated into REE's technology and/or products. As a result, the Company neither expects to make any royalty payments to BIRD nor any repayment, including in connection with any potential strategic transaction to which the BIRD agreement may potentially apply. Notwithstanding the foregoing, in the event that BIRD determines that REE technology and/or products contain any BIRD funded product, any related IP and/or technology and any derivative of any of the foregoing, REE may be required to provide notice to, and obtain the prior approval of, BIRD as part of certain types of potential strategic transactions. In connection therewith, REE may also be required, depending on the specific facts and circumstances, to repay the grants received, and, in the event of non-payment, BIRD has a right to one half of any sales proceeds, subject to certain conditions being fulfilled.

**Risks Related to REE's Dual Class Structure**

***The dual class structure of our Ordinary Shares has the effect of concentrating voting power with REE's Founders, who serve as its Chief Executive Officer and Chief Technology Officer, respectively, which limits an investor's ability to influence the outcome of important transactions, including a change in control.***

The Class B ordinary shares, without par value, of REE, or Class B Ordinary Shares, have 10 votes per share, while shares of Class A Ordinary Shares have one vote per share. REE's Founders, Daniel Barel and Ahishay Sardes, hold all Class B Ordinary Shares granting each of them, when combined with each of their holdings of Class A Ordinary Shares, approximately 27.3% and 26.9%, respectively, of voting power and together approximately 54.2% of the voting power of REE, as of May 5, 2026. See "Item 7A. Major shareholders". As a result, if they act together, they will be able to control matters submitted to REE's shareholders for approval (unless such Class B Ordinary shareholder(s) has a personal interest, which otherwise prevents the exercise of such shareholder(s)' voting power), including the election of directors, amendments of its organizational documents and any merger, consolidation, sale of all or substantially all of its assets or other major corporate transactions (although neither Founder individually has a majority of the voting power). REE's Founders may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. While the Class B Ordinary Shares do not have any economic rights, this concentrated control may have the effect of approving, delaying, preventing or deterring a change in control of REE, could deprive its shareholders of an opportunity to receive a premium for their shares as part of a sale of REE, and might ultimately affect the market price of shares of Class A Ordinary Shares.

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***REE cannot predict the impact REE's dual class structure may have on the stock price of Class A Ordinary Shares.***

REE cannot predict whether REE's dual class structure will result in a lower or more volatile market price of Class A Ordinary Shares or in adverse publicity or other adverse consequences. Previously, certain index providers announced restrictions on including companies with multiple-class share structures in certain of their indexes. For example, S&P Dow Jones in 2017 announced the exclusion of companies utilizing dual or multi-class capital structures from the S&P Composite 1500, comprised of the S&P 500, S&P MidCap 400 and S&P SmallCap 600. However, in April 2023, it reversed this policy and announced that companies with dual or multi-class capital structures will again be eligible for inclusion in its indices. MSCI and FTSE Russell had similar discussions surrounding the issue of dual classes as well. Due to the policy discussions of index providers, we cannot guarantee that we will not be excluded from an index due to our dual share class. In the event that REE is ineligible for inclusion in an index, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track such index would not invest in our Class A Ordinary Shares. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from indexes could make our Class A Ordinary Shares less attractive to other investors. In addition, certain proxy advisory firms oppose the use of multiple class structures and may publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. As a result, the market price of Class A Ordinary Shares could be adversely affected.

In addition, institutional investors and certain investment funds may also be precluded, reluctant or unwilling to invest in entities with dual class structures due to a lack of ability to meaningfully influence corporate affairs and policies through voting. Such restrictions, reluctance and unwillingness may make our Class A Ordinary Shares less attractive to investors and, as a result, the market price of our Class A Ordinary Shares could be adversely affected.

***The market price of REE's Class A Ordinary Shares has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control.***

The market price of our Class A Ordinary Shares has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may be beyond our control. These factors include, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "short squeezes";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comments by securities analysts or other third parties, including blogs, articles, message boards and social and other media;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• large stockholders exiting their position in our securities or an increase or decrease in the short interest in our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated fluctuations in our financial and operating results, including the publication of a going concern in our financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in foreign currency exchange rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory or legal developments in the United States and other countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the success of competitive products or technologies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developments or disputes concerning patent applications, issued patents or other proprietary rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the recruitment or departure of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• litigation matters, including amounts which may or may not be recoverable pursuant to our officer and director insurance policies, regulatory actions affecting the Company and the outcome thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated changes in estimates as to financial results, commercialization timelines or recommendations by securities analysts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant lawsuits, including supplier, patent, or shareholder litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• variations in our financial results or those of companies that are perceived to be similar to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• market conditions in our market sector;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investors' general perception of us and our business.

Stock markets in general and our stock price in particular have recently experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies and our Company. For example, the closing sale prices of our Class A Ordinary Shares from January 1, 2025 through December 31, 2025, ranged from a high of $9.3450 per share (on January 2, 2025) to a low of $0.5500 per share (on June 25, 2025). These broad market fluctuations may adversely affect the trading price of our securities. Additionally, these and other external factors have caused and may continue to cause the market price and demand for our Class A Ordinary Shares to fluctuate substantially, which may limit or prevent our shareholders from readily selling their Class A Ordinary Shares and may otherwise negatively affect the liquidity of our Class A Ordinary Shares.

In addition, if the price of our Class A Ordinary Shares continues to trade at its current level, it may imply as a negative indicator of the valuation of our intangible and/or tangible assets, which could result in an impairment for these assets.

**Risks Related to REE's Incorporation and Location in Israel**

***Political, economic and military conditions in Israel could adversely affect REE's supply chain, business, operations,***

***and ability to raise capital.***

REE is incorporated under the laws of the State of Israel, and its principal research and development facilities, including

REE's major data centers, and executive offices are located in Israel. In addition, the majority of REE's key employees,

officers, and directors are Israeli citizens. Accordingly, political, economic and military conditions in Israel directly affect

its business. In recent years, Israel has been engaged in armed conflict with terrorist organizations in the Middle East, including Hamas in the Gaza Strip, Hezbollah in southern Lebanon, and the Houthis in Yemen. For example, since October

7, 2023, Israel has been in a state of war with Hamas and other terrorist organizations in the Gaza Strip and in military

conflict with Hezbollah and the Houthis. Although certain ceasefire agreements have been reached, there is no assurance

that these agreements will fully mitigate hostilities, be upheld and/or continue in the near future. For example, despite a prior ceasefire, Israel and Hezbollah have resumed armed conflict following renewed attacks by Hezbollah in March 2026. It is possible that other terrorist organizations as well as other hostile countries will join the hostilities and that such clashes may escalate in the future into a greater regional conflict. Additionally, instability in Syria has previously led Israel to engage in armed actions therein and it may do so again in the future. In 2025, for twelve days Israel engaged in armed conflict with Iran and the United States launched its own military strikes on Iran. Such conflict ended in a ceasefire agreement. In late February 2026, Israel and the United States attacked Iran, which triggered a broad Iranian military response across the Middle East and has contributed to significant regional instability including with respect to the Straight of Hormuz. The conflict and its impact on the Middle East, in particular, remains highly fluid, and we are unable to predict if, when, or on what terms, it will be fully resolved. Although certain ceasefire agreements have been reached, there is no assurance that these agreements will fully mitigate hostilities, be upheld, be respected, or remain in force, and additional hostilities and escalations may occur at any time.

We are headquartered in Israel and a significant portion of our management, research and development and other critical functions are located in Israel. As a result, our operations are directly affected by the security situation in Israel. The ongoing hostilities and regional instability have led, and may continue to lead, to disruptions in our workforce, including due to military reserve duty obligations of employees, as well as delays or interruptions in our operations, supply chain, and ability to travel or conduct business internationally. In addition, geopolitical developments may negatively impact our relationships with customers, suppliers, and partners, and may affect our ability to raise capital or operate in certain markets. Additionally, geopolitical tensions involving Israel may result in reputational risks or reduced willingness of certain counterparties to engage with us.

While our facilities have not been damaged during the current period, in the event that REE's facilities are damaged as a result of conflict or hostilities otherwise disrupt REE's operations in Israel, its research and development could be materially adversely affected along with REE's ability to manage its operations from its headquarters. For example, shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict may temporarily disrupt REE's management and employees' ability to effectively perform their daily tasks. Certain of the conflicts have led to a deterioration of certain indicators of Israel's economic standing, including downgrades in Israel's credit rating by rating agencies such as by Moody's, S&P Global,

and Fitch.

REE's commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.

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Although the Israeli government currently covers the reinstatement under the Property Tax and Compensation Fund Law,

1961, the reinstatement is limited and partial compensation value of direct damages that are caused by terrorist attacks or

acts of war, REE cannot assure you that this government coverage will be maintained or that it will sufficiently cover

REE's potential damages. Any losses or damages incurred by REE could have a material adverse effect on its business.

Moreover, several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies,

and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in Israel

or political instability in the region continues or increases. Similarly, actions of certain international bodies along with

activists who advocate for the boycott of Israel, have developed and may continue to foster a negative perception of Israel

and/or its citizens, which may include its businesses. For example, the 2024 ruling of the International Court of Justice with

respect to Israel's actions during the Gaza war following the October 7, 2023 attack and the International Criminal Court's

November 2024 arrest warrants for Prime Minister Benjamin Netanyahu and then-Defense Minister Yoav Gallant have

enhanced anti-Israeli political efforts. The foregoing efforts by countries, activists, and international bodies, particularly if

they become more widespread, may materially and adversely impact our business, including if any suppliers or partners terminate or seek to terminate our commercial relationship due to such efforts.

Any conflict involving Israel, the interruption or curtailment of trade between Israel and its trading partners, significant

downturn in the economic or financial conditions in Israel, or any political instability in the region could adversely affect

Israel's economy, business conditions and/or our business operations, results of operations, and financial condition. It may

also result in parties with whom we have agreements claiming that they are not obligated to perform their commitments

pursuant to force majeure provisions in such agreements. This may also make it more difficult for us to enter into customer

agreements and/or to receive purchase orders for our products, to raise capital, either of which would adversely affect our

business, results of operations and the market price of our Class A Ordinary Shares.

In addition, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve

duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain

occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist

activity and/or regional conflict(s), there have been periods of significant call-ups of military reservists, including in response to the October 7, 2023 attack. REE's operations and business could be disrupted by such call-ups, particularly if such call-ups include members of REE's management.

Political instability in Israel could also disrupt REE's operations. Having held five general elections between 2019 and

2022, government policy is subject to regular disruptive changes. Additionally, over the past few years there have been

widespread protests regarding various political issues. Prime Minister Benjamin Netanyahu is also currently standing trial

on corruption and it is not clear to what extent this will affect the stability of the government. Actual or perceived political

instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely

affect the Israeli economy and, in turn, our business, financial condition, results of operations, growth prospects, and our

ability to raise additional funds.

***Investors' rights and responsibilities of REE's shareholders are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of non-Israeli companies.***

Because REE was incorporated under Israeli law, the rights and responsibilities of its shareholders are governed by its Amended and Restated Articles and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders of U.S. and other non-Israeli corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters, such as an amendment to the company's articles of association, an increase of the company's authorized share capital, a merger of the company and approval of related party transactions that require shareholder approval. A shareholder also has a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder or a shareholder who knows that it possesses the power to determine the outcome of a shareholders' vote or to appoint or prevent the appointment of an office holder in the company has a duty to act in fairness towards the company. These provisions may be interpreted to impose additional obligations and liabilities on REE's shareholders that are not typically imposed on shareholders of U.S. corporations.

***It may be difficult to enforce a judgment of a United States court against us and certain of our officers and directors in***

***Israel or the United States, to assert United States securities laws claims in Israel or to serve process on certain of our***

***officers and directors.***

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We are incorporated in Israel and all but one of our executive officers and four of our directors reside outside of the United States. Most of REE's assets are located outside of the United States and assets of the aforementioned executive officers and directors may be located outside of the United States. Therefore, a judgment obtained against REE, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action with respect to United States securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of United States securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not United States law is applicable to the claim. If United States law is found to be applicable, the content of applicable United States law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against s in Israel, you may not be able to collect any damages awarded by either a United States or foreign court.

***Provisions of Israeli law and REE's Amended and Restated Articles may delay, prevent or make undesirable an acquisition of all or a significant portion of its shares or assets.***

Provisions of Israeli law and REE's Amended and Restated Articles could have the effect of delaying or preventing a change in control and may make it more difficult for a third-party to acquire REE or its shareholders to elect different individuals to REE's board of directors, even if doing so would be considered to be beneficial by some of REE's shareholders, and may limit the price that investors may be willing to pay in the future for the Class A Ordinary Shares. Among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Israeli corporate law requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Israeli corporate law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Amended and Restated Articles generally require a vote of a simple majority of the voting power represented at a general meeting of shareholders in person or by proxy and voting thereon, as one class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Amended and Restated Articles generally do not permit a director to be removed except by a vote of the holders of (i) so long as any Class B Ordinary Shares remain outstanding, a simple majority of the voting power represented at a general meeting of shareholders in person or by proxy and voting thereon, as one class, and (ii) if no Class B Ordinary Shares remain outstanding, a supermajority of at least sixty-five percent (65%) of the voting power represented at a general meeting of shareholders in person or by proxy and voting thereon; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Amended and Restated Articles generally provide that director vacancies may be filled by REE's board of directors.

Further, Israeli tax considerations may make potential transactions undesirable to REE or some of its shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerous conditions, including, a holding period of two years from the date of the transaction during which certain sales and dispositions of shares of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred.

The tax benefits that are available to REE require it to continue to meet various conditions and may be terminated or reduced in the future, which could increase REE's costs and taxes. REE may be eligible for certain tax benefits provided to "Preferred Technological Enterprises" under the Israeli Law for the Encouragement of Capital Investments, 1959, referred to as the Investment Law. In order to remain eligible for the tax benefits for "Preferred Technological Enterprises" it must continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended. If these tax benefits are reduced, cancelled or discontinued, REE's Israeli taxable income from the approved enterprise would be subject to

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regular Israeli corporate tax rates. The current standard corporate tax rate for Israeli companies is 23%. Additionally, if REE increases its activities outside of Israel through acquisitions, for example, its expanded activities might not be eligible for inclusion in future Israeli tax benefit programs. See "*Item 10.E. Taxation – Certain Material Israeli Tax Considerations*."

***REE's Amended and Restated Articles provide that unless REE consents otherwise, the competent courts of Tel Aviv, Israel shall be the sole and exclusive forum for substantially all disputes between REE and its shareholders' under the Companies Law and the Israeli Securities Law, which could limit its shareholders ability to bring claims and proceedings against, as well as obtain favorable judicial forum for disputes with, REE, its directors, officers and other employees.***

The competent courts of Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on behalf of REE, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of REE to REE or REE's shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Israeli Companies Law, 5759-1999, as amended, or the Companies Law, or the Israeli Securities Law, 5728-1968, as amended, or the Israeli Securities Law. This exclusive forum provision is intended to apply to claims arising under Israeli Law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which federal courts would have exclusive jurisdiction. Such exclusive forum provision in the Amended and Restated Articles will not relieve REE of its duties to comply with federal securities laws and the rules and regulations thereunder, and shareholders of REE will not be deemed to have waived REE's compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholder's ability to bring a claim in a judicial forum of its choosing for disputes with REE or its directors or other employees which may discourage lawsuits against REE, its directors, officers and employees.

***REE is a foreign private issuer and, as a result, it is not subject to U.S. proxy rules and is subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.***

REE reports under the Exchange Act as a non-U.S. company with foreign private issuer status. Because REE qualifies as a foreign private issuer under the Exchange Act, it is exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, shareholder proposals, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act that require our 10% shareholders to file public reports of their share ownership and trading activity and create liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

***As REE is a "foreign private issuer" and follows certain home country corporate governance practices, its shareholders may not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.***

As a foreign private issuer, REE is permitted to follow certain home country corporate governance practices rather than those otherwise required by Nasdaq rules, provided that it discloses the requirements it is not following and describes the equivalent home country practices it follows instead. REE relies on this "foreign private issuer exemption" with respect to the Nasdaq rules for director nomination procedures and shareholder meeting quorums. REE may in the future elect to follow home country practices with regard to other matters. As a result, its shareholders will not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.

***REE may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.***

As discussed above, REE is a foreign private issuer, and therefore is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to REE on June 30, 2025. In the future, REE would lose its foreign private

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issuer status if (1) more than 50% of its outstanding voting securities are owned by U.S. residents and (2) a majority of its directors or executive officers are U.S. citizens or residents, or it fails to meet additional requirements necessary to avoid loss of foreign private issuer status. If REE loses its foreign private issuer status, it will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. REE would also have to comply with U.S. federal proxy requirements, and its officers, directors and principal shareholders will become subject to the short-swing profit recovery provisions of Section 16 of the Exchange Act. In addition, it would lose its ability to rely upon exemptions from certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a foreign private issuer, REE would incur significant additional legal, accounting and other expenses that it will not incur as a foreign private issuer.

**Risks Related to Ownership of the Class A Ordinary Shares**

***REE may issue additional Class A Ordinary Shares or other securities without shareholder approval, which would dilute existing ownership interests and may depress the market price of Class A Ordinary Shares.***

REE has previously issued and may continue to issue additional Class A Ordinary Shares or other equity securities of equal or senior rank in the future in connection with, among other things, REE's equity incentive plan, without shareholder approval, in a number of circumstances. REE's issuance of additional Class A Ordinary Shares or other equity securities of equal or senior rank would have the following effects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE's legacy shareholders' proportionate ownership interest in REE may decrease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of cash available per share, including for payment of dividends in the future, may decrease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the relative voting strength of each previously outstanding Class A Ordinary Share may be diminished; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market price of Class A Ordinary Shares may decline.

As of December 31, 2025, REE had 1,884,364 Class A Ordinary Shares available for future grant under the 2021 Plan and 154,284 shares available under the Employee Stock Purchase Plan. There were 3,574,908 Class A Ordinary Shares underlying outstanding options under its equity incentive plans, at a weighted average exercise price of $2.80 per share, 3,387,972 of which were vested and exercisable. Additionally, there were 950,588 Class A Ordinary Shares underlying outstanding RSUs under its equity incentive plan.

***Future sales of large amounts of shares into the public markets may adversely affect the market price of Class A Ordinary Shares.***

We have issued and sold, and may continue to issue and sell, additional Class A Ordinary Shares and/or securities convertible or exchangeable into Class A Ordinary Shares in the public markets. Such sales in the past have included our ATM program, securities offerings during 2024, and our registered direct offerings during March 2025. As a result, a substantial number of our Class A Ordinary Shares can be sold in the public market, along with sales by investors that purchased our securities in connection thereto. For example, as further described in Item 7.A of this Annual Report, among other shareholders, M&G currently holds 18.9% of our Class A Ordinary Shares along with additional shares that it can acquire through Warrants and Convertible Notes whereas Motherson currently holds 18.1% of our Class A Ordinary Shares. These shareholders along with other shareholders of REE could sell any or all of their shares at any time on the public market or to a person who wishes to acquire control of us, including in circumstances where such shareholder(s) no longer believes in REE, its management, financial condition, and/or business plan. Sales of a substantial number of our Class A Ordinary Shares in the public markets, or the perception that such sales could occur, could depress the market price of our Class A Ordinary Shares and/or impair our ability to raise capital through the sale of additional equity securities. Such large sale amounts could likewise keep our share price below the minimum bid amount on Nasdaq, which may cause us to be delisted if we are unable to reestablish compliance with the minimum bid amount.

Additionally, pursuant to the Investors' Rights Agreement (defined below) between REE, 10X Capital Venture Acquisition Corp., or 10X, Capital and certain of REE's shareholder, the Sponsor can demand that REE register its registrable securities under certain circumstances and also has piggyback registration rights for these securities in connection with certain registrations of securities that REE undertakes. REE is also required to use its commercially reasonable effort to maintain the effectiveness of a registration statement under the Securities Act covering such securities and certain other securities of REE, including those held by PIPE Investors. The availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of REE's Class A Ordinary Shares.

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**Risks Related to Taxation** 

***The IRS may not agree that REE should be treated as a non-U.S. corporation for U.S. federal income tax purposes.***

Although REE is incorporated and tax resident in Israel, the IRS may assert that it should be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Internal Revenue Code of 1986, as amended, or the Code. For U.S. federal income tax purposes, a corporation is generally considered a U.S. "domestic" corporation if it is created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia. Because REE is not so created or organized (but is instead incorporated only in Israel), it would generally be classified as a foreign corporation (that is, a corporation other than a U.S. "domestic" corporation) under these rules. Section 7874 of the Code provides an exception under which a corporation created or organized only under foreign law may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes, such as when a foreign corporation acquires the shares of a U.S. corporation.

Based on the terms of the Agreement and Plan of Merger, dated as of February 3, 2021, by and among 10X Capital, REE and Merger Sub, as such agreement may be amended or otherwise modified from time to time in accordance with its terms, or Merger Agreement, and the rules for determining share ownership under Code Section 7874 and the Treasury regulations promulgated under Code Section 7874, or the Section 7874 Regulations), REE is not expected to be treated as a U.S. corporation for U.S. federal income tax purposes under Code Section 7874 after the merger of Spark Merger Sub Inc., or Merger Sub, with and into 10X Capital, with 10X Capital surviving the merger and becoming a wholly-owned subsidiary of REE, along with the other transactions contemplated by the Merger Agreement, or the Merger. However, the application of Section 7874 of the Code is complex, is subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S. tax laws and regulations with possible retroactive effect) and is subject to certain factual uncertainties. Accordingly, there can be no assurance that the IRS will not challenge the status of REE as a foreign corporation under Code Section 7874 or that such challenge would not be sustained by a court.

If the IRS were to successfully challenge under Code Section 7874 REE's status as a foreign corporation for U.S. federal income tax purposes, REE and certain REE shareholders could be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on REE and future withholding taxes on certain REE shareholders, depending on the application of any income tax treaty that might apply to reduce such withholding taxes. In particular, holders of Class A Ordinary Shares and/or Warrants would be treated as holders of stock and warrants of a U.S. corporation. See "*Item 10.E. Taxation – Certain Material U.S. Tax Considerations – U.S. Federal Income Tax Treatment of REE*" for a more detailed discussion.

***U.S. Holders of Class A Ordinary Shares may suffer adverse tax consequences if REE is treated as a passive foreign investment company.***

A non-U.S. corporation generally will be treated as a "passive foreign investment company," or a PFIC, for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for such year is passive income (such as interest, dividends, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of assets giving rise to passive income) or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based on the current and anticipated composition of the income, assets and operations of REE and its subsidiaries, there is a significant risk that REE was a PFIC for U.S. federal income tax purposes for 2025, and REE may be a PFIC for U.S. federal income tax purposes for the current or future taxable years. This is a factual determination that depends on, among other things, the composition of REE's income and assets, and the market value of its shares and assets, including the composition of income and assets and the market value of shares and assets of its subsidiaries, from time to time, and thus a complete determination can only be made annually after the close of each taxable year. Furthermore, the value of our gross assets is likely to be determined in part by reference to our market capitalization, which may fluctuate significantly. Thus, no assurance can be given as to whether REE will be a PFIC in the current or any future taxable year. In addition, REE's U.S. counsel expresses no opinion with respect to REE's PFIC status for 2025, current, or future taxable years.

If REE is a PFIC for any taxable year, a U.S. Holder of Class A Ordinary Shares and/or Warrants may be subject to adverse tax consequences and may incur certain information reporting obligations. Under the PFIC rules, unless such U.S. Holder makes an election available under the Code (which election could itself have adverse consequences for such U.S. Holder), such U.S. Holder may be subject to U.S. federal income tax at the then prevailing maximum rates on ordinary income and possibly an "interest" charge, in respect of "excess distributions" and upon any gain from the disposition of

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Class A Ordinary Shares and/or Warrants, as if the excess distribution or gain had been recognized ratably over such U.S. Holder's holding period of the Class A Ordinary Shares and/or Warrants. Certain elections (including a qualified electing fund election (or a QEF election) or a mark-to-market election) that may be available to U.S. Holders of Class A Ordinary Shares to mitigate some of the adverse tax consequences resulting from PFIC treatment, however, are not available with respect to the Warrants. Additionally, there can be no assurance that REE will have timely knowledge of its status as a PFIC in the future or that REE will timely provide information that would be required in order for a U.S. Holder to make a QEF election. See "*Item 10.E. Taxation – Certain Material U.S. Tax Considerations – U.S Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to U.S. Holders – Passive Foreign Investment Company Rules*" for further discussion. U.S. Holders of Class A Ordinary Shares and/or Warrants are strongly encouraged to consult their own advisors regarding the potential application of these rules to REE and the ownership of Class A Ordinary Shares and/or Warrants.

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**Item 4. Information on the Company**

**A. History and development of the company**

REE Automotive Ltd. was incorporated on January 16, 2011, as a company limited by shares under the laws of the State of Israel. We are registered under the Israeli Companies Law and registered with the Israeli Registrar of Companies under registration number 51-455733-9. REE's principal executive offices are located at Kibbutz Glil-Yam 4690500, Israel, and our telephone number is +972 (77) 899-5200. Our registered agent for service of process is Puglisi & Associates located at 850 Library Avenue, Newark, Delaware 19711, and its telephone number is +1 (302) 738-6680.

Investors and others should note that we may announce business and financial information to our investors using our website www.ree.auto, our SEC Filings, webcasts, press releases, and public conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.

Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included our website in this Annual Report solely for informational purposes. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.

***Capital Expenditures***

For a description of our capital expenditures, see "*Item 5.B*. *Operating and Financial Review and Prospects-Liquidity and Capital Resources.*"

**B. Business Overview**

***Company Overview***

We are an automotive technology company that develops and produces cutting edge SDV technology designed to manage

Our approach of "complete not compete" allows original equipment manufacturers, or OEMs, and other customer types to license our technology in order to design and build vehicles tailored to their specific requirements using REE's scalable, future-ready platform. Our technology and collaborative application programming interface, or API, approach allows our customers to connect their current and future operating systems and application layers having significant input on the design of the system according to their individual needs. In addition, our software flexibility allows delivery and logistics fleets, dealers, Mobility-as-a-Service, or MaaS, providers and others to incorporate their Voice of the Customer, or VoC, input into new vehicle designs and applications. Incorporation of this voice allows these customers to design vehicles that are better tailored to the specific needs of their end-user base and the market in which they service. Additionally, in February 2025, we launched REEai Cloud to provide advanced data analytics based on artificial intelligence capabilities, among others.

Our SDV technology is a combination of software, electrical hardware, and by-wire technology.

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***Software***: Our patent-protected proprietary software controls different automotive functions including vehicle dynamics, safety, power loops, efficiency, advanced driver-assistance systems, or ADAS, infotainment and over-the-air, or OTA, services. Our software and analytics support optimized performance and provide advanced data analytics via our REEai Cloud. With embedded software redundancies on both the communication layer and the application layer, we are able to support high levels of ADAS and autonomy features including Level 4, or L4, autonomous driving.

***Electrical Hardware***: We have developed a fast system on chip, or SoC, built in collaboration with Infineon and Vitesco to run our propriety software in a secure, stable, and efficient manner. Our current Gen4 SoC is designed in a full zonal architecture, allowing for a significant reduction in the number of vehicle electronic control units, or ECUs, and controllers. Our SoC is designed in an effort to be future-proof with OTA update capabilities, embedded hardware redundancies, and ample computing power.

***X-By-Wire***: Our X-By-Wire vehicles rely upon our proprietary REEcorner™ design, which packs critical vehicle components including steering, braking, suspension, powertrain, and control into a single compact module that is located between the chassis and the wheels. Each module is independently controlled, eliminating traditional mechanical linkages. Once each of our REEcorners are positioned across the four corners of our chassis, they can independently improve driving precision on the road, which we believe produces a safer vehicle overall. Key benefits to our X-By-Wire include what we believe will be a lower overall total cost of ownership, or TCO, and operational efficiency. Our X-By-Wire technology is power agnostic, allowing us to utilize different power sources and configurations including different battery types, hybrid vehicles, and fuel cells. Our REEcorner design is able to incorporate multiple drive, brake, suspension, and other components including several existing off-the-shelf components, maximizing compatibility with OEMs.

In furtherance of such goals, we had also partnered with various dealerships in North America in an effort to build one of the largest commercial EV dealership networks. As of May 15, 2025, our dealer network had spanned across approximately 80 locations in both the U.S. and Canada, each an Authorized Dealer. Each of our Authorized Dealers had placed initial orders for our P7 products, with certain Authorized Dealers having also placed follow-on capacity reservations. We have also entered into a non-binding memorandum of understanding with a leading technology company to produce autonomous shuttles. Our reservations include both binding sales orders and non-binding capacity reservations, including those from our March MOU (defined below). Reservations are intended to include deliveries over the next few years.

Furthermore, as a technology company, we had sought to partner with other leaders for the production and assembly of our

P7 vehicle lineup. In 2024, we entered into a strategic partnership with Motherson Group, one of the largest automotive

component manufacturers with operations in more than 400 facilities across 44 countries globally. Through this partnership

we expected Motherson to manage our global supply chain and drive operational and manufacturing improvements,

impacting our production line, supply chain management, bill of materials, and cost structure. In addition, we

contracted with Roush Industries Inc., a leading global product development supplier operating across more than 30

countries, to assemble our P7 lineup in its U.S. facilities in Michigan. Prior to our production pause, we had begun the

production of our initial vehicles for delivery.

Prior to our production pause, we had made progress on the following main business fronts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Growing our vehicle reservations value

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Kicking off production of our P7 program

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securing a global supply chain for the P7 lineup

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increasing our North American footprint through our Authorized Dealer network, or ADN, to approximately 80 locations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Advancing discussions with OEMs and technology companies for integration of our SDV technology into their vehicle platforms

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Initiating autonomous driving, or AD, programs with Airbus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Launching REEai Cloud product in February 2025; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securing a strategic partnership and investment from Motherson and launching U.S. assembly and integration of our P7 products with Roush, both of which help us achieve improved operating economics while accelerating our ability to scale and meet demand.

**Recent Business Developments & Initiatives**

*Advancing negotiations with OEMs, Tier 1s and mobility players for integration of our SDV and x-by-wire technology into vehicle platforms*

We are in active discussions with several global vehicle manufacturers who are interested in integrating our SDV and x-by-wire technology into their vehicles in order to leverage our technology and shorten their time to introduce their vehicles to the market. We are seeing that OEMs are looking to expedite their transition to SDV architectures, and therefore collaborating with technology pioneers like us can allow automakers, in our view, to protect and regain market share by offering customers more technologically advanced vehicles with better TCO and performance as well as decreasing their research and development costs. Our philosophy of "complete not compete" allows global OEMs, major automotive companies, and other customer types to access our SDV technology, which they can integrate into current and future product lines across multiple vehicle categories. We are seeing interest from OEMs that are evaluating our SDV technology, which may include interest with respect to our x-by-wire technology, REEcorner®, and/or our Software-as-a-Service, or SaaS, offerings.

*Strategic Alternative Process*

On May 1, 2026, the Company announced that it had initiated a review of strategic alternatives to maximize shareholder value. These strategic alternatives may include a potential sale of the Company or all or a portion of its assets, a merger or other strategic business combination, a reverse merger, strategic partnership(s), licensing opportunities, or other strategic transactions. The Company expects the strategic review process to proceed on an expedited basis. The Company's Board of Directors has engaged TD Securities (USA) LLC as its financial advisor to assist it in the strategic review process.

While this strategic review is underway, the Company does not intend to disclose or comment on developments related to its review unless and until its Board of Directors has approved a specific transaction, or it has otherwise been determined that further disclosure is appropriate or necessary. There can be no assurance that this strategic review will result in any transaction, nor any assurance as to the outcome or timing thereof.

*November 2025 Mitsubishi Fuso Memorandum of Understanding*

On November 18, 2025, we announced that we entered into a non-binding memorandum of understanding, or the MOU,

*Technology Company Shuttle Project*

On March 18, 2025, we previously announced the entry into a non-binding memorandum of understanding, or the March

MOU, with a global technology company. On August 15, 2025, we converted our March 2025 memorandum of understanding with a leading technology company into the Definitive Agreement, which became binding and effective upon its execution. However, the commencement of the Definitive Agreement has not yet occurred. Under the Definitive Agreement, REE and the technology company have agreed to collaborate on the design and development of autonomous shuttle prototypes based on our proprietary SDV technology, subject to the commencement of the Definitive Agreement, which date is subject to certain satisfaction of certain conditions precedent, such date being the Commencement Date. Following the Commencement Date and subject to the implementation of the Definitive Agreement, we expect to generate

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up to approximately $107 million over an expected two-year development period, with payments structured on a phased, milestone-based basis, including an initial payment upon the Commencement Date and additional payments tied to development progress. The Definitive Agreement became effective upon execution, but the Commencement Date will occur only upon satisfaction of certain conditions precedent, which have not occurred as of the date of this Annual Report. REE has completed all actions required to trigger the Commencement Date, and the remaining conditions precedent in order to trigger the Commencement Date must be satisfied solely by the counterparty and are outside of REE's control. The Definitive Agreement also contemplates a potential subsequent production phase relating to Level 4 autonomous public transportation vehicles, incorporating REEcorner modules, which would be subject to the successful completion of the development phase and the negotiation and execution of a separate serial supply and after-market agreement. Prior to the Commencement Date, each party has a contractual right to withdraw from the Definitive Agreement. To-date, neither party has delivered a notice to withdraw from the Definitive Agreement.

*BorgWarner Collaboration*

On December 29, 2025, we announced entry into a non-binding memorandum of understanding with BorgWarner, or the

BorgWarner MOU, a Tier 1 automotive supplier, and its motion brand Cascadia. The BorgWarner MOU provides a

framework for cooperation related to the evaluation, development, and potential commercialization of a next-generation

electric drive unit, or EDU, based on REEcorner technology for global OEM electrification programs. The new EDU

product will be jointly developed by BorgWarner, Cascadia Motion, and REE. The BorgWarner MOU provides for a

phased commercial plan, including the potential for royalty-based arrangements and time-limited exclusivity option for the

distribution of an EDU that integrates BorgWarner's Cascadia drive unit (motor and inverter) with REEcorner technology, subject to further evaluation, negotiation, and the execution of definitive agreements. In addition to the EDU-focused product offering, the parties plan to evaluate demand for complete SDV solutions, including standalone REEcorner units and REE's SDV products, which could supplement the EDU offering or provide additional capabilities for OEM customers.

*Pause of Vehicle Production*

Due to what we believed to be unforeseen and unpreventable circumstances surrounding U.S. trade policy with respect to

tariffs and trade wars, on May 15, 2025 we paused our production plans with respect to our P7-S Strip Chassis and P7-C

Chassis Cab and Cutway Chassis products until the situation stabilizes. We had stated that once we better understand the

final determinations with respect to country-specific tariffs and trade deals, should they materialize, we would expect to

address our next steps with respect to such production. As of the date of this Annual Report, the production pause is still in

place. As described under "Cost of Revenues" and "Other Expenses" below, we have taken certain impairments and write-offs in connection with our production pause. For the sake of clarity, as discussed in "Liquidity and Capital Resources," based on our current financial condition, we do not expect to make a determination regarding any possible resumption of production until we have sufficient capital to support production needs, and there can be no assurance that we will obtain such capital or resume production at all.

In connection with this pause and our cost reduction initiatives, we reevaluated certain suppliers and other contractual relationships, resulting in the termination of our agreement with Roush Industries, as contract manufacturer, along with other suppliers. In connection therewith, in certain cases we entered into negotiated resolutions of outstanding obligations and, in one case, arbitration proceedings were commenced, which was ultimately settled. Since our production pause, we have focused on less capital-intensive commercialization pathways, including through licensing of our SDV technology and offering our REEcorners to OEMs, suppliers, and other customers. In particular, we have continued discussions with several potential customers about the integration of REE's zonal SDV architecture and x-by-wire technology into their future vehicle models. We have also been working to collaborate with other Tier 1 suppliers to produce vehicle components based on REEcorner modules to support higher levels of functional safety, including ASIL-D, and to improve efficiency and time to market through over-the-air updates.

*Vehicle Production Prior to Production Pause*

Prior to this production pause, as part of the commercialization of our P7 lineup, in September 2024, we had announced

that we selected U.S.-based Roush Industries, a leading global product development supplier operating across more than 30 countries, to assemble our P7 vehicles at its U.S. facility. We had also built out a network of carefully curated authorized dealers, which we refer to as our Authorized Dealership Network, focusing on those that have embraced the EV future of commercial vehicles and that are in geographic areas of high demand. In certain cases, our Authorized Dealer Network, were located in states that provided their own tax incentives. Through this dealer network, we had expected to provide sales and service points to the fleet customers across North America.

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By the end of 2024, we had approximately 80 Authorized Dealership Network locations across the U.S. and Canada, which

as of May 15, 2025, had each placed initial orders for our P7 vehicles. Certain Authorized Dealers also had placed follow-on capacity reservations. Our reservations had included both binding sales orders and non-binding capacity reservations,

including those from our March 2025 memorandum of understanding with a leading technology company. Reservations

were also intended to include deliveries over the next few years.

Such Authorized Dealership Network had included: Pritchard EV, Tom's Truck Center, Industrial Power & Truck

Equipment, New England Truck Solutions, FMI Truck Sales & Services The Truck Shop, Monarch Truck Center, Ry-Den

Truck Center, Jim Reed's Truck Sales, Inc., Fleet Direct Sales, Specialty Vehicles & Equipment Ltd., McCandless Truck

Centers, Lynch Truck Centers, Midwest Transit Equipment, LLC, XPO Auto Sales, Inc. and Harris Auto Group (BC).

During 2024, we also delivered our P7-C cab chassis demonstration trucks for fleet evaluations in North America through

our Authorized Dealer Network. Our demonstration program was intended to allow potential fleet customers the

opportunity to experience the benefits of our P7-C commercial vehicle in multiple upfitting configuration based on several

partnerships with leading upfitters in North America. As of May 2025, we had conducted more than 400 demonstrations.

In addition, during 2024, we obtained interest in, and support of, our SDV technology vehicle through additional partnerships. In particular, Penske began demonstrations of our P7-C truck upfitted with a 16-foot Wabash (NYSE: WNC)

for demonstration and orders across North America. We also had sent U-Haul our P7-S platform for evaluation as a

solution to support the electrification of its fleet. During 2024, Knapheide showcased our P7-C with a KUV body, which

was aimed to provide benefits including low load floor, greater driver maneuverability and comfort and high driver

visibility. Lastly, Mission Mobile had signed a non-binding agreement with us to build a mobile healthcare fleet using REE

trucks—highlighting our SDV technology's versatility across applications.

*Initiating Autonomous Driving (AD) Programs with Airbus*

In March 2024, we were selected by, and delivered a prototype vehicle to Airbus UpNext, a wholly-owned innovation subsidiary of Airbus SE, or Airbus, to provide technological know-how based upon the REEcorner® and full-by-wire control systems. Airbus's autonomous program, reliant upon our technology, resulted in the first-ever autonomous drive on an active runway in a large commercial airport, demonstrating our by-wire leadership and the strength of our autonomous-ready technological capabilities. We believe that the autonomous ready capabilities of our SDV products, along with the Airbus demonstration have generated additional interest from leading AD companies looking for a functional-safe platform as the basis for their future autonomous fleets.

*Motherson Strategic Supply Chain Management Services Agreement*

On September 15, 2024, we executed a supply chain management services agreement, or Supply Chain Management Services Agreement, with Motherson, pursuant to which we appointed Motherson (including any of its affiliates) to provide certain services to us on an exclusive basis. In that regard, Motherson agreed to provide services relating to development, management, and optimization of our supply chain, which includes supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration.

When we signed this agreement, we anticipated that our ability to service customers at scale will increase. By collaborating with Motherson, we sought to focus on further growing our customer base, pulling forward orders, and increasing gross and cash flow margins.

If and when we resume production, our ability to do so will depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions, and we would expect to build to order and have aligned our production plan with what we expect to be our current reservation trajectory. We believe that this strategy would allow us to maximize our capital efficiency.

As part of this collaboration, we agreed to pay Motherson, on a quarterly basis, an amount equal to fifty percent (50%) of certain cost improvements that would be achieved under the agreement in addition to annual payments for such resources required to be deployed by Motherson for the purpose of rendering the services under the agreement, which shall be agreed upon by us and Motherson.

The agreement will terminate upon the later of three (3) years or when Motherson has received an amount equal to $30 million in quarterly fees. In addition, the agreement will automatically renew for consecutive one (1) year terms unless either party provides notice of termination within 180 days prior to the end of a term. In addition, Motherson may terminate the agreement for any reason upon providing 180 day written prior notice.

*Lowering Acquisition Costs* 

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With capital efficiency in mind, as we have noted above, we seek to "complete not compete".

Prior to our production delay we supported and incentivized, and if and when we resume production, we would expect to support and incentivize, our ADN in certain ways that further enhance their economics for selling our vehicles with the goal of lowering acquisition costs. For example, we seek to create brand awareness for our Authorized Dealers through our brand and SDV technology promotional efforts, including through social media campaigns, trade shows, and other demonstrations, while also providing each of our Authorized Dealers with the necessary marketing materials, presentations, discount product options, and sales and product trainings to aid them in their sales efforts. In order to provide customer service, we are leveraging our ADN to provide after-sales parts and service. We believe that this provides Authorized Dealers with parts and service revenues to help drive profitability and allows them to be partners to the fleets in their service areas with respect to our vehicles. We have started training our authorized dealers to certify technicians to provide service on our vehicles, which we believe will assist in facilitating adoption by fleets. We anticipate further expanding our ADN in North America.

Additionally, we had pursued, and would expect to again pursue if and when we resume production, multiple go-to-market paths to accelerate the adoption of our SDV vehicles by commercial fleet owners and operators. This includes collaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a comprehensive ecosystem of enabling capabilities and services, such as after-sales, service and Data-as-a-Service, or DaaS, in order to allow for a smoother transition for our potential customers from internal combustion engine, or ICE, vehicles to EV fleets.

If and when we resume production, we anticipate taking a measured approach to continue to allow time for customer and end-user feedback, stabilize production processes and quality assurance and, most importantly, optimize our bill of material and production costs.

**Market Opportunity for SDV Vehicle Technology** 

According to Morgan Stanley's 2023 report titled "*The Migration to SDVs*", the SDV market is projected to grow at a compound annual growth rate of 41% from $147 billion in 2024 to $1.16 trillion by 2030. SDV accounted for just 3% of automotive production in 2021 and may represent 90% of new vehicle production by 2029. OEMs also appear to be taking an increased interest in SDV technology and incorporating it as a part of their overall strategy. For example, in 2024, Rivian established a joint venture with Volkswagen International America Inc. and Volkswagen AG and its affiliate to build electrical architecture and software technology together for future electric vehicles. General Motors also completed its acquisition of GM Cruise Holdings LLC, which it uses to lead in autonomous and software-defined vehicles, according to its public reports. Ford Motor Company has similarly expressed, according to its public report, that electric and software-defined vehicles will play an increasingly important role for its future.

With respect to commercial vehicles, in particular, we believe the shift to electric vehicles in the North American commercial vehicle market continues to grow driven by the maturity of electric truck offerings yielding lower operating costs over time, the reduction in battery costs and improvement in charging infrastructure along with consumer preference. We believe that the global commercial EV industry is growing as well and undergoing a transformation, which we expect to continue as driven by the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **OEMs are increasingly looking to integrate SDV into their vehicle line ups.** We believe that amidst competition between legacy auto manufacturers and new Chinese OEMs, more legacy OEMs are looking to expedite their transition to SDV architectures. We believe that collaborating with software-defined vehicle technology pioneers allows these automakers to protect and regain market share by offering customers vehicles that are more technologically advanced with a better total cost of ownership and performance, while being able to also offer software services. REE's philosophy of "complete, not compete" allows legacy OEMs to access our SDV technology, which they can integrate into their current and future product line across multiple vehicle categories.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Growth Anticipated in Last-Mile and Mid-Mile Delivery Market.** The rise of e-commerce has led to growth in the transportation services and logistics providers that provide e-commerce services. This in turn feeds into a need for delivery vehicles with increased productivity and efficiencies. According to Statista, in the e-commerce market, the number of users is expected to amount to 4.1 billion users by 2030 and revenue in the e-commerce market is projected to reach $3.88 trillion in 2026. We believe that the durable design and added benefits of our P7 lineup positions us to compete in this market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Autonomous driving has the potential to transform transportation.** In recent years, there has been an automotive focus on autonomous driving. We have heard from potential customers that the commercial vehicle market suffers from driver shortages and autonomy is a compelling solution for fleets and operators. However, fleets and operators lack a safe, mature and reliable vehicle architecture to support autonomous driving, once they have identified a proper autonomous software provider. According to McKinsey & Company, autonomous driving could create between $300 billion and $400 billion in revenue by 2035. We believe that our successful demonstration with Airbus UpNext positions us to be a leader with autonomous-ready technology to service this market need.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Consumer Preferences Driving EV Adoption*.*** The shift in consumer preference is attributable to consumers' environmental consciousness and increased awareness of the impact of global climate change, improvement in battery technology, the continuing build-out of electric charging infrastructure, increased offerings from automotive manufacturers that cater to this consumer demand and the growing comfort with EV range capabilities that is easing "range anxiety" and facilitating adoption. Furthermore, EVs present ongoing energy cost reductions as compared to ICE vehicles due to ongoing gas price volatility.

**REE's Technological Differentiation** 

***Industry Approaches and Their Limitations***

We believe that the automotive industry is at an inflection point. Based on our experience, we believe that global OEMs face significant hurdles in transitioning to software-defined vehicles due to outdated vehicle architectures, which were built around mechanical systems rather than digital platforms. Their reliance on fragmented third-party software ecosystems creates integration challenges, and their vehicles' mechanical linkages make it difficult to adopt by-wire systems without complete redesigns. Additionally, based on our experience, we understand that some OEMs lack the in-house software, AI, and cybersecurity expertise needed for SDV development. Organizational inertia and long product development cycles further hinder agility and innovation. In contrast, we built REE from the ground up with a modular, software-first approach, enabling faster integration, flexibility, and future-ready scalability.

The design of the average ICE vehicle has remained relatively unchanged over the last century. The typical format of the ICE vehicle consists of an engine positioned between the front or back wheels, with most other critical vehicle systems such as steering, braking, suspension, powertrain and control likewise located centrally between the vehicle wheels. Most EVs in the market locate these components similarly. While this vehicle format is familiar, it is subject to an inherent limitation with respect to compartment space, vehicle function, maintenance and modularity.

We believe that ICE vehicles and EV manufacturers employ a correspondingly similar strategy to the development of new vehicle platforms: vehicle functionality is determined by the OEM mindset trying to forecast and influence future market trends. This means that, during development, most ICE vehicle and EV manufacturers will design and produce individual new vehicle platforms with vehicle models being restricted as to size, shape or functionality. This, in our view, creates a less nimble development process than is required to respond quickly and effectively to changing market demand and customer/end-user preferences unless such demand corresponds with existing "off-the-shelf" offerings. As a result, in trying to address these changes in market preference, ICE vehicle and EV manufacturers are burdened by extremely high capital costs and long development cycles inherent in designing and engineering new models.

***REE's Technology Approach***

We address such limitations with innovation at the core of our DNA. This is what drives us throughout the development process all the way down to the architecture of every detail of our SDV design. We have developed core innovations that make up the foundation of our SDV technology offering. In particular, our SDV technology contains what we believe to be a number of key technological advancements and critical design functions that provide distinct advantages over competitor offerings. These advancements include the management of a vehicle's operations and features through software to enable a safer and more stable means of transport. Our proprietary software manages multiple vehicle operations from vehicle dynamics and ADAS to infotainment, cabin and OTA services. This SDV technology is supported by REEai Cloud analytics, which provides real-time data analytics and calculations on the vehicle, pattern and anomaly recognition, along with built-in redundancies for advanced autonomy, including L4 capabilities.

Furthermore, we have designed our REEcorner® by-wire steering, braking and drive to deliver overall better stability and greater maneuverability in a vehicle, designed for better performance, which we believe produces better overall safety.

With respect to our P7 vehicle in particular, our X-by-Wire technology and progressive iterations of the REEcorner have undergone testing and validation in order to achieve a product that meets the standards, needs, and specifications of our and our ADN's customer/end-user base. For example, we completed winter testing in cold conditions of minus 30 degrees Celsius, testing our P7 vehicle and the X-by-Wire technology therein on solid ice, testing safety, vehicle dynamics and battery performance to allow us to deliver a better product to our customers. During winter testing, we completed several verification and validation activities including ABS and Traction Control Systems, putting vehicles through cold soaks and evaluating their ability to withstand and perform even after prolonged exposure to cold conditions. We also tested charging conditions for our P7 overnight in such conditions.

***REE's X-BY-Wire Technology and Zonal SDV Architecture***

We deploy our x-by-wire vehicle technology and zonal SDV architecture to control a vehicle's functions and drive through

a combination of software, data, and hardware.

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***REE Software****:* REE's proprietary-developed software is designed to centralize the control of the vehicle through a high-performance vehicle's main electronic control unit, or ECU. This control enables significant development synergies by preserving core FuSa and Autosar based software development achievements including motion and stability dynamic functions and ISO 26262 and 21434. Our software further controls a vehicle's performance and system management, including ADAS, vehicle controls, vehicle dynamics, infotainment systems, brake managements systems, and autonomous-ready systems. Additionally, during a vehicle's drive, its data-as-a-service, or DaaS, sensors gather thousands of data points per second and communicate them for incorporation into our software along with driver behavior and analysis. Such data points could include, among others, weather conditions or other environmental conditions. Using such data, our software communicates with our hardware to administer commands with respect to the braking, steering, and driving of the vehicle. Through this method, we believe that our software can enable strong electronic stability control, or ESC, in adverse conditions and in emergency maneuvers. We have also built into our software certain fail operational design redundancies to ensure functionality is preserved in the event of a failure, should it occur. We design such redundancies in an effort to have no single point-of-failure. In addition, our software is designed in a zonal architecture that allows to connect multiple "zones" from third parties such as ADAS, telecommunication, vehicle control units, in addition to supporting multiple operating systems from different OEMs. The zonal architecture design supports our collaboration with OEMs and allows OTA updates of core components and capabilities without damaging the integrity or stability of the system. The usage of zonal architecture also allows for the allocation of redundant computing power and capabilities in the event of a malfunction without the need to have additional backup systems.

***REE Hardware:*** In collaboration with Infineon and Vitesco, we built a fast and strong SoC to power our proprietary software in a zonal architecture that reduces the number of ECUs in a vehicle. Through this we believe that it lowers costs, accelerates time-to-market for our customers, provides OTA support, and provides a technology that we design in an effort to make future-proof. Specifically, along with our zone specific ECUs, we use a combination of two main ECUs, our REEGateway ECU, and REECenter ECU hardware to form the backbone of our SDV technology.

The *REECenter ECU* serves as the software-defined nerve-center that synchronizes steering, braking, propulsion,

and traction with a design to provide ASIL-D functional safety, cybersecurity-by-design and true fail-operational

redundancy for next-generation electric and autonomous vehicles. More specifically, it provides holistic motion control by harmonizing steering, braking, acceleration and traction in real-time with an aim to provide smooth and predictive vehicle dynamics. Through dual independent inertial measurement units, or IMUs, which serve as vehicle sensors, along with wheel-speed, voltage, current, and thermal inputs, the REECenter ECU seeks to achieve millisecond-level situational awareness. Additionally, the ASIL-D safety architecture uses dual local-step compute channels, built in diagnostics and watchdogs in an effort to meet ISO 26262 standards. For redundancy, it is designed with fail-operational power and communications in an effort to keep the vehicle controllable during faults.

The *REE Gateway* serves as a secure data router and is designed to connect in-vehicle networks with external

cloud and fleet systems. In particular, it is designed to route and secure data between all in-platform CAN networks, and "foreign" devices (LiDAR, OBD, diagnostics, OTA) to maintain controlled, prioritized communication. It runs two Infineon AURIX processors in lock-step with a dedicated watchdog, SPI, and interrupt links for fail-operational control in the event of a failure. It relies on certain security methods to build integrity and trust and supports SSL/TLS sessions for cloud links.

Moving to the zonal architecture, the REEzonal ECUs are designed to consolidate and control steer, brake, and

drive functions within each vehicle zone. Such ECUs also provide capabilities to obtain over-the-air updates, provide vehicle diagnostics, and data monitoring with respect to various data sets from a vehicle. These localized ECUs consolidate and control steer, brake, and drive functions within each vehicle zone. Here as well, we have built certain fail operational design redundancies into our hardware to maintain vehicle functionality in the event of a failure, should it occur.

***REEai Cloud:*** To improve a vehicle's drive and enhance its awareness of the surrounding environment, we have developed REEai Cloud. REEai Cloud is a software-as-a-service product that provides advanced data analytics to fleet operators for vehicle and service optimization with the aim of further reducing TCO, enhancing safety, and optimizing vehicle driving features. For example, our payload monitoring system is designed to provide fleet operators with real-time weight data calculations, potentially reducing fines that result from overweight payloads. Similarly, such monitoring system is designed to improve vehicle stability and tire wear-and-tear based upon real-time data with respect to a vehicle's payload weight. We believe that such product can deliver more real-time data to fleet operators for actionable insights, which helps optimize their fleet performance, creating an additional revenue source for REE. We can offer REEai Cloud as a standalone product while also selling it for integration with other products.

***REEcorners*®*:*** Our revolutionary REEcorner® is a compact single module that integrates critical vehicle drive components (steering, braking, suspension, powertrain and control) into the area between the chassis and the wheel. Use of

these REEcorners provides for a versatile, customizable, modular platform that can be adapted to mission-specific applications. This versatility is designed to permit fleet operators, technology companies and OEMs to design and develop

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In sum, the key features of REE's next-generation SDV technology include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• X-by-Wire architecture, which has been FMVSS-certified (described below) for public roads

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adaptive vehicle dynamics learns and enhances driving, safety and stability

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REEai Cloud for vehicle and services optimization and advanced data analytics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Autonomous-ready full X-by-Wire redundancy designed in a manner that draws from ISO 26262 ASIL-D level for L4-5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Core over-the-air technology with virtual security operations, cybersecurity, and real time encryption and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Virtual software development environment drastically reduces development cycles and total time to market

We believe that this approach differentiates us from other players, who we believe must often substantially redesign and reengineer their vehicles in order to meet market demand. Such actions can result in a significant time investment and required capital amounts in relation to architecture integration, unique performance requirements, different market requirements and full crash structure development and testing.

In contrast, REE's underlying SDV technologies are clean-sheet that can be designed to work together with other potential customer, including OEMs, operating systems and proprietary designs. By leveraging more than a decade of our innovations, we believe that REE customers will be able to design new vehicle models more easily and bring them to market in less than the traditional amount of time needed. Doing so allows us to meet our customers where they are and adjust our product offerings into a design or system that a potential customer currently uses and/or seeks to develop/build in the future.

Each of the aspects of our technology described above layers on benefits to a potential customer, however they are built to be stand alone. We believe that when each of these are combined together it provides a customer with the greatest set of long-term competitive benefits that we can offer in terms of versatile, customizable, modular platforms that can be adapted to mission-specific applications. With this level of versatility, we believe that it provides fleet operators, OEMs, and other customers alike the ability to design and develop vehicles tailored to their particular requirements while seeking to reduce the total cost of ownership.

Further highlighting our innovation, we were named a CES 2025 Innovation Award® Honoree for our SDV technology and were awarded Frost & Sulivan's 2025 Company of the Year award in the North American Electric Medium-Duty Vehicle Platform Industry category.

**REE's Products** 

REE's goal is to serve counterparties and customers with a range of electric and SDV solutions, including X-by-Wire systems, zonal SDV architecture, software services, complete commercial EVs, stripped chassis, and REEcorner® modules. REE provides different paths to partner with it to construct SDVs. These paths range from licensing its SDV technology, SDV engineering partnerships, all the way through full vehicle engineering and production partnerships. Having this range of offerings allows a customer to either (i) build mission-specific vehicles built on REE SDV technology, which they can tailor to their vehicle size, design, power-source, and driving mode (*i.e.,* it is autonomous-ready) needs, and/or (ii) to receive an EV commercial vehicle that offers the benefits of SDV technology, EV, modularity, among other benefits, in a prepackaged solution.

As an initial product, we had designed and previously launched the P7 lineup in an effort to present our SDV technology through a prepackaged commercial vehicle to provide a technological demonstration for how our technology can be implemented and showcased in practice in an actual vehicle. Due to what we believed to have been unforeseen and unpreventable circumstances surrounding U.S. trade policy with respect to tariffs and trade wars, we paused our production

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plans with respect to our P7-S Strip Chassis and P7-C Chassis Cab and Cutway Chassis products until the situation stabilizes. Prior to this production pause, as part of the commercialization of our P7 lineup, we had built out a network of carefully curated authorized dealers, which we refer to as our Authorized Dealership Network, focusing on those that have embraced the EV future of commercial vehicles and that were in geographic areas of high demand. In certain cases, our Authorized Dealer Network, were located in states that provided their own tax incentives. Through such network, we had expected to provide sales and service points to the fleet customers across North America.

As further described below in our Go-to-Market strategy section, since our production pause, we advanced our Phase 2 software business and focused our efforts on securing proof-of concepts, design wins and/or partnerships with OEMs and technology companies with respect to the integration of our SDV technology products into their vehicles. Licensing REE's SDV technology allows OEMs and technology companies to design and build vehicles tailored to their specific requirements by deploying REE's zonal SDV architecture, x-by-wire, and proprietary software packages of advanced vehicle dynamics, chassis control, body control, autonomy integration, safety systems, and connectivity. Such potential customers can also integrate REE's steer-by-wire, brake-by-wire and drive-by-wire independent wheel control into their own vehicle functionalities, platforms, and applications, including autonomous applications. Through a partnership with REE, these customers can likewise collaborate on the design and development of vehicle prototypes and road-ready vehicles based on our proprietary SDV technology. Such projects can include collaboration between the engineering teams of REE and the customer to transform existing traditional vehicle infrastructures and designs into software-defined models.

***REECore***

Through a license of our unified zonal SDV architecture and x-by-wire technology, OEMs and technology companies can power motion, safety, power, and connectivity, which can also be adapted to multiple vehicle classes and platforms. This technology includes built-in diagnostics, OTA update capabilities, and fleet data integration. Through a REECore partnership with REE, OEM engineering teams work collaboratively with REE's staff to convert their traditional commercial vehicles into next-generation commercial vehicles that are designed to be smarter, safer, and upgradable cloud-connected software-defined trucks. The deployment of our REE zonal architecture ECU design simplifies the integration and reduces the hardware complexity to allow OEMs to standardize across multiple vehicle platforms. This product's built-in cybersecurity, AI-driven serviceability, and continuous OTA updates are designed to provide a future-proof foundation for autonomous and connected capabilities. Through a REECore partnership, OEMs receive a tested, road-ready SDV solution that is designed to accelerate their time-to-market without compromising safety or performance. Moreover, this product is designed to reduce downtime, lower the total cost of ownership, and unlock new data-driven revenue for OEMs and technology companies alike.

***REEautonomy***

Customers can deploy our REEcorner® technology to enable independent steer-by-wire, brake-by-wire and drive-by-wire wheel control across different means of autonomous transportation. This technology allows for more precise maneuverability and real-time adaptability while integrating into third party autonomous algorithms that operate the mode of transport. For customers interested in launching autonomous transportation, REE's technology provides certain key advantages, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Integrated hardware and software that combines REE's zonal architecture, x-by-wire systems, and embedded intelligence for AV readiness in an effort to provide more safe and scalable autonomy,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Autonomous intelligence, which provides advanced sensing, artificial intelligence, and data fusion to enable reliable real-time decision-making,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Improved safety features through an ASIL-D compliant architecture that includes redundant, fail-operational design and built-in cybersecurity, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A scalable platform that is designed to support Level 4-5 autonomy and that is adaptable across commercial fleets and diverse vehicle platforms.

Through REE's configurable drive-by-wire architecture, customers deploying autonomous software can obtain more precise control, along with a manual override as an added safety precaution. This technology likewise integrates with third party hardware and sensors, providing a real-world test environment for autonomous algorithms.

***REEmotion By-Wire***

Our in-house specially designed EV commercial Class 4-5 truck is built upon our SDV technology that combines our software, hardware, and REEcorners into a single solution for our customers. We designed this particular product in an effort to present our SDV technology through a prepackaged commercial vehicle ready for fleets to purchase off the shelf.

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In doing so, we sought to provide a technological demonstration for how our technology can be implemented and showcased in practice in an actual vehicle that is ready and certified for public roads. As part of its design, we incorporated EV technology to add an additional element for fleets seeking to electrify, however our underlying SDV technology is agnostic to a vehicle's size, design, power-source, and driving mode (*i.e.*, it is autonomous-ready), making it adaptable, including to non-EV vehicle designs. While EV produces additional benefits, including potential regulatory incentives, we believe that our commercial truck product value-add provides much more compared to the current commercial trucks in this class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **P7-S Strip Chassis** – Fully flat from end-to-end, the P7 modular platform, or the P7 Platform, is enabled by the REEcorner and designed for commercial delivery vehicles, autonomous vehicles and walk-in vans. The P7 Platform enables efficiencies for fleets, offering a low, fully flat chassis for vehicles in Classes 4-5 designed with smart predictive maintenance and reduced downtime to optimize TCO. EVs and autonomous vehicles built on top of P7 Platforms are designed to achieve optimal driving ranges with regenerative braking for last-mile delivery, all-wheel steering and improved maneuverability for urban environments. Upfitters and other manufacturers looking for full design freedom can also leverage the modularity of REE's stripped chassis or chassis cabs for maximum design flexibility on specialty equipment applications.

Each of the component systems that form our REEcorners® and P7 chassis are engineered in an effort to achieve optimal performance. We place a strong emphasis on functional integration, allowing for increased modularity. This is aimed to reduce the total number of parts and platform size, ultimately providing more usable interior space in the vehicle cabin and a more cost-effective offering. By leveraging our modular REE products, along with our efficient design and streamlined production process, we anticipate that new vehicle models can generally be developed and produced in 24 to 36 months, however specialized specifications and requirements from customers such as OEMs could require additional time, depending on the technical specifications and customization. We had been developing core hardware and software technologies for our REEcorner® both in-house at our UK Integration Facility and pursuant to development agreements with certain strategic partners, with the goal of achieving superior vehicle dynamics while raising the bar for safety. See the discussion of "Vehicle Production Prior to Production Pause" below for the current status of these vehicles.

**Our Competitive Strengths** 

We believe that our disruptive SDV technology and value proposition are unique to the industry and will offer a number of competitive strengths.

*Attractive value proposition, safety, and superior total cost of ownership*

Our SDVs aim to have lower TCO than ICE vehicles. We believe that vehicles built on our products will have a lower TCO than those of our competitors, which can enhance customer and end-user satisfaction. More specifically, we expect to derive our TCO advantages from our asset-light production model, low costs of operations due to anticipated greater cargo volume, and lower maintenance costs due to predictive maintenance and the REEcorner's durable design. We plan to work with strategic partners to integrate into their products our predictive data services through smart service and artificial intelligence in combination with over-the-air updates that seek to ensure maintenance is performed before a part may fail. Specifically, our REEai Cloud product relies upon real-time data and historical usage patterns, as drawn from our SDVs, to predicatively seek to identify when the wear and tear to an SDV vehicle part may require maintenance. Such predictive maintenance can assist operations managers seeking to optimize their operations in order to avoid unscheduled maintenance events that are costly and disruptive to their fleets. Through our predictive maintenance, we believe that it can provide fleet managers with the information to allow them to better schedule a particular vehicle's route around when a part is predicted to require service. We believe that such advanced warning systems could provide savings by eliminating unnecessary part replacements, reduce downtime for vehicle repairs, and improve the lifespan of the vehicle.

Furthermore, we have designed a fully flat EV platform reliant upon our SDV technology, purposefully engineered with the goal of maximum space efficiency and modularity to support a wide range of vehicle applications in the business-to-business (B2B) market. We believe that platforms using REEcorners will present significant functional and operational advantages over conventional "skateboards" currently available in the market and will enable superior vehicle specifications for cargo volume/length, payload, maneuverability and battery capacity. Our technology is also designed to

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enable enhanced operational efficiencies due to a low center of gravity, high durability, long lifecycle and superior product ergonomics. For example, low step-in height affords easy and fast embarking and disembarking from vehicle and we are able to provide high driver visibility due to enhanced field of vision and optimal driver ergonomics.

Our development of FMVSS, EPA, CARB, and HVIP certified X-by-Wire software control technology challenges century-old automotive concepts. We expect that our X-by-Wire control technology will enable lower TCO through expedient REEcorner<sup>®</sup> replacement, referred to as the Quick REEcorner® swap, smart preventative maintenance and over-the-air updates, and improved residual value per truck given our efforts to future proof each vehicle through, among other capabilities, autonomous driving ready capabilities and the ability to receive new software, and software updates as they become available. Our REEai Cloud data analytics capabilities may be used to further reduce TCO via intelligent preventative maintenance features.

Our track record of invention and early development of our products has afforded us many years to innovate across hardware and software, which we believe has created substantial advantages in our targeted markets as a result of our industry know-how and proprietary trade secrets. Our research and development efforts have resulted in a strong intellectual property portfolio, and we have filed for patent protection for several of our key inventions across key markets of the world, resulting in, as of May 4, 2026, approximately 177 active or pending patent applications for SDV products, component systems, X-by-Wire, testing and enhanced product manufacturability, of which approximately 100 are granted patents and utility models. Granted patents are related to (i) unique suspension, steering, powertrain, and brake systems, (ii) corner modules encompassing vehicle subsystems for controlling the operation of the vehicle, (iii) installation and swapping of corner modules, (iv) communication and control systems for operating individual corner modules and vehicle platform, (v) flat chassis designs, (vi) and manufacturing and testing methodologies.

*Improved safety and security*

Additionally, we believe that our REEai Cloud predictive technology can improve safety for vehicles running on its technology. Specifically, through our real-time data collection, our technology gathers various data points across the components of a vehicle. Through such collection, our predictive technology seeks to identify parts that require immediate repair, such as an engine issue, and to relay this information in real-time to fleet managers to remove a vehicle from operation. Through the gathering of such data, we believe that it allows fleet operators to better respond in real-time to safety issues that affect a particular vehicle and to use such data to prevent a vehicle with faulty parts from going out onto the road. Furthermore, through our data collection we have designed our technology to attempt to identify, in certain instances, vehicle behaviors that increase safety concerns. For example, we can collect data with respect to a vehicle's weight and turn radius, the combination of which, if maneuvered inappropriately and too quickly, can lead a vehicle to flip over. Through such data points, our predictive technology is designed in a manner to communicate with our SDV system to deter actions that may otherwise flip a vehicle.

*CapEx-light and flexible production approach*

Prior to our production pause and UK property lease assignment, we had sought to produce our REEcorner<sup>®</sup> in our Global Integration Center in Coventry, UK. REEcorners® were designed for ease of manufacture, and to benefit from our capex-light strategy through a fully commissioned production line. Previously, this product line had thirteen robotic stations run by only seven operators, and offered a production capacity of 40,000 REEcorners® (10,000 vehicles) annually based on a single shift per day. Our production line had been commissioned at above the current required capacity and could have been duplicated quickly to support any future expansion needs.

Outside of producing our core technology as a technology company, we had sought to partner with other leaders for the

production and assembly of our P7 vehicle lineup. To that end, in 2024 we entered into a strategic partnership with

Motherson Group, one of the largest automotive component manufacturers with operations in more than 400 facilities

across 44 countries globally. Through this partnership we had expected Motherson Group to manage our global supply

chain and drive operational and manufacturing improvements, impacting our production line, supply chain management,

bill of materials, and cost structure. Motherson Group was also intended to enable us to scale faster while

avoiding common operational challenges faced by others in the automotive space.

In addition, in 2024 we had contracted with Roush Industries Inc. to assemble our P7 lineup in its U.S. facilities in

Michigan. Prior to our production pause, we had begun the necessary preparations at Roush's Michigan facility for

tandem, we had commenced the production of our initial vehicles for delivery. We had expected that following the

completion of the assembly and integration preparations at the Roush facility, to ship our REEcorners to such location for

full vehicle assembly.

Through our production approach, we had sought to reduce our up-front capital investment and eliminate recurring fixed costs and overhead that would be required for us to own and operate our own product assembly facilities. We believed that this would have otherwise enabled us to remain a comparatively asset-light enterprise, which would have further helped to increase our operating margin and overall return on investment.

In the future, leveraging the flexibility inherent in the REEcorner® design, we have the ability to scale up or down from the Class 4 and 5 market that we serve today.

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*Lowering Acquisition Costs*

With capital efficiency in mind, as we have noted above, we seek to "complete not compete".

Prior to our production delay, we supported and incentivized, and if and when we resume production, we would expect

to support and incentivize, our ADN in certain ways that further enhance their economics for selling our vehicles with the

goal of lowering acquisition costs. For example, we seek to create brand awareness for our Authorized Dealers through our

brand and SDV technology promotional efforts, including through social media campaigns, trade shows, and other

demonstrations, while also providing each of our Authorized Dealers with the necessary marketing materials, presentations,

discount product options, and sales and product trainings to aid them in their sales efforts. In order to provide customer

service, we are leveraging our ADN to provide after-sales parts and service. We believe that this provides Authorized

Dealers with parts and service revenues to help drive profitability and allows them to be partners to the fleets in their

service areas with respect to our vehicles. We have started training our authorized dealers to certify technicians to provide

service on our vehicles, which we believe will assist in facilitating adoption by fleets. We anticipate further expanding our

ADN in North America.

Additionally, we had pursued, and would expect to again pursue if and when we resume production, pursuing multiple

go-to-market paths to accelerate the adoption of our SDV vehicles by commercial fleet owners and operators. This includes

collaborations with partners not only to develop full vehicle offerings, such as leading upfitters, but also to provide a

comprehensive ecosystem of enabling capabilities and services, such as after-sales, service and Data-as-a-Service, or DaaS,

in order to allow for a smoother transition for our potential customers from internal combustion engine, or ICE, vehicles to

EV fleets.

If and when we resume production, we anticipate taking a measured approach to continue to allow time for customer

and end-user feedback, stabilize production processes and quality assurance and, most importantly, optimize our bill of

material and production costs.

*Key Certifications*

In September 2023, we obtained a certification from the U.S. Environmental Protection Agency for our P7-C vehicles. In

January 2024 of the following year, upon the completion of a test program, which included third party evaluation, we

became the first in the U.S. to obtain a FMVSS certification on our P7-C through the self-certification process for a fully

by-wire vehicle of any category. Following this, in March 2024, we obtained two certifications from the California Air

Resources Board, or CARB, on our P7-C. The two certifications include (1) Phase 2 Greenhouse Gas, or GHG, covering

the complete vehicle and (2) the new Zero Emission Powertrain, or ZEP certification. Obtaining these certifications

enabled our P7-C to qualify for applicable incentives in California and other states that follow CARB guidance. In

February 2025, our P7-C was approved for California's Hybrid and Zero-Emission Truck and Bus Voucher Incentive

Project, or HVIP. We believe that each of these achievements further demonstrates the strength of our SDV technology while also providing an additional means, to the extent applicable, for customers to potentially lower their TCO through

certain incentive programs.

**REE's Go-To-Market Strategy**

*Go to Market Strategy*

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The second phase of our strategy focuses on collaborating with OEMs and technology companies globally, and licensing our SDV technology to power each of their next-generation vehicles that may be built across various vehicle sizes, design, power-source, and driving modes. This second phase provides us with additional opportunities for specification and customization with OEMs, and we believe that it may produce higher margins and recurring revenue, based upon our initial market research and interest from OEMs and technology companies. Also as part of this second phase, we would seek to provide a suite of value-added services through software subscriptions, including through OTA updates.

Specifically, in contrast to production, which requires ongoing supplier-related costs, including the sourcing of parts and components for vehicle assembly and a dedicated space and the labor to ultimately assemble a vehicle, licensing requires a software connection point and a customer's system compatibility with our SDV technology, now that it is developed, tested, and road-ready. As a result, we believe that licensing of this technology to OEMs will provide a more lucrative value proposition (although our ability to execute this strategy will depend on our financial condition, access to capital, and the outcome of any strategic or restructuring actions) than the sale of our P7 lineup in the long-term, including through a subscription-based revenue model. Moreover, licensing provides us with additional opportunities for customer specification and customization, which can likewise add additional margin with typically less significant changes to our proprietary software to run our SDV technology on a customer's system.

Additionally, with respect to recurring revenues, we anticipate that proof-of-concepts, design wins and/or partnerships with OEMs or other technology companies can present opportunities for non-recurring engineering, or NRE, arrangements and royalty revenues in connection with vehicles built upon our technology. In particular, we believe that partnerships with OEMs and technology companies can include NRE arrangements pursuant to which we are reimbursed for a portion of the design, development and testing expenses associated with integrating our SDV technology with our customers' systems. We further believe that following a design win and the integration of our software and SDV technology into OEM vehicles, it presents a longer-term opportunity for recurring revenues from the SDV technology license once such vehicles are sold to end-users.

*Two Phase Implementation* 

Specifically, we value the strategic importance of vehicle production, which we believe primarily serves as a technological demonstration of the application of our SDV technology in practice and as a method to produce our P7 products to address what we believe to be a near-term demand for commercial fleets looking to electrify. For these reasons, as part of our Phase one implementation, we had built our UK Engineering Center and REE's Integration Center at Coventry, UK for the design, validation, verification, testing, homologation, and assembly of our products, including our REEcorner.

Furthermore, during 2024, we entered into a partnership with Roush for the assembly and integration of our products as our contract manufacturer at their Michigan facility. Roush was intended to provide a strong U.S. presence to bring our products to the North American market. With respect to our supply chain, in September 2024, we executed a supply chain management services agreement with Motherson, pursuant to which we appointed Motherson provide services relating to development, management, and optimization of our supply chain. This included supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration.

In addition, during 2024, we had made progress in obtaining interest in, and support of, our SDV technology vehicle through additional partnerships. For example, Penske performed demonstrations of our P7-C truck upfitted with a Wabash body, and U-Haul received one of our products and has evaluated it as a solution to electrify its fleets. Additionally, Knapheide showcased our P7-C with a KUV body, which was aimed to provide benefits including low load floor, greater driver maneuverability and comfort and high driver visibility. Additionally, Mission Mobile had signed a non-binding agreement with us to build a mobile healthcare fleet using REE trucks—highlighting our SDV technology's versatility across applications.

We also previously obtained EPA certification for our P7-C chassis cab and P7-S stripped chassis products in 2023. Moreover, in 2024, we became the first company in the U.S. to achieve FMVSS certification on a vehicle controlled fully

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by wire. We further achieved CARB certification in 2024. We believe that these achievements demonstrate the strength of our technology.

To round out our implementation of Phase 1, we partnered with Airbus Upnext, which sought a by-wire system for its autonomous airplane taxiing driving system. In partnership thereto, Airbus Upnext successfully tested an autonomous shuttle built on our SDV technology in 2024. This successful test demonstrated that our SDV technology can provide the actual autonomous results that we set out to promote when designing our technology to be autonomous-ready.

By the end of 2024, we had secured reservations from approximately 25 Authorized Dealers. We had used such Authorized Dealers in an effort to market to their sales network of around 200 potential fleet customers. We also previously entered into an arrangement to serve as a qualified vendor under a four-year Sourcewell contract, giving over 50,000 government and educational entities access to our SDV trucks.

With regard to Phase 2 implementation, during 2024, we previewed our SDV technology with several OEMs, and during 2025, we delivered a prototype to an OEM in connection with their design requests. We also shared concept designs with other OEMs as part of this strategy. Moreover, we signed the March MOU with a leading technology company, and converted it into a definitive agreement in December 2025, which if commenced following the fulfillment of several conditions, can lead our entry into the autonomous shuttle market. As a continuation of this strategy, we had aimed to grow our customer base by continuing to market our SDV technology products to OEMs and technology companies in an effort to secure customer partnerships and design wins.

As we continue Phase 2, we aim to continue dialogue with OEMs based on our current positive market traction and to work toward the sharing of concept designs, building of prototypes, and ultimately working to secure design wins from OEMs to incorporate our technology into their vehicle lineup. See our risk factor in Item 3.D. titled "*We invest significant effort and money seeking customer, including OEM, selection of our products and there can be no assurance that these efforts will result in the selection of our products.*.."

**Competition** 

We believe that our business differentiates us from competitors because we can market and sell our products individually, such as our P7-C, or as an SDV technology solution, which allows OEMs and technology companies to design a vehicle specifically tailored toward their needs while integrating our SDV technology at the vehicles core. We believe the primary competitive factors in our market will revolve around, but not be limited to, the following key differentiation factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Technological innovation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product quality and reliability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Safety features;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Market adoption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Service options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product performance including through our real-time data analytics for fleet management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Design and styling;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product price; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Production efficiency.

We believe that our products will strongly compete in the SDV, EV, and AD markets based on these factors.

**Environmental, Social and Governance (ESG) Practices** 

As an automotive technology company with a vision to become the cornerstone of tomorrow's zero-emission EVs, we are committed to operating in an ethical and sustainable manner while maximizing our ability to positively impact our environment and society. We are building the foundation of a leading environmental, social, and governance, or ESG, program that benefits all our stakeholders including, customers, partners, employees, and the communities where we work. We are committed to aligning with leading industry best practices and are establishing company-wide policies that outline the Company's standards for all business operations. For example, our corporate governance is guided by a Code of Business Conduct and Ethics, which we make available on our website. Our ethics policies are supplemented by training courses on ethical standards and a Whistleblower program to report any concerns.

We endeavor to respect, value, and empower our stakeholders. In addition, we seek to protect the communities in which we operate. Within each community, we endeavor to protect our employees' and neighbors' health and safety, being good citizens, and respecting business ethics. Innovation and collaboration are at the core of our business, and we extend these values to how we interact with the local communities where we operate.

We embrace and celebrate the unique experiences, perspectives, and cultural backgrounds that our employees bring to the workplace. We endeavor to recruit a workforce that reflects the diversity of the communities in which we operate, including the gender and ethnic diversity of job applicants, new hires, and senior management and we review our efforts with respect to such diversity. We strive to foster an environment where our employees feel respected, valued, and empowered, and it is a shared responsibility of all employees, including our management team, to create a supportive and inclusive workplace culture.

**Intellectual Property** 

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**General**

Our ability to protect our intellectual property is paramount to our business. We rely upon a combination of protections afforded to owners of patents, designs, copyrights, trade secrets, and trademarks, along with employee and third-party nondisclosure agreements and other contractual restrictions to establish and protect REE's intellectual property rights. In addition, industry know-how and unpatented trade secrets in the fields of research, development and engineering are an important aspect of our business by ensuring that its technology and strategic business assets remain confidential. We pursue patent protection when we develop a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings.

**Patents**

As of May 4, 2026, we had approximately 177 pending and registered patents in the U.S. and globally, of which approximately 100 are granted and utility models. In addition, we have six (6) families of design patents registered globally. Our patent applications are directed to, among other things, EV products, component systems, x-by-wire and enhanced product manufacturability, for example, corner modules, flat chassis, electrical and control systems, brake and steering systems, wheel assemblies, and testing. We generally review our development efforts to assess the existence and patentability of new inventions, and we may file additional patent applications when we determine it would benefit our business to do so.

**Trademarks and Service Marks**

**Government Regulation**

***Laws in the U.S.***

Certain of our products are, or may become subject to, the U.S. National Traffic and Motor Vehicle Safety Act, as amended, or Safety Act, and numerous regulatory requirements established by the National Highway Traffic Safety Administration, or NHTSA, an operating administration of the U.S. Department of Transportation, or DOT, including applicable FMVSS standards. We must also comply with all of NHTSA's applicable U.S. Federal Motor Vehicle Safety Standards, or Safety Standards. Additionally, under the Safety Act, if and when we resume production, we must certify that our vehicles meet all applicable Safety Standards, as well as the NHTSA bumper standard, or are otherwise exempt from such standards prior to our vehicles being sold in the U.S. The categories of Safety Standards that apply to our vehicles would include crashworthiness requirements, crash avoidance requirements, and EV-specific requirements.

We are also required to comply with or demonstrate exemptions from other requirements of federal laws administered by NHTSA and certain state laws, including the Federal Corporate Average Fuel Economy, or CAFE, standards, Theft Prevention Act requirements, consumer information labeling requirements, Early Warning Reporting requirements regarding warranty claims, field reports, death and injury reports and foreign recalls, and owner's manual requirements. We also must comply with laws relating to defects related to motor vehicle safety, recall requirements, reporting required notices, bulletins, and other communications.

In 2023, we became the first company to achieve FMVSS certification on a vehicle controlled fully by-wire. There are regulatory changes being considered for several FMVSSs, however on January 20, 2025, the Trump Administration issued an executive order delaying the approval of final rules, which affected the proposed rules for several FMVSS.

If and when we resume production, our P7-C may be subject to the Clean Air Act, as administered by the EPA, and the California Air Resources Board, or CARB, certification for vehicle greenhouse gases and zero emission powertrains. This requires that we obtain an EPA-issued Certificate of Conformity and a CARB executive order with respect to the emissions for our vehicles. We obtained the EPA certification in late 2023, achieved CARB certification in March 2024, and the California HVIP approval in February 2025. Additionally, additional warranty, durability, and other "zero-emission vehicle assurance measures" may be required for vehicles certified to Advanced Clean Cars Two standards and sold in California. Other states may adopt similar standards.

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The battery modules on our P7 vehicles, if and when we resume production, may need to conform to mandatory regulations that govern transport of "dangerous goods," defined to include lithium-ion batteries, which may present a risk in transportation. The governing regulations, which are issued by the Pipeline and Hazardous Materials Safety Administration, are based on the UN Recommendations on the Safe Transport of Dangerous Goods Model Regulations and related UN Manual Tests and Criteria. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck or air. If and when we resume production, we may use lithium-ion cells in the high voltage battery packs in our vehicles. The use, storage, and disposal of the battery modules is regulated under federal law.

We may also be subject to "Right to Repair" laws, which may require us to provide third-party access to our network and/or vehicle systems.

***Emissions Credits***

If and when we resume production, if we were to deploy batteries to fully power our vehicles, we may be able to generate credits from regulatory standards that we can monetize through the sale of our products, including in California and other states that have adopted the California standards applicable to light-duty and medium-duty vehicles, The EPA and NHTSA also set minimum GHG emissions and CAFE standards applicable to light- and medium-duty vehicles. These federal regulations require that manufacturers of light- and medium-duty vehicles meet minimum standards pertaining to GHG emissions and fuel economy based on a vehicle's footprint or overall dimensions.

In addition, in 2022, the EPA reinstated California's ability to establish its own vehicle emission standards in lieu of the federal standards. These standards, which have also been adopted by "Section-177" states, provide additional credit generating opportunities beyond the federal programs. President Donald Trump's executive order titled "Unleashing American Energy", which was signed on January 20, 2025, may have direct implications on the policies and regulations that impact the automotive and transportation industries. This order seeks to rescind waivers granted by the EPA for California's zero emission vehicle regulations with a focus on eliminating any "electric vehicle mandates" and terminating "state emission waivers that function to limit sales of gasoline-powered vehicles", and modify and/or eliminate the greenhouse gases, or GHG, standards for applicable to certain trucks. As a result, the status of U.S. emission regulations and tax incentives remains uncertain at this current time.

***Federal and State Incentives in the United States***

The federal government in the U.S. may from time-to-time use certain incentive programs to encourage the adoption of alternative fuel vehicles, including tax exemptions, tax credits, exemptions, and special privileges. Additionally, a number of states and municipalities in the U.S. likewise may from time-to-time offer incentive programs to encourage the adoption of alternative fuel vehicles, including tax exemptions, tax credits, exemptions, and special privileges. The actions and policy changes by the Trump Administration have created uncertainty with respect to such incentives and credits. On July 4, 2025, the Trump Administration signed the reconciliation bill, commonly known as the One Big Beautiful Bill Act, or OBBBA, into law. Among other items included therein, OBBBA ended EV charging infrastructure tax credits and certain tax credits for electric vehicles.

***International Laws***

Additionally, our P7 vehicles are not currently subject to non-U.S. safety, environmental and other regulations. Many of those regulations are different from those applicable in the U.S. and may require redesign and/or retesting, if and when we resume production. For example, the E.U. has established new approval and oversight rules requiring that a national authority certify compliance with heightened safety rules, emissions limits and production requirements before vehicles can be sold in each E.U. member state. These changes could impact the rollout of new features in Europe.

Similarly, as a global company deploying cutting-edge technology, we are also subject to trade, export controls, customs product classification and sourcing regulations. Our operations also are subject to various federal, state and local laws and regulations governing the occupational health and safety of our employees and wage regulations. We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety.

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 ***ADAS Regulations***

We have also equipped our products with certain autonomous driving readiness features. Generally, laws pertaining to autonomous driving are evolving globally, and in some cases may create restrictions on advanced driver assistance or autonomous features.

While there are currently no U.S. Federal Motor Vehicle Safety Standards specifically pertaining to autonomous vehicles or autonomy equipment, NHTSA has published recommended guidelines on autonomous vehicles and retains the authority to investigate and/or act on the safety of any vehicle, equipment or features operating on public roads. NHTSA also published its Standing General Order (as amended on April 24, 2025) that requires reports regarding certain crashes involving vehicles with ADAS, which includes motor vehicle and equipment manufacturers of which REE may be included under. On January 15, 2025, NHTSA published a Notice of Proposed Rulemaking detailing its proposal for the ADS-equipped Vehicle Safety, Transparency, and Evaluation Program, however its status is currently uncertain under the Trump Administration. Certain U.S. states also have legal restrictions on the operation, registration or licensure of autonomous vehicles, and other states may be considering similar restrictions. This regulatory patchwork increases the legal complexity with respect to autonomous vehicles in the U.S.

In markets that follow the regulations of the United Nations Economic Commission for Europe, some requirements restrict the design of advanced driver assistance or autonomous features, which can compromise or prevent their use entirely. Other applicable laws, both current and proposed, may hinder the path and timeline to introducing such features in the markets where they apply.

***General Governing Laws***

Like all companies operating in similar industries, we are subject to environmental laws and regulations, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination. Compliance with these rules may include the need to obtain permits, licenses, and other government approvals from one or more governmental agencies to conduct our operations and sell our products, which includes allowing inspections of our facilities and products. The requirements vary depending on the location where our regulated activities are conducted. The failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining some or all of our operations in affected areas. For additional information, see our risk factor titled "REE's products will make use of lithium-ion battery cells, which can be dangerous in certain circumstances" and "REE is subject to various environmental laws and regulations" in Item 3.D. "Risk Factors."

**C. Organizational Structure**

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| | | |
|:---|:---|:---|
| **Name of Subsidiary** | **Country of Incorporation and Place of Business** | **Proportion of<br>Ordinary Shares<br>Held by REE** |
| REE Automotive UK Limited \* | United Kingdom | 100% |
| REE Software UK Ltd. | United Kingdom | 100% |
| REE Automotive USA Inc. | United States | 100% |
| REE Automotive GmbH | Germany | 100% |
| REE Automotive Japan K.K. | Japan | 100% |

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\*On May 5, 2026, REE Automotive UK Limited commenced an administration process in the United Kingdom in connection with its corporate wind down. In connection therewith, REE established REE Software UK Ltd, a newly organized entity in the United Kingdom. For further information, see Item 5.A. under the section titled "United Kingdom Administration".

**D. Property, plants, and equipment**

Our principal executive offices are located at Kibbutz Glil-Yam 4690500, Israel. Until April 7, 2026 we had fully occupied and utilized an office space totaling approximately 35,520 square feet (3,300 square meters), under a lease agreement that expires in the second half of 2026, with an option to extend the lease until 2031. On April 7, 2026, we entered into an agreement with our landlord to permit the use of approximately 11,840 square feet (1,100 meters) of this space by a third party in exchange for a monthly payment (including the associated monthly municipal taxes) by such party, which is expected to be paid directly to the Company's landlord. Additionally, the third party is expected to reimburse the Company monthly for one-third of its average total monthly utility expense (*e.g*., water, electric). All other terms of the Company's lease remain unchanged. As a result, the Company's monthly lease payment is expected to be reduced to two-thirds of the

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original lease payment amount. Therefore, as of the date of this Annual Report, we are only utilizing approximately 23,681 square feet (2,200 square meters) of our principal executive office in Kibbutz Glil-Yam for our Company's operations.

In addition, we have the following facilities that we consider to be material as well as certain immaterial facilities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Previously, REE had entered into a lease agreement for its UK Engineering Center and Launch Factory, which was located in Coventry, UK. The facility was approximately 130,000 square feet (approximately 12,077 square meters), under a lease agreement that expired in 2032. REE had utilized this facility for engineering, process validation activities, along with product assembly operations. In March 2026, REE, through its wholly-owned UK subsidiary (REE Automotive UK Limited), entered into an agreement with the landlord and a third-party assignee for the assignment of the lease agreement relating to such facility. As a result, effective March 10, 2026, REE no longer occupies such facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.REE operates a testing facility in MIRA Technology Park in the UK for an approximately 4,693 square foot (436 square meters) facility. REE utilizes this facility for product engineering design, validation, verification and testing, as well as product homologation. REE's lease for this facility may be terminated by either party upon three months' notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Previously, REE had entered into a lease agreement for its Austin, Texas facility in the U.S. The facility was approximately 118,132 square feet (10,975 square meters), under a lease agreement that expired in 2032. In 2025 and 2024, we partially subleased this facility to third parties, which was terminated in the end of 2025. REE has not utilized this facility in 2026 and the landlord retook possession of the property. On May 8, 2026, REE, through its wholly-owned U.S. subsidiary (REE Automotive USA Inc.) entered into an agreement with its landlord to terminate its lease and the obligations therein. As a result, effective May 8, 2026, REE no longer occupies such facility. See also note 20 to our financial statements.

Aside from our own facilities, in 2024, we had entered into an agreement with Roush to serve as our contract manufacturer for the assembly and integration of our vehicles. Prior to our production pause, such activities were conducted at Roush's Southeast, Michigan facility with approximately 47,200 square feet (approximately 4,385 square meters) of dedicated space. Following our production pause, we are no longer using these facilities and the agreement was terminated during 2025.

Unless otherwise stated, all our facilities are utilized. We believe that our offices and facilities are adequate for our current needs.

**Item 4A. Unresolved Staﬀ Comments**

Not applicable.

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**Item 5. Operating and Financial Review and Prospects**

*The following discussion and analysis should be read in conjunction with the section titled "Key Components of Statements of Operations" of this Annual Report and our consolidated financial statements and the related notes contained elsewhere in this Annual Report. This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in "Item 3.D. Risk Factors" of this Annual Report.*

**A. Operating results.**

*The information contained in this section should be read in conjunction with our audited financial statements for the years ended December 31, 2025 and 2024 and related notes and the information contained elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Forward-Looking Statements", "Risk Factors" and in other parts of this Annual Report on Form 20-F.Our financial statements have been prepared in accordance with the generally accepted accounting principles in the U.S., or U.S. GAAP.* 

*For a discussion of our consolidated statements of operations for the years ended December 31, 2024 and 2023 and our cash flows for the years then ended, see the section "Operating and Financial Review and Prospects" in our annual report on Form 20-F (File No. 001-40649), as filed with the SEC on* May 15, 2025*.*

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***Company Overview***

to customer and market changes and designed with future autonomy and connectivity in mind.

Our approach of "complete not compete" allows original equipment manufacturers, or OEMs, and other customer types to license our technology in order to design and build vehicles tailored to their specific requirements using REE's scalable, future-ready platform. Our technology and collaborative application programming interface, or API, approach allows our customers to connect their current and future operating systems and application layers having significant input on the design of the system according to their individual needs. In addition, our software flexibility allows delivery and logistics fleets, dealers, Mobility-as-a-Service, or MaaS, providers and others to incorporate their Voice of the Customer, or VoC, input into new vehicle designs and applications. Incorporation of this voice allows these customers to design vehicles that are better tailored to the specific needs of their end-user base and the market in which they service. Additionally, in February 2025, we launched REEai Cloud to provide advanced data analytics based on artificial intelligence capabilities, among others.

Our SDV technology is a combination of software, electrical hardware, and by-wire technology. We aim to offer many customer benefits including a reduced TCO, lower maintenance and spare-part inventory management costs, higher active and passive safety standards, improved vehicle efficiency, ADAS, and increased fleet management system compatibility.

We further believe that by incorporating our proprietary software through our certified hardware architecture, our potential

We have made progress discussing the integration of our SDV technology into certain OEMs' model lineups in certain markets and categories, from passenger vehicles to heavy duty commercial trucks.

On May 15, 2025, REE announced a decision to implement a temporary pause of its previously planned production in light

of significant uncertainty in the global macroeconomic environment and evolving U.S. trade policy impacts on the automotive industry and supply chains, including our P7-S Strip Chassis and P7-C Chassis Cab and Cutaway Chassis products. To-date, the temporary pause remains in effect.

***Recent Developments***

Except as otherwise described below, see our discussion under the section titled "Recent Business Developments & Initiatives" in Item 4.B. for further developments with respect to our business.

*United Kingdom Administration* 

On May 5, 2026, REE Automotive UK Limited, a private limited company organized under the laws of England and Wales, or REEUK, and a wholly-owned subsidiary of the Company, commenced an administration process in the United Kingdom. Immediately prior to this process, certain REEUK employees were transferred to REE Software UK Ltd, a newly organized entity in the United Kingdom. Following the appointment of an administrator, such administrator will seek to sell any or all of REEUK's assets to one or more third parties, in order to maximize recoveries for creditors, and to wind down any of its remaining operations.

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*Nasdaq Minimum Bid Price Notification*

On July 3, 2025, we received notice from Nasdaq's Listing Qualifications Department that we were not in compliance with the Minimum Bid Price Requirement. We were provided until December 29, 2025 to regain compliance, which generally requires our Class A Ordinary Shares to close at or above $1.00 for at least 10 consecutive business days.

On December 29, 2025, REE requested an extension of 180-days to cure the Minimum Bid Price Requirement from Nasdaq. Nasdaq granted REE's extension request on December 30, 2025 and set June 29, 2026 as the deadline to achieve compliance. We intend to monitor the closing bid price of our Class A Ordinary Shares and to consider available options to regain compliance.

*2025 Annual General Meeting and Board Appointment*

On January 22, 2026, we held our annual general meeting for the fiscal year-end 2025, or the Meeting, at which our shareholders approved: (i) a proposal to approve the re-election of each of Hicham Abdessamad, Carlton Rose, Ittamar Givton, Rajesh Goel, Ahishay Sardes and Daniel Barel to serve as directors of the Company, each to hold office until the close of business on the date of the next annual general meeting of shareholders and until his respective successor is duly elected and qualified, or until such individual's earlier resignation or retirement, (ii) to approve an amendment to the Company's Articles to increase the authorized share capital of the Company to 75,333,333 Class A Ordinary Shares, and 2,780,570 Class B Ordinary Shares, and (iii) to approve the re-appointment of Kost, Forer, Gabbay & Kasierer, a member firm of Ernst & Young Global, as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2025, and its service until the next annual general meeting of shareholders, and to authorize the Board of Directors, upon the recommendation of the Audit Committee, to fix the remuneration of the independent registered public accounting firm.

*Special General Meeting of Shareholders*

On November 13, 2025, we held a special general meeting of shareholders at which shareholders approved certain

amendments to our compensation policy, and a special cash bonus award for 2024 to Daniel Barel and Ahishay Sardes

along with related amendments to each of their respective employment terms, in each case as described in our proxy

statement filed with the SEC on October 9, 2025, as supplemented on November 12, 2025.

***Key Factors Affecting Operating Results***

REE is an early-stage growth company in the early commercialization stage and we believe that our performance and the foreseeable future of our business, including our immediate financial condition constraints depend on several factors that present opportunities for us but also pose significant risks and challenges, including those set forth in Item 3.D. of this Annual Report under the caption "Risk Factors".

**Known Trends**

*Financial Condition & Going Concern Qualification*

The Company's consolidated financial statements included herein have been prepared on a going concern basis. Therefore, the accompanying consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of these uncertainties. See Note 1 "General" to the consolidated financial statements included as part of this Annual Report for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern. The Company generated a net loss of $55.8 million for the year ended December 31, 2025, as compared to a net loss of $111.8 million for the year ended December 31, 2024.

In connection therewith, we expect to incur significant expenses and continuing losses for the foreseeable future, and there is substantial doubt that we will have sufficient funds to satisfy our obligations for the foreseeable future and through the next 12 months from the date of this Annual Report if we are unable to obtain sufficient additional funding or do not have access to capital to finance our current business plan. We therefore require substantial additional capital to fund our operations for the foreseeable future. Absent any potential strategic transaction, additional revenues, further cost-reduction measures or additional funding, we currently estimate that our existing financial resources will be sufficient to fund our projected operating costs and expected cash requirements into, but not beyond, the middle or the end of the second quarter

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of 2026. Management is actively pursuing additional financing opportunities, including through discussions with existing shareholders, as well as strategic transactions and further cost-reduction initiatives in order to extend the Company's liquidity runway. However, there can be no assurance that such efforts will be successful or available on acceptable terms. If we are unable to obtain additional funding, consummate a strategic transaction(s), generate additional revenues or further reduce costs, we may need to significantly curtail or modify our operations and strategic plans. While we have taken steps to reduce our cash requirements through our cost reduction plan in an effort to extend our cash runway, we can provide no assurance as to the success of such efforts. See Item 3.D., Risk Factors - "*REE has a history of losses, and expects to incur significant expenses and continuing losses for the foreseeable future, and there is substantial doubt that we will have sufficient funds to satisfy our obligations through the next 12 months*." Until we can generate sufficient revenue and positive gross margins, we expect to finance our operations through the issuance of equity or convertible debt or other equity-linked securities along with debt financings or credit facilities, which would likely include restrictive convents relating to our capital raising activities and other financial and operational matters. The amount and timing of our future funding requirements will depend on many factors, including demand for our SDV products by OEMs and technology companies and expense levels, among others. Because we generally incur the costs and expenses from our 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 we do not achieve design wins or technology companies do not purchase our products in sufficient volume, which would further increase our losses.

Any inability to fund our business could cause our customers, suppliers, strategic partners, or other third parties to decrease the amount of business they do with us or terminate their relationship with us, or we could go into default on our outstanding Convertible Notes, or have our current credit facility revoked, which, in turn, would permit our creditors to enforce remedies against us, which may include taking control of our business, and cause us to consider reducing, discontinuing, or selling operations or seeking protection from creditors, and further raise substantial doubt about our ability to continue as a going concern.

If we are unable to generate cash flow, we may be required to adopt one or more alternatives, such as winding down or restructuring our business, selling assets, restructuring our Convertible Notes or obtaining additional equity capital on terms that may be onerous or highly dilutive. In the event of the occurrence of any of the above, it would likely qualify as an event of default under our Convertible Notes, unless otherwise waived by the holders thereof, and thereby trigger the acceleration of a payment in an amount equal to one hundred thirty percent (130%) of the outstanding principal amount plus the accrued interest thereof on the date on which the first event of default occurred, together with all costs, including, without limitation, legal fees and expenses, of collection. As of December 31, 2025, the outstanding principal amount of our Convertible Notes was $8.5 million, and the aggregate outstanding balance, including accrued interest, was $10.3 million.

*Tariffs, Trade Policies, and Import and Export Controls*

In 2025, the Trump Administration imposed, rescinded, modified, rolled-back, and continues to impose/reimpose tariffs and trade barriers, and additional trade restrictions could be implemented on a broad range of products, geographic regions,

and/or raw materials. Such tariffs have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign countries, which may in turn lead to additional tariffs imposed or measures taken by the Trump Administration. Such items can increase the prices associated with vehicle parts and vehicle production and may reduce demand for SDV technology overall due to such costs. It may also limit our ability to procure raw components or raw materials or impede or slow the movement of goods across borders. In addition, tariffs may raise the prices for vehicles, which could reduce demand and thus the need for our SDV technology.

In August 2025, the U.S. Court of Appeals for the Federal Circuit, or the Court, affirmed a Court of International Trade, or

CIT, ruling that held that the trafficking and reciprocal tariffs imposed by the Trump Administration exceeded the authority

delegated to the U.S. president. The Court also affirmed the CIT's grant of declaratory relief that the orders are invalid as contrary to law. However, the Court vacated the CIT's grant of a permanent injunction universally, allowing such tariffs to

remain in place while an appeal is sought. The Trump Administration appealed the decision to the U.S. Supreme Court, which on February 20, 2026, held that President Trump was not authorized to impose the specified tariffs under the International Emergency Economic Powers Act. Despite the Supreme Court's decision, significant uncertainty remains, including the imposition of additional tariffs by the Trump Administration subsequent to the Supreme Court decision.

In addition, while the Trump Administration has announced certain trade deals, including with China, implementation of such agreements may be prolonged, including as a result of the government approval processes, and disagreements between contracting parties may arise. All of the above have increased uncertainty regarding the ultimate effects of tariffs

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and trade policy on economic conditions and its ultimate impact on our industry and business. For additional information, see Item 3.D. Risk Factors in this Annual Report.

*Global Competition for Automotive Vehicles* 

The worldwide automotive market is highly competitive and volatile. The demand for automobiles is affected by a number of factors including social, political and general macroeconomic conditions, introduction of new vehicles and technologies, and costs incurred by customers to purchase or operate vehicles. Additionally, the worldwide automotive industry is in a period of global competition which may continue for the foreseeable future, including significant competition from OEMs and other vehicle manufacturers in China, and in general the competitive environment in which we operate is likely to intensify.

Our business performance is related to global automotive sales and automotive vehicle production by OEMs and technology companies. Economic conditions in North America, Europe and Asia can have a significant impact on production volumes, and, accordingly, have an impact on our future revenue. Such customer production can vary from period to period due to global demand, market conditions and competitive conditions, geopolitical issues including trade restrictions and tariffs, as well as other factors. Continued or future constraints on global automotive production resulting from the effects of economic uncertainty, both global and in specific markets in which we operate, may be a limiting factor on our ability to obtain revenue. We expect to continue to capitalize on our initial discussions with OEMs in order to expand our presence in certain EU countries, Japan, and India and capture the long-term growth opportunities we see from OEMs, in particular.

*Electric Vehicle Market Demand* 

With electrification on the rise for commercial fleets, we anticipate increased demand for EV solutions. In particular, REE has observed increase support for EVs in recent years as Tesla has become a dominant player in a once insular automotive industry. Additionally, in 2021 traditional OEMs had announced that they will transition their resources to producing EVs. Whereas EVs were traditionally marketed to niche areas, we had seen traditional OEM's establishing waiting list for customers who want to purchase the electric version of their mainstream vehicles.

In REE's view, this trend is driven by several factors. A rising environmental consciousness is encouraging customers to weigh their emission footprint. As a zero-emission alternative to traditional ICE options, an EV that can match or exceed an ICE in performance is a natural choice. Assisting with that choice, local and national governments previously implemented both various forms of rebates and credits for the purchase of an EV and prohibitive ICE regulations to expedite the rise of e-mobility by accelerating the push for zero emission vehicles and increased awareness of the impacts of global warming. As EV sales grow, EV components become more prevalent, allowing automakers to purchase parts at greater availability and lower costs, further accelerating the switch to electric. Additionally, the continuing improvement in battery technology and continuing build-out of electric charging infrastructure are decreasing range anxiety, increasing comfort with EV range capabilities and facilitating EV adoption. Lastly, particularly in the U.S. market, customers must deal with increased gas cost resulting from civil unrest and wars in countries on which they depend for gas. However, the Trump Administration's recent policy changes could reduce or eliminate supply and demand-side incentives, resulting in slower adoption of EVs.

*Software-Defined Vehicle Demand*

Large OEMs interest in SDV technology appears to be growing. According to Morgan Stanley's *The Migration to SDVs* report, the SDV market is projected to grow at a compound annual growth rate of 41% from $147 billion in 2024 to $1.16 trillion by 2030. SDV accounted for just 3% of automotive production in 2021 and may represent 90% of new vehicle production by 2029. Additionally, in 2024, Rivian established a joint venture with Volkswagen International America Inc. and Volkswagen AG and its affiliate to build electrical architecture and software technology together for future electric vehicles. Additionally, General Motors, completed its acquisition of GM Cruise Holdings LLC, which it uses to lead in autonomous and software-defined vehicles, according to its public reports. Ford Motor Company has similarly expressed, according to its public report, that electric and software-defined vehicles will play an increasingly important role for its future. We have seen and continue to see interest from OEMs in SDV technology capabilities and we therefore anticipate continued demand and growth for our technology.

*Design Wins and Proof-of-Concept* 

We believe that global OEMs and technology companies are continuously looking for innovative ways to improve their vehicles and have thus far been unable to product in-house systems with respect to SDV technology. Design wins along with proofs-of-concept with respect to our SDV technology is critical to our future. However, the revenue generated by a

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design win and/or any proof of concept, and the time necessary to achieve a design win or to complete a proof-of-concept can vary significantly, including for several years. To be competitive, we would need to maintain strong SDV technology compared to the industries' technology and continue to offer solutions that remain superior to the competition's, including as compared to any in-house technologies developed by OEMs or other technology companies. While we seek to work closely with OEMs and technology companies to understand their system requirements, there is no guarantee that such potential customers will purchase our SDV products in any certain quantity or at any certain price even if we are successful in achieving a design win or proof-of-concept.

*Regulation for ADAS and Autonomous Driving Solutions*

We have equipped our products with certain autonomous driving readiness features. Generally, laws pertaining to autonomous driving are evolving globally, and in some cases may create restrictions on advanced driver assistance or autonomous features. It is also subject to considerable regulatory uncertainty as the law evolves to catch up with the rapidly evolving nature of the technology itself, all of which are beyond REE's control. Currently, we believe that there are no Federal Motor Vehicle Safety Standards that relate to the performance of autonomous technology and no widely accepted uniform standards to certify autonomous technology and its commercial use on public roads. However, NHTSA has established recommended guidelines, including its Standing General Order (as amended on April 24, 2025) requiring reports regarding certain crashes involving vehicles with advanced driver assistance systems. and proposed a regulation for autonomous vehicles. Certain states have legal restrictions on such vehicles, and many other states are considering them. Autonomous driving laws and regulations are expected to continue to evolve in numerous states in the U.S., which increases the likelihood of a patchwork of complex or conflicting regulations or may delay products or restrict autonomous features and availability, which could adversely affect our business. Autonomous products that may be integrated into REE products also may not achieve the requisite level of autonomous compatibility required for certification and rollout to consumers or satisfy changing regulatory requirements, which could require REE to redesign, modify and/or update its products in order to be compatible with autonomous products.

*Consumer Adoption of Our ADAS and Autonomous Driving Solutions*

We expect to target what we view as a strong demand for software that can deploy autonomous-ready solutions. In recent years, we have seen that there has been an automotive focus on autonomous driving. We have heard from potential customers that the commercial vehicle market suffers from driver shortages and autonomy is a compelling solution for fleets and operators. However, fleets and operators lack a safe, mature and reliable vehicle architecture to support autonomous driving, once they have identified a proper autonomous software provider. We believe that our successful demonstration with Airbus UpNext positions us to be a leader with autonomous-ready technology to service this market need. As a result, consumers' demand for, and willingness to adopt, ADAS and autonomous driving technologies will significantly impact our financial performance. We believe that our leadership position in ADAS positions us to continue to set the standard for advanced autonomous solutions and will help us benefit from increasing consumer confidence in and demand for autonomous technology over time.

*Tax Law and Policy Changes*

On July 4, 2025, the Trump Administration signed the reconciliation bill, commonly known as the One Big Beautiful Bill Act, or OBBBA, into law. Among other items included therein, OBBBA ended EV charging infrastructure tax credits and certain tax credits for electric vehicles. It also extended certain provisions of the Tax Cuts & Jobs Act of 2017, and modified certain international tax provisions, all of which may be subject to further clarification and the issuance of interpretive guidance from the U.S. Internal Revenue Service and the U.S. Treasury. The Company is assessing the legislation and its effect on its consolidated financial statements, including as more clarity is developed with respect to the

OBBBA.

In addition, certain tax policy changes in the United States may phase out certain demand-side incentives to purchase EVs and reduce certain supply-side benefits to produce EVs, all of which may result in slower adoption of EVs and/or otherwise

potentially disrupt the market for EVs.

*Political Unrest Armed Conflict in Israel and Other Parts of the Middle East*

In recent years, Israel has engaged in armed conflict with terrorist organizations in the Middle East, including Hamas in the

Gaza Strip, Hezbollah in southern Lebanon, and the Houthis in Yemen. For example, Israel has been in a war against Hamas and other terrorist organizations in the Gaza Strip and in armed conflict against Hezbollah in Lebanon since 2024. Although certain ceasefire agreements have been reached, there is no assurance that these agreements will fully mitigate hostilities, be upheld and/or continue in the near future. For example, despite a prior ceasefire, Israel and Hezbollah have

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resumed armed conflict following renewed rocket attacks by Hezbollah in March 2026. It is possible that other terrorist organizations as well as other hostile countries will join the hostilities and that such clashes may escalate in the future into a greater regional conflict. Additionally, it is possible that other terrorist organizations, as well as other hostile countries, may engage in armed conflict with Israel and that such clashes may escalate in the future into a greater regional conflict. Additionally, instability in Syria has led Israel to engage in armed actions therein and it may do so again in the future. Israel is also under current threats from Iran. In particular, for twelve days in 2025 Israel engaged in armed conflict with Iran and the United States launched its own military strikes on Iran. Such conflict ended in a ceasefire agreement. In late February 2026, Israel and the United States attacked Iran, which triggered a broad Iranian military response across the Middle East and has contributed to significant regional instability including with respect to the Straight of Hormuz. The conflict and its impact on the Middle East, in particular, remains highly fluid, and we are unable to predict if, when, or on what terms, it will be fully resolved. Although certain ceasefire agreements have been reached, there is no assurance that these agreements will fully mitigate hostilities, be upheld, be respected, or remain in force, and additional hostilities and escalations may occur at any time.

The current conflict had led to a deterioration of certain indicators of Israel's economic standing, including a downgrade in Israel's credit rating by rating agencies such as by Moody's, S&P Global, and Fitch. Moreover, there have been and continues to be periods of political disruption in Israel, including through widespread protests regarding various political issues, multiple elections in the past, and a corruption trial of Israel's Prime Minister.

Any conflict involving Israel, the interruption or curtailment of trade between Israel and its trading partners (including from

embargos), significant downturn in the economic or financial conditions in Israel, or any political instability in the region or in Israel could adversely affect Israel's economy, business conditions and/or our business operations, results of operations, and financial condition. It may also result in parties with whom we have agreements claiming that they are not obligated to perform their commitments pursuant to force majeure provisions in such agreements. This may make it more difficult for us to enter into customer agreements, to receive purchase orders for our products, and/or to raise capital, which

would adversely affect REE's operations and results of operations.

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***Key Components of Statements of Operations***

***Revenue***

Aside from isolated projects from time-to-time, we have not begun significant commercial operations and currently have no significant revenues. Once we reach commercialization and the sales of our SDV products, which following our current production pause may in the future also include the recommencement of production, we expect that the significant majority of our revenue would likely be derived from any of the following, including a combination of, direct sales to OEMs, dealers, logistics and technology companies and, thereafter, other related products and services within the REE ecosystem.

***Cost of Revenues***

Cost of revenues is primarily comprised from the cost of SDVs and includes direct parts, material and labor costs, share-based compensation expenses, production overhead (*e.g.*, depreciation of machinery and tooling), shipping and logistics costs, and reserves including for estimated warranty costs related to the sale of SDVs, inventory write-downs and/or write-offs and adjustments to write down the carrying value of inventory when it exceeds its estimated net realizable value, or NRV. In 2025, our cost of revenues also included one-time costs related to the production pause.

***Research and Development Expenses, Net***

Research and development, or R&D, expenses consist of our costs associated with the employment of our R&D and engineering staff, including share-based compensation, third-party engineering consultants, development projects such as corners programs and component programs and program consumables. Such R&D expenses also include expenses related to the testing, validation and certification of our SDV vehicles, UK R&D tax credit and grants received for R&D programs and projects, costs associated with our properties, and depreciation of our fixed assets.

***Selling, General and Administrative Expenses***

Selling, general and administrative expenses consist of our costs associated with the employment of staff (excluding R&D and engineering staff), share-based compensation, legal, insurance, accounting and consulting expenses, travel and marketing expenses such as public relations activities and trade shows, costs associated with our properties, and depreciation of our fixed assets.

***Other Expenses***

Other expenses consist of impairment charges of long-lived assets.

***Financial Income (Expenses), Net***

Finance income (expenses), net consists primarily of change in fair value of derivatives liabilities, interest expenses and discount of convertible promissory notes and bank fees offset by interest income and foreign currency exchange gains or losses. Foreign currency exchange gains or losses are related to changes in the value of our non-U.S. denominated financial assets and liabilities, primarily cash and cash equivalents and operating lease liabilities related to our leased properties in Israel, the United States, and the UK. Interest income consists of interest earned on our cash, cash equivalents, and short-term investments. We expect interest income to vary depending on our average investment balances and market interest rates during each reporting period. Derivative liabilities at fair value are related to our convertible promissory notes. Fair value of derivative liabilities has and is expected to continue to vary depending on the change in stock price, volatility, risk-free rate, cost of debt and other inputs used for the fair value measurements. Interest expenses relate to the accrued interest on our short-term loans under our credit facility and our convertible promissory notes. Discount expenses relate to the amortization of the discount on our convertible promissory notes.

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***Results of Operations***

***Year Ended December 31, 2025 Compared to Year Ended December 31, 2024***

The following table sets forth REE's historical operating results for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | | |
| | **2025** | **2024** |<br>**Change** |<br>**% Changes** |
| | USD in thousands | USD in thousands | USD in thousands | |
| Revenues | $1297 | $183 | $1114 | 609% |
| Cost of revenues | 17571 | 3681 | 13890 | 377% |
| Gross loss | $(16274) | $(3498) | $(12776) | 365% |
| Research and development expenses, net | 45432 | 49460 | (4028) | (8)% |
| Selling, general and administrative expenses | 19988 | 26171 | (6183) | (24)% |
| Other expenses | 24716 |  | 24716 |  |
| Total operating expenses | 90136 | 75631 | 14505 | 19% |
| Operating loss | $(106410) | $(79129) | $(27281) | 34% |
| Income (Loss) from warrants remeasurement | 37953 | (22750) | 60703 | 267% |
| Financial income (expenses), net | 10658 | (7812) | 18470 | 236% |
| Net loss before income tax | $(57799) | $(109691) | $51892 | (47)% |
| Taxes on income (tax benefit) | (1992) | 2063 | (4055) | (197)% |
| Net loss | $(55807) | $(111754) | $55947 | (50)% |

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***Revenues***

As previously noted, we have not begun significant commercial operations and currently have no significant revenues. For the year ended December 31, 2025, we recorded revenues in the amount of $1.3 million from SDV engineering and development services. For the year ended December 31, 2024, we recorded revenues in the amount of $0.2 million with respect to the sale of SDV prototypes to a customer.

***Cost of Revenues***

Cost of revenues increased by $13.9 million, or 377%, from $3.7 million for the year ended December 31, 2024 to $17.6 million for the year ended December 31, 2025. In the year ended December 31, 2025, cost of revenues was impacted primarily by a one-time non-cash inventory write-off, in the amount of $15.9 million, which had no operational use following our announced pause in production and one-time costs related thereto. This increase was partially offset by adjustments to write down the carrying value of inventory, which exceeded its estimated NRV, as part of material purchasing for preparation to production of SDVs in the year ended December 31, 2024.

***Research and Development Expenses, Net***

R&D expenses decreased by $4.1 million, or 8%, from $49.5 million for the year ended December 31, 2024 to $45.4 million for the year ended December 31, 2025. The decrease was primarily attributable to (i) lower non-recurring engineering and materials expenses related to the development of our P7 lineup SDVs, (ii) a decrease of $2.6 million in payroll and related expenses primarily in connection with our cost reduction plan and the reduction-in-force of R&D employees thereunder, and (iii) lower share-based compensation expenses, which decreased to $2.4 million for the year ended December 31, 2025 from $4.2 million for the year ended December 31, 2024. These decreases were partially offset by lower UK R&D tax credits, which were $2.4 million for the year ended December 31, 2025, compared to $5.7 million for the year ended December 31, 2024, the absence of a grant from APC in the UK in the amount of $3.6 million received in the year ended December 31, 2024, which was the final year in which the Company received this grant, and one-time expenses of $1.6 million related to our reduction-in-force for the year ended December 31, 2025. Excluding UK R&D tax credits, share-based compensation expense, and one-time expenses related to our R&D reduction-in-force, our R&D expenses decreased by $7.3 million, or 14%, from $51.0 million for the year ended December 31, 2024 to $43.7 million for the year ended December 31, 2025.

***Selling, General and Administrative Expenses***

Selling, general, and administrative expenses decreased by $6.2 million, or 24%, from $26.2 million for the year ended December 31, 2024 to $20.0 million for the year ended December 31, 2025. The decrease was primarily attributable to (i) a lower share-based compensation expense of $2.6 million for the year ended December 31, 2025, compared to $5.4 million for the year ended December 31, 2024, (ii) a decrease of $2.7 million in payroll and related expenses primarily in connection with our cost reduction plan and the reduction-in-force of non-R&D employees thereunder, (iii) and a decrease in director and officers insurance expenses. These decreases were partially offset by one-time expenses of $0.5 million related to our non-R&D reduction-in-force for the year ended December 31, 2025. Excluding share-based compensation, and one-time expenses related to our non-R&D reduction-in-force, selling, general and administrative expenses decreased by $3.9 million, or 19%, from $20.8 million for the year ended December 31, 2024 to $16.9 million for the year ended December 31, 2025.

***Other Expenses***

Other expenses totaled $24.7 million for the year ended December 31, 2025, compared to zero expenses for the year ended December 31, 2024. The increase was attributable to our decision to pause production and the determination therewith that the carrying value of certain long-lived assets may not be recoverable. Accordingly, we performed impairment assessments that resulted in impairment charges of long-lived assets in the amount of $24.7 million.

***Income (Loss) from Warrants Remeasurement***

Income (loss) from warrants remeasurement, increased by $60.8 million, or 267%, from a loss of $22.8 million for the year ended December 31, 2024 to an income of $38.0 million for the year ended December 31, 2025. This increase was due to pre-funded warrants that we issued as part of our September 2024 registered offering and the change in the fair value of such warrant liability, which was mainly impacted by the decline in the price of our Class A Ordinary Shares for the year ended December 31, 2025.

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***Financial Income (Expenses), Net***

Financial income (expenses), net increased by $18.5 million, or 236%, from financial expenses, net of $7.8 million for the year ended December 31, 2024 to financial income, net of $10.7 million for the year ended December 31, 2025. This increase was primarily attributable to changes in the fair value of a derivative liability, which was mainly driven by the decrease in the price of our Class A Ordinary Shares for the year ended December 31, 2025. By comparison, during the year ended December 31, 2024, the Company recognized losses related to changes in the fair value of the derivative liability as a result of an increase in the price of our Class A Ordinary Shares following the Company's September 2024 registered offering. In addition, financial income was adversely affected by lower interest income earned on bank deposits as a result of lower average cash balances.

***Taxes on Income (tax benefit)***

Taxes on income (tax benefit) decreased by $4.1 million, from taxes on income of $2.1 million for the year ended December 31, 2024 to a tax benefit of $2.0 million for the year ended December 31, 2025. The change was primarily attributable to changes in deferred tax balances resulting in a tax benefit for the year ended December 31, 2025, compared to taxes on income for the year ended December 31, 2024.

**B. Liquidity and Capital Resources.**

As of the date of this Annual Report, we have not yet generated significant revenues from our principal business operations and have generated minimal revenues overall and do not expect to generate sufficient revenues from the sale of products in the near future to cover our costs and capital expenditures.

Since inception, we have incurred losses and have generated negative cash flows from operations and have therefore funded our operations, capital expenditure and working capital needs through capital contributions, the sale of our securities including Class A Ordinary Shares, warrants, pre-funded warrants, and convertible promissory notes to investors, and from the consummation of the merger whereby 10X Capital Venture Acquisition Corp ("10X Capital"), a Delaware corporation and special purpose acquisition company, and Spark Merger Sub, Inc. ("Merger Sub"), our wholly-owned subsidiary, pursuant to which Merger Sub merged with and into 10X Capital.

In accordance with the ASC 205-40, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,

we evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about our

ability to continue as a going concern within one year after the date that those consolidated financial statements were issued.

Our ability to continue as a going concern will depend on our ability to obtain additional financing, attain further operating efficiencies, and generate future cash from operations, however, we can provide no assurance that any will occur. These conditions raise substantial doubts about the Company's ability to continue as a going concern. Therefore, the accompanying consolidated financial statements in this Report have been prepared on a going concern basis and do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should the Company be unable to continue as a going concern. See Note 1 "General" to our financial statements included as part of this Annual Report for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern. Our ability to access capital is critical. Until we can generate sufficient revenue to cover our operating expenses, working capital and capital expenditures, we will need to raise additional capital or debt to continue our business operations. Our ability to fund our cash needs is subject to various risks,

including as detailed in the risk factor section in Item 3.D. of this Annual Report.

***March 2025 Registered Direct Offerings & Lock-up Agreements***

On March 18, 2025, we entered into a securities purchase agreement with certain institutional and accredited investors, providing for the issuance of an aggregate of 6,376,631 Class A Ordinary Shares at a purchase price of $4.25 per ordinary share, or the March 18 Offering. The March 18 Offering closed on March 19, 2025, and the offering resulted in gross proceeds of approximately $27.1 million, which, after the deduction of fees and expenses, we intended to use the net proceeds for working capital and general corporate purposes.

Additionally, on March 26, 2025, we entered into a securities purchase agreement with certain institutional and accredited

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investors, providing for the issuance of an aggregate of 2,219,176 Class A Ordinary Shares at a purchase price of $4.25 per

ordinary share. The offering closed on March 27, 2025 and resulted in gross proceeds of approximately $9.4 million, which, after the deduction of fees and expenses, we intended to use the net proceeds for working capital and general corporate purposes.

As part of each of these transactions, each of the directors and executive officers of the Company entered into lock-up agreements, pursuant to which they agreed not to sell or transfer any of the Company securities which they hold, subject to

certain customary exceptions, for established periods as set forth in the securities purchase agreements. Additionally, the Company agreed that until September 19, 2025, it will not conduct any sales of ordinary shares or equivalent securities involving a variable rate transaction (as defined in the securities purchase agreement), subject to certain exceptions as described in the securities purchase agreement, which included REE's at-the-market agreements where the sale of Class A

Ordinary Shares are made at a price per share greater than $6.50.

***September 2024 Securities Purchase Agreements***

On September 15, 2024, we entered into a securities purchase agreement, or the September 2024 Offering, with certain investors for the issuance of an aggregate of (i) 7,362,930 Class A Ordinary Shares, at a price of $4.122 per share, and (ii) 3,639,893 pre-funded warrants each to purchase one Class A Ordinary Share. The pre-funded warrants were sold at a price of $4.121 each, representing the per share offering price of $4.122 per Class A Ordinary Share, minus the $0.001 per share exercise price of such pre-funded warrant. The total net proceeds were approximately $44.9 million after deducting transaction costs. We have been using the net proceeds from the September 2024 Offering for working capital and general corporate purposes.

***March 2024 Public Offering***

On March 1, 2024, REE executed an underwriting agreement, or the Underwriting Agreement, between the Company and Roth Capital Partners LLC, or Roth, pursuant to which the Company conducted an underwritten public offering, or the Public Offering, of 2,000,000 Class A Ordinary Shares at a purchase price of $6.50 per share, for aggregate gross proceeds of approximately $13.0 million, or March 2024 Offering. Pursuant to the terms of the Underwriting Agreement, the Company also granted Roth a 20-day option to purchase Class A Ordinary Shares of up to 300,000 Class A Ordinary Shares, or 15% of the number of Class A Ordinary Shares sold in the March 2024 Offering, solely to cover over-allotments. On March 4, 2024 Roth exercised its overallotment option to purchase an additional 300,000 Class A Ordinary Shares in full. The March 2024 Offering, including the shares issuable upon the exercise of the overallotment option, closed on March 5, 2024.

At the closing of the Public Offering, we issued 2,300,000 Class A Ordinary Shares, for aggregate net proceeds of approximately $14.135 million to REE, after deducting the underwriting discounts and transaction costs payable by us. REE has used the net proceeds from the March 2024 Offering for general working capital purposes.

***ATM Agreements***

On August 16, 2022, we entered into the ATM Equity Offering Sales Agreement<sup>,</sup> or the BofA Agreement, with BofA Securities Inc., or BofA, pursuant to which we may offer and sell, at our option, up to $75.0 million of our Class A Ordinary Shares through an "at-the-market" equity program under which BofA agreed to act as sales agent. As of December 31, 2025, we had not sold any of our Class A Ordinary Shares under the BofA Agreement.

On July 14, 2023, we entered into the HCW Agreement, pursuant to which we may offer and sell, at our option, up to $35 million of Class A Ordinary Shares through an "at-the-market" equity program under which HCW agreed to act as our sales agent. Throughout the year ended December 31, 2025 we have not sold any of our Class A Ordinary Shares under the HCW Agreement. Throughout the year ended December 31, 2024, the Company sold 310,822 Class A Ordinary Shares, under the ATM Sales Agreement for total net proceeds of $0.2 million.

***Convertible Promissory Notes and Warrants&nbsp;&nbsp;&nbsp;&nbsp;***

On November 27, 2023, we entered into securities purchase agreements, or the November Purchase Agreements, with certain investors, pursuant to which we agreed to issue and sell convertible promissory notes, or the November Notes, in the principal amount of $8 million, in the aggregate, at a conversion price of $5.09 per share (subject to adjustment as provided therein), and warrants, or the November Warrants, to purchase up to an aggregate of 1,571,710 of Class A Ordinary Shares at an exercise price of $4.42 per share (subject to adjustment as provided therein). Closing under the November Purchase Agreements occurred on December 3, 2023, pursuant to which the November Notes and November Warrants were issued to the investors.

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In addition, on December 6, 2023, we entered into a subsequent securities purchase agreement, or the December Purchase Agreement, dated December 2, 2023, with a certain accredited investor, pursuant to which we agreed to issue and sell an additional convertible promissory note, or the December Note, in the principal amount of $750,000 at a conversion price of $5.74 per share (subject to adjustment as provided therein), and additional warrants, or the December Warrants and together with the November Warrants, the "Warrants", to purchase up to 130,662 Class A Ordinary Shares, at an exercise price of $5.74 per share (subject to adjustment as provided therein). Closing under the December Purchase Agreement occurred on December 20, 2023, pursuant to which December Note and December Warrants were issued to the applicable investor.

Pursuant to the November Purchase Agreement and December Purchase Agreement, the November Notes and December Note, or together the Convertible Notes, each have a term of five-years from the date of issuance, accrue interest at a rate of ten percent per annum (compounding annually) and are convertible into Class A Ordinary Shares at conversion prices of $5.09 and $5.74 per share, respectively. We may not repay any portion of the outstanding principal amount of the November Notes or December Note (or any interest accrued thereon) prior to the maturity date. The conversion price of November Notes and December Note is subject to customary adjustments, and the Convertible Notes contain customary anti-dilution protections (including in the event of (i) certain equity issuances by us at a price less than the conversion price then in effect, provided that the conversion price shall in no event be reduced to less than $1.02 and $1.15 per share, respectively; (ii) stock splits and combinations; and (iii) certain dividends or distributions).

On December 23, 2024, we received a notice of conversion for $300,000 of the principal amount, including accrued interest, of the Convertible Notes. As a result, we issued 72,780 Class A Ordinary shares at conversation price of $4.122.

The November Warrants to purchase up to 1,571,710 Class A Ordinary Shares are exercisable at an exercise price of $4.42 per Class A Ordinary Share (subject to customary adjustments) and have a term of five-years from the date of issuance, which was December 3, 2023. The December Warrants to purchase up to 130,662 Class A Ordinary Shares are exercisable at an exercise price of $5.74 per Class A Ordinary Share (subject to customary adjustments) and have a term of five years from the date of issuance, which was December 20, 2023.

As of December 31, 2025, the Company has Convertible Notes outstanding that can be converted into 2,506,984 Class A Ordinary Shares (including Convertible Notes owed under accrued interest) and Warrants outstanding to purchase up to 1,702,372 Class A Ordinary Shares.

***Loan under Credit Facility***

On August 14, 2023, we entered into an agreement with a leading Israeli commercial bank to establish a revolving credit line facility, or the Credit Facility, in the amount of $15 million, which the bank is committed to until December 31, 2024. In December 2023, the terms of the Credit Facility were extended through June 30, 2025. In March 2024, the terms of the credit facility were extended through December 31, 2025. Outstanding loans under the Credit Facility had a variable interest at the rate of the Monthly Term Secured Overnight Financing Rate, or SOFR, plus an annual margin of 3.5%. The interest is payable on a monthly basis. Under the terms of the Credit Facility, we were required to keep unsecured deposits in the aforementioned bank in the amount of $20 million. In November 2024, the agreement was amended to increase the Credit Facility amount to $18,000 while the unsecured deposit amount was reduced to $18,000. Under certain terms, the bank has the right to offset loans drawn under the Credit Facility with the deposits kept in the bank. We were charged a fee of 0.25% per annum on amounts available for draw that are undrawn under the Credit Facility. The Credit Facility expired on December 31, 2025 and was not renewed thereafter.

As of December 31, 2025 and 2024 we had utilized zero and $18,000, respectively, under the Credit Facility for a short term loan. In January 2025, the short term loan was fully repaid by us. As of December 31, 2024 the annual interest rate for the loan utilized under the Credit Facility was 7.86%.

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***Cash Flows Summary***

Presented below is a summary of our operating, investing and financing cash flows for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** |
| | USD in thousands | USD in thousands |
| Net cash provided by (used in) |  |  |
| Operating activities | $(68710) | $(68985) |
| Investing activities | (6205) | 35969 |
| Financing activities | 16362 | 63548 |
| Net change in cash and cash equivalents and restricted cash | $(58553) | $30532 |

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***Cash Flows from Operating Activities***

Our cash flows used in operating activities to-date have primarily resulted from costs related to development of our products, payroll, fluctuations in accounts payable and other current assets and liabilities. We expect to continue incurring cash outflows on operating activities until we begin to generate sufficient cash flows from our business.

During the year ended December 31, 2025, operating activities used $68.7 million in cash. The primary factors affecting operating cash flows during this period were a net loss of $55.8 million before deducting non-cash charges mainly consisting of impairment of long-lived assets of $24.7 million, share-based compensation of $5.1 million, depreciation and amortization expenses including a change in operating right of use asset and liability, net, of $5.0 million, and a decrease in operating working capital (including inventory write-offs) of $2.8 million. These non-cash charges were offset by changes in the fair value of warrant and derivative liabilities of $49.7 million.

During the year ended December 31, 2024, operating activities used $69.0 million in cash. The primary factors affecting operating cash flows during this period were a net loss of $111.8 million before deducting non-cash charges mainly consisting of changes in the fair value of warrant and derivative liabilities of $31.9 million, share-based compensation of $9.6 million, depreciation, amortization, and accretion expense and a change in operating right of use asset and liability, net, of $4.0 million. These non-cash charges were offset by an increase in operating working capital of $6.4 million.

Cash flows used in operating activities decreased by $0.3 million from $69.0 million for the year ended December 31, 2024 to $68.7 million for the year ended December 31, 2025. The decrease was primarily attributable to the cost reduction plan announced in June 2025. The decrease was partially offset by (i) production-related costs incurred prior to the production pause, which were mainly related to inventory purchases for the P7 program, (ii) lower UK R&D tax credits received during 2025 compared to 2024 and (iii) the absence of UK APC grants for 2025, as compared to 2024.

***Cash Flows from Investing Activities***

Our cash flows used in investing activities to-date have been primarily comprised of cash outflows for tangible fixed assets (plant and equipment).

Net cash used in investing activities was $6.2 million for the year ended December 31, 2025, which was mainly driven by purchases of property and equipment in the amount of $6.3 million.

Net cash provided by investing activities was $36.0 million for the year ended December 31, 2024, which was primarily due to the maturity of short-term investments of $43.5 million, partially offset by cash outflows for purchases of property and equipment of $7.5 million.

***Cash Flows from Financing Activities***

Our cash flows provided by financing activities to-date have been primarily comprised of proceeds from the issuance of Class A Ordinary Shares, proceeds and repayments of short-term loans, and proceeds from the issuance of warrants and pre-funded warrants.

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Net cash provided by financing activities was $16.4 million for the year ended December 31, 2025, which was primarily due to proceeds from issuance of Class A Ordinary Shares, net of $34.4 million, which was partially offset by the repayment of a short-term loan under our Credit Facility in the amount of $18.0 million.

Net cash provided by financing activities was $63.5 million for the year ended December 31, 2024, which was primarily due to proceeds from the issuance of Class A Ordinary Shares, net of $45.5 million, issuance of pre-funded warrants of $15.0 million and proceeds from short-term loan, net of $3.0 million.

***Contractual Obligations and Commitments***

We currently lease approximately 3,300 square meters (approximately 35,520 square feet) of office space in Glil-Yam, Israel as our headquarters. This facility accommodates its principal executive, research and development, marketing, design, business development, human resources, finance, information technology, and administrative activities. The lease is for a five-year term, which expires in the second half of 2026, with the option to extend for an additional period of five years until 2031. On April 7, 2026, we entered into an agreement with our landlord to permit the use of approximately 11,840 square feet (1,100 meters) of this space by a third party in exchange for a monthly payment (including the associated monthly property taxes) by such party. Additionally, the third party is expected to reimburse the Company monthly for one-third of its average total monthly utility expense (*e.g*., water, electric). All other terms of the Company's lease remain unchanged. As a result, the Company's monthly lease payment will be reduced to two-thirds of the original lease payment amount.

In the UK, we had a lease agreement for the UK Engineering Centre and Launch Factory, which was located in Coventry, UK. The facility was approximately 130,000 square feet (approximately 12,077 square meters), under a lease agreement that expired in 2032. We had utilized this facility for engineering, process validation activities, along with product assembly operations. As of March 2026, through our wholly-owned UK subsidiary (REE Automotive UK Limited), this lease agreement has been assigned to a third party. As a result, effective March 10, 2026, REE no longer occupies such facility and is therefore no longer making monthly lease payments with respect thereto. As part of the assignment agreement, REE received a gross refund of its rent deposit in the amount of approximately $2.3 million (£1.7 million), and, concurrently, provided a rent deposit in the amount of approximately $0.8 million (£0.6 million) in connection with the assignee's lease, which will be released upon the expiration of the original lease term in 2032. In addition, REE incurred certain costs in connection with the assignment of the lease in the amount of approximately $0.2 million (£0.2 million). For further information, see Note 20 to our financial statements and Item 4.D above. In addition, REE maintains a lease in Warwickshire with MIRA Technology Park, which it utilizes as an engineering and testing facility. This lease agreement may be terminated by either party upon three months' notice.

In the U.S., we had a lease agreement for our Austin, Texas facility. The facility was approximately 118,132 square feet (10,975 square meters) and was under a lease agreement that expired in 2032. In 2025 and 2024, we partially subleased this facility to third parties, which was terminated at the end of 2025. REE has not utilized this facility in 2026 and the landlord retook possession of the property. On May 8, 2026, REE, through its wholly-owned U.S. subsidiary (REE Automotive USA Inc.) entered into an agreement with its landlord to terminate its lease agreement. Such agreement described the final amounts paid or to be paid to the landlord in exchange for the release of all relevant parties from the lease agreement and obligations thereunder. As a result, effective May 8, 2026, REE no longer occupies such facility and is therefore no longer making lease payments with respect thereto. For further information, see Note 20 to our financial statements and Item 4.D above.

In 2024, we entered into an agreement with Roush Industries to serve as our contract manufacturer for the assembly and integration of our SDVs. The assembly and integration space was located at their Southeast, Michigan facility with approximately 47,200 square feet (approximately 4,385 square meters) of dedicated space for production, warehousing, transfer to production, assembly, testing, and storage, including both inside and outside. Prior to our production pause, this space was being prepared for our vehicle assembly and integration activity. Following our production pause, we are no longer using this facility and we terminated the agreement during 2025.

The following table summarizes our contractual obligations and other commitments for cash expenditures as of December 31, 2025, and the years in which these obligations are due. Certain obligations are reflected in our balance sheet, while other are disclosed as future obligations. This table is not meant to represent a forecast of our total cash expenditures for any of the periods presented.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Payments due by period** | **Payments due by period** | **Payments due by period** | **Payments due by period** |
| | **Total** | **Less than 1 year** | **1-5 years** | **More than 5 years** |
| | USD in thousands | USD in thousands | USD in thousands | USD in thousands |
| **Contractual obligations:** |  |  |  |  |
| Operating lease obligations | $17780 | 3435 | 9882 | 4463 |
| Purchase obligations | 1603 | 1603 |  |  |
| **Total** | $19383 | $5038 | $9882 | $4463 |

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***Purchase obligations***. The amounts listed for purchase obligations in the table above represent agreements (including open purchase orders to purchase inventory) to purchase products and for other expenditures in the ordinary course of business that are enforceable and legally binding and that specify all significant terms.

Open purchase orders that are cancellable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding agreements.

In addition, we entered into agreements in the normal course of business with vendors to perform various services, which are generally cancellable upon written notice. These payments are not included in this table of contractual obligations.

**C. Research and development, patents and licenses, etc.**

We have invested significant time and expense into research and development with respect to our products. Our research and development activities are primarily located in Israel and in the UK. Our ability to obtain a leadership position in the automotive industry depends in part on our ongoing research and development activities. Our research and development team includes engineers and researchers with a diverse range of expertise, levels of experience, and academic backgrounds. We have a strong combination of engineers with automotive and technology industry experience from Israel, the UK and Germany, who together combine innovative thinking with a common goal of developing a superior SDV product for the automotive market. Our research and development department is comprised of approximately 97 employees and external consultants as of December 31, 2025. In 2025, research and development costs accounted for approximately 50% of our total operating expenses. Following our production pause and shift toward a technology-first approach focused on collaboration with OEMs and strategic partners, we expect to continue to incur expenses from our research and development activities.

Israeli tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:

• the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;

• the research and development must be for the promotion of the company; and

• the research and development is carried out by or on behalf of the company seeking such tax deduction.

The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Israeli Income Tax Ordinance (New Version), 5721-1961. Expenditures that are unqualified under the conditions above are deductible in equal amounts over three years.

**D. Trend information**

Other than as disclosed in "*Item 5.A. Operating Results — Key Factors Affecting Operating Results*" and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2025 to December 31, 2025 that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.

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**E. Critical Accounting Estimates**

Our financial statements have been prepared in accordance with U.S. GAAP. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates, judgments and assumptions. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period and accompanying notes. Actual results could differ from those estimates. Our management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made.

While our significant accounting policies are described in the notes to its financial statements, we believe the following accounting policies are the most critical in fully understanding and evaluating our financial condition and results of our operations under U.S. GAAP.

***Impairment of long-lived assets***

Long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

For the year ended December 31, 2025, $24.3 million impairment charges were recognized in connection with our production pause, which includes our production lines, equipment, and tooling. For the years ended December 31, 2024 and 2023, no impairment charges were recognized.

***Inventory***

The Company's inventory, which includes raw materials, work in-process, and finished goods, is carried at the lower of cost or Net Realizable Value, or NRV. Inventory cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. In the case of produced inventories and work in progress, cost includes an appropriate share of production overheads based on operating capacity.

At the end of each reporting period, the Company evaluates whether its inventories are damaged, obsolete, or have material changes in price or other causes, and if so, a loss is recognized in the period in which it occurs. Inventory write-downs are also based on reviews for any excess or obsolescence.

The Company also reviews its inventory to determine whether its carrying value exceeds the NRV upon the ultimate sale of the inventory. NRV is the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion, disposal, and transportation. At the end of each reporting period, the Company determines the estimated selling price of its inventory based on market conditions. Once inventory is written-down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. During the years ended December 31, 2025, 2024 and 2023 the Company recorded inventory write-downs of $15,936, $2,276 and $1,970 respectively, to reduce inventories to their net realizable values and for any excess or obsolete inventories, including in connection with the Company's production pause.

***Fair value of financial instruments***

Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We measure financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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A financial instrument's classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial instruments consist, among others, of cash equivalents, other accounts receivable, short-term loan, trade payables and other accounts payable and accrued expenses. These financial instruments are stated at their carrying value, which approximates their fair value due to the short time to the expected receipt or payment date. The Company considers its pre-funded warrants to be Level 2. The warrants and derivative liabilities are measured at fair value using Level 3 inputs.

***Recently Issued Accounting Pronouncements***

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report.

***Our status as an emerging growth company***

Under the JOBS Act, an "emerging growth company" can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an "emerging growth company" to delay the adoption of new or revised accounting standards that have different transition dates for public and private companies until those standards would otherwise apply to private companies. We meet the definition of an "emerging growth company" and have elected to use this extended transition period for complying with new or revised accounting standards until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements and the reported results of operations contained therein may not be directly comparable to those of other public companies.

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**Item 6. Directors, Senior Management and Employees**

**A. Directors and Senior Management**

The following table sets forth the name, age and position of each of our executive officers and directors as of May 15, 2026:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| *Executive Officers* |  |  |
| Daniel Barel | 47 | Co-Founder, Chief Executive Officer and Director |
| Ahishay Sardes | 44 | Co-Founder, Chief Technology Officer and Director |
| Hai Aviv | 44 | Chief Financial Officer |
| Avital Futterman | 43 | General Counsel & Corporate Secretary |
| Tali Miller | 50 | Chief Business Officer |
| *Directors* |  |  |
| Hicham Abdessamad <sup>(1) (2) (3)</sup> | 52 | Chairman of the Board |
| Carlton Rose<sup>(3)</sup>  | 64 | Director |
| Ittamar Givton <sup>(1) (2) (3)</sup>  | 73 | Director |
| Rajesh Goel\*\* | 57 | Director |
| Ayellet (Mimi) Zemah <sup>(1) (2) (3)</sup>\*\*\* | 57 | Director |

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*(1) Member of our audit committee*

*(2) Member of our compensation committee*

*(3) Independent director under the rules of Nasdaq*

***Executive Officers***

**Daniel Barel** has been the Chief Executive Officer of REE since 2013 and has served as a member of the board of directors since 2013. Mr. Barel is an entrepreneur and businessperson who founded several startups in the fields of medical devices, cyber security and software applications. He serves as chairman of SpecterX, an Israeli data management company he co-founded in 2019<sup>1</sup>. Mr. Barel holds a Bachelor of Arts in Economics and Business Administration from the Hebrew University.

**Ahishay Sardes** has been the Chief Technology Officer of REE since 2013 and has served as a member of the board of directors since 2021. Mr. Sardes has over 15 years of experience in engineering including mechanics, electronics, software and research. From 2008 to 2013, he served as Head of Engineering at ZIV-AV Technologies, an Israeli engineering company. Mr. Sardes holds a Bachelor of Science in Mechanical Engineering from the Afeka Tel Aviv Academic College of Engineering.

**Hai Aviv** has been the Chief Financial Officer of REE since November 15, 2024. Prior to joining REE, from 2022 to 2023, Mr. Aviv served as the Chief Financial Officer of Prisma Photonics, a private company operating in the field of infrastructure monitoring. Mr. Aviv previously served as REE's Chief Financial Officer from 2018 to 2022. From 2016 to 2018, he served as the Chief Financial Officer of Beyond Air, a public company listed on Nasdaq, operating in the fields of biopharmaceutical and medical devices. From 2010 until 2013, Mr. Aviv served as a corporate controller and from 2013 until 2017, Mr. Aviv served as Chief Financial Officer of Babylon Ltd., a public company listed on the Tel Aviv Stock Exchange, operating in the fields of internet, software and venture capital investments. Prior to that, from 2005 to 2010, Mr. Aviv was a manager at Ernst & Young. Mr. Aviv is a Certified Public Accountant and holds a Bachelor of Arts in Business and Accounting from the College of Management Academic Studies, and an MBT in Business and Taxation from the College of Management Academic Studies.

<sup>1</sup> REE is also a customer of SpecterX. See "*Item 7.B. Related Party Transactions*" of this Annual Report for additional information.

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**Avital Futterman** has served as General Counsel of REE Automotive Ltd. since July 2022, where she leads the Company's legal affairs and supports its corporate governance. Prior to joining REE, Ms. Futterman served in senior legal roles at Cellebrite, including as General Counsel, from 2015 to 2022. Earlier in her career, Ms. Futterman practiced law at leading firms, including Zellermayer, Pelossof, Rosovsky, Tsafrir, Toledano & Co., Schnitzer Gotlieb Samet & Co., and Naschitz, Brandes, Amir & Co. Ms. Futterman holds an LL.B. and a B.A. in Economics from Tel Aviv University, and a Global MBA from Reichman University.

**Tali Miller** joined REE Automotive in 2018 and is the company's Chief Business Officer since November 2021, having previously served as the company's Vice President of Corporate Development. Ms. Miller brings over 20 years of experience in business development, partnerships and M&A activities in the tech, telecom and environmental sectors. Prior to REE, from 2008 to 2015, Ms. Miller led the M&A and regional business development at Miya, an Arison Group company, and from 2005 to 2008, Ms. Miller led partnerships and M&A at the Nasdaq listed companies M-Systems Ltd. and SanDisk. Ms. Miller holds a BA in Economics from Tel Aviv University and an MBA from INSEAD.

***Current Directors***

**Hicham Abdessamad** serves as the Chairman of the Board of Directors of REE and has served on its Board since 2023. He currently also serves as the Chairman of the Board of Directors of Studio 2050 Ventures. He previously served for more than 21 years at Hitachi, including most recently as the Chairman & CEO of Hitachi America where he was responsible for overseeing 18 operating entities, of approximately $14 billion in revenue, and 24,700 employees. In such role, he delivered 28% revenue growth and approximately $19 billion in strategic M&A. Mr. Abdessamad also served as the President & CEO of Hitachi Vantara and CEO of Hitachi's Global Social Innovation Business, which spans across more than 50 countries across energy, digital, mobility, manufacturing, and healthcare. Mr. Abdessamad has also previously served as an advisor to U.S. Commerce Secretary Gina Raimondo on FDI and economic growth. Mr. Abdessamad holds a Bachelor of Science in Computer Engineering from Suffolk University and attended the executive development program at the Tuck School of Business at Dartmouth College in New Hampshire.

**Carlton Rose** has served on the board of directors since June 2023. Mr. Rose was employed by United Parcel Service starting in 1980, first as a package handler and, during his 43-year tenure, having earned numerous promotions as a result of his technical skills, business skills and team leadership culminating in his most recent position as its President, Global Fleet Maintenance & Engineering until his retirement in March, 2023. Mr. Rose serves on the board of directors of Lincoln Educational Services Corporation (Nasdaq: LINC) since August 2020. A native of Marion, Indiana, Mr. Rose is an automotive engineering graduate of the Indianapolis campus of Lincoln Technical Institute, now Lincoln College of Technology.

**Ittamar Givton** has served on the board of directors since March 29, 2023. Mr. Givton served on the boards of several government entities and public companies in Israel, across the energy, banking, chemical, and communication sectors as well as on the board of the Israeli Stock Exchange. In addition, Mr. Givton served for many years as Managing Director of Automotive Equipment Group in Israel (importer of Suzuki, Man and Bridgestone, among others) and is now serving as Chairman of the Group's Advisory Committee. Prior to his work in AEG, Mr. Givton held a senior position in the Budget Department of the Israeli Ministry of Finance and later served as VP for Business Development in the Dankner Group. Mr. Givton holds a BA in Economics from Tel Aviv University and an LL.B from the Hebrew University in Jerusalem.

**Rajesh Goel** joined our board of directors in November 2024. Mr. Goel has served on the board of directors of Motherson International Limited, Yachiyo India Manufacturing Pvt Limited, Prysm Displays (India) Private Limited and Samvardhana Motherson International Leasings IFSC Limited since 2024, on the board of directors of FDO Holidays Private Limited, Motherson Auto Solutions Limited, Youngshin Motherson Auto Tech Limited, Samvardhana Motherson Hamakyorex Engineered Logistics Limited, Samvardhana Motherson Electric Vehicles LLC and Motherson Electronic Components Private Limited since 2023, and on the board of directors of Aero Treatments Private Limited, CIM Tools Private Limited and Samvardhana Motherson International Limited since 2022. He also served on the board of directors of Prysm Systems, Inc. from 2023 until 2024 and Honda Cars India Ltd. From 2018 until 2021. Mr. Goel serves as a member of the audit, nomination and remuneration, and corporate social responsibility committees of Yachiyo India Manufacturing Pvt Limited, a member of the audit and nomination and remunerations committees of Samvardhana Motherson Hamakyorex Engineered Logistics Limited and Motherson Electronic Components Private Limited, and as a member of the nomination and remuneration committee of CIM Tools Private Limited. Mr. Goel has more than 25 years of experience serving at various executive roles with Honda, including as General Manager, Purchasing Division 2 - Worldwide, in Honda Motor Co., Ltd. from 2015 until 2018. Mr. Goel holds a Bachelor of Commerce degree from the Dehli University and is a Certified TQM trainer from Honda Motor, Japan as well as AOTS, Japan. He is also an alumnus of IMD, Switzerland, Center for Creative Leadership, San Diego and AOTS & International Skill Cooperation Center, Japan.

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**Ayellet (Mimi) Zemah** joined our board of directors in March 2025. Ms. Zemah has served as a founding partner of Zemah, Schnieder & Partners since 2008, where she heads the high-tech, investment funds, corporate law, and Mergers & Acquisitions departments. She also heads the High-Tech Dispute Resolution Institute, which was established in 2019 to provide dispute settlement for the high-tech industry in Israel. Prior to 2008, Ms. Zemah practiced corporate law for several law firms. Ms. Zemah holds a LL.B degree from Tel-Aviv University School of Law and an LL.M degree from New York University School of Law.

**Family Relationships**

There are no family relationships between any of our executive officers and our directors.

**Arrangements for Election of Directors and Members of Management**

On September 15, 2024, we entered into a securities purchase agreement with Motherson through which they invested $15 million as part of a registered direct offering. On the same date, we entered into a Supply Chain Management Services Agreement with Motherson, pursuant to which we appointed Motherson (including any of its affiliates) to provide certain services to REE on an exclusive basis. In connection with the foregoing, we invited a Motherson representative to join our board of directors. On November 14, 2024, we appointed Rajesh Goel from Motherson to our board of directors, effective November 15, 2024. For the sake of clarity, there is no arrangement or agreement that grants Motherson an appointment right with respect to nominations to our board of directors.

**B. Compensation**

**Compensation of Executive Officers and Directors**

The compensation paid by REE and our subsidiaries to our executive officers and directors as a group for the year ended December 31, 2025 was $3.7 million. This amount includes $0.5 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, car expenses, relocation, professional and business association dues and expenses reimbursed, and other benefits commonly reimbursed or paid by companies in Israel. In addition, we incurred $1.8 million of share-based compensation expense related to equity awards made by us to our executive officers and directors.

As of December 31, 2025, options to purchase 2,806,385 Class A Ordinary Shares granted to our executive officers and directors as a group were outstanding under our equity incentive plans at a weighted average exercise price of $2.37 per ordinary share. The expiration date of such options is 10 years after their date of grant. In addition, 528,535 Class A Ordinary Shares RSUs granted to our executive officers and directors as a group, were outstanding under our equity incentive plans as of December 31, 2025.

For the year ended December 31, 2025, our executive officers and directors were granted 129,186 Class A Ordinary Shares RSUs under our 2021 Share Incentive Plan. For the sake of clarity, such grants do not include the combined 13,599,128 Class A Ordinary Shares granted to our CEO and CTO, as approved at our November 13, 2025 Special General Meeting because the actual grants were not made until 2026.

The table below sets forth the compensation earned by our five most highly compensated office holders (as defined under the Israeli Companies Law) during or with respect to the year ended December 31, 2025. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person's title, a director, and any other manager directly subordinate to the general manager. We refer to the five individuals for whom the disclosure is provided herein as "Covered Executives". For purposes of the table and the summary below, "compensation" includes salary, bonuses, equity-based compensation, retirement or termination payments, and any benefits or prerequisites such as car, phone and social benefits, as well as undertaking to provide such compensation in the future.

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***Summary Compensation Table***

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Information Regarding the Covered Executive (1) (2)** | **Information Regarding the Covered Executive (1) (2)** | **Information Regarding the Covered Executive (1) (2)** | **Information Regarding the Covered Executive (1) (2)** | |
| **Name and Principal Position** | **Base Salary** | **Benefits & Perquisites (3)** | **Variable Compensation (4)** | **Equity-Based Compensation (5)** | **Total** |
| Daniel Barel, Chief Executive Officer & Director | $485598 | $193754 | $207000 | $— | $886352 |
| Hai Aviv, Chief Financial Officer | $300000 | $88044 | $— | $466348 | $854392 |
| Joshua Tech, former Chief Operating Officer \* | $380000 | $53793 | $— | $263960 | $697753 |
| Avital Futterman, General Counsel & Corporate Secretary \*\* | $355000 | $124740 | $— | $194093 | $673833 |
| Tali Miller, Chief Business Officer | $400000 | $87073 | $— | $153685 | $640758 |

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\* Mr. Joshua Tech left the Company during February 2026.

\*\* Ms. Avital Futterman's compensation includes a salary increase during 2025 and a one-time payment in connection with such salary increase.

(1) In accordance with Israeli law, all amounts reported in the table are based on the cost to REE as recorded in our financial statements for the year ended December 31, 2025.

(2) All the officers listed in the table, except Joshua Tech, are current full-time employees. Joshua Tech served as the full-time Chief Operating Officer of REE from April 5, 2022 through February 13, 2026. Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the conversion rate on the payment date of the compensation.

(3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (such as life, disability and accident insurances), convalescence pay, payments for Medicare and social security, tax gross-up payments and other benefits and perquisites consistent with our compensation policy, regardless of whether such amounts have actually been paid to the executive.

(4) Amounts reported in this column refer to variable compensation such as earned commissions, incentives and earned or paid bonuses as recorded in our financial statements for the year ended December 31, 2025.

(5) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2025, with respect to equity-based compensation, reflecting also equity awards made in previous years which may have vested during the current year. Assumptions and key variables used in the calculation of such amounts are described in Note 11 to our audited consolidated financial statements, which are included in this Annual Report.

***Compensation Policy for Non-Executive Directors***

In July 2021, our shareholders amended and re-adopted the compensation policy for our non-executive directors. Our shareholders later approved amendments thereto on November 28, 2022 and November 13, 2025. Pursuant to the amended compensation policy, the non-executive directors are paid an annual cash retainer and receive a fixed annual equity grant. The policy does not provide for the payment of any benefits upon termination of any non-executive director's service.

***Cash retainer.*** The annual retainer for board membership is $50,000, payable quarterly, with the Chairman of the board of directors paid a supplemental annual fee of $50,000, paid quarterly. The annual retainer for committee membership is $10,000 for audit committee membership, $7,500 for membership of the compensation committee, and $5,000 for membership of each nominating and corporate governance committee. The annual retainer for serving as chair of the audit committee, the compensation committee and the nominating and corporate governance committee is $20,000, $15,000 and $10,000, respectively. REE currently does not have a nomination committee.

***Initial equity awards.*** Each non-employee director is granted an initial grant of $100,000 worth of RSUs to purchase Class A Ordinary Shares, plus a prorated portion of $150,000, which will be granted on the date of the director's election or

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appointment to the Board, based on the closing share price on the date of grant. The prorated portion will be determined by multiplying $150,000 by the quotient of (i) the number of days remaining from the date of appointment or election until the next annual meeting of shareholders, divided by (ii) 360, or the Initial RSU Grant. Each such grant will vest in three equal installments on the first, second and third anniversaries of the date of grant or on the date of the annual meeting of shareholders in the first, second and third years following the date of grant, whichever is earlier in any year. For eligible Israeli directors, such grants will be made in accordance with the capital gains track under Section 102 of the Israeli Income Tax Ordinance and the REE Automotive Ltd. 2021 Share Incentive Plan.

***Annual equity awards.*** Each current and future non-employee director will receive an annual grant of RSUs in the amount of $150,000 (in the case of the Chairman of the Board, $200,000, which the Chairman may elect to receive in whole or in part in quarterly installments of cash instead of RSUs, or some combination thereof), which will be granted at each annual meeting of shareholders at which such non-employee director is reelected, based on the closing share price on the date of grant, or the Annual RSU Grant. A non-employee director who is first elected at an annual meeting of shareholders will receive the full $150,000 Initial RSU Grant but will not receive an Annual RSU Grant for the year in which he or she is elected. Each such grant will vest in one installment on the first anniversary of the date of grant or the annual meeting of shareholders immediately following the date of grant, whichever is earlier. For eligible Israeli directors, such grants will be made in accordance with the capital gains track under Section 102 of the Israeli Income Tax Ordinance and the 2021 REE Automotive Ltd. Share Incentive Plan.

All RSU grants will be fully accelerated upon a change of control of the Company, which shall be defined by the Board and the Compensation Committee.

**Option Plans**

**Key Employee Share Incentive Plan (2011)**

*Authorized Shares.* REE no longer grants awards under the REE Automotive Ltd. Key Employee Share Incentive Plan (2011), or the Existing Plan, although previously granted awards under the Existing Plan remain outstanding and governed by such plan. Class A Ordinary Shares subject to awards granted under the Existing Plan that expire or become non-exercisable without having been exercised in full will become available again for future grant under the 2021 REE Automotive Ltd. Share Incentive Plan, or the2021 Plan. As of December 31, 2025, there were a total of 3,416,677 Class A Ordinary Shares subject to outstanding awards granted under the 2011 Plan, which if expired, cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or otherwise non-exercisable without having been exercised, will become available for issuance under the 2021 Plan.

*Administration.* REE's board of directors administers the Existing Plan. Under the Existing Plan, the administrator has the authority, subject to applicable law, to designate recipients of option grants, determine the terms of awards, including the exercise price of an option award, the time and vesting schedule applicable to an option grant and the other conditions applicable to an award, and take all other actions and make all other determinations necessary or desirable for, or incidental to, the administration of the Existing Plan. The board of directors may resolve to appoint a Share Incentive Committee in the future and in such case such committee will administer the plan, as shall be determined by the board of directors.

*Eligibility.* The Existing Plan provides for granting awards under various tax regimes, including in compliance with Section 102, or Section 102, of the Israeli Income Tax Ordinance (New Version), 5721-1961, or the "Ordinance, and Section 3(i) of the Ordinance.

Section 102 allows employees, directors and officers who are not controlling shareholders and who are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions. Our non-employee service providers and controlling shareholders who are considered Israeli residents may be granted options only under Section 3(i) of the Ordinance, which does not provide for similar tax benefits. Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee. Section 102(b)(2) of the Ordinance, the most favorable tax treatment for the grantee, permits the issuance to a trustee under the "capital gain track."

*Grants.* All awards granted pursuant to the Existing Plan are evidenced by an award agreement that sets forth the terms and conditions of the award, including the type of award, number of shares subject to such award, vesting schedule and conditions (including performance goals or measures) and the exercise price, if applicable.

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Each award will expire ten years from the date of the grant thereof, unless such shorter term of expiration is otherwise designated by the administrator.

*Exercise.* An award under the Existing Plan may be exercised by providing REE with notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the administrator and permitted by applicable law. An award may not be exercised for a fraction of a share. The exercise price of awards under the Existing Plan may be paid in cash or on a net issuance basis.

*Termination of Employment.* In the event of termination of a grantee's employment or service with REE or any of its affiliates, all vested and exercisable awards held by such grantee as of the date of termination may be exercised within 90 days after such date of termination, unless otherwise determined by the administrator. After such 90 day period, all such unexercised awards will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan.

In the event of termination of a grantee's employment or service with REE or any of its affiliates due to such grantee's death, all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee's legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within four months after such date of termination, unless otherwise provided by the administrator. In the event of termination of a grantee's employment or service with REE or any of its affiliates due to such grantee's disability (as defined in the Existing Plan), REE's board of directors shall determine the terms under which the grantee may continue to exercise such awards. Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the four month period (in the event of death) or within the period determined by REE's board of directors (in the event of disability), will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan.

Notwithstanding any of the foregoing, if a grantee's employment or services with REE or any of its affiliates is terminated for "cause" (as defined in the Existing Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan, and all shares issued upon previous exercise of options of such grantee shall be subject to repurchase by REE or its designee at a price to be determined by REE's board of directors, but not less than their nominal value.

*Transactions.* In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of REE's shares, any other increase or decrease in the number of issued shares effected without receipt of consideration by REE, or in the event of a merger, consolidation, reorganization or the like involving REE, the options under the Existing Plan shall become exercisable for such number of securities of REE or the other corporation involved as would have been the case but for such action. In such case, REE's board of directors in its sole discretion shall make an appropriate adjustment.

**Employee Stock Purchase Plan**

The REE Employee Stock Purchase Plan, or ESPP, was approved by REE's board of directors and shareholders on July 21, 2021. The ESPP provides our employees and employees of participating subsidiaries with an opportunity to acquire a proprietary interest in our company through the purchase of shares of Class A Ordinary Shares. With respect to its employees in the U.S., the ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code and the ESPP will be interpreted in a manner that is consistent with that intent. However, in order to ensure our employees located in jurisdictions other than the U.S. may receive similar benefits under the ESPP, the Committee may, in its sole discretion, establish subplans to the ESPP that may not qualify under Section 423 of the Code.

*Administration.* Our ESPP is administered by the Compensation Committee. The Compensation Committee has the authority to take any actions necessary or desirable for the administration of the ESPP, including adopting sub-plans applicable to particular participating subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code, or special rules applicable to participants in particular participating subsidiaries or particular locations. The Compensation Committee may change the minimum amounts of compensation (as defined in the ESPP) for payroll deductions, the frequency with which a participant may elect to change his or her rate of payroll deductions, the dates by which a participant is required to submit an enrollment form and the effective date of a participant's withdrawal from the ESPP due to a termination or transfer of employment or change in employment status. The Compensation Committee may delegate some or all of its authority to the extent permitted by law to one or more officers of the Company or one or more committees of the Board.

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*Shares Reserved.* The maximum number of shares of our ordinary shares available for issuance under the ESPP initially shall not exceed in the aggregate 154,284 Class A Ordinary Shares (as adjusted following the 1-for-30 reverse share split). The share pool will be increased on the first day of each fiscal year in an amount equal to the lesser of (i) 154,284 Class A Ordinary Shares (ii) 1.0% of the total number of shares of the Class A Ordinary Shares outstanding on the last day of the immediately preceding fiscal year and (iii) such number of shares as determined by the Board in its discretion.

*Eligibility*. With respect to employees who qualify to participate in an "employee stock purchase plan" pursuant to Section 423 of the Code, unless otherwise determined by the Compensation Committee in a manner that is consistent with Section 423 of the Code, any employee of ours or a participating subsidiary who has been employed by us or a participating subsidiary for at least 6 months and is customarily employed for at least 20 hours per week and more than 5 months in any calendar year is eligible to participate in an offering period, subject to the requirements of Section 423 of the Code. An eligible employee will not be granted an option if such grant would result in the employee owning 5% or more of the total combined voting power or value of all classes of our and our subsidiaries' ordinary shares or if such grant would permit the employee to purchase our and our subsidiaries' ordinary shares at a rate that exceeds $25,000 of the fair market value of the ordinary shares for each calendar year in which such option is outstanding at any time. The Committee may also determine additional employees to participate in sub-plans that are not subject to Section 423 of the Code.

*Offering Periods.* Unless otherwise determined by the Compensation Committee, each offering period under the ESPP will have a duration of six months commencing on or about January 1 or July 1 of each year (or such other time determined by the Compensation Committee). The initial offering period under the ESPP will commence on a date to be specified by the Compensation Committee. The Compensation Committee may, prior to the commencement of a particular offering period, change the duration, frequency, start and end dates of such offering period, subject to a maximum duration of 27 months.

*Participation.* Participation in the ESPP is voluntary. Eligible employees may elect to participate in the ESPP by completing an enrollment form and submitting it in accordance with the enrollment procedures established by the Compensation Committee, upon which the employee authorizes payroll deductions from his or her paycheck on each payroll date during the offering period in an amount equal to at least 1% of his or her compensation.

Participants may decrease or increase their rate of payroll deductions only once during an offering period by submitting a new enrollment form which must be submitted at least fifteen (15) days before the Purchase Date (as defined in the ESPP). The deduction rate selected for an offering period will remain in effect for subsequent offering periods unless the participant (i) submits a new enrollment form authorizing a new rate of payroll deductions, (ii) withdraws from the ESPP or (iii) terminates employment or otherwise becomes ineligible to participate in the ESPP.

*Grant and Exercise of Options.* Each participant will be granted, on the first trading day of each offering period, an option to purchase, on the last trading day of the offering period, a number of our ordinary shares determined by dividing the participant's accumulated payroll deductions by the applicable purchase price. The purchase price for the option will equal to 85% of the fair market value of a share on the purchase date. A participant's option will be exercised automatically on the purchase date to purchase the maximum number of whole Class A Ordinary Shares that can be purchased with the amounts in the participant's notional account.

*Withdrawal.* Participants may withdraw from an offering at any time prior to the last day of the offering period by submitting a revised enrollment form indicating his or her election to withdraw at least 15 days before the purchase date. The accumulated payroll deductions held on behalf of the participant in his or her notional account will be paid to the participant promptly following receipt of the participant's revised enrollment form indicating their election to withdraw, and the participant's option will be automatically terminated.

*Termination of Employment; Change in Employment Status; Transfer of Employment*. On termination of a participant's employment for any reason, or a change in the participant's employment status following which the participant is no longer an eligible employee, the participant will be deemed to have withdrawn from the ESPP effective as of the date of such termination of employment or change in status, the accumulated payroll deductions remaining in the participant's notional account will be returned to the participant, and the participant's option will be automatically terminated.

*Over-subscribed Offerings.* If the Compensation Committee determines that, on a particular purchase date, the number of shares with respect to which options are to be exercised either exceeds the number of shares available under the ESPP or the Offering Period Limit (as defined in the ESPP), the shares will be allocated pro rata in a uniform manner as practicable and as the Compensation Committee deems equitable.

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*Adjustments Upon Changes in Capitalization; Corporate Transactions.* In the event of any dividend or other distribution, recapitalization, share split, reorganization, merger, consolidation, spin-off, combination, repurchase, or exchange of shares or other securities of REE or other change in REE's structure affecting our Class A Ordinary Shares, then in order to prevent dilution or enlargement of the benefits intended to be made available under the ESPP, the Compensation Committee will make equitable adjustments to the number and class of shares that may be issued under the ESPP, the purchase price per share, and the number of shares covered by each outstanding option.

In the event of a Corporate Transaction (as defined in the ESPP), each outstanding option will be assumed (or an equivalent option substituted) by the successor corporation or a parent or subsidiary of such successor corporation. If the successor corporation refuses to assume or substitute such option, the offering period will be shortened by setting a new purchase date on which the offering period will end. The new purchase date for the offering period will occur before the date of the corporate transaction.

*Dissolution or Liquidation.* Unless otherwise determined by the Compensation Committee, in the event of a proposed dissolution or liquidation of REE, any offering period in progress will be shortened by setting a new purchase date and the offering period will end immediately prior to the proposed dissolution or liquidation. Participants will be provided with written notice of the new purchase date and that the participant's option will be exercised automatically on such date, unless before such time, the participant has withdrawn from the offering.

*Amendment and Termination.* The Compensation Committee may, in its sole discretion, amend, suspend or terminate the ESPP at any time and for any reason. The Compensation Committee may elect, upon termination of the ESPP, to terminate any outstanding offering period either immediately or once shares have been purchased on the next purchase date or permit the offering period to expire in accordance with its terms.

**2021 Share Incentive Plan**

The 2021 Plan was approved by REE's board of directors and shareholders on July 21, 2021, and provides for the grant equity linked awards to attract, motivate and retain talented employees for which REE competes.

*Authorized Shares.* The maximum number of Class A Ordinary Shares available for issuance under the 2021 Plan is equal to the sum of (i) 771,421 Class A Ordinary Shares (as adjusted following the 1-for-30 reverse share split), (ii) any shares subject to awards under the Existing Plan which have expired, or were cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became non-exercisable without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the Plan, equal to the lesser of (A) 5% of the outstanding Class A Ordinary Shares, as determined on a fully diluted basis, as of the last day of the immediately preceding calendar year and (B) such amount as determined by REE's board of directors if so determined prior to January 1 of a calendar year. If permitted by REE, Class A Ordinary Shares tendered to pay the exercise price or withholding tax obligations with respect to an award granted under the 2021 Plan or any additional plan may again be available for issuance under the 2021 Plan. REE's board of directors may also reduce the number of Class A Ordinary Shares reserved and available for issuance under the 2021 Plan in its discretion.

*Administration.* The Compensation Committee administers the 2021 Plan. Under the 2021 Plan, the administrator has the authority, subject to applicable law, to interpret the terms of the 2021 Plan and any award agreements or awards granted thereunder, designate recipients of awards, determine and amend the terms of awards, including the exercise price of an option award, the fair market value of an ordinary share, the time and vesting schedule applicable to an award or the method of payment for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of agreement for use under the 2021 Plan and take all other actions and make all other determinations necessary for the administration of the 2021 Plan.

The administrator also has the authority to amend and rescind rules and regulations relating to the 2021 Plan or terminate the 2021 Plan at any time before the date of expiration of its ten-year term.

*Eligibility.* The 2021 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Ordinance, and Section 3(i) of the Ordinance and for awards granted to REE's U.S. employees or service providers, including those who are deemed to be residents of the U.S. for tax purposes, Section 422 of the Code and Section 409A of the Code. Generally, any employee, director, officer, consultant, advisor or any other person or entity providing services to REE (including any prospective employee, director, officer, consultant, advisor) may

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be eligible to receive awards under the 2021 Plan subject to the administrator's 's discretion and taking into account the qualification under each tax regime pursuant to which awards are granted.

*Grants.* All awards granted pursuant to the 2021 Plan will be evidenced by an award agreement, in a form approved, from time to time, by the administrator in its sole discretion. The award agreement will set forth the terms and conditions of the award, including the type of award, number of shares subject to such award, vesting schedule and conditions (including performance goals or measures) and the exercise price, if applicable. Certain awards under the 2021 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards.

Each award will expire 10 years from the date of the grant thereof, unless such shorter term of expiration is otherwise designated by the administrator.

*Awards.* The 2021 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), Class A Ordinary Shares, restricted shares, restricted share units, stock appreciation rights, other cash-based awards and other share-based awards. Options granted under the 2021 Plan to REE's employees who are U.S. residents may qualify as "incentive stock options" within the meaning of Section 422 of the Code or may be non-qualified stock options. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant shareholders).

*Exercise.* An award under the 2021 Plan may be exercised by providing REE with a written or electronic notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the administrator and permitted by applicable law. An award may not be exercised for a fraction of a share. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2021 Plan, the administrator may, in its discretion, accept cash, or provide for net withholding of shares in a cashless exercise mechanism.

*Transferability.* Other than by will, the laws of descent and distribution or as otherwise provided under the 2021 Plan, neither the options nor any right in connection with such options are assignable or transferable.

*Termination of Employment.* In the event of termination of a grantee's employment or service with REE or any of its affiliates, all vested and exercisable awards held by such grantee as of the date of termination may be exercised within three months after such date of termination, unless otherwise determined by the administrator. After such three-month period, all such unexercised awards will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan.

In the event of termination of a grantee's employment or service with REE or any of its affiliates due to such grantee's death or permanent disability, or in the event of the grantee's death within the three month period (or such longer period as determined by the administrator) following his or her termination of service, all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee's legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within twelve months after such date of termination, unless otherwise provided by the administrator. Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the twelve months period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan.

Notwithstanding any of the foregoing, if a grantee's employment or services with REE or any of its affiliates is terminated for "cause" (as defined in the 2021 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan.

*Voting Rights.* Except with respect to restricted share awards, grantees will not have the rights as a shareholder of REE with respect to any shares covered by an award until the award has vested and/or the grantee has exercised such award, paid any exercise price for such award and becomes the record holder of the shares. With respect to restricted share awards, grantees will possess all incidents of ownership of the restricted shares, including the right to vote and receive dividends on such shares.

*Dividends.* Grantees holding restricted share awards will be entitled to receive dividends and other distributions with respect to the shares underlying the restricted share award. Any stock split, stock dividend, combination of shares or similar

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transaction will be subject to the restrictions of the original restricted share award. Grantees holding restricted share units, or RSUs, will not be eligible to receive dividend but may be eligible to receive dividend equivalents.

*Transactions.* In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of REE's shares, or any other increase or decrease in the number of issued shares effected without receipt of consideration by REE (but not including the conversion of any convertible securities of REE), the administrator in its sole discretion may, and where required by applicable law shall, without the need for a consent of any holder, make an appropriate adjustment in order to adjust (i) the number and class of shares reserved and available for the outstanding awards, (ii) the number and class of shares covered by outstanding awards, (iii) the exercise price per share covered by any award, (iv) the terms and conditions concerning vesting and exercisability and the term and duration of the outstanding awards, and (v) the type or class of security, asset or right underlying the award (which need not be only that of REE, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions), and (vi) any other terms of the award that in the opinion of the administrator should be adjusted; provided that any fractional shares resulting from such adjustment shall be rounded down to the nearest whole share unless otherwise determined by the administrator. In the event of a distribution of a cash dividend to all shareholders, the administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by REE, subject to applicable law.

In the event of a merger or consolidation of REE, or a sale of all, or substantially all, of REE's shares or assets or other transaction having a similar effect on REE, or change in the composition of the board of directors, or liquidation or dissolution, or such other transaction or circumstances that the board of directors determines to be a relevant transaction, then without the consent of the grantee, (i) unless otherwise determined by the administrator, any outstanding award will be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the award (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, (b) cancel the award and pay in cash, shares of REE, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances, or (c) provide that the terms of any award shall be otherwise amended, modified or terminated, as determined by the administrator to be fair in the circumstances. Unless otherwise determined by the administrator, to the extent any awards are not assumed or substituted by the successor corporation, such awards shall vest in full and be entitled to receive the consideration payable to shareholders generally (subject to any applicable exercise price and taxes in respect of any award) in such event. Notwithstanding the foregoing, the administrator may upon such event amend, modify or terminate the terms of any award as it shall deem, in good faith, appropriate.

**C. Board practices**

***Board of Directors***

Under the Companies Law and REE's Amended and Restated Articles of Association, or the Amended and Restated Articles, our business and affairs will be managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to executive management. Our Chief Executive Officer (referred to as a "general manager" under the Companies Law) is responsible for day-to-day management of REE. Our Chief Executive Officer is appointed by and serves at the discretion of our board of directors, subject to the employment agreement that we have entered into with him. All other executive officers are appointed by the Chief Executive Officer, subject to applicable corporate approvals, and shall be subject to the terms of any applicable employment or consulting agreements.

Under the Amended and Restated Articles the number of directors on our board of directors will be no less than three and no more than eleven. Our directors will generally be elected by a simple majority vote of holders of Ordinary Shares, participating and voting (in person or by proxy) at an annual general meeting of our shareholders. Each director will hold office until the next annual general meeting of our shareholders, unless the tenure of such director expires earlier pursuant to the Companies Law or unless such director is removed from office as described below.

Under the Amended and Restated Articles, the approval of the holders of at least 65% of the total voting power of our shareholders will generally be required to remove any of our directors from office or amend the provision requiring the approval of at least 65% of the total voting power of our shareholders to remove any of our directors from office, provided that if any Class B Ordinary Shares remain outstanding, then the required majority shall be a majority of the total voting power of REE's shareholders. In addition, vacancies on our board of directors may be filled by a vote of a simple majority of the directors then in office. A director so appointed will hold office until the next annual general meeting of our

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shareholders for the election of the class of directors in respect of which the vacancy was created. In the case of a vacancy due to the number of directors being less than the maximum number of directors stated in the Amended and Restated Articles, the new director filling the vacancy will serve until the next annual general meeting of our shareholders for the election of the class of directors to which such director was assigned by our board of directors.

On October 16, 2023, REE amended its Amended and Restated Articles of Association to include a quorum requirement so that the presence of at least one of the Company's holders of Class B Shares shall be required to constitute a quorum, unless waived.

***Chairperson of the Board***

Under the Amended and Restated Articles, the board of directors shall appoint a member of the board to serve as the chairperson. Under the Companies Law, the chief executive officer of a public company, or a relative of the chief executive officer, may not serve as the chairperson of the board of directors, and the chairperson of the board of directors, or a relative of the chairperson, may not be vested with authorities of the chief executive officer, unless approved by a special majority of the company's shareholders. The shareholders' approval may be effective for a period of up to three years.

In addition, a person who is subordinated, directly or indirectly, to the chief executive officer may not serve as the chairperson of the board of directors, the chairperson of the board of directors may not be vested with authorities that are granted to persons who are subordinated to the chief executive officer, and the chairperson of the board of directors may not serve in any other position in the Company or in a controlled subsidiary, but may serve as a director or chairperson of a controlled subsidiary.

***External Directors***

Under the Companies Law, companies incorporated under the laws of the State of Israel that are "public companies", including companies with shares listed on Nasdaq, are required to appoint at least two external directors. Pursuant to regulations promulgated under the Companies Law, companies which do not have a "controlling shareholder," with shares traded on any stock exchange outside of Israel including Nasdaq, may, subject to certain conditions, "opt out" from the Companies Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of the board of directors. In accordance with these regulations, REE has elected to "opt out" from the Companies Law requirement to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation committee of our board of directors.

***Director Independence***

Nasdaq corporate governance rules require that a majority of our board of directors be independent. An "independent director" is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the listed company). Our board of directors has determined that Hicham Abdessamad, Carlton Rose, Ayellet (Mimi) Zemah, and Ittamar Givton are independent directors, as defined in the Nasdaq corporate governance rules.

***Audit Committee***

Under Nasdaq corporate governance rules, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise.

Our audit committee consists of Ittamar Givton, Hicham Abdessamad, and Ayellet (Mimi) Zemah. Ittamar Givton serves as the chair of our audit committee. Each of the current members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. We do not currently have an audit committee financial expert, as defined by the SEC rules, serving on our audit committee. See Item 16A of this Form 20-F for further information.

Our board of directors has determined that each current member of our audit committee is independent, as such term is defined in Rule 10A3(b)(1) under the Exchange Act, which is different from the general test for independence of board and committee members.

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***Companies Law Requirements***

Under the Companies Law, the board of directors of a public company must appoint an audit committee. We have elected to "opt out" from additional Companies Law requirements relating to the size and composition of the audit committee.

***Audit Committee Role***

Our board of directors adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the Companies Law, SEC rules, and Nasdaq corporate governance rules. These responsibilities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• appointing, retaining, and overseeing our independent auditors, subject to ratification by the board of directors, and in the case of retention, subject to ratification by the shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the accounting and financial reporting processes of our company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• managing audits of our financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preparing all reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication, filing, or submission to the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor's engagement fees and terms, in accordance with the Companies Law, as well as approving the yearly or periodic work plan proposed by the internal auditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing with our general counsel and/or external counsel, as deemed necessary, legal and regulatory matters that may have a material impact on the financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying irregularities in our business administration, inter alia, by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing policies and procedures with respect to transactions (other than transactions related to compensation or terms of services) between REE and its officers and directors, affiliates of officers or directors, or transactions that are not in the ordinary course of REE's business and deciding whether to approve such acts and transactions if so required under the Companies Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establishing procedures for handling employee complaints relating to the management of our business and the protection to be provided to such employees.

***Internal Auditor***

Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor, among other things, is to review the company's compliance with applicable law and orderly business procedure. Under the Companies Law, the internal auditor cannot be an interested party, an office holder, or a relative of an interested party or an office holder, nor may the internal auditor be the company's independent auditor or its representative. An "interested party" is defined in the Companies Law as (i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate one or more directors or to designate the chief executive officer of the company, or (iii) any person who serves as a director or as chief executive officer of the company.

The audit committee is required to oversee the activities and to assess the performance of the internal auditor as well as to review the internal auditor's work plan. Tali Yaron, a partner with Deloitte Brightman Almagor, serves as our internal auditor.

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***Compensation Committee***

Under Nasdaq corporate governance rules, we are required to maintain a compensation committee consisting of at least two independent directors.

Our compensation committee consists of Hicham Abdessamad, Ittamar Givton, and Ayellet (Mimi) Zemah. Hicham Abdessamad serves as the chairperson of the compensation committee. Our board of directors has determined that each current member of our compensation committee is independent under Nasdaq corporate governance rules, including the additional independence requirements applicable to the members of a compensation committee.

***Companies Law Requirements***

Under the Companies Law, the board of directors of a public company must appoint a compensation committee. We have elected to "opt out" from additional Companies Law requirements relating to the size and composition of the compensation committee.

***Compensation Committee Role***

In accordance with the Companies Law, the responsibilities of the compensation committee are, among others, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, with respect to any extensions to a compensation policy that was adopted for a period of more than three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates to the compensation policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• resolving whether to approve arrangements with respect to the terms of office and employment of office holders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders.

Our board of directors adopted a compensation committee charter setting forth the responsibilities of the committee, which are consistent with Nasdaq corporate governance rules and include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommending to our board of directors for its approval a compensation policy, in accordance with the requirements of the Companies Law, as well as other compensation policies, incentive-based compensation plans, and equity-based compensation plans, overseeing the development and implementation of such policies, and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving the granting of options and other incentive awards to our Chief Executive Officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, including evaluating their performance in light of such goals and objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving and exempting certain transactions regarding office holders' compensation pursuant to the Companies Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans, and the awards and agreements issued pursuant thereto, and making and determining the terms of awards to eligible persons under the plans.

***Compensation Policy under the Companies Law***

In general, under the Companies Law, the board of directors of a public company must approve a compensation policy after receiving and considering the recommendations of the compensation committee. In addition, our compensation policy must be approved at least once every three years, first, by our board of directors, upon recommendation of our

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compensation committee, and second, by a simple majority of REE Ordinary Shares present, in person or by proxy, and voting (excluding abstentions) at a general meeting of shareholders, provided that either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the majority of such REE Ordinary Shares is comprised of shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy voting against the policy does not exceed two percent (2%) of the aggregate voting rights in the company.

Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed grounds, and after discussing again with the compensation committee, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the Company.

Pursuant to relief available under the Companies Law, REE's compensation policy, which was approved by our board of directors and shareholders prior to the closing of the Merger and described in our Registration Statement on Form F-4 filed with the SEC in connection with the Merger, was deemed a validly adopted policy in accordance with the Companies Law requirements and will remain in effect for a term of five years from the closing of the Merger. Since the initial approval of our compensation policy, our shareholders have approved certain amendments thereto at our annual general meeting held

on November 28, 2022 and at a special general meeting held on November 13, 2025.

Our compensation policy is designed to retain and motivate our directors and executive officers, incentivize superior individual excellence, align the interests of our directors and executive officers with our long-term performance, and provide a risk management tool. To that end, a portion of our executive officer compensation package is targeted to reflect our short and long-term goals, as well as the executive officer's individual performance. Our compensation policy includes measures designed to reduce the executive officer's incentives to take excessive risks that may harm the Company in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer, and minimum vesting periods for equity-based compensation.

Our compensation policy addresses our executive officers' individual characteristics (such as their respective positions, education, scope of responsibilities, and contributions to the attainment of our goals) as the basis for compensation variation among our executive officers and considers the internal ratios between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses, and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements, such as outstanding personal achievement, outstanding personal effort, or outstanding company performance), equity-based compensation, benefits and retirement and termination of service arrangements. All cash bonuses will be limited to a maximum amount linked to the executive officer's base salary.

An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to our executive officers, other than our Chief Executive Officer, will be based on performance objectives and a discretionary evaluation of the executive officer's overall performance by our Chief Executive Officer and subject to minimum thresholds. The annual cash bonus that may be granted to executive officers, other than our Chief Executive Officer, may alternatively be based entirely on a discretionary evaluation. Furthermore, our Chief Executive Officer will be entitled to approve performance objectives for executive officers who report to him.

The measurable performance objectives of our Chief Executive Officer will be determined annually by our compensation committee and board of directors. A non-material portion of the Chief Executive Officer's annual cash bonus, as provided in our compensation policy, may be based on a discretionary evaluation of the Chief Executive Officer's overall performance by the compensation committee and the board of directors.

Under our compensation policy, the equity-based compensation of our executive officers and members of our board of directors will be designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers' and directors' interests with our long-term interests and those of our shareholders, and to strengthen the retention and the motivation of executive officers and directors over the long term. Our compensation policy provides for executive officer and director compensation in the form of share options or other equity-based awards, such as restricted shares and restricted share units, in accordance with our then-current equity incentive plan. All equity-based incentives granted to executive officers and

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directors shall be subject to vesting periods in order to promote long-term retention. Equity-based compensation shall be granted from time to time and be individually determined and awarded according to the individual's performance, educational background, prior business experience, qualifications, role, and personal responsibilities. Under amendments to

our compensation policy that our shareholders approved at our November 13, 2025 special general meeting, such equity-based compensation may also include grants made to the Chief Executive Officer and/or any other office holder if (i) the

Chief Executive Officer and/or other office holder did not receive an equity grant from the Company in the three years

prior to November 13, 2025 one time during the period of this compensation policy, or (ii) upon the consummation of a

Strategic Transaction. A "Strategic Transaction" shall include any transaction achieved after January 1, 2025 that includes:

(i) a merger, acquisition or other Change of Control transaction; (ii) the execution of a strategic commercial agreement that

generates annual revenue exceeding $30 million; or (iii) any other similar strategic agreement or transaction approved by

the board of directors as meeting the intent of this definition.

In addition, our compensation policy contains provisions that allow us, under certain conditions, to recover bonuses paid in excess, enable our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer who reports directly to him (provided that such changes are in accordance with our compensation policy), and will allow us to exculpate, indemnify, and insure our executive officers and directors to the maximum extent permitted by Israeli law subject to certain limitations set forth therein.

Our compensation policy also provides for compensation to the members of our board of directors either (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as modified by the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel), 5760-2000, as such regulations may be amended from time to time, or (ii) in accordance with the amounts determined in our compensation policy.

**Approval of Related Party Transactions under Israeli Law**

*Fiduciary Duties of Directors and Executive Officers*

The Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person's title, a director, and any other manager directly subordinate to the general manager.

An office holder's fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would act under the same circumstances. The duty of care includes, among other things, a duty to use reasonable means, in light of the circumstances, to obtain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• information on the business advisability of a given action brought for the office holder's approval or performed by virtue of the office holder's position; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all other important information pertaining to such action.

The duty of loyalty requires an office holder to act in good faith and in the best interests of the Company, and includes, among other things, the duty to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• refrain from any act involving a conflict of interest between the performance of the office holder's duties in the company and the office holder's other duties or personal affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• refrain from any activity that is competitive with the business of the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for the office holder or others; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disclose to the company any information or documents relating to the company's affairs which the office holder received as a result of the office holder's position.

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Under the Companies Law, a company may approve an act, specified above, which would otherwise constitute a breach of the office holder's fiduciary duty, provided that the office holder acted in good faith, neither the act nor its approval harms the company, and the personal interest of the office holder is disclosed a sufficient time before the approval of such act. Any such approval is subject to the terms of the Companies Law setting forth, among other things, the required corporate approvals and the methods of obtaining such approvals.

*Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions*

The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest and all related material information known to such office holder concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one's relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director, or general manager or in which such person has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from one's ownership of shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder's vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.

If it is determined that an office holder has a personal interest in a non extraordinary transaction (meaning any transaction that is in the ordinary course of business, on market terms or that is not likely to have a material impact on the company's profitability, assets or liabilities), approval by the board of directors is required for the transaction unless the company's articles of association provide for a different method of approval. Any such transaction that is adverse to the company's interests may not be approved by the board of directors.

Approval first by the company's audit committee and subsequently by the board of directors will be required for an extraordinary transaction (meaning any transaction that is not in the ordinary course of business, not on market terms or that is likely to have a material impact on the company's profitability, assets or liabilities) in which an office holder has a personal interest.

A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee or the board of directors have a personal interest in the matter, then all of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof and, in such case, shareholder approval will also be required.

Certain disclosure and approval requirements apply under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a personal interest, and certain arrangements regarding the terms of service or employment of a controlling shareholder. For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company's actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company. Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder.

*Shareholder Duties*

Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an amendment to the company's articles of association;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an increase of the company's authorized share capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a merger; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interested party transactions that require shareholder approval.

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In addition, a shareholder has a general duty to refrain from discriminating against other shareholders.

Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder who knows that it has the power to determine the outcome of a shareholder vote, and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or exercise any other rights available to it under the company's articles of association with respect to the company. The Companies Law does not define the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty of fairness.

*Exculpation, Insurance and Indemnification of Office Holders*

Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care, but only if a provision authorizing such exculpation is included in its articles of association. Our Amended and Restated Articles will include such a provision. An Israeli company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.

An Israeli company may indemnify an office holder from the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator's award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company's activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988.

An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company's articles of association:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a financial liability imposed on the office holder in favor of a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.

An Israeli company may not indemnify or insure an office holder against any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an act or omission committed with intent to derive illegal personal benefit; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a fine, monetary sanction, or forfeit levied against the office holder.

Under the Companies Law, exculpation, indemnification, and insurance of office holders must be approved by the compensation committee and the board of directors (and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined in accordance with the company's compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company's profitability, assets, or obligations.

Our Amended and Restated Articles allow us to exculpate, indemnify, and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by a directors and officers' liability insurance policy.

We have entered into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances.

The maximum indemnification amount set forth in such agreements is limited to an amount equal to the higher of $50 million, 25% of our total shareholders' equity as reflected in our most recent consolidated financial statements as of the date on which the indemnity payment is made and 10% of our total market capitalization calculated based on the average closing price of Class A Ordinary Shares over the 30 trading days prior to the actual payment, multiplied by the total number of our issued and outstanding shares as of the date of the payment and the aggregate amount of proceeds from the sale of, or value exchanged in relation to, in connection with or arising out of a public offering of our securities. The maximum amount set forth in such agreements is in addition to any amount paid (if paid) under insurance and/or by a third party pursuant to an indemnification arrangement.

In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable.

**Compensation of Directors and Executive Officers**

*Directors*

Under the Companies Law, the compensation of a public company's directors requires the approval of (i) its compensation committee, (ii) its board of directors and, unless exempted under regulations promulgated under the Companies Law, (iii) the approval of its shareholders at a general meeting. In addition, if the compensation of a public company's directors is inconsistent with the company's compensation policy, then those inconsistent provisions must be separately considered by the compensation committee and board of directors, and approved by the shareholders by a special vote in one of the following two ways:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, vote in favor of the inconsistent provisions of the compensation package, excluding abstentions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the inconsistent provisions of the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company.

*Executive Officers other than the Chief Executive Officer*

The Companies Law requires the compensation of a public company's office holders (other than the chief executive officer) be approved in the following order: (i) the compensation committee, (ii) the company's board of directors, and (iii) if such compensation arrangement is inconsistent with the company's stated compensation policy, the company's shareholders (by a special vote as discussed above with respect to the approval of director compensation that is inconsistent with the compensation policy).

However, there are exceptions to the foregoing approval requirements with respect to non-director office holders. If the shareholders of the company do not approve the compensation of a non-director office holder, the compensation committee and board of directors may override the shareholders' disapproval for such non-director office holder provided that the compensation committee and the board of directors each document the basis for their decision to override the disapproval of the shareholders and approve the compensation.

An amendment to an existing compensation arrangement with a non-director office holder requires only the approval of the compensation committee, if the compensation committee determines that the amendment is immaterial. However, if the non-director office holder is subordinate to the chief executive officer, an amendment to an existing compensation arrangement shall not require the approval of the compensation committee if (i) the amendment is approved by the chief executive officer, (ii) the company's compensation policy allows for such immaterial amendments to be approved by the chief executive officer and (iii) the engagement terms are consistent with the company's compensation policy.

*Chief Executive Officer*

Under the Companies Law, the compensation of a public company's chief executive officer is required to be approved by: (i) the company's compensation committee, (ii) the company's board of directors and (iii) the company's shareholders (by a special vote as discussed above with respect to the approval of director compensation that is inconsistent with the compensation policy). However, if the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders' decision provided that they each document the basis for their decision and the compensation is in accordance with the company's compensation policy.

In the case of a new chief executive officer, the compensation committee may waive the shareholder approval requirement with regard to the compensation of a candidate for the chief executive officer position if the compensation committee determines that: (i) the compensation arrangement is consistent with the company's compensation policy, (ii) the chief executive officer candidate did not have a prior business relationship with the company or a controlling shareholder of the company and (iii) subjecting the approval of the engagement to a shareholder vote would impede the company's ability to employ the chief executive officer candidate. However, if the chief executive officer candidate will serve as a member of the board of directors, such candidate's compensation terms as chief executive officer must be approved in accordance with the rules applicable to approval of compensation of directors.

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**D. Employees.**

As of December 31, 2025, we had 127 employees and external consultants deployed to REE on a full-time equivalent ("FTE")<sup>2</sup> basis located in the following geographic locations:

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| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Israel | 67 | 92 | 112 |
| United Kingdom | 56 | 100 | 111 |
| United States | 1 | 15 | 16 |
| Germany | 3 | 3 | 3 |
| Other |  | 1 | 2 |
|  | 127 | 211 | 244 |

---

The following table shows the breakdown of our global workforce of employees and external consultants deployed to REE on an FTE basis by category of activity as of the dates indicated:

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| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| General and administrative | 26 | 43 | 50 |
| Selling and Marketing | 4 | 8 | 11 |
| Research and development<sup>3</sup> | 97 | 160 | 183 |
|  | 127 | 211 | 244 |

---

In regard to our Israeli employees, Israeli labor laws govern the length of the work day, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment. Subject to certain exceptions, Israeli law generally requires severance pay upon the retirement, death or dismissal of an employee, and requires us and our employees to make payments to the National Insurance Institute, which is similar to the U.S. Social Security Administration. Our employees have pension plans that comply with the applicable Israeli legal requirements and we make monthly contributions to severance pay funds for all employees, which cover potential severance pay obligations.

None of our employees work under any collective bargaining agreements. Extension orders issued by the Israeli Ministry of Economy apply to us and affect matters, such as cost of living adjustments to salaries, length of working hours and week, recuperation pay, travel expenses, and pension rights.

We have never experienced labor-related work stoppages or strikes and believe that our relations with our employees are satisfactory.

**E. Share ownership**

For information regarding the share ownership of our directors and executive officers, please refer to "*Item 6.B. Compensation—Option Plans*" and "*Item 7.A. Major Shareholders.*"

**F. Disclosure of a registrant's action to recover erroneously awarded compensation.**

Not applicable.

<sup>2</sup> Number of external consultants deployed to REE is calculated on a full-time equivalent basis. External consultants are converted to full-time equivalents, or FTE, by dividing their actual working hours per month by a full-time standard. As of December 31, 2025, 2024 and 2023 we had 1, 5 and 11 external consultants on an FTE basis deployed to REE, respectively.

<sup>3</sup> Includes our research and development and engineering employees as well as our operations employees, which support our research and development activities.

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**Item 7. Major Shareholders and Related Party Transactions**

**A. Major shareholders**

The following table and accompanying footnotes set forth information with respect to the beneficial ownership of our Ordinary Shares, as of May 5, 2026:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each person or entity who is known by us to be the beneficial owner of more than 5% of the outstanding Ordinary Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our current executive officers and directors, individually; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our executive officers and directors, as a group.

The SEC has defined "beneficial ownership" of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security. A shareholder is also deemed to be, as of any date, the beneficial owner of all securities that such shareholder has the right to acquire within 60 days after that date through (i) the exercise of any option, warrant or right, (ii) the conversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the automatic termination of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, Ordinary Shares subject to options or other rights (as set forth above) held by that person that are currently exercisable, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Each person named in the table has sole voting and investment power with respect to all of the Ordinary Shares shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below.

The percentage of Ordinary Shares beneficially owned is computed on the basis of 29,124,486 Class A Ordinary Shares and 2,780,570 Class B Ordinary Shares, or collectively Ordinary Shares, outstanding as of May 5, 2026.

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them. To our knowledge, no Ordinary Shares beneficially owned by any executive officer, director or director nominee have been pledged as security.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Number of Class A Ordinary Shares Beneficially Owned** | **Percentage of Outstanding Class A Ordinary Shares** | **Number of Class B Ordinary Shares Beneficially Owned** | **Percentage of Outstanding Class B Ordinary Shares** | **Percentage of Total Voting Power** |
| ***5% Holders:*** | | | | | |
| M&G Investment Management Limited <sup>(1)</sup> | 5815179 | 18.9% |  | —% | 9.9% |
| Samvardhana Motherson International Ltd. <sup>(2)</sup> | 5273156 | 18.1% |  | —% | 9.3% |
| Kukac LLC <sup>(3)</sup> | 3590260 | 11.7% |  | —% | 6.1% |
| Varana Capital, LLC <sup>(4)</sup> | 1692701 | 5.8% |  | —% | 3.0% |
| ***Executive Officers and Directors*** |  |  |  |  |  |
| *Current Directors and Officers* |  |  |  |  |  |
| Daniel Barel <sup>(5)</sup> | 2251335 | 7.2% | 1390285 | 50% | 27.3% |
| Ahishay Sardes <sup>(6)</sup> | 1906416 | 6.1% | 1390285 | 50% | 26.9% |
| Tali Miller Levin | \* | \* |  |  | \* |
| Avital Futterman | \* | \* |  |  | \* |
| Hai Aviv | \* | \* |  |  | \* |
| Rajesh Goel <sup>(7)</sup> | 5273156 | 18.1% |  |  | 9.3% |
| Ayellet (Mimi) Zemah | \* | \* |  |  | \* |
| Ittamar Givton | \* | \* |  |  | \* |
| Hicham Abdessamad | \* | \* |  |  | \* |
| Carlton Rose | \* | \* |  |  | \* |
| **All Executive Officers and Directors as a Group** | **9974776** | **29.9%** | **2780570** | **100.0%** | **61.7%** |

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\*&nbsp;&nbsp;&nbsp;&nbsp;Less than 1%.

(1)&nbsp;&nbsp;&nbsp;&nbsp;Based on information reported on a Schedule 13D filed on March 28, 2025 with the SEC represents (a) 4,248,429 Class A Ordinary Shares; (b) warrants to purchase 785,855 Class A Ordinary Shares ("Warrants"); (c) approximately $4,755,149 in principal and interest on the 10% convertible promissory notes due 2028, which are convertible into 934,214 Class A Ordinary Shares as of March 28, 2025 ("Convertible Notes"); and (d) pre-funded warrants to purchase 3,639,893 Class A Ordinary Shares ("Pre-funded Warrants"). Due to a beneficial ownership blocker that prevents beneficial ownership of Class A Ordinary Shares in excess of 19.99%, the Class A Ordinary Shares reported for M&G Investment Management Limited only represents 5,815,179 Class A Ordinary Shares that it beneficially owns but excludes 3,793,212 Class A Ordinary Shares that are issuable upon the exercise or conversion of its Warrants, Convertible Notes, and Pre-Funded Warrants. Based upon the Form 13D, M&G Investment Funds 1 and M&G ACS, each a private investment vehicle, together with the Prudential Assurance Company for which the Reporting Person serves as investment adviser, have the right to receive and/or the power to direct the receipt of dividends from, or the proceeds from the sale of, more than five percent of the Class A Ordinary Shares. The principal business address of the M&G Entities is 10 Fenchurch Avenue, London, EC3M 5AG, UK.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Based on information reported on the Schedule 13D filed with the SEC on April 2, 2025, along with information available to the Company, this represents an aggregate of (a) 3,639,010 Class A Ordinary Shares purchased in the Company's September 2024 offering, (b) 1,595,647 Class A Ordinary Shares purchased in the Company's March 2025 offering, and (c) 38,499 Class A Ordinary Shares that have vested or that will vest within 60 days of May 5, 2026. The Schedule 13D is filed by Samvardhana Motherson International Limited, a company limited by shares organized under the laws of the Republic of India (SAMIL), and Samvardhana Motherson Automotive Systems Group B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the laws of the Netherlands, and an indirect wholly-owned subsidiary of SAMIL (SMASG). Rajesh Goel, a member of our board of directors, serves as director on the board of multiple companies in India and overseas within the Motherson Group and is included here out of an abundance of caution only. Mr. Goel disclaims any beneficial ownership of the subject shares except to the extent of any pecuniary interest therein. The principal business address of Samvardhana Motherson International Limited is Unit 705, C Wing, ONE BKC, G Block, Bandra Kurla Complex, Bandra East, Mumbai City, Mumbai, Maharashtra, India, 400051.

(3) &nbsp;&nbsp;&nbsp;&nbsp;Based on information reported on a Schedule 13D/A filed with the SEC on March 19, 2025, along with information available to the Company, represents the joint beneficial ownership by Kukac LLC and Kayrow Limited of (a) 1,973,552 Class A Ordinary Shares, (b) warrants exercisable for 785,855 Class A Ordinary Shares, and (c) promissory notes convertible into 830,853 Class A Ordinary Shares. The principal business address of Kukac LLC/Kayrow Limited is 9060 W Cheyenne Ave., Las Vegas, NV 88129.

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(4) &nbsp;&nbsp;&nbsp;&nbsp;Based on information available to the Company and information reported on a Schedule 13G filed on November 4, 2024 with the SEC, reflects (a) 1,575,061 Class A Ordinary Shares, and (b) an additional 117,640 Class A Ordinary Shares acquired in March 2025. The principal business address of Varana Capital, LLC is 3141 Walnut St, Ste 203b, Delaware.

(5)&nbsp;&nbsp;&nbsp;&nbsp;Based on information available to the Company, reflects (i) 833 Class A Ordinary Shares, (ii) 1,390,287 Class A Ordinary Shares issuable upon the exercise of options held by Mr. Barel that are fully vested, and (iii) 860,215 Class A Ordinary Shares issued or issuable upon the vesting of restricted share units within 60 days of May 5, 2026.

(6)&nbsp;&nbsp;&nbsp;&nbsp;Based on information available to the Company, reflects 1,390,285 Class A Ordinary Shares issuable upon the exercise of options held by Mr. Sardes that are fully vested, and (ii) 516,129 Class A Ordinary Shares issued or issuable upon the vesting of restricted share units within 60 days of May 5, 2026.

(7) &nbsp;&nbsp;&nbsp;&nbsp;Consists of shares held by Samvardhana Motherson International Limited and Samvardhana Motherson Automotive Systems Group B.V. See footnote (2) above.

**Registered Holders**

As of May 5, 2026, we had 36 holders of record of our Class A Ordinary Shares in the U.S., including Cede & Co., the nominee of The Depository Trust Company. These shareholders held in the aggregate 27,385,394 of our outstanding Class A Ordinary Shares, or 94.0% of our outstanding Class A Ordinary Shares as of May 5, 2026. The number of record holders in the U.S. is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident because many of these Class A Ordinary Shares were held by brokers or other nominees.

**Significant Changes**

To our knowledge, other than as disclosed in this Annual Report and in other filings with the SEC, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2023.

Based on information available to the Company, Daniel Barel beneficially owns 7.2% and Ahishay Sardes beneficially owns 6.1% of the outstanding Class A Ordinary Shares, respectively, as of May 5, 2026, compared to 4.7% for each respectively, as of May 15, 2025, based upon the Company's Form 20-F, as filed with the SEC on May 15, 2025. Previously, each held, respectively, 11.4%, as of March 12, 2024, based upon the Company's Form 20-F, as filed with the SEC on March 27, 2024.

Based on information available to the Company and information reported on Form 13D as filed on March 28, 2025 with the SEC, M&G Investment Management Limited, or MAGAIM, along with certain investment vehicles managed by MAGAIM, beneficially owned 18.9% of the outstanding Class A Ordinary Shares (inclusive of Convertible Notes, Warrants, and Pre-Funded Warrants), as of May 5, 2026. Previously, MAGAIM owned 19.5%, as of May 7, 2025, as described in the Company's Form 20-F, as filed with the SEC on May 15, 2025, along with 19.19%, 16.13% and 6.12%, as disclosed in its Form 13G/A as filed with the SEC on October 7, 2024, April 9, 2024, and February 13, 2024, respectively.

Based on information available to the Company and information reported on Form 13D as filed with the SEC on April 2, 2025, Samvardhana Motherson Automotive Systems Group B.V., or Motherson, an indirect wholly-owned subsidiary of Samvardhana Motherson International Limited, beneficially owned 18.1% of the outstanding Class A Ordinary Shares, as of May 5, 2026. Previously, Motherson owned 18.5% of the Company's Class A Ordinary Shares, as of May 7, 2025, as described in the Company's Form 20-F, as filed with the SEC on May 15, 2025, along with 19.6% of the our Class A Ordinary Shares, as of September 26, 2024, as reported in its Form 13D, as filed with the SEC on September 26, 2024.

Based on information available to the Company and information reported on a Schedule 13G filed on November 4, 2024 with the SEC, Varana Capital LLC beneficially owns 5.8% of the outstanding Class A Ordinary Shares, as of May 5, 2026, compared to 6.0% of the outstanding Class A Ordinary Shares, as of May 7, 2025, as described in the Company's Form 20-F, as filed with the SEC on May 15, 2025. Previously, such entity held 8.46%, as reported on its Form 13G, as filed with the SEC on November 4, 2024.

Based on information available to the Company and information reported on Form 13D/A as filed with the SEC on March 19, 2025, Kukac LLC and Kayrow Limited beneficially owned 11.7% of the outstanding Class A Ordinary Shares, as of May 5, 2026. Previously, Kukac LLC and Kayrow Limited owned 12.0% of the outstanding Class A Ordinary Shares, as of May 7, 2025, as described in the Company's Form 20-F, as filed with the SEC on May 15, 2025, and held 14.2% as of October 2, 2024, based upon their Schedule 13D, as filed with the SEC on October 2, 2024.

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In November 2024, Clal Insurance Enterprises Holdings Ltd. reported changes in its beneficial ownership, as their beneficial ownership percentages had decreased from 5.4% to 4.2%, over the course of 2024, causing it to cease to be a 5% shareholder of the Company.

**Voting Rights**

Neither our major shareholders nor our directors and executive officers have different or special voting rights with respect to their Ordinary Shares, except that each Class A Ordinary Share is entitled to one vote per share and each Class B Ordinary Share is be entitled to ten votes per share. For additional information about our dual class structure, see Exhibit 2.5 to this Annual Report, which is incorporated by reference herein.

**B. Related party transactions**

Our policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred. For a description of the procedures governing our approval of related party transactions, see "*Item 6.C. Board Practices — Approval of Related Party Transactions under Israeli Law*."

The Company has entered into the following arrangements and agreements, which were approved by REE's board of directors in accordance with Israeli law, and, where applicable, by REE's shareholders to the extent required by Israeli law. The following is a description of our related party transactions since January 1, 2025:

As of May 5, 2026, the following shareholders beneficially owned more than 10% of the Company's outstanding Class A Ordinary Shares and can exercise significant influence over the Company. In particular, as of May 5, 2026, M&G beneficially owned approximately 18.9% of our outstanding Class A Ordinary Shares, representing approximately 9.9% of our total voting power. Samvardhana Motherson Automotive Systems Group B.V., an indirect wholly-owned subsidiary of Samvardhana Motherson International Limited, or collectively Motherson, beneficially owned approximately 18.1% of our outstanding Class A Ordinary Shares, representing approximately 9.3% of our total voting power.

*March 2025 Registered Direct Offerings*

On March 26, 2025, we conducted the March 26 Offering, as more fully described in Item 5.B. "Liquidity and Capital Resources - March 26, 2025 Securities Purchase Agreements & Lock-up Agreement", providing for the issuance of an aggregate of 2,219,176 Class A Ordinary Shares. The offering raised gross proceeds of approximately $9.4 million before deducting applicable fees and expenses.

In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $1.40 million in the March 26 Offering. Additionally, Motherson invested approximately $6.8 million.

On March 18, 2025, we conducted the March 18 Offering, as more fully described in Item 5.B. "Liquidity and Capital Resources - March 18, 2025 Securities Purchase Agreements & Lock-up Agreement", providing for the issuance of an aggregate of 6,376,631 Class A Ordinary Shares. The offering raised gross proceeds of approximately $27.1 million before deducting applicable fees and expenses.

In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $4.08 million in the March 18 Offering.

*September 2024 Registered Direct Offering* 

On September 15, 2024, as more fully described in Item 5.B "Liquidity and Capital Resources - September 2024 Securities Purchase Agreements", the Company conducted the September 2024 Offering. However, in lieu of Class A Ordinary Shares, certain investors purchased pre-funded warrants exercisable into 3,639,893 Class A Ordinary Shares. The total net proceeds were approximately $44,877 after deducting transaction costs, of which $29,877 was recorded in the additional paid-in capital and the reminder was recorded as pre-funded warrants liability.

In particular, M&G Investment Management Limited, through its affiliated entities and/or advised entities, invested approximately $20 million in the September 2024 Offering. Additionally, Motherson invested approximately $15 million in the September 2024 Offering.

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*Motherson Supply Chain Management Services Agreement* 

On September 15, 2024, we executed a supply chain management services agreement with Motherson, pursuant to which we appointed Motherson (including any of its affiliates) to provide certain services to REE on an exclusive basis. In that regard, Motherson agreed to provide services relating to development, management, and optimization of our supply chain, which includes supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration. We agreed to pay Motherson, on a quarterly basis, an amount equal to fifty percent (50%) of certain cost improvements that would be achieved under the agreement in addition to annual payments for such resources required to be deployed by Motherson for the purpose of rendering the services under the agreement, which shall be agreed upon by us and Motherson.

The agreement will terminate upon the later of three (3) years or when Motherson has received an amount equal to $30 million in quarterly fees. In addition, the agreement will automatically renew for consecutive one (1) year terms unless either party provides notice of termination within 180 days prior to the end of a term. In addition, Motherson may terminate the agreement for any reason upon providing 180 day written prior notice.

**Indemnification Agreements**

Our articles permit us to exculpate, indemnify and insure each of our directors and office holders to the fullest extent permitted by Israeli law. We have entered into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances. We have also obtained directors and officers insurance for each of our executive officers and directors. For further information, see "*Item 6.C. Board Practices — Approval of Related Party Transactions under Israeli Law — Exculpation, Insurance and Indemnification of Office Holders*" for additional information.

**Arrangements and Agreements with Directors and Officers**

*Founder Bridge Financing Arrangement*. On April 27, 2026, the Company approved a financing arrangement with Daniel Barel, the Company's CEO, co-founder, and director, and Ahishay Sardes, the Company's CTO, co-founder, and director, pursuant to which each agreed to defer certain termination-related entitlements, including accrued vacation days and notice period payments, totaling an aggregate amount of approximately $1.3 million. The deferred amounts constitute bridge financing to the Company and accrue interest at an annual rate of 18%, with a minimum interest owed of 25% of the total amount deferred. Such financing shall be payable only upon the consummation of a strategic transaction, with full priority rights for the deferred principal amounts and *pari passu* with other creditors with respect to any interest owed. Such financing may also be payable in the event of a forced liquidation or voluntary wind-down of the Company, provided that there are sufficient assets available to make all or part of such payment. The Company determined that the arrangement constituted a non-extraordinary transaction with controlling shareholders under the Israeli Companies Law, 5759-1999.

*Joint Ownership Agreement for Company Vehicle.* During 2021, REE entered into an agreement with Daniel Barel, the Company's CEO, co-founder, and director, relating to joint ownership of a company car. REE undertook to provide Daniel Barel with a company car, the value of which is an amount of up to NIS 300,000 to be borne by REE. The excess cost of the car purchased for such purpose has been, and the ongoing fixed cost of the car will continue to be, borne by Daniel Barel. Such car is registered under REE's name, but Daniel Barel is entitled to an ownership portion of such car, corresponding to the excess acquisition cost thereof borne by him. In October 2025, the Company sold this vehicle and, in accordance with the terms of Mr. Barel's employment agreement, a portion of the proceeds from the sale, reflecting Mr. Barel's ownership interest in the vehicle, were remitted to Mr. Barel.

*Employment of Daniel Barel's Father-in-Law*. Prior to June 2025, the Company's co-founder, director, and CEO Daniel Barel's father-in-law was employed by the Company in the selling, general, and administrative department.

*SpecterX Transaction*. On October 29, 2021, REE entered into a license agreement with SpecterX for secure file exchange services. The co-founder and CEO of SpecterX is the brother of co-founder, director, and CEO Daniel Barel. Daniel Barel is also the Chairman of the Board and an investor of SpecterX. Prior to entering into the agreement with SpecterX, REE conducted an extensive analysis of the available solutions, and determined that SpecterX best met REE's needs. In 2025, REE paid SpecterX $42,120. On May 14, 2026, the Company reviewed and re-approved the terms of its license agreement with SpecterX following another analysis of the available solutions and the audit committee and board of director's respective conclusions that SpecterX best met REE's needs.

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*Employment and Related Agreements.* We have entered into written employment agreements with each of our executive officers including recent amendments to the terms of employment for our chief executive officer, chief technology officer, and General Counsel. The amendments to the employment agreements of our chief executive officer and chief technology officer were approved by our shareholders at a special general meeting on November 13, 2025. Our officers' employment agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the officer will continue to receive base salary and benefits. They also contain provisions in the event of a change of control of the Company. Additionally, these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law.

*Equity Awards.* Since our inception we have granted options to purchase, and RSUs underlying, our Class A Ordinary Shares to our officers and certain of our directors. Such grants include the grant of RSUs to our CEO and CTO, respectively, as part of each of their respective amended terms of employment, as described above. Such award agreements contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under "Item 6.B. Compensation." If the relationship between us and an executive officer, or a director, is terminated, except for cause (as defined in the various option plan agreements), all options that are vested will remain exercisable for ninety days after such termination in the case of our executive officers, or one year in the case of our directors.

*Section 16 Reports Officers and Directors.* Section 16(a) of the Securities Exchange Act of 1934 requires each of our directors and officers (as defined thereunder), to file with the SEC initial reports of ownership and reports of changes in ownership of our securities. Such reports are available at https://investors.ree.auto/financials-filings/section-16-reports/. Information contained on, or that can be accessed through, such website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included such website in this Annual Report solely for informational purposes.

**C. Interests of experts and counsel**

Not applicable.

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**Item 8: Financial Information**

A. Consolidated Statements and Other Financial Information.

We have appended our consolidated financial statements at the end of this Annual Report, starting at page <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_241)[1](#ib754f8dbfd9a410ebea6292869b01926_241)</u>, as part of this Annual Report.

***Legal Proceedings***

From time to time, REE may become involved in actions, claims, suits, and other legal proceedings, such as requests to disclose information before initiating derivative cases, arising in the ordinary course of our business, including but not limited to claims related to employment, intellectual property and shareholder matters. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

*OSR Legal Proceeding*

On December 16, 2022, a lawsuit was filed in the District Court, against REE and its US subsidiaries (in this section, the "Group"), by OSR Group alleging that the Group stole OSR Group's trade secrets. The OSR Group requested the court to grant them the following: (a) a request for an injunction pertaining to the use of such trade secrets; (b) affirmative action to protect the OSR Group's alleged trade secrets; (c) the establishment of a constructive trust to transfer all the relevant Group's legal title and intellectual property to the OSR Group; (d) an award to the OSR Group of monetary damages in an amount of no less than USD 2.6 billion together with exemplary damages in an amount of no less than USD 5.2 billion, such amounts to be determined in the trial, plus interest; (e) an award to the OSR Group for all of its expenses relating to the action; (f) an award to the OSR Group of pre-judgment interest on all damages; and (g) an award of other relief as the court deem fit. REE believes that the lawsuit is without merit and is defending itself vigorously. On January 4, 2024, Magistrate Judge Susan Hightower entered a Report and Recommendation, or the Report, recommending dismissal of the lawsuit based on *forum non conveniens*, such that OSR could pursue its claims in an Israeli forum rather than in the U.S., assuming that OSR chooses to do so after dismissal. The Report was pending before the District Court, which conducted a *de novo* review of the motion to dismiss, the response, the Report and its recommendation, the objection to the Report and recommendation, the response and reply to the objections, and the applicable laws. The Report was not binding on the District Court. On August 26, 2024, the District Court issued an order adopting the recommendation of the Report and granted the Group's motion to dismiss for *forum non conveniens* in accordance with the Report and the recommendation therein and ordered the clerk of the court to close the case. The District Court also noted that it may reassert jurisdiction if timely notified that the courts of Israel refuse to accept jurisdiction of this case for reasons other than the OSR Group's refusal to pursue an action or to comply with the procedural requirements of Israeli courts. On September 26, 2024, the OSR Group filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit, appealing the District Judge's adoption of the Report and dismissal of the case for *forum non conveniens*. On October 10, 2025, the Court of Appeals affirmed the District Court's decision dismissing the OSR Group's claim for forum non conveniens. On November 12, 2025, the Fifth Circuit denied OSR's petition for rehearing. On February 10, 2026, the deadline for OSR to seek appellate review before the U. S. Supreme Court expired. To our knowledge, OSR did not file a motion requesting an extension of time to pursue such review.

As of December 31, 2025 and December 31, 2024, respectively, the Company did not record a loss contingency.

*Schwab Arbitration Proceeding*

On August 27, 2025, a demand for arbitration was filed with the American Arbitration Association in Michigan, against REE and its US subsidiary by Schwab Industries, Inc., or Schwab, alleging a failure to pay all required outstanding amounts. REE counterclaimed alleging mismanagement, price increases, mistakes, and unjustified requests for payment advances along with a failure to deliver under the terms of the contract. On April 16, 2026, the parties entered into a settlement agreement under which the Company agreed to make a payment to Schwab in exchange for a release of the relevant parties from all claims. Accordingly, as of December 31, 2025, the Company record a loss contingency.

***Dividend Policy***

We have never declared or paid any cash dividends on our Ordinary Shares. We currently intend to retain any future earnings to finance operations and to expand our business and, therefore, do not expect to pay any cash dividends in the foreseeable future.

**B. Significant Changes**

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Since the date of our financial statements included in Item 18 of this Annual Report, no significant changes have occurred since December 31, 2025, except as otherwise disclosed in this Annual Report.

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**Item 9. The Oﬀer and Listing**

**A. Oﬀer and listing details**

REE's Class A Ordinary Shares and Class A warrants commenced trading on the Nasdaq Capital Market on July 23, 2021 under the trading symbol "REE" and "REEAW", respectively. REE's Class A warrants were removed from listing on October 7, 2022. Prior to July 23, 2021, no public market existed for REE's Class A Ordinary Shares or warrants.

**B. Plan of distribution**

Not applicable.

**C. Markets**

See "*Item 9.A. Offer and listing details.*" above.

**D. Selling shareholders**

Not applicable.

**E. Dilution**

Not applicable.

**F. Expenses of the issue**

Not applicable.

**Item 10. Additional Information.**

**A. Share capital**

Not applicable.

**B. Memorandum and articles of association**

A copy of our current amended and restated articles of association is attached as Exhibit 1.1 to this Annual Report. The information called for by this Item is set forth in Exhibit 1.1 to this Annual Report and is incorporated by reference herein.

**C. Material Contracts**

The following is a summary of each material contract, other than material contracts entered into in the ordinary course of

business, to which we are or have been a party, for the two years immediately preceding the date of this Annual Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of the Lease Agreement, dated as of August 23, 2020 by and between REE Automotive Ltd. and Kibbutz Glil-Yam**.** *See* Item "4.D Property, plants, and equipment".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of Letter Agreement, dated April 7, 2026, to the Lease Agreement originally dated August 23, 2020 by and between REE Automotive Ltd. and Kibbutz Glil-Yam. *See* Item "4.D Property, plants, and equipment".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ATM Equity Offering Sales Agreement, dated August 16, 2022, between REE Automotive Ltd. and BofA Securities, Inc., filed as Exhibit 1.2 to the Company's Registration Statement on Form F-3 (File No. 333-266902) filed on August 16, 2022. *See* Item "5.B Liquidity and Capital Resources – ATM Agreements".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• At The Market Offering Agreement, dated July 14, 2023, between REE Automotive Ltd. and H.C. Wainwright & Co., LLC, filed as Exhibit 10.1 to the Company's Current Report on Form 6-K, filed on July 14, 2023. *See* Item "5.B Liquidity and Capital Resources – ATM Agreements".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities Purchase Agreement, dated November 27, 2023, by and between REE Automotive Ltd. and the purchasers signatory thereto filed as Exhibit 99.1 to the Company's Current Report on Form 6-K, filed on

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November 28, 2023. *See* Item "5.B Liquidity and Capital Resources – Convertible Promissory Notes and Warrants".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities Purchase Agreement, dated December 6, 2023, by and between REE Automotive Ltd. and the purchasers signatory thereto filed as Exhibit 99.1 to the Company's Current Report on Form 6-K, filed on January 5, 2024. *See* Item "5.B Liquidity and Capital Resources – Convertible Promissory Notes and Warrants".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Underwriting Agreement, dated March 1, 2024 by and between REE Automotive Ltd. and Roth Capital Partners, LLC, filed as Exhibit 1.1 to the Company's Current Report on Form 6-K, filed on March 4, 2024. *See* Item "5.B Liquidity and Capital Resources – Convertible Promissory Notes and Warrants".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Form of Securities Purchase Agreement, dated September 15, 2024, by and between REE Automotive Ltd. and the purchasers signatory thereto, filed as Exhibit 10.1 to the Company's Current Report on Form 6-K, filed on September 17, 2024. *See* Item "5.B Liquidity and Capital Resources-September 2024 Registered Direct Offering".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supply Chain Management Services Agreement, dated September 15, 2024, by and between the Company and Samvardhana Motherson International Limited filed as Exhibit 10.2 to the Company's Current Report on Form 6-K, filed on September 17, 2024. *See* Item "7.B. Related Party Transactions".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Form of Securities Purchase Agreement, dated March 18, 2025, by and between REE Automotive Ltd. and the purchasers signatory thereto, filed as Exhibit 10.1 to the Company's Current Report on Form 6-K, filed on March 19, 2025. *See* Item "5.B Liquidity and Capital Resources-March 2025 Registered Direct Offering".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Placement Agent Agreement, dated March 18, 2025, by and between REE Automotive Ltd and A.G.P./Alliance Global Partners, filed as Exhibit 10.2 to the Company's Current Report on Form 6-K, filed on March 19, 2025. *See* Item "5.B Liquidity and Capital Resources-March 2025 Registered Direct Offering".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Form of Securities Purchase Agreement, dated March 26, 2025, by and between the Company and the purchaser parties thereto, incorporated by reference to Exhibit 10.1 the Company's Current Report on Form 6-K, filed with the SEC on March 26, 2025. *See* Item "5.B Liquidity and Capital Resources-March 2025 Registered Direct Offering".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Placement Agent Agreement, dated March 26, 2025, by and between REE Automotive Ltd and A.G.P./Alliance Global Partners, filed as Exhibit 10.2 to the Company's Current Report on Form 6-K, filed on March 26, 2025. *See* Item "5.B Liquidity and Capital Resources-March 2025 Registered Direct Offering".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of the Credit Agreement, dated August 14, 2023, between Mizrahi Tefahot Bank Ltd. and REE Automotive Ltd. *See* Item "5.B Liquidity and Capital Resources – Loan under Credit Facility".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of the Amendment No.1 to Credit Agreement, dated December 17, 2023, between Mizrahi Tefahot Bank Ltd. and REE Automotive Ltd. *See* Item "5.B Liquidity and Capital Resources – Loan under Credit Facility".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of the Amendment No.2 to Credit Agreement, dated March 18, 2024, between Mizrahi Tefahot Bank Ltd. and REE Automotive Ltd. *See* Item "5.B Liquidity and Capital Resources – Loan under Credit Facility".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summary in English of the Amendment No.3 to Credit Agreement, dated November 26, 2024, between Mizrahi Tefahot Bank Ltd. and REE Automotive Ltd. *See* Item "5.B Liquidity and Capital Resources – Loan under Credit Facility".

**D. Exchange controls**

There are currently no Israeli currency control restrictions on remittances of dividends on Class A Ordinary Shares, proceeds from the sale of the Class A Ordinary Shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that at the time are, or have been, in a state of war with Israel

**E. Taxation**

***Certain Material Israeli Tax Considerations***

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The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of the Class A Ordinary Shares. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.

***Israeli tax considerations***

The following is a brief summary of certain material Israeli tax laws applicable to REE. This section also contains a discussion of certain material Israeli tax consequences concerning the ownership and disposition of Class A Ordinary Shares purchased by investors. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of its, his or her personal circumstances or to some types of investors subject to special treatment under Israeli law. Examples of such investors include Israeli residents, partnerships, trusts or traders in securities who are subject to special tax regimes not covered in this discussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation, REE cannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. The discussion below is not intended and should not be construed, as legal or professional tax advice and is not exhaustive of all possible tax considerations. The discussion is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax consequences described below.

SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY NON-U.S., STATE OR LOCAL TAXES.

***General corporate tax structure in Israel***

Israeli companies are generally subject to corporate tax on their taxable income. The corporate tax rate is 23%. However, the effective tax rate payable by a company that derives income from a Preferred Enterprise or a Preferred Technological Enterprise (as discussed below) may be considerably lower. Capital gains derived by an Israeli company are generally subject to the standard corporate tax rate.

***Law for the Encouragement of Industry (Taxes), 5729-1969***

The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax benefits for "Industrial Companies."

The Industry Encouragement Law defines an "Industrial Company" as an Israeli resident-company incorporated in Israel, of which 90% or more of its income in any tax year, other than income from certain government loans, is derived from an "Industrial Enterprise" owned by it and located in Israel or in the "Area", in accordance with the definition under section 3A of the Ordinance. An "Industrial Enterprise" is defined as an enterprise whose principal activity in a given tax year is industrial production.

Following are the main tax benefits available to Industrial Companies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• amortization of the cost of purchased patent, rights to use a patent, and know-how, which were purchased in good faith and are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first exercised;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.

We believe that we currently qualify as an Industrial Company within the meaning of the Industry Encouragement Law. Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority. There can be no assurance that we will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.

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***Tax benefits and grants for research and development***

Israeli tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research and development projects, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the research and development must be for the promotion of the company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the research and development is carried out by or on behalf of the company seeking such tax deduction.

The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. Under these research and development deduction rules, no deduction is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Expenditures that are unqualified under the conditions above do not qualify for this special deduction are deductible in equal amounts over three years.

From time to time we may apply to the IIA for approval to allow a tax deduction for all or most of research and development expenses during the year incurred. There can be no assurance that such application will be accepted. If we are not be able to deduct research and development expenses during the year of the payment, we may be able to deduct research and development expenses in equal amounts over a period of three years commencing in the year of the payment of such expenses.

***Law for the Encouragement of Capital Investments, 5719-1959***

The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets). Generally, an investment program that is implemented in accordance with the provisions of the Investment Law, referred to as an Approved Enterprise, a Beneficiary Enterprise, a Preferred Enterprise, a Preferred Technological Enterprise, or a Special Preferred Technological Enterprise, is entitled to benefits as discussed below. These benefits may include cash grants from the Israeli government and tax benefits, based upon, among other things, the geographic location in Israel of the facility in which the investment is made. In order to qualify for these incentives, the Company is required to comply with the requirements of the Investment Law.

The Investment Law was significantly amended effective as of April 1, 2005, as of January 1, 2011, or the 2011 Amendment, and as of January 1, 2017, or the 2017 Amendment. The 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. However, companies entitled to benefits under the Investment Law as in effect prior to January 1, 2011 were entitled to choose to continue to enjoy such benefits, provided that certain conditions are met, or elect instead, irrevocably, to forego such benefits and have the benefits of the 2011 Amendment apply. The 2017 Amendment introduces new benefits for Technological Enterprises, alongside the existing tax benefits.

***Tax benefits under the 2011 amendment***

The 2011 Amendment introduced new benefits for income generated by a "Preferred Company" through its "Preferred Enterprise" (as such terms are defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company includes a company incorporated in Israel that is not fully owned by a governmental entity, and that has, among other things, Preferred Enterprise status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 16% with respect to its income derived by its Preferred Enterprise as of 2017, unless the Preferred Enterprise is located in a specified development zone, in which case the rate will be 7.5%. Income derived by a Preferred Company from a "Special Preferred Enterprise" (as such term is defined in the Investment Law) would be entitled, subject to certain conditions and during a benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred Enterprise is located in a certain development zone.

Dividends distributed from income which is attributed to a "Preferred Enterprise" will be subject to withholding tax at source at the following rates: (i) Israeli resident companies — 0%, (although, if such dividends are subsequently

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distributed to individuals or a non-Israeli company, a tax rate of 20% or such lower rate as may be provided in an applicable tax treaty); (ii) Israeli resident individuals — 20% and potentially a 3% or 5% surtax, as discussed below; and (iii) non-Israeli residents (individuals and corporations) — 20% and for non-Israeli individuals, potentially a 3% or 5% surtax, as discussed below, subject to a reduced tax rate under the provisions of an applicable tax treaty. Claim of tax benefits afforded by an applicable tax treaty is subject to the receipt in advance of a valid certificate from the Israel Tax Authority, or the ITA, allowing for a reduced tax rate.

REE currently does not intend to implement the 2011 Amendment.

***New tax benefits under the 2017 Amendment that became effective on January 1, 2017***

The 2017 Amendment provides new tax benefits for two types of "Technology Enterprises," as described below, and is in addition to the other existing tax benefits programs under the Investment Law.

The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a "Preferred Technology Enterprise" and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as "Preferred Technology Income", as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technological Enterprise located in development zone "A". In addition, a Preferred Technology Company will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain "Benefitted Intangible Assets" (as defined in the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a foreign company on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the IIA.

The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a "Special Preferred Technology Enterprise" and will thereby enjoy a reduced corporate tax rate of 6% on "Preferred Technology Income" regardless of the company's geographic location within Israel In addition, a Special Preferred Technology Enterprise will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain "Benefitted Intangible Assets" to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technology Enterprise that acquires Benefitted Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law.

Dividends distributed by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to tax at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld. If such dividends are distributed to a foreign company or companies (holding directly at least 90% in the Preferred Company which owns the Preferred Technology Enterprise or holding indirectly such 90% in the Preferred Company which owns the Preferred Technology Enterprise, subject to certain conditions) and other conditions are met, the tax rate will be 4% or such lower rate as may be provided in an applicable tax treaty.

REE currently does not intend to implement the 2017 Amendment.

***Taxation of our shareholders***

***Capital gains Tax on Sales of our Ordinary Shares***

Israeli law generally imposes a capital gains tax on the sale or disposition of any capital assets by Israeli residents, as defined for Israeli tax purposes, and on the sale of capital assets located in Israel, including shares in Israeli companies, by both Israeli residents and non-Israeli residents, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder's country of residence provides otherwise. The Ordinance distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain equivalent to the increase of the relevant asset's purchase price attributable to an increase in the Israeli consumer price index, or, in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. Inflationary surplus is currently not subject to tax in Israel. The real gain is the excess of the total capital gain over the inflationary surplus.

***Capital gains taxes applicable to Israeli resident shareholders***

An Israeli resident company that derives capital gains from the sale of shares in an Israeli resident company will generally be subject to tax on the real capital gains generated on such sale at the corporate tax rate of 23% (in 2025). An Israeli

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resident individual will generally be subject to capital gain tax at the rate of 25% and potentially a 3% or 5% surtax, as discussed below. However, if the individual shareholder claims deduction of interest and linkage differences expenses in connection with the purchase and holding of such shares or is a "substantial shareholder" at the time of the sale or at any time during the preceding twelve months period, such gain will be taxed at the rate of 30% and potentially a 3% or 5% surtax, as discussed below. A "substantial shareholder" is generally a person who alone or together with such person's relative or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the "means of control" of the corporation. "Means of control" generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. Individual holders dealing in securities in Israel for whom the income from the sale of securities is considered "business income" as defined in Section 2(1) of the Ordinance are taxed at the marginal tax rates applicable to business income (up to 47% in 2026) plus an additional excess tax of 3% as described below. Certain Israeli institutions who are exempt from tax under Section 9(2) or Section 129C(a)(1) of the Ordinance (such as exempt trust fund, pension fund) may be exempt from capital gains tax from the sale of the shares.

***Capital gains taxes applicable to non-Israeli resident shareholders***

A non-Israeli resident who derives capital gains from the sale of shares of an Israeli resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel, will generally be exempt from Israeli tax if, among other conditions, the shares were not held through, or attributable to, a permanent establishment that the non-Israeli resident maintains in Israel. However, non-Israeli "body of persons" (as defined in the Ordinance, which includes corporate entities, partnerships, and other entities) will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest of more than 25% in any of the means of control of such non-Israeli body of persons or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli body of persons, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed to be business income.

Moreover, a sale of shares by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under the Convention Between the U.S. Government and the Government of the State of Israel with respect to Taxes on Income, as amended, or the U.S.-Israel Tax Treaty, the sale, exchange or other disposition of shares by a shareholder who is a U.S. resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S.-Israel Tax Treaty, or a U.S. Resident, is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12 month period preceding the disposition, subject to certain conditions; or (v) such U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year. In any such case, the sale, exchange or disposition of such shares by the U.S. Resident would be subject to Israeli tax, to the extent applicable.

Regardless of whether non-Israeli shareholders may be liable for Israeli capital gains tax on the sale of our Ordinary Shares, the payment of the consideration for such shares may be subject to withholding of Israeli tax at source, and holders of our Ordinary Shares may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale. Specifically, the ITA may require shareholders who are not liable for Israeli capital gains tax to sign declarations on forms specified by the ITA or obtain a specific exemption from the ITA to confirm their status as non-Israeli residents, and, in the absence of such declarations or exemptions, the ITA may require the purchaser of the shares to withhold tax at source.

A detailed return, including a computation of the tax due, must be filed and an advance payment must be paid on January 31 and July 31 of each tax year for sales of securities traded on a stock exchange made within the previous six months. However, if all tax due was withheld at the source according to applicable provisions of the Ordinance and the regulations promulgated thereunder, the return does not need to be filed provided that (i) such income was not generated from business conducted in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed and an advance payment does not need to be made, and (iii) the taxpayer is not obligated to pay excess tax (as further explained below). Capital gains are also reportable on an annual income tax return.

***Taxation of Israeli shareholders on receipt of dividends***

An Israeli resident individual is generally subject to Israeli income tax on the receipt of dividends paid on our Ordinary Shares at the rate of 25% and potentially a 3% or 5% surtax, as discussed below. With respect to a person who is a "substantial shareholder" at the time of receiving the dividend or on any time during the preceding twelve months, the

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applicable tax rate is 30% and potentially a 3% or 5% surtax, as discussed below. Such dividends are generally subject to Israeli withholding tax at a rate of 25% if the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not) and 20% if the dividend is distributed from income attributed to a Preferred Enterprise or Technological Enterprise. If the recipient of the dividend is an Israeli resident corporation such dividend income will generally be exempt from tax provided the income from which such dividend is distributed was derived or accrued within Israel and was received directly or indirectly from another corporation that is liable to Israeli corporate tax. An exempt trust fund, pension fund or other entity that is exempt from tax under Section 9(2) or Section 129(C)(a)(1) of the Ordinance is exempt from tax on dividend.

***Taxation of non-Israeli shareholders on receipt of dividends***

Non-Israeli residents (either individuals or corporations) are generally subject to Israeli income tax on the receipt of dividends paid on our Ordinary Shares at the rate of 25% or 30% if the dividends recipient is a "substantial shareholder" at the time of distribution or at any time during the preceding 12 months period, and for non-Israeli individuals, potentially a 3% or 5% surtax, as discussed below, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder's country of residence. Such dividends are generally subject to Israeli withholding tax at a rate of 25% if the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not). Such withholding rates may be reduced if the dividend is distributed from income attributed to a Preferred Enterprise or Technological Enterprise or a reduced rate provided under an applicable tax treaty, in each case subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate. For example, under the U.S.-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our Ordinary Shares who is a U.S. Resident is 25%. However, generally, the maximum rate of withholding tax on dividends, not generated by a Preferred Enterprise or Technological Enterprise, that are paid to a U.S. corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved Enterprise, Benefited Enterprise or Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the conditions related to the outstanding voting rights and the gross income for the previous year (as set forth in the previous sentences) are met. If the dividend is attributable partly to income derived from a Preferred Enterprise or Technological Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders' tax liability.

A foreign resident who had income from a dividend that was accrued from Israeli source, from which the full tax was deducted, will be generally exempt from filing a tax return in Israel, provided that (1) such income was not generated from business conducted in Israel by the foreign resident, (ii) the foreign resident has no other taxable sources of income in Israel with respect to which a tax return is required to be filed and (iii) the foreign resident is not liable to additional Surtax (see below) in accordance with Section 121B of the Ordinance.

***Surtax***

Individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident and

with respect to a non-Israeli resident, subject to tax treaties not otherwise limiting the applicable tax rate to such non-Israeli

resident) are also subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends,

interest and capital gain) exceeding a certain threshold (currently, NIS 721,560 for years 2025 through 2027, which

amount is linked to the annual change in the Israeli consumer price index, or the Threshold Amount.

According to legislation effective as of January 1, 2025, an additional 2% excess tax will be imposed on "Capital-Sourced

Income", which is defined as income from any source other than employment income, business income or income from

"personal effort", provided that the individual's Capital-Sourced Income exceeds the Threshold Amount. This additional

excess tax applies, among other things, to income from capital gains, dividends, interest, rental income, or the sale of real

property.

***Estate and Gift Tax***

Israeli law presently does not impose estate or gift taxes.

***Certain Material U.S. Federal Income Tax Considerations***

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The following discussion summarizes the material U.S. federal income tax consequences to U.S. Holders and Non-U.S. Holders (as defined below) of the ownership and disposition of Class A Ordinary Shares and Warrants. This discussion applies only to the Class A Ordinary Shares and Warrants, as the case may be, that are held as "capital assets" within the meaning of Section 1221 of the Code (generally, property held for investment).

The following does not purport to be a complete analysis of all potential tax effects arising in connection with the ownership and disposition of Class A Ordinary Shares and Warrants. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service, the IRS, in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect the tax consequences discussed below. REE has not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS will not take or a court will not sustain a contrary position regarding the tax consequences discussed below.

This discussion does not address all U.S. federal income tax consequences relevant to a holder's particular circumstances, including the impact of the Medicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to holders subject to special rules, including, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• banks, insurance companies, and certain other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulated investment companies and real estate investment trusts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokers, dealers, or traders in securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• traders in securities that elect to mark to market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-exempt organizations or governmental organizations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. expatriates and former citizens or long-term residents of the U.S.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons holding Class A Ordinary Shares and/or Warrants, as the case may be, as part of a hedge, straddle, constructive sale, or other risk reduction strategy or as part of a conversion transaction or other integrated or similar transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons subject to special tax accounting rules as a result of any item of gross income with respect to Class A Ordinary Shares and/or Warrants, as the case may be, being taken into account in an applicable financial statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons that actually or constructively own 5% or more (by vote or value) of the outstanding Class A Ordinary Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• founders, sponsors, officers or directors of 10X Capital or holders of private placement warrants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to avoid U.S. federal income tax (and their shareholders);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• S corporations, partnerships, or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. Holders having a functional currency other than the U.S. dollar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who hold or received Class A Ordinary Shares and/or Warrants, as the case may be, pursuant to the exercise of any employee stock option or otherwise as compensation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-qualified retirement plans.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Class A Ordinary Shares and/or Warrants, the tax treatment of a partner in such partnership will depend on the status of the owner or participant in the arrangement, the activities of the entity or arrangement, and certain determinations made at the owner or participant level. Accordingly, entities or arrangements treated as partnerships for U.S. federal income tax purposes and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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For purposes of this discussion, a "U.S. Holder" is any beneficial owner of Class A Ordinary Shares and/or Warrants, as the case may be, that is for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual who is a citizen or resident of the U.S.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation (or other entity taxable as a corporation) created or organized in, or under the laws of, the U.S., any state thereof, or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more "United States persons" (within the meaning of Section 7701(a)(30) of the Code) or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

**THE U.S. FEDERAL INCOME TAX TREATMENT OF THE OWNERSHIP AND DISPOSITION OF CLASS A ORDINARY SHARES AND/OR WARRANTS TO ANY PARTICULAR HOLDER WILL DEPEND ON THE HOLDER'S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF THE OWNERSHIP AND DISPOSITION OF CLASS A ORDINARY SHARES AND/OR WARRANTS.**

**U.S. Federal Income Tax Treatment of REE**

***Tax Residence of REE for U.S. Federal Income Tax Purposes***

Although REE is incorporated and tax resident in Israel, the IRS may assert that it should be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a U.S. "domestic" corporation if it is created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia. Because REE is not so created or organized (but is instead incorporated only in Israel), it would generally be classified as a foreign corporation (that is, a corporation other than a U.S. "domestic" corporation) under these rules. Section 7874 of the Code provides an exception under which a corporation created or organized only under foreign law may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. The Section 7874 rules are complex and require analysis of all relevant facts, and there is limited guidance and significant uncertainties as to their application.

Under Code Section 7874, a corporation created or organized outside the U.S. (i.e., a foreign corporation) will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes when (i) the foreign corporation directly or indirectly acquires substantially all of the assets held directly or indirectly by a U.S. corporation (including the indirect acquisition of assets of the U.S. corporation by acquiring the outstanding shares of the U.S. corporation), (ii) the shareholders of the acquired U.S. corporation hold, by vote or value, at least 80% of the shares of the foreign acquiring corporation after the acquisition by reason of holding shares in the U.S. acquired corporation, or the Section 7874 Percentage, and (iii) the foreign corporation's "expanded affiliated group" does not have substantial business activities in the foreign corporation's country of creation or organization relative to such expanded affiliated group's worldwide activities, or the Substantial Business Activities Exception. The Section 7874 Regulations further provide for a number of special rules that aggregate multiple acquisitions of U.S. corporations for purposes of Code Section 7874 that are made as part of a plan or made over a 36-month period, making it more likely that Code Section 7874 will apply to a foreign acquiring corporation.

REE indirectly acquired substantially all of the assets of 10X Capital through the Merger. As a result, Section 7874 of the Code may apply to cause REE to be treated as a U.S. corporation for U.S. federal income tax purposes following the Merger depending on whether the Section 7874 Percentage equals or exceeds 80%, subject to the applicability of the Substantial Business Activities Exception.

Based upon the terms of the Merger and the rules for determining share ownership under Code Section 7874 and the Section 7874 Regulations, 10X Capital and REE expect that the Section 7874 Percentage of 10X Capital stockholders in REE should be less than 80% after the Merger. Accordingly, REE is not expected to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code. The calculation of the Section 7874 Percentage is complex, is subject to detailed regulations (the application of which is uncertain in various respects and could be impacted by changes in U.S. tax laws and regulations with possible retroactive effect), and is subject to certain factual uncertainties. Moreover, former holders of 10X Capital Common Stock may be deemed to own an amount of Class A Ordinary Shares with respect to certain redemptions by former holders of 10X Capital Common Stock prior to the Merger for purposes of

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determining the ownership percentage of former holders of 10X Capital Common Stock under Section 7874 of the Code. Accordingly, there can be no assurance that the IRS will not challenge the status of REE as a foreign corporation under Code Section 7874 or that such challenge would not be sustained by a court.

If the IRS were to successfully challenge under Code Section 7874 REE's status as a foreign corporation for U.S. federal income tax purposes, REE and certain REE shareholders could be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on REE and future withholding taxes on certain REE shareholders. In particular, holders of Class A Ordinary Shares and/or Warrants would be treated as holders of stock and warrants of a U.S. corporation.

However, even if the Section 7874 Percentage was such that REE were still respected as a foreign corporation under Code Section 7874, REE may be limited in using its equity to engage in future acquisitions of U.S. corporations over a 36-month period following the Merger. If REE were to be treated as acquiring substantially all of the assets of a U.S. corporation within a 36-month period after the Merger, the Section 7874 Regulations would exclude certain shares of REE attributable to the Merger for purposes of determining the Section 7874 Percentage of that subsequent acquisition, making it more likely that Code Section 7874 would apply to such subsequent acquisition.

The remainder of this discussion assumes that REE will not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code.

***Utilization of 10X Capital's Tax Attributes and Certain Other Adverse Tax Consequences to REE and REE's Shareholders.***

Following the acquisition of a U.S. corporation by a foreign corporation, Code Section 7874 can limit the ability of the acquired U.S. corporation and its U.S. affiliates to use U.S. tax attributes (including net operating losses and certain tax credits) to offset U.S. taxable income resulting from certain transactions, as well as result in certain other adverse tax consequences, even if the acquiring foreign corporation is respected as a foreign corporation for purposes of Code Section 7874.

Based upon the terms of the Merger and the rules for determining share ownership under Section 7874 of the Code and the Section 7874 Regulations, 10X Capital and REE expect that the limitations and other rules described above are not expected to apply to REE or 10X Capital after the Merger.

If the above rules were to apply, REE and certain of REE's shareholders may be subject to adverse tax consequences including, but not limited to, restrictions on the use of tax attributes with respect to "inversion gain" recognized over a 10-year period following the transaction, disqualification of dividends paid from preferential "qualified dividend income" rates, and the requirement that any U.S. corporation owned by REE include as "base erosion payments" that may be subject to a minimum U.S. federal income tax any amounts treated as reductions in gross income paid to certain related foreign persons. Furthermore, certain "disqualified individuals" (including officers and directors of a U.S. corporation) may be subject to an excise tax on certain stock-based compensation at a rate of 20%. However, as a blank check company whose assets are primarily comprised of cash and cash equivalents, it is not expected that 10X Capital will have a significant amount of inversion gain as a result of the Merger.

There can be no assurance that the IRS will not challenge whether REE is subject to the above rules or that such a challenge would not be sustained by a court. If the IRS successfully applied these rules to REE, significant adverse tax consequences could result for REE and for certain REE shareholders, including a higher effective corporate tax rate on REE U.S. Holders.

***U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to U.S. Holders***

*Distributions on Class A Ordinary Shares*

If REE makes distributions of cash or property on the Class A Ordinary Shares, such distributions will be treated first as a dividend to the extent of REE's current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder's tax basis, with any excess treated as gain from the sale or exchange of the shares. The amount of any such distribution will include any amounts withheld by REE (or another applicable withholding agent). If REE does not provide calculations of its earnings and profits under U.S. federal income tax principles, a U.S. Holder should expect all cash distributions to be reported as dividends for U.S. federal

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income tax purposes. Any dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.

Subject to the discussions above under "— *Utilization of 10X Capital's Tax Attributes and Certain Other Adverse Tax Consequences to REE and REE's Shareholders*" and below under "— *Passive Foreign Investment Company Rules*," dividends received by certain non-corporate U.S. Holders (including individuals) may be "qualified dividend income," which is taxed at the lower applicable capital gains rate, provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• either (a) the shares are readily tradable on an established securities market in the U.S. or (b) REE is eligible for the benefits of a qualifying income tax treaty with the U.S. that includes an exchange of information program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• REE is neither a PFIC (as discussed below under below under "— Passive Foreign Investment Company Rules") nor treated as such with respect to the U.S. Holder for REE's taxable year in which the dividend is paid or the preceding taxable year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the U.S. Holder satisfies certain holding period requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the taxpayer does not take the dividends into account as investment income under Code Section 163(d)(4)(B).

There can be no assurances that REE will be eligible for benefits of an applicable comprehensive income tax treaty between the U.S. and Israel. In addition, there also can be no assurance that Class A Ordinary Shares will be considered "readily tradable" on an established securities market in accordance with applicable legal authorities. Furthermore, REE will not constitute a qualified foreign corporation for purposes of these rules if it is a PFIC for the taxable year in which it pays a dividend or for the preceding taxable year. See "— *Passive Foreign Investment Company Rules.*" U.S. Holders should consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to Class A Ordinary Shares.

The amount of any dividend distribution paid in foreign currency will be the U.S. dollar amount calculated by reference to the applicable exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Subject to certain exceptions, dividends on Class A Ordinary Shares will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by a fraction, the numerator of which is the reduced rate applicable to qualified dividend income and the denominator of which is the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by REE with respect to the Class A Ordinary Shares generally will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general category income". Moreover, Treasury regulations that apply to taxable years beginning on or after December 28, 2021 may in some circumstances prohibit a U.S. Holder from claiming a foreign tax credit unless the taxes are creditable under an applicable treaty and the holder is eligible for benefits under the treaty and elects its application. The rules governing foreign tax credits are complex and U.S. Holders are urged to consult their tax advisors regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, a U.S. Holder may, in certain circumstances, deduct foreign taxes in computing the holder's taxable income, subject to generally applicable limitations under U.S. law. Generally, an election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

*Sale, Exchange, Redemption or Other Taxable Disposition of Class A Ordinary Shares and Warrants*

Subject to the discussion below under "— *Passive Foreign Investment Company Rules*," a U.S. Holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of Class A Ordinary Shares or Warrants in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. Holder's adjusted tax basis in such shares and/or warrants. Any gain or loss recognized by a U.S. Holder on a taxable disposition of Class A Ordinary Shares or Warrants generally will be capital gain or loss. A non-corporate U.S. Holder, including an individual, who has held the Class A Ordinary Shares and/or Warrants for more than one year generally will be eligible for reduced tax rates for such long-term capital gains. The deductibility of capital losses is subject to limitations.

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Any such gain or loss recognized generally will be treated as U.S. source income or loss. Accordingly, in the event any Israeli tax (including withholding tax) is imposed upon such sale or other disposition, a U.S. Holder may not be able to utilize foreign tax credits unless such holder has foreign source income or gain in the same category from other sources. Moreover, there are special rules under the income tax treaty between the U.S. and Israel (the "*Treaty*"), which may impact a U.S. Holder's ability to claim a foreign tax credit. In addition, Treasury regulations that apply to taxable years beginning on or after December 28, 2021 may preclude a U.S. Holder from claiming a foreign tax credit with respect to Israeli taxes on gain from dispositions of Class A Ordinary Shares unless the U.S. Holder is eligible for benefits under the Treaty and elects its application and other applicable requirements are satisfied. The rules governing foreign tax credits and deductibility of foreign taxes are complex and U.S. Holders are urged to consult their tax advisor regarding the ability to claim a foreign tax credit and the application of the Treaty to such U.S. Holder's particular circumstances.

*Exercise, Lapse, or Redemption of a Warrant*

Subject to the PFIC rules discussed below, a U.S. Holder generally will not recognize gain or loss upon the acquisition of a Class A Ordinary Share on the exercise of a warrant of REE that entitles the holder thereof to purchase one Class A Ordinary Share originally for $11.50 per share, or the Warrant, for cash. A U.S. Holder's tax basis in a Class A Ordinary Shares received upon exercise of the Warrant generally should be an amount equal to the sum of the U.S. Holder's tax basis in the Warrant exchanged therefor (assuming the Merger is not a taxable transaction) and the exercise price. The U.S. Holder's holding period for a Class A Ordinary Share received upon exercise of the Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Warrant and will not include the period during which the U.S. Holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder's tax basis in the Warrant.

The tax consequences of a cashless exercise of a Warrant are not clear under current tax law. Subject to the PFIC rules discussed below, a cashless exercise may be tax-deferred, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-deferred situation, a U.S. Holder's basis in the Class A Ordinary Shares received generally would equal the U.S. Holder's basis in the Warrants exercised therefor. If the cashless exercise is not treated as a gain realization event, a U.S. Holder's holding period in the Class A Ordinary Shares would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the Warrants and will not include the period during which the U.S. Holder held the Warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Class A Ordinary Shares would include the holding period of the Warrants exercised therefor.

It is also possible that a cashless exercise of a Warrant could be treated in part as a taxable exchange in which gain or loss would be recognized in the manner set forth above under "— *Sale, Exchange, Redemption or Other Taxable Disposition of Class A Ordinary Shares and Warrants*." In such event, a U.S. Holder could be deemed to have surrendered warrants equal to the number of Class A Ordinary Shares having an aggregate fair market value equal to the exercise price for the total number of warrants to be exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss with respect to the Warrants deemed surrendered in an amount generally equal to the difference between (i) the fair market value of the Class A Ordinary Shares that would have been received in a regular exercise of the Warrants deemed surrendered, net of the aggregate exercise price of such Warrants and (ii) the U.S. Holder's tax basis in such Warrants. In this case, a U.S. Holder's aggregate tax basis in the Class A Ordinary Shares received would equal the sum of (i) U.S. Holder's tax basis in the Warrants deemed exercised and (ii) the aggregate exercise price of such Warrants. A U.S. Holder's holding period for the Class A Ordinary Shares received in such case generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Warrants and will not include the period during which the U.S. Holder held the Warrants.

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, including when a U.S. Holder's holding period would commence with respect to the Class A Ordinary Share received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise of Warrants.

Subject to the PFIC rules described below, if REE redeems Warrants for cash pursuant to the redemption provisions described in Exhibit 2.6 to this Annual Report under the section entitled "*Warrants*" or if REE purchases Warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under "— *Sale, Exchange, Redemption or Other Taxable Disposition of Class A Ordinary Shares and Warrants*."

*Possible Constructive Distributions*

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The terms of each Warrant provide for an adjustment to the number of Class A Ordinary Shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain events, as discussed in Exhibit 2.6 to this Annual Report under the section captioned "*Warrants*." An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. Holder of a Warrant would, however, be treated as receiving a constructive distribution from REE if, for example, the adjustment increases the holder's proportionate interest in REE's assets or earnings and profits (for instance, through an increase in the number of Class A Ordinary Shares that would be obtained upon exercise of such warrant) as a result of a distribution of cash or other property such as other securities to the holders of the Class A Ordinary Shares which is taxable to the U.S. Holders of such shares as described under "— *Distributions on Class A Ordinary Shares*" above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holder of such Warrant received a cash distribution from REE equal to the fair market value of such increase in interest.

*Passive Foreign Investment Company Rules*

The treatment of U.S. Holders of the Class A Ordinary Shares and Warrants could be materially different from that described above, if REE is treated as a "passive foreign investment company," or PFIC, for U.S. federal income tax purposes. An entity treated as a foreign corporation for U.S. federal income tax purposes generally will be a PFIC for U.S. federal income tax purposes for any taxable year if either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at least 75% of its gross income for such year is passive income (such as interest, dividends, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of assets giving rise to passive income); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income.

For this purpose, REE will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other entity treated as a corporation for U.S. federal income tax purposes in which REE own, directly or indirectly, 25% or more (by value) of the stock.

Based on the current and anticipated composition of the income, assets and operations of REE and its subsidiaries, there is a substantial risk that REE was a PFIC for U.S. federal income tax purposes for 2025, and REE may be a PFIC for U.S. federal income tax purposes for current or future taxable years.

Nevertheless, whether REE is treated as a PFIC is determined on an annual basis. The determination of whether a non-U.S. corporation is a PFIC is a factual determination that depends on, among other things, the composition of REE's income and assets, and the market value of its shares and assets, including the composition of income and assets and the market value of shares and assets of its subsidiaries, from time to time, and thus the determination can only be made annually after the close of each taxable year. Furthermore, the value of our gross assets is likely to be determined in part by reference to our market capitalization, which may fluctuate significantly. Thus, no assurance can be given as to whether REE will be a PFIC for the current or any future taxable year.

Under the PFIC rules, if REE were considered a PFIC at any time that a U.S. Holder owns Class A Ordinary Shares or Warrants, REE would generally continue to be treated as a PFIC with respect to such holder in a particular year unless (i) REE has ceased to be a PFIC and (ii) (a) the U.S. Holder has made a valid "QEF election" (as described below) for the first taxable year in which the holder owned such holder's Class A Ordinary Shares in which REE was a PFIC, (b) a valid mark-to-market election (as described below) is in effect for the particular year, or (c) the U.S. Holder has made a "deemed sale" election under the PFIC rules. If such a "deemed sale" election is made, a U.S. Holder will be deemed to have sold its Class A Ordinary Shares at their fair market value on the last day of the last taxable year in which REE is classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below. After the "deemed sale" election, the Class A Ordinary Shares with respect to which the "deemed sale" election was made will not be treated as shares in a PFIC unless REE subsequently becomes a PFIC.

For each taxable year that REE is treated as a PFIC with respect to a U.S. Holder's Class A Ordinary Shares or Warrants, the U.S. Holder will be subject to special tax rules with respect to any "excess distribution" (as defined below) received and any gain realized from a sale or disposition (including a pledge of Class A Ordinary Shares and under proposed regulations transfers of Warrants and certain transfers of Class A Ordinary Shares that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes) of its Class A Ordinary Shares or Warrants (collectively the "*excess distribution rules*"), unless, with respect to the Class A Ordinary Shares, the U.S. Holder makes a valid QEF or mark-to-market election as discussed below. Generally, distributions received by a U.S. Holder in a taxable year that are greater than 125% of the average annual distributions received by such U.S. Holder during the shorter of the three preceding

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taxable years or the portion of such U.S. Holder's holding period for the Class A Ordinary Shares or Warrants that preceded the taxable year of the distribution will be treated as excess distributions. Under these special tax rules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the excess distribution or gain will be allocated ratably over the U.S. Holder's holding period for the Class A Ordinary Shares or Warrants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount allocated to the U.S. Holder's taxable year in which the U.S. Holder recognized the gain or received the excess distribution or to the period in the U.S. Holder's holding period before the first day of REE's first taxable year in which REE is a PFIC, will be treated as ordinary income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount allocated to each other taxable year (or portions thereof) of the U.S. Holder and included in such holder's holding period will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year without regard to the U.S. Holder's other items of income and loss for such year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the resulting tax attributable to each such year.

Under the excess distribution rules, the tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Class A Ordinary Shares or Warrants cannot be treated as capital gains, even though the U.S. Holder holds the Class A Ordinary Shares or Warrants as capital assets.

Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which REE may hold, directly or indirectly, that are PFICs (collectively, "Lower-Tier PFICs"). There can be no assurance, however, that REE does not own, or will not in the future acquire, an interest in a subsidiary or other entity that is or would be treated as a Lower-Tier PFIC. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to any of REE's subsidiaries.

If REE is a PFIC, a U.S. Holder of shares in REE may avoid taxation under the excess distribution rules described above with respect to the Class A Ordinary Shares by making a timely and valid "qualified electing fund" ("QEF") election (if eligible to do so). However, a U.S. Holder may make a QEF election with respect to its Class A Ordinary Shares only if REE provides U.S. Holders on an annual basis with certain financial information specified under applicable U.S. Treasury regulations, including the information provided in a PFIC Annual Information Statement. There can be no assurance, however, that REE will have timely knowledge of its status as a PFIC in the future or that REE will timely provide such information for such years. The failure to provide such information on an annual basis could prevent a U.S. Holder from making a QEF election or result in the invalidation or termination of a U.S. Holder's prior QEF election.

A U.S. Holder that makes a QEF election with respect to its Class A Ordinary Shares would generally be required to include in income for each year that REE is treated as a PFIC the U.S. Holder's pro rata share of REE's ordinary earnings for the year (which would be subject to tax as ordinary income) and net capital gains for the year (which would be subject to tax at the rates applicable to long-term capital gains), without regard to the amount of any distributions made in respect of the Class A Ordinary Shares. Any net deficits or net capital losses of REE for a taxable year, however, would not be passed through and included on the tax return of the U.S. Holder. A U.S. Holder's basis in the Class A Ordinary Shares would be increased by the amount of income inclusions under the QEF rules. Dividends actually paid on the Class A Ordinary Shares generally would not be subject to U.S. federal income tax to the extent of prior income inclusions and would reduce the U.S. Holder's basis in the Class A Ordinary Shares by a corresponding amount. If REE owns any interests in a Lower-Tier PFIC, a U.S. Holder generally must make a separate QEF election for each Lower-Tier PFIC, subject to REE's providing the relevant tax information for each Lower-Tier PFIC on an annual basis. There can be no assurance that REE will have timely knowledge of the status of any such Lower-Tier PFIC. In addition, REE may not hold a controlling interest in any such Lower-Tier PFIC and thus there can be no assurance REE will be able to cause the Lower-Tier PFIC to provide such required information.

If a U.S. Holder does not make a QEF election effective from the first taxable year of a U.S. Holder's holding period for the Class A Ordinary Shares in which REE is a PFIC (or a mark-to-market election, as discussed below), then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S. Holder that first makes a QEF election in a later year may avoid the continued application of the excess distribution rules to its Class A Ordinary Shares by making a "deemed sale" election. In that case, the U.S. Holder will be deemed to have sold the Class A Ordinary Shares at their fair market value on the first day of the taxable year in which the QEF election becomes effective, and any gain from such deemed sale would be subject to the excess distribution rules described above. As a result of the "deemed sale" election, the U.S. Holder will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new holding period in the Class A Ordinary Shares.

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It is not entirely clear how various aspects of the PFIC rules apply to the warrants. However, a U.S. Holder may not make a QEF election with respect to its Warrants. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants) and REE was a PFIC at any time during the U.S. Holder's holding period of such warrants, any gain recognized generally will be treated as an excess distribution, taxed as described above.

If a U.S. Holder that exercises such warrants properly makes and maintains a QEF election with respect to the newly acquired Class A Ordinary Shares (or has previously made a QEF election with respect to the Class A Ordinary Shares), the QEF election will apply to the newly acquired Class A Ordinary Shares. Notwithstanding such QEF election, the rules relating to "excess distributions" discussed above, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired Class A Ordinary Shares (which under proposed regulations will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the Warrants), unless the U.S. Holder makes a "deemed sale" election under the PFIC rules. U.S. Holders are urged to consult their tax advisors as to the application of the rules governing "deemed sale" elections to their particular circumstances.

The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder that is eligible to make a QEF election with respect to its Class A Ordinary Shares generally may do so by providing the appropriate information to the IRS in the U.S. Holder's timely filed tax return for the year in which the election becomes effective. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.

U.S. Holders should consult their tax advisors as to the availability and desirability of a QEF election.

Alternatively, if REE is a PFIC and Class A Ordinary Shares constitute "marketable stock" (as defined below), a U.S. Holder may make a mark-to-market election for such holder's Class A Ordinary Shares with respect to such shares for the first taxable year in which it holds (or is deemed to hold) Class A Ordinary Shares and each subsequent taxable year to elect out of the excess distribution rules discussed above. If a U.S. Holder makes a mark-to-market election with respect to its Class A Ordinary Shares, such U.S. Holder generally will include in income for each year that REE is treated as a PFIC with respect to such Class A Ordinary Shares an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of the U.S. Holder's taxable year over the adjusted basis in the Class A Ordinary Shares. A U.S. Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. However, deductions will be allowed only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in the U.S. Holder's income for prior taxable years. Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the Class A Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent the amount of such loss does not exceed the net mark-to-market gains for such Class A Ordinary Shares previously included in income. A U.S. Holder's basis in the Class A Ordinary Shares will be adjusted to reflect any mark-to-market gain or loss. If a U.S. Holder makes a mark-to-market election, any distributions REE makes would generally be subject to the rules discussed above under "*— Distributions on Class A Ordinary Shares*," except the lower rates applicable to qualified dividend income would not apply. Currently, U.S. Holders of Warrants will not be able to make a mark-to-market election with respect to their Warrants.

The mark-to-market election is available only for "marketable stock," which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. The Class A Ordinary Shares, which are expected to be listed on Nasdaq, are expected to qualify as marketable stock for purposes of the PFIC rules, but there can be no assurance that Class A Ordinary Shares will be "regularly traded" for purposes of these rules. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless Class A Ordinary Shares cease to qualify as "marketable stock" for purposes of the PFIC rules or the IRS consents to the revocation of the election. Because a mark-to-market election cannot be made for equity interests in any Lower-Tier PFICs, a U.S. Holder that does not make the applicable QEF elections generally will continue to be subject to the excess distribution rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for Class A Ordinary Shares.

If a U.S. Holder does not make a mark-to-market election (or a QEF election, as discussed above) effective from the first taxable year of a U.S. Holder's holding period for the Class A Ordinary Shares in which REE is a PFIC, then the U.S. Holder generally will remain subject to the excess distribution rules. A U.S. Holder that first makes a mark-to-market election with respect to the Class A Ordinary Shares in a later year will continue to be subject to the excess distribution rules during the taxable year for which the mark-to-market election becomes effective, including with respect to any mark-

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to-market gain recognized at the end of that year. In subsequent years for which a valid mark-to-mark election remains in effect, the excess distribution rules generally will not apply. A U.S. Holder that is eligible to make a mark-to-market with respect to such holder's Class A Ordinary Shares may do so by providing the appropriate information on IRS Form 8621 and timely filing that form with the U.S. Holder's tax return for the year in which the election becomes effective.

U.S. Holders should consult their tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any Lower-Tier PFICs.

A U.S. Holder of a PFIC may be required to file an IRS Form 8621 on an annual basis and to provide such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations applicable to such U.S. Holder until such required information is furnished to the IRS. U.S. Holders should consult their tax advisors regarding any reporting requirements that may apply to them if REE is a PFIC.

The rules dealing with PFICs and with the QEF, "deemed sale," and mark-to-market elections are very complex and are affected by various factors in addition to those described above. U.S. Holders are strongly encouraged to consult their tax advisors regarding the application of the PFIC rules to their particular circumstances.

*Additional Reporting Requirements*

Certain U.S. Holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating to Class A Ordinary Shares subject to certain exceptions (including an exception for Class A Ordinary Shares held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their tax return for each year in which they hold Class A Ordinary Shares. Substantial penalties apply to any failure to file IRS Form 8938 and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. U.S. Holders are urged to consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of Class A Ordinary Shares.

**Non-U.S. Holders**

The section applies to Non-U.S. Holders of Class A Ordinary Shares and Warrants. For purposes of this discussion, a Non-U.S. Holder means a beneficial owner (other than a partnership or an entity or arrangement so characterized for U.S. federal income tax purposes) of Class A Ordinary Shares or Warrants that is for U.S. federal income tax purposes not a U.S. Holder, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a nonresident alien individual, other than certain former citizens and residents of the U.S. subject to U.S. tax as expatriates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a foreign corporation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a foreign estate or trust;

but generally does not include a beneficial owner who has been or is engaged in the conduct of a trade or business within the U.S. or an individual who is present in the U.S. for 183 days or more in the taxable year of the disposition of Class A Ordinary Shares or Warrants (except to the extent discussed below). If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of exercising redemption rights with respect to 10X Capital Common Stock or the ownership and disposition of Class A Ordinary Shares or Warrants.

*U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to Non-U.S. Holders*

Subject to the discussion below concerning backup withholding, any (i) dividends of cash or property (including constructive distributions treated as dividends as further described under the heading "*U.S. Holders — U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to U.S. Holders — Possible Constructive Distributions*") paid or deemed paid to a Non-U.S. Holder in respect of Class A Ordinary Shares or (ii) gain realized upon the sale or other taxable disposition of Class A Ordinary Shares and/or Warrants by a Non-U.S. Holder generally will not be subject to U.S. federal income taxation or withholding tax unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the gain or dividend is effectively connected with the Non-U.S. Holder's conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment or a "fixed base" in the U.S. to which such gain is attributable); or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of any gain, the Non-U.S. Holder is a nonresident alien individual present in the U.S. for 183 days or more during the taxable year of the disposition and certain other requirements are met.

Gain or distributions described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the U.S.), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

The U.S. federal income tax treatment of a Non-U.S. Holder's exercise of a Warrant, or the lapse of a Warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a Warrant by a U.S. Holder, as described under "*— U.S. Holders — U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to U.S. Holders — Exercise, Lapse or Redemption of a Warrant*" above, although to the extent a cashless exercise or lapse results in a taxable exchange, the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holder's gain on the sale or other disposition of the Class A Ordinary Shares and Warrants.

The characterization for U.S. federal income tax purposes of the redemption of the Non-U.S. Holder's Warrants generally will correspond to the U.S. federal income tax treatment of such a redemption of a U.S. Holder's warrants, as described under "*— U.S. Holders — U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to U.S. Holders — Exercise, Lapse or Redemption of a Warrant*" above, and the consequences of the redemption to the Non-U.S. Holder will be as described in the first paragraph above under the heading "— *U.S. Federal Income Tax Consequences of the Ownership and Disposition of Class A Ordinary Shares and Warrants to Non-U.S. Holders*" based on such characterization.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

**Information Reporting and Backup Withholding**

Information reporting requirements may apply to dividends received by U.S. Holders of Class A Ordinary Shares, and the proceeds received on the disposition of Class A Ordinary Shares effected within the U.S. (and, in certain cases, outside the U.S.), in each case other than U.S. Holders that are exempt recipients (such as corporations). Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. Holder's broker) or is otherwise subject to backup withholding. Any redemptions treated as dividend payments with respect to Class A Ordinary Shares and proceeds from the sale, exchange, redemption or other disposition of Class A Ordinary Shares may be subject to information reporting to the IRS and possible U.S. backup withholding. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Information returns may be required to be filed with the IRS in connection with, and Non-U.S. Holders may be subject to backup withholding on amounts received in respect of, a Non-U.S. Holder's disposition of their Class A Ordinary Shares, unless the Non-U.S. Holder furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the Non-U.S. Holder otherwise establishes an exemption. Dividends paid with respect to Class A Ordinary Shares and proceeds from the sale of other disposition of Class A Ordinary Shares received in the U.S. by a Non-U.S. Holder through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding unless such Non-U.S. Holder provides proof of an applicable exemption or complies with certain certification procedures described above, and otherwise complies with the applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the taxpayer's U.S. federal income tax liability, and a taxpayer may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.

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**THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO YOU DEPENDING UPON YOUR PARTICULAR SITUATION. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND DISPOSITION OF CLASS A ORDINARY SHARES AND WARRANTS, AS APPLICABLE, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.**

**F. Dividends and paying agents**

Not applicable.

**G. Statement by experts**

Not applicable.

**H. Documents on display**

We are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains an internet site at www.sec.gov that contains reports, proxy and information statements and other information we have filed electronically with the SEC. As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We also provide access through our website, free of charge, to our Annual Report and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is www.ree.auto. The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this Annual Report.

**I. Subsidiary Information**

Not applicable.

**J. Annual Report for Security Holders**

Not applicable.

**Item 11. Quantitative and Qualitative Disclosures about Market Risk**

REE is exposed to a variety of market and other risks, including foreign currency exchange fluctuations, changes in interest rates and inflation. We regularly assess currency, interest rate, and inflation risks to minimize any adverse effects on our business as a result of those factors.

***Interest Rate Risk***

REE holds cash and cash equivalents for working capital purposes. As of December 31, 2025, we had cash and cash equivalents of $14.2 million, consisting of cash in banks, bank deposits and money market funds.

Our exposure to interest rate risk primarily relates to excess cash invested in bank deposits bearing fixed interest rates with original maturities of less than one year and money market funds exposed to variable interest rates. Such interest-earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates. Variable rate securities may negatively have an impact on the interest income received from those securities due to a decline in interest rates. The primary objectives of our management of cash balances are the preservation of capital and the fulfillment of liquidity needs. We do not enter into investments for trading or speculative purposes. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our historical consolidated financial statements. As a result, we have not been, and do not expect to be, exposed

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to material interest rate risks, and therefore have not used any derivative financial instruments to manage our interest risk exposure.

***Inflation Risk***

Inflationary factors such as increases in the cost of our products and overhead costs may adversely affect our operating results. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we do not believe that inflation has had a material effect on our financial position or results of operations to-date. However, a high rate of inflation in the future may have an adverse effect on our research and development and selling, general and administrative expenses. More specifically, the Trump Administration in the U.S. imposed tariffs on a variety of countries and regions that it perceives as engaging in unfair trade practices. Significant increases in the market price for parts or components that we import to the U.S. for production, including, in particular, from the UK and China, could negatively impact our gross loss, if and when we resume production, if we are unable to pass along these price increases to our customers.

***Foreign Currency Risk***

Due to our international operations, our results of operations and cash flows are affected by fluctuations due to changes in foreign currency exchange rates. In 2025, our cost of revenues and operating expenses were denominated in U.S. dollars, in Israeli Shekels (NIS), in British pounds sterling (GBP) and the remainder in other currencies, primarily Euros (EUR) and Japanese Yens (JPY). Our foreign currency-denominated expenses consist primarily of personnel, research and development, rent and other overhead costs. The foreign currency exposure gives rise to foreign currency risk associated with the exchange rate movements of the U.S. dollar against non-U.S. dollar currencies, primarily the GBP and NIS.

A 10% strengthening or weakening in the value of the GBP, NIS, Euro, and JPY against the U.S. dollar would have increased or decreased our operating loss in 2025 by approximately 6.7%, respectively. If non-U.S. dollar currencies in which our operating expenses are denominated strengthen significantly against the U.S. dollar, it may have a material negative impact on our results of operations.

These estimates of the impact of fluctuations in currency exchange rates on our historic results of operations may be different from the impact of fluctuations in exchange rates on our future results of operations since the mix of currencies comprising our cost of revenue and operating expenses may change.

As of December 31, 2025, approximately 82% of our cash and cash equivalents were denominated in U.S. dollars. As a result, we are exposed to foreign currency risk. We may, in the future, decide to enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rate of the currencies mentioned above in relation to U.S. dollars. These measures, however, may not adequately protect us and our operations could be adversely affected if we are unable to effectively hedge against currency fluctuations in the future.

***Liquidity risk***

We monitor forecasts of our liquidity (comprising cash and cash equivalents). We generally carry this out based on our expected cash flows in accordance with practice and limits set by our management. We have a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future. Our ability to continue to operate is dependent upon our ability to significantly reduce our operating costs and to obtain the necessary financing and/or the receipt of cash revenues from customers to meet our obligations and repay our liabilities arising from the ordinary course of business operations. The outcome of these matters cannot be predicted with any certainty at this time. These conditions raise substantial doubts about our ability to continue as a going concern.

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**Item 12. Description of Securities Other than Equity Securities.**

Not applicable.

**Part II**

**Item 13. Defaults, Dividend Arrearages and Delinquencies.**

None.

**Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.**

***Material Modifications to the Rights of Security Holders and Use of Proceeds***

On October 16, 2023, REE shareholders voted to approve certain amendments to the Company's Amended and Restated Articles of Association, effective immediately upon such approval. REE's Amended and Restated Articles of Association contain certain modifications that effect the rights of REE's security holders. The description of such amendments is set forth in REE's proxy statement filed as Exhibit 99.1 to REE's Form 6-K, filed with the SEC on September 21, 2023, and is incorporated by reference herein. REE's Amended and Restated Articles of Association, as amended, is filed as Exhibit 1.1 to this Annual Report on Form 20-F and is incorporated by reference herein.

***Use of proceeds***

Not applicable.

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**Item 15. Controls and Procedures.**

***Disclosure controls and procedures***

Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2025, our disclosure controls and procedures were effective such that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

***Management's annual report on internal control over financial reporting***

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transaction and dispositions of the assets of the company, provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment, our management concluded that as of December 31, 2025, our internal control over financial reporting was effective.

***Attestation Report of the Registered Public Accounting Firm***

This Annual Report on Form 20-F does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption for emerging growth companies provided in the JOBS Act.

***Changes in Internal Control over Financial Reporting***

There were no changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) that occurred during the period covered by this Annual Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Item 16. [Reserved]** 

**Item 16A. Audit committee financial expert**

We do not currently have an "audit committee financial expert", as such term is defined in Rule 10A-3(b)(1) under the Exchange Act and under the listing standards of Nasdaq, serving on our audit committee because no member of our audit committee meets the criteria of an "audit committee financial expert". However, our audit committee consists exclusively of independent directors whose past employment experience in finance and/or other backgrounds results in each

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individual's financial sophistication, as defined under applicable Nasdaq rules. We believe that the combined knowledge, skills and experience of such members enables them, as a group, to act effectively in the fulfillment of their tasks and responsibilities. In addition, our audit committee has the authority to engage outside experts as they deem appropriate to provide them with advice on matters related to their responsibilities. Our board of directors may consider the "audit committee financial expert" qualification as a criteria in future director nominations and appointments to our audit committee.

**Item 16B. Code of Ethics**

REE has adopted a Code of Business Conduct and Ethics, or Code of Conduct, which is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. We have made our Code of Conduct publicly available on our website at https://investors.ree.auto/. Information contained on, or that can be accessed through, this website does not constitute a part of this Annual Report and is not incorporated by reference herein. If we make any amendment to the Code of Conduct or grant any waivers, including any implicit waiver, from a provision of the Code of Conduct, we will disclose the nature of such amendment or waiver on this website to the extent required by the rules and regulations of the SEC, including the instructions to Item 16B of Form 20-F.

**Item 16C. Principal Accountant Fees and Services**

Kost Forer Gabbay & Kasierer, a member or Ernst & Young Global, an independent registered public accounting firm, have served as our independent public accountants for each of the fiscal years in the three-year period ended December 31, 2025, for which audited financial statements appear in this Annual Report on Form 20-F.

The following table presents the total fees billed to us by Kost Forer Gabbay & Kasierer for services performed in each of the two last fiscal years ended December 31, 2025 and 2024 and breaks down these fees by type of service:

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| | | |
|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** |
| | USD in thousands | USD in thousands |
| Audit fees | $380 | $440 |
| Audit-related fees |  | 180 |
| Tax fees | 64 | 70 |
| All other fees |  |  |
| Total | $444 | $690 |

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"Audit fees" are the total fees billed for the audit of our annual financial statements, including review of internal control over financial reporting and review of our unaudited interim financial statements.

"Audit-related fees" are the total fees billed for assurance and related services that are reasonably related to the performance of the audit and are not reported under audit fees. These fees primarily include comfort letters and consents with respect to registration statements filed with the SEC, accounting consultations regarding the accounting treatment of matters that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from time to time.

"Tax fees" are the total fees billed for tax compliance services, including the preparation of tax returns and claims for tax refund; tax consultations, such as assistance and representation in connection with tax audits and appeals, and requests for rulings or technical advice from the taxing authorities.

***Audit committee's pre-approval policies and procedures***

Our audit committee has adopted a pre-approval policy for the engagement of our independent public accounting firm to perform certain audit and non-audit services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit service, audit-related service and tax services that may be performed by our independent public accounting firm. All of the audit and non-audit services performed for us by our independent registered public accounting firm in 2025 and 2024 were preapproved in accordance with our policy.

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**Item 16D. Exemptions from the Listing Standards for Audit Committees**

Not applicable.

**Item 16E. Purchases of Equity Securities by the Issuer and Aﬃliated Purchasers**

Not applicable.

**Item 16F. Change in Registrant's Certifying Accountant**

Not applicable.

**Item 16G. Corporate Governance**

As a foreign private issuer, we are permitted to comply with Israeli corporate governance practices instead of the Nasdaq requirements, *provided* that we disclose those Nasdaq requirements with which we do not comply and the equivalent Israeli requirement that we follow instead. We currently rely on this "foreign private issuer exemption" with respect to the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Distribution of certain reports to shareholders.* As opposed to the Nasdaq Listing Rules, which require listed issuers to make certain reports, such as annual reports, interim reports and quarterly reports, available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders, but to make such reports available through a public website. In addition to making such reports available on a public website, we plan to make our audited financial statements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC's proxy solicitation rules. See "Item 10. Additional Information—Documents on Display" for a description of our Exchange Act reporting obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Quorum requirement for shareholder meetings*. Under Nasdaq corporate governance rules, a quorum would require the presence, in person or by proxy, of holders of at least 33⅓% of the total issued outstanding voting power of our shares at each general meeting of shareholders. Pursuant to our Amended and Restated Articles and as permitted under the Companies Law, the quorum required for a general meeting of shareholders will consist of at least two shareholders present in person or by proxy who hold or represent at least 33⅓% of the total outstanding voting power of our shares, except if (i) any such general meeting of shareholders was initiated by and convened pursuant to a resolution adopted by the board of directors and (ii) at the time of such general meeting, we qualify as a "foreign private issuer," in which case the requisite quorum will consist of two or more shareholders present in person or by proxy who hold or represent at least 25% of the total outstanding voting power of our shares (and if the meeting is adjourned for a lack of quorum, the quorum for such adjourned meeting will be, subject to certain exceptions, any number of shareholders). Notwithstanding the foregoing, a quorum for a general meeting (and for any adjourned general meeting) shall also require the presence in person or by proxy of at least one shareholder holding Class B Ordinary Shares if such shares are outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Nomination of our directors*. Under Nasdaq listing rules for domestic issuers that are not controlled, director nominees must either be selected or recommended for the board's selection by either by a nominating committee comprised solely of independent directors, or by independent directors constituting a majority of the board's independent directors in a vote in which only independent directors participate. However, we intend to rely on the foreign private issuer exemption with respect to this requirement, such that nominations of directors will be made by our board of directors, in accordance with the provisions of the Companies Law and our Amended and Restated Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Compensation of officers*. We follow the provisions of the Companies Law with respect to matters in connection with the composition and responsibilities of our compensation committee, Office Holder compensation and any required approval by the shareholders of such compensation. Israeli law and our Articles do not require that the independent members of our Board, or a compensation committee composed solely of independent members of our Board, determine an executive officer's compensation, as is generally required under the Nasdaq Listing Rules with respect to the Chief Executive Officer and all other executive officers of a company. Instead, remuneration of Office Holders is determined and approved by our compensation committee, and in general, by our Board as well, and in certain circumstances, by our shareholders, as detailed above. The requirements for shareholder approval of any Office Holder compensation, and the relevant majority or Special Majority for such approval, are all as set forth in the Companies Law. Thus, we seek shareholder approval for all corporate actions with respect to Office Holder compensation requiring such approval under the requirements of the Companies Law, including for our Compensation Policy and for certain Office Holder Compensation, rather than seeking approval for such corporate

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actions in accordance with Nasdaq Listing Rules. All members of our compensation committee are independent directors under applicable Nasdaq Capital Market and SEC rules, as affirmatively determined by our Board. See "Item 6. Directors, Senior Management and Employees—B. Compensation."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Independent directors*. Although Israeli law does not require that a majority of the directors serving on our Board be "independent," as defined under Nasdaq Capital Market Listing Rule 5605(a)(2), but rather requires we have at least two external directors who meet the requirements of the Companies Law, as described above under "Item 6. Directors, Senior Management and Employees—C. Board Practices—External Directors.", following our "opt-out" of the requirement to appoint external directors, a majority of our Board is independent based on the Nasdaq Capital Market rules. We are required, however, to ensure that all members of our audit committee are "independent" under the applicable Nasdaq Capital Market and SEC criteria for independence (as we cannot exempt ourselves from compliance with that SEC independence requirement, despite our status as a foreign private issuer). Our independent directors' conduct regularly scheduled meetings at which only such independent directors are present, as required by the Nasdaq Listing Rules. Nasdaq corporate governance rules require that a majority of our board of directors be independent. An "independent director" is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the listed company). Our board of directors has determined that Carlton Rose, Ittamar Givton, Hicham Abdessamad and Ayellet (Mimi) Zemah are independent directors as defined in Nasdaq corporate governance rules. Therefore, the majority of our board of directors are independent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Shareholder approval*. We will seek shareholder approval for all corporate actions requiring such approval under requirements of the Companies Law, rather than seeking approval for corporate actions in accordance with Nasdaq Capital Market Listing Rule 5635. In particular, under this Nasdaq Capital Market rule, shareholder approval is generally required for: (i) an acquisition of shares or assets of another company that involves the issuance of 20% or more of the acquirer's shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption or amendment of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (or via sales by directors, officers or 5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required for, among other things: (i) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals of the remuneration committee, board of directors and shareholders are all required, (ii) Extraordinary Transactions with controlling shareholders of publicly held companies, which require the special approval described under "Item 6. Directors, Senior Management and Employees—C. Board Practices—Approval of Related Party Transactions under Israeli Law—Transactions with Controlling Shareholders," and (iii) terms of office and employment or other engagement of the controlling shareholder of the Company or such controlling shareholder's relative, which require the special approval described under "Item 6. Directors, Senior Management and Employees—B. Compensation" and "Item 6. Directors, Senior Management and Employees—C. Board Practices—Approval of Related Party Transactions under Israeli Law." In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies. See also "Compensation of officers" above.

**Item 16H. Mine Safety Disclosure**

Not applicable.

**Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

**Item 16J. Insider Trading Policy**

We have adopted an insider trading policy that governs the purchase, sale and other dispositions of the Company's securities by senior management, directors, employees, contractors and other covered persons, including immediate family members and entities controlled thereby, subject to exception. A copy of our insider trading policy is filed as Exhibit 11.1 to this Annual Report.

**Item 16K. Cybersecurity**

REE recognizes the critical importance of maintaining the trust and confidence of our customers, clients, business partners (such as suppliers, vendors or other external parties) and employees. REE's cybersecurity policies, standards, processes and

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practices are fully integrated into our risk management program and are based on recognized frameworks established by the Israel National Cyber Directorate, ISO 27001, ISO 21434 and other applicable industry standards. For the sake of clarity, the references to such standards does not necessarily imply that we intend to meet any particular technical standards, specifications, or requirements, but instead that we use them as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. As of the date of this Annual Report, we are ISO 27001 certified. In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when and if they occur. Specifically, we developed an information security policy in an effort to (1) protect our technology, hardware, intellectual property, and brand, and hardware against theft, loss, hacking, and manipulation, (2) maintain the confidentiality and integrity of our information, and (3) adhere to relevant statutory, regulatory, and contractual obligations. This policy applies to all our employees, contractors, suppliers and strategic partners and to all products, computer systems and information communication system applications, technologies, processes, endpoints and REE information, along with the interactions between systems and business processes that they support.

**Risk Management and Strategy**

As part of the critical elements of our overall risk management approach, our cybersecurity program is focused on the following key areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identifying and Managing Risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Ongoing risk assessments, including through the use of a third party, to identify internal and external threats and vulnerabilities on an on-going basis and to classify each into risk categories. Escalation is conducted based upon the assigned risk profile, including escalation by the third party to REE's Chief Information Security Officer, or CISO. Additionally, we undertake risk classifications with respect to our suppliers/vendors by identifying the information that such entity will access, collect and/or process and identify the potential threats and risks that may exist as a result. Based upon such classifications, we consider the information security and privacy requirements for the contract with such entity. Access to REE data, and specifically personal data by external parties, may be based upon a contract and an appropriate preliminary risk assessment process. Certain contracts may contain specifications with respect to security procedures and the ability to conduct testing and/or site visits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Company also uses third parties to conduct penetration tests from time-to-time with respect to its information technology and for operational technology (production) and products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ With respect to certain contracts involving personal data, we attempt to outline which data will be collected, how it will be processed, and who may access such data, among other items. We also may seek to include provisions relating to confidentiality and information security, and the implementation of appropriate technical and organizational measures to ensure a level of security appropriate to the risks associated therein. Where practicable, we may consider notification provisions to notify REE upon the occurrence of a cyber attack that affects REE in any way, and/or as otherwise required under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management: REE's CISO is responsible for developing, maintaining and overseeing the REE security program, providing oversight, direction, and advice to the organization regarding information security, assist and coordinate with respect to security incidents (as applicable), assess REE's security risks and communicate them to REE's leadership team as a basis for risk-based decision-making, among other responsibilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Least Privilege: REE aims to provide the least access possible to individuals, while allowing them to perform their responsibilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identify, prevent and mitigate cybersecurity threats and incidents. It also implements controls and procedures through its information security policy to provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made in a timely manner, where applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company's information systems from cybersecurity threats, including third-party developed software such as firewalls, intrusion prevention and detection systems, anti-malware functionality, the REE Gateway, and access controls, which are evaluated and improved annually through vulnerability assessments and cybersecurity threat intelligence, as overseen by the Company's Cyber Security Steering Committee. From time-to-time we conduct network and other tests in combination with technical and management exercises that simulate cyber events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans that address the Company's response to a cybersecurity incident, and such plans are tested and

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evaluated at least once annually. In addition, REE utilizes a third party in order to monitor and respond to incidents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Third-Party Risk Management: REE maintains a comprehensive risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company's systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. The Company expects its suppliers to comply with security best practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Education and Awareness: The Company provides mandatory training for personnel regarding cybersecurity threats as a means to equip the Company's personnel with effective tools to address cybersecurity threats, and to communicate the Company's evolving information security policies, standards, processes and practices.

REE reviews its Information Security Policy at least annually and seeks to update as required. As part of such policy, REE also improves and reviews current REE practices and the REE Information Security Management System, or ISMS, to identify improvements based upon changes to the business (e.g., changes to customer demands, regulations, opportunities).

**Governance**

The CISO, along with the employees listed below, work collaboratively across the Company to implement a program designed to protect the Company's information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company's incident response and recovery plans. Such program includes the Cyber Security Steering Committee and REE's management. To facilitate the success of the Company's information security policy, the CISO and his team regularly monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real-time, and report such threats and incidents to the Risk Management Committee when appropriate. The CISO endeavors to produces a risk management report every two years and provides updates to the Company annually with respect to ongoing cyber risk. REE's Information Security Policy delegates responsibility to the following employees:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CISO: Responsible for developing, maintaining and overseeing the REE security program; providing oversight and direction and advising the Company regarding information and physical security; assisting and coordinating during security incidents; assessing REE's security risks and communicating them with REE's leadership team as a basis for risk-based decision-making; ensuring that security policies and procedures are understood and adhered to; and initiating the disciplinary process for major policy violations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Global IT Manager: Responsible for developing, maintaining and overseeing the REE network; providing and revoking access; recertification of user access to all systems on a regular basis; managing employees workstations/laptops including configurations, installations and upgrades, and ongoing maintenance; managing company information assets according to best practices and regulatory requirements; overseeing implementation of new systems to the organization (SaaS, hardware, etc.); maintaining and implementing the organizational information security policy published by the CISO, and granting and/or revoking access to systems according to employee onboarding and off-boarding processes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General Counsel: Acts as REE's Data Protection Officer; provides advice regarding data protection regulation requirements and employee contracts; manages REE Data Protection Agreements for customers and vendors, to the extent applicable; and handles non-disclosure agreements, employee contracts and asset contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Government, Risk and Compliance Manager, or GRC: Responsible for managing REE's Information Management Program; designing and implementing data protection methodologies and guidelines; verifying alignment with global data protection laws such as the GDPR; and testing the effectiveness of technical and administrative security controls where applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DevOps Engineer: Responsible for building new development tools and infrastructure with regards to cybersecurity.

REE's CISO is experienced in the field of cybersecurity, including having served as the head of the Cybersecurity Guidance department of the Israel National Cyber Directorate from 2019 to 2021, among other cybersecurity roles over the past 20 years, including as a cybersecurity consultant to several high tech companies in Israel. Additionally, from 2018 to 2019, our CISO led and managed the cyber studies at INT College (NESS) in Israel. Our CISO oversees an information technology team who are tasked with the implementation and ongoing oversight of our cybersecurity program and who support the CISO in carrying out reporting, security, and mitigation functions.

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As of the date of this annual report, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations or financial condition. For additional information concerning risks related to cybersecurity, see Item 3.D. of our Risk Factors in the subsection titled "Risks Related to REE's Information Security."

**Part III**

**Item 17. Financial Statements**

Not applicable.

**Item 18. Financial Statements**

The audited consolidated financial statements as required under Item 18 are attached hereto starting on page <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_241)[1](#ib754f8dbfd9a410ebea6292869b01926_241)</u> of this Annual Report. The audit report of Kost Forer Gabbay and Kasierer, an independent registered public accounting firm, is included herein preceding the audited consolidated financial statements and such report includes an explanatory paragraph on existence of substantial doubt about the Company's ability to continue as a going concern.

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**Item 19. Exhibits.**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 1.1 | <u>[Amended and Restated Articles of Association of REE Automotive Ltd.incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 (File No. 333-261130) filed with the SEC on February 24, 2026.](https://www.sec.gov/Archives/edgar/data/1843588/000121390026019872/ea027799501ex4-1_reeauto.htm)</u> |
| 2.1 | <u>[Specimen Class A Ordinary Share Certificate of REE Automotive Ltd., incorporated by reference to Exhibit 4.5 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021033268/ff42021a3ex4-5_reeauto.htm)</u> |
| 2.2 | <u>[Form of Assignment, Assumption and Amendment Agreement, by and among REE Automotive Ltd, 10X Capital Venture Acquisition Corp and Continental Stock Transfer & Trust Company, incorporated by reference to Exhibit 4.7 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021033268/ff42021a3ex4-7_reeauto.htm)</u> |
| 2.3 | <u>[Form of Letter Agreement, incorporated by reference to Exhibit 4.9 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021033268/ff42021a3_reeautomotive.htm#T804)</u> |
| 2.4 | <u>[Investor Rights Agreement, dated as of February 3, 2021, by and among REE Automotive Ltd and certain shareholders of REE Automotive Ltd., incorporated by reference to Exhibit 4.10 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021014453/ff42020ex4-10_reeautomotive.htm)</u> |
| 2.5 | <u>[Description of Securities, incorporated by reference to Exhibit 2.5 to the Company's Registration Statement on Form S-8 (File No. 333-261130) filed with the SEC on February 24, 2026.](https://www.sec.gov/Archives/edgar/data/1843588/000121390026019872/ea027799501ex2-5_reeauto.htm)</u> |
| 4.1 | <u>[Agreement and Plan of Merger, dated as of February 3, 2021, by and among REE Automotive Ltd., Spark Merger Sub, Inc., and 10XCapital Venture Acquisition Corp, incorporated by reference to Exhibit 2.1 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021014453/ff42020_reeautomotiveltd.htm#T1100)</u> |
| 4.2 | <u>[Form of Subscription Agreement by and between Subscriber and REE Automotive Ltd., incorporated by reference to Exhibit 10.4 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021033268/ff42021a3_reeautomotive.htm#T803)</u> |
| 4.3† | <u>[2021 REE Automotive Ltd. Share Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-8 (File No. 333-261130) filed with the SEC on November 16, 2021.](https://www.sec.gov/Archives/edgar/data/0001843588/000121390021060120/ea147829ex10-1_reeautomotive.htm)</u> |
| 4.4† | <u>[2021 REE Automotive Ltd. Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.6 to the Company's Shell Company Report on Form 20-F (File No. 001-40649) filed with the SEC on July 28, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021039131/ea144898ex4-6_reeautomotiv.htm)</u> |
| 4.5† | <u>[REE Automotive Ltd. Key Employee Share Incentive Plan (2011) incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-8 (File No. 333-261130) filed with the SEC on November 16, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021060120/ea147829ex10-2_reeautomotive.htm)</u> |
| 4.6† | <u>[Form of Director and Officer Indemnification Agreement, incorporated by reference to Exhibit 10.7 to Amendment No. 3 to the Company's Registration Statement on Form F-4 (File No. 333-254070) filed with the SEC on June 21, 2021.](https://www.sec.gov/Archives/edgar/data/1843588/000121390021033268/ff42021a3ex10-7_reeauto.htm)</u> |
| 4.7† | <u>[Compensation Policy for Directors and Officers, incorporated by reference to Annex A of Exhibit 99.1 to the Company's Current Report on Form 6-K, filed with the SEC on October 9, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000121390025097817/ea026084901ex99-1_reeauto.htm)</u> |
| 4.8 | <u>[ATM Equity Offering](https://www.sec.gov/Archives/edgar/data/1843588/000121390022048392/ea164235ex1-2_reeautomotive.htm)</u><sup>SM</sup><u>[Sales Agreement, dated August 16, 2022, between REE Automotive Ltd. and BofA Securities, Inc., incorporated by reference to Exhibit 1.2 to the Company's Registration Statement on Form F-3 (File No. 333-266902) filed with the SEC on August 16, 2022.](https://www.sec.gov/Archives/edgar/data/1843588/000121390022048392/ea164235ex1-2_reeautomotive.htm)</u> |
| 4.9 | <u>[Form of At The Market Offering Agreement, dated July 14, 2023, between REE Automotive Ltd. and H.C. Wainwright & Co., LLC, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 6-K, filed with the SEC on July 14, 2023.](https://www.sec.gov/Archives/edgar/data/1843588/000121390023057095/ea181753ex10-1_reeautomotive.htm)</u> |
| 4.10 | <u>[Form of Securities Purchase Agreement, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 6-K, filed with the SEC on November 28, 2023.](https://www.sec.gov/Archives/edgar/data/1843588/000121390023090580/ea189076ex99-1_reeauto.htm)</u> |
| 4.11 | <u>[Form of Convertible Promissory Note, incorporated by reference to Exhibit 99.2 the Company's Current Report on Form 6-K, filed with the SEC on November 28, 2023.](https://www.sec.gov/Archives/edgar/data/1843588/000121390023090580/ea189076ex99-2_reeauto.htm)</u> |
| 4.12 | <u>[Form of Ordinary Share Purchase Warrant, incorporated by reference to Exhibit 99.3 the Company's Current Report on Form 6-K, filed with the SEC on November 28, 2023.](https://www.sec.gov/Archives/edgar/data/1843588/000121390023090580/ea189076ex99-3_reeauto.htm)</u> |
| 4.13 | <u>[Form of Securities Purchase Agreement, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 6-K, filed with the SEC on January 5, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024001584/ea189608ex99-1_reeauto.htm)</u> |
| 4.14 | <u>[Form of Convertible Promissory Note, incorporated by reference to Exhibit 99.2 the Company's Current Report on Form 6-K, filed with the SEC on January 5, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024001584/ea189608ex99-2_reeauto.htm)</u> |
| 4.15 | <u>[Form of Ordinary Share Purchase Warrant, incorporated by reference to Exhibit 99.3 the Company's Current Report on Form 6-K, filed with the SEC on January 5, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024001584/ea189608ex99-3_reeauto.htm)</u> |
| 4.16 | <u>[Underwriting Agreement, dated March 1, 2024 by and between REE Automotive Ltd. and Roth Capital Partner, LLC, incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 6-K, filed with the SEC on March 4, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024019617/ea0201056ex1-1_reeauto.htm)</u> |

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 4.17 | <u>[Form of Pre-Funded Warrant, incorporated by reference to Exhibit 4.1 the Company's Current Report on Form 6-K, filed with the SEC on September 17, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024079521/ea021474101ex4-1_reeauto.htm)</u> |
| 4.18 | <u>[Form of Securities Purchase Agreement, dated September 15, 2024, by and between the Company and the purchaser parties thereto, incorporated by reference to Exhibit 10.1 the Company's Current Report on Form 6-K, filed with the SEC on September 17, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024079521/ea021474101ex10-1_reeauto.htm)</u> |
| 4.19 | <u>[Form of Securities Purchase Agreement, dated March 18, 2025, by and between the Company and the purchaser parties thereto, incorporated by reference to Exhibit 10.1 the Company's Current Report on Form 6-K, filed with the SEC on March 19, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000121390025024818/ea023488201ex10-1_reeauto.htm)</u> |
| 4.20 | <u>[Placement Agency Agreement, dated March 18, 2025, by and between the Company and A.G.P./Alliance Global Partners, incorporated by reference to Exhibit 10.2 the Company's Current Report on Form 6-K, filed with the SEC on March 19, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000121390025024818/ea023488201ex10-2_reeauto.htm)</u> |
| 4.21 | <u>[Form of Securities Purchase Agreement, dated March 26, 2025, by and between the Company and the purchaser parties thereto, incorporated by reference to Exhibit 10.1 the Company's Current Report on Form 6-K, filed with the SEC on March 26, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000101376225002712/ea023568301ex10-1_reeauto.htm)</u> |
| 4.22 | <u>[Placement Agency Agreement, dated March 25, 2025, by and between the Company and A.G.P./Alliance Global Partners, incorporated by reference to Exhibit 10.2 the Company's Current Report on Form 6-K, filed with the SEC on March 26, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000101376225002712/ea023568301ex10-2_reeauto.htm)</u> |
| 4.23 | <u>[Summary in English of the Lease Agreement, dated as of August 23, 2020 by and between the Registrant and Kibbutz Glil-Yam, incorporated by reference to Exhibit 4.23 to the Company's Annual Report on Form 20-F field with the SEC on May 15, 2025.](https://www.sec.gov/Archives/edgar/data/1843588/000162828025025661/ex423summaryofhebrewlangua.htm)</u> |
| 4.24\* | <u>[Summary in English of the Letter Agreement to the Company's Lease Agreement, dated as of April 7, 2026, by and between the Registrant and Kibbutz Glil-Yam.](ex424summaryofhebrewlangua.htm)</u> |
| 8.1\* | <u>[List of subsidiaries of REE Automotive Ltd.](ex81listofsubsidiariesofre.htm)</u> |
| 10.1 | <u>[Supply Chain Management Services Agreement, dated September 15, 2024, by and between the Company and Samvardhana Motherson International Limited, incorporated by reference to Exhibit 10.2 the Company's Current Report on Form 6-K, filed with the SEC on September 17, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000121390024079521/ea021474101ex10-2_reeauto.htm)</u> |
| 11.1\* | <u>[Insider Trading Policy](ex111insidertradingpolicyf.htm)</u>  |
| 12.1\* | <u>[Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002](ex121certificateofchiefexe.htm)</u> |
| 12.2\* | <u>[Certificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002](ex122certificateofchieffin.htm)</u> |
| 13.1\*\* | <u>[Certificate of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002](ex131certificateofchiefexe.htm)</u> |
| 13.2\*\* | <u>[Certificate of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002](ex132certificateofchieffin.htm)</u> |
| 15.1\* | <u>[Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, independent registered accounting firm for REE Automotive Ltd.](ex151consentofindependentr.htm)</u> |
| 97.1 | <u>[Clawback Policy, incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 20-F field with the SEC on March 27, 2024.](https://www.sec.gov/Archives/edgar/data/1843588/000162828024013211/ex971clawbackpolicy.htm)</u> |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

____________

\* Filed herewith.

\*\* Furnished herewith.

† Indicates a management contract or compensatory plan.

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | | |
|:---|:---|:---|
| | | REE Automotive Ltd. |
| Date: | May 15, 2026 | /s/ DANIEL BAREL |
| | | Daniel Barel |
| | | Co-Founder, Chief Executive Officer and Director |

---

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD.**

**CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF DECEMBER 31, 2025**

**U.S. DOLLARS IN THOUSANDS**

**INDEX**

---

| | |
|:---|:---|
| **Report of Independent Registered Public Accounting Firm (PCAOB ID: 1281)** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_247)[2](#ib754f8dbfd9a410ebea6292869b01926_247)</u> |
| **Consolidated Balance Sheets** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_250)[3](#ib754f8dbfd9a410ebea6292869b01926_250)</u> |
| **Consolidated Statements of Comprehensive Loss** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_253)[4](#ib754f8dbfd9a410ebea6292869b01926_253)</u> |
| **Consolidated Statements of Changes in Shareholders' Equity** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_259)[5](#ib754f8dbfd9a410ebea6292869b01926_259)</u> |
| **Consolidated Statements of Cash Flows** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_265)[6](#ib754f8dbfd9a410ebea6292869b01926_265)</u> |
| **Notes to the Consolidated Financial Statements** | <u>[F-](#ib754f8dbfd9a410ebea6292869b01926_268)[8](#ib754f8dbfd9a410ebea6292869b01926_268)</u> |

---

#

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Shareholders and the Board of Directors of**

**REE Automotive Ltd.**

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of REE Automotive Ltd. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

**The Company's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses, negative cash flow from operations, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/S/ KOST FORER GABBAY & KASIERER

A Member of EY Global

We have served as the Company's auditor since 2015.

Tel-Aviv, Israel

May 15, 2026

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**U.S. dollar in thousands (except share and per share data)**

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2025** | **2024** |
| **ASSETS** |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $14246 | $72262 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 24 | 11 |
| &nbsp;&nbsp;&nbsp;Inventory |  | 3075 |
| &nbsp;&nbsp;&nbsp;Other accounts receivable and prepaid expenses | 691 | 7158 |
| Total current assets | 14961 | 82506 |
| NON-CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Non-current restricted cash | 1973 | 2510 |
| &nbsp;&nbsp;&nbsp;Other accounts receivable and prepaid expenses | 2386 | 3091 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 15004 | 20063 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 3857 | 22110 |
| Total non-current assets | 23220 | 47774 |
| **TOTAL ASSETS** | $**38181** | $**130280** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Short term loan | $— | $18008 |
| &nbsp;&nbsp;&nbsp;Trade payables | 1736 | 5602 |
| &nbsp;&nbsp;&nbsp;Other accounts payable and accrued expenses | 7337 | 7966 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 3637 | 4607 |
| Total current liabilities | 12710 | 36183 |
| NON-CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Warrants liability | 3197 | 41150 |
| &nbsp;&nbsp;&nbsp;Convertible promissory notes | 4830 | 14758 |
| &nbsp;&nbsp;&nbsp;Deferred tax liability |  | 1782 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 10694 | 13279 |
| Total non-current liabilities | 18721 | 70969 |
| **TOTAL LIABILITIES** | **31431** | **107152** |
| Commitments and Contingent Liabilities (Note 9) |  |  |
| SHAREHOLDERS' EQUITY: |  |  |
| &nbsp;&nbsp;Class A Ordinary Shares of no par value: Authorized: 55,333,333 shares as of December 31, 2025 and 2024; Issued and outstanding: 28,743,914 and 19,478,877 shares as of December 31, 2025 and 2024, respectively |  |  |
| &nbsp;&nbsp;Class B Ordinary shares of no par value: Authorized, issued and outstanding: 2,780,570 and 2,780,570 shares as of December 31, 2025 and 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 1010447 | 971018 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (1003697) | (947890) |
| **Total shareholders' equity** | **6750** | **23128** |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $**38181** | $**130280** |

---

&nbsp;&nbsp;&nbsp;&nbsp;*The accompanying notes are an integral part of the consolidated financial statements.*

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS**

**U.S. dollar in thousands (except share and per share data)**

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Revenues | $1297 | $183 | $1608 |
| Cost of revenues | 17571 | 3681 | 3270 |
| **Gross loss** | $**(16274)** | $**(3498)** | $**(1662)** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;Research and development expenses, net | 45432 | 49460 | 82662 |
| &nbsp;&nbsp;Selling, general and administrative expenses | 19988 | 26171 | 35568 |
| &nbsp;&nbsp;Other expenses | 24716 |  |  |
| Total operating expenses | 90136 | 75631 | 118230 |
| **Operating loss** | $**(106410)** | $**(79129)** | $**(119892)** |
| &nbsp;&nbsp;Income (Loss) from warrants remeasurement | 37953 | (22750) | 396 |
| &nbsp;&nbsp;Financial income (expenses), net | 10658 | (7812) | 3928 |
| Net loss before income tax | (57799) | (109691) | (115568) |
| &nbsp;&nbsp;Taxes on income (tax benefit) | (1992) | 2063 | (1360) |
| Net loss | $**(55807)** | $**(111754)** | $**(114208)** |
| **Net comprehensive loss** | $**(55807)** | $**(111754)** | $**(114208)** |
| **Basic and diluted net loss per Class A ordinary share** | $**(1.74)** | $**(7.01)** | $**(11.32)** |
| Weighted average number of ordinary shares used in computing basic and diluted net loss per share | 32140321 | 15933291 | 10087691 |

---

*The accompanying notes are an integral part of the consolidated financial statements.*

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY**

**U.S. dollar in thousands (except share and per share data)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Ordinary shares - Class A** | **Ordinary shares - Class A** | **Ordinary shares - Class B** | **Ordinary shares - Class B** | **Additional<br>Paid-in<br>Capital** | **Accumulated Deficit** | **Total Shareholders' Equity** |
| | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated Deficit** | **Total Shareholders' Equity** |
| **Balance – January 1, 2023** | **8135348** | $**—** | **2780570** | $**—** | $**897337** | $**(721928)** | $**175409** |
| Issuance of Ordinary shares, net | 91802 |  |  |  | 467 |  | 467 |
| Exercise of options, warrants and vesting of RSUs | 225110 |  |  |  | 129 |  | 129 |
| Share-based compensation |  |  |  |  | 16278 |  | 16278 |
| Net loss |  |  |  |  |  | (114208) | (114208) |
| **Balance – December 31, 2023** | **8452260** | $**—** | **2780570** | $**—** | $**914211** | $**(836136)** | $**78075** |
| Issuance of Ordinary shares, net | 9973752 |  |  |  | 45535 |  | 45535 |
| Exercise of options and vesting of RSUs | 980085 |  |  |  | 13 |  | 13 |
| Conversion of convertible note | 72780 |  |  |  | 550 |  | 550 |
| Share-based compensation |  |  |  |  | 10709 |  | 10709 |
| Net loss |  |  |  |  |  | (111754) | (111754) |
| **Balance – December 31, 2024** | **19478877** | $**—** | **2780570** | $**—** | $**971018** | $**(947890)** | $**23128** |
| Issuance of Ordinary shares, net | 8595807 |  |  |  | 34361 |  | 34361 |
| Exercise of options and vesting of RSUs | 669230 |  |  |  | 1 |  | 1 |
| Share-based compensation |  |  |  |  | 5067 |  | 5067 |
| Net loss |  |  |  |  |  | (55807) | (55807) |
| **Balance – December 31, 2025** | **28743914** | $**—** | **2780570** | $**—** | $**1010447** | $**(1003697)** | $**6750** |

---

*The accompanying notes are an integral part of the consolidated financial statements.*

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**U.S. dollar in thousands (except share and per share data)**

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| <u>Cash flows from operating activities:</u> |  |  |  |
| Net loss | $(55807) | $(111754) | $(114208) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 3090 | 3182 | 2255 |
| &nbsp;&nbsp;&nbsp;Accretion income on short-term investments |  |  | (731) |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 5067 | 9585 | 16278 |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrants liability | (37953) | 22750 | (396) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | (11751) | 9143 | (240) |
| &nbsp;&nbsp;&nbsp;Amortization of discount of convertible promissory note | 883 | 476 | 30 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 932 | 872 | 81 |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in accrued interest on short-term investments |  | 895 | (169) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in inventory | 3075 | (3412) | (463) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in accounts receivable | (13) | 444 | (455) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in other accounts receivable and prepaid expenses | 5269 | (419) | 5401 |
| &nbsp;&nbsp;&nbsp;Change in operating lease right-of-use assets and liabilities, net | 1065 | 390 | 2123 |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in trade payables | (4280) | 1905 | (901) |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in other accounts payable and accrued expenses | (1230) | (4956) | 2928 |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in deferred tax liability | (1782) | 1782 |  |
| &nbsp;&nbsp;&nbsp;Decrease in deferred revenue |  |  | (943) |
| &nbsp;&nbsp;&nbsp;Impairment of long-lived assets | 24716 |  |  |
| &nbsp;&nbsp;&nbsp;Loss from property and equipment sales and disposals | 9 | 132 | 137 |
| Net cash used in operating activities | (68710) | (68985) | (89273) |
| <u>Cash flows from investing activities:</u> |  |  |  |
| Purchase of property and equipment | (6305) | (7531) | (3745) |
| Proceeds from sale of property and equipment | 100 |  |  |
| Purchases of short-term investments |  |  | (94364) |
| Proceeds from short-term investments |  | 43500 | 147726 |
| Net cash provided by (used in) investing activities | (6205) | 35969 | 49617 |
| <u>Cash flows from financing activities:</u> |  |  |  |
| Proceeds from issuance of Ordinary Shares, net | 34361 | 45535 | 467 |
| Proceeds from exercise of options and warrants | 1 | 13 | 129 |
| Repayment of short term loan | (18000) | (15000) |  |
| Proceeds from short term loan |  | 18000 | 15000 |
| Proceeds from issuance of warrants |  | 15000 | 3633 |
| Proceeds from bifurcated embedded derivatives |  |  | 4179 |
| Proceeds from convertible note |  |  | 563 |
| Net cash provided by financing activities | 16362 | 63548 | 23971 |
| Increase (Decrease) in cash, cash equivalents and restricted cash | (58553) | 30532 | (15685) |
| Cash, cash equivalents and restricted cash at beginning of year | 74772 | 44240 | 59925 |
| **Cash, cash equivalents and restricted cash at end of period** | $16219 | $74772 | $44240 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

*The accompanying notes are an integral part of the consolidated financial statements.*

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**U.S. dollar in thousands (except share and per share data)**

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| <u>Non-cash activity:</u> |  |  |  |
| Purchase of property and equipment in trade payables and other accounts payable and accrued expenses | $1063 | $48 | $54 |
| Conversion of convertible notes | $— | $550 | $— |
| Derecognition of ROU assets and lease liabilities due to lease reassessment | $1023 | $— | $— |
| Share settlement of employee liability | $— | $1124 | $— |
| Right-of-use assets obtained in exchange for lease liabilities | $343 | $2230 | $1097 |
| Transfer from inventory to property and equipment, net | $— | $800 | $— |
| Prepaid purchases classified as property and equipment | $1903 | $— | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| <u>Supplemental disclosure of cash flows information:</u> |  |  |  |
| Cash paid for income taxes | $79 | $358 | $995 |
| Interest paid | $27 | $51 | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| <u>Reconciliation of cash, cash equivalents and restricted cash:</u> |  |  |  |
| Cash and cash equivalents | $14246 | $72262 | $41232 |
| Non-current restricted cash | $1973 | $2510 | $3008 |
| Total cash, cash equivalents and restricted cash | $16219 | $74772 | $44240 |

---

------

<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 1. GENERAL**

REE Automotive Ltd. was incorporated in Israel on January 16, 2011.

REE Automotive Ltd. is an automotive technology company. REE Automotive Ltd. has established wholly-owned subsidiaries in the United States, the United Kingdom, Germany and Japan (the "Subsidiaries"). REE Automotive Ltd. and its subsidiaries (the "Company" or "REE") are in the early stages of commercialization and develop and produce software-defined vehicle ("SDV") technology that manages vehicle operations and features through proprietarily-developed software.

The Company became a Nasdaq listed publicly traded company on July 23, 2021, through a merger agreement (the "Merger Agreement") with 10X Capital Venture Acquisition Corp ("10X Capital"), a Delaware corporation and special purpose acquisition company ("SPAC"), and Spark Merger Sub, Inc., a wholly-owned subsidiary of the Company, pursuant to which Merger Sub merged with and into 10X Capital (the "Merger"). The Company's Class A ordinary shares, without par value (the "Class A Ordinary Shares") are trading under the ticker symbol "REE". The Company also has Class B ordinary shares, without par value, having 10 votes per share (the "Class B Ordinary Shares" and together with the Class A Ordinary Shares, the "Ordinary Shares") that include voting rights only and are not listed on the Nasdaq.

In March 2025, the Company completed two separate registered direct offerings in the total net proceeds of approximately $34.361 million (see also note 10, Shareholders Equity, for details).

In June 2025, the Company announced a Cost-Reduction-Plan. For the year ended on December 31, 2025 the Company incurred one-time expenses, in connection with its reduction-in-force under its Cost-Reduction-Plan, of $2,101 in connection with this plan.

As of December 31, 2025, the Company had cash and cash equivalents in the total amount of $14,246. The Company has incurred losses since inception and had negative cash flows used in operating activities of $68,710 for the year ended December 31, 2025. The Company expects to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. The Company's ability to continue to operate is dependent upon raising additional funds to finance its activities. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term operational and production activities. These conditions raise substantial doubts about the Company's ability to continue as a going concern. Absent any potential strategic transaction, additional revenues, further cost-reduction measures or additional funding, the Company currently estimates that its existing financial resources will be sufficient to fund its projected operating costs and expected cash requirements into, but not beyond, the middle or the end of the second quarter of 2026. Management is actively pursuing additional financing opportunities, including through discussions with existing shareholders, as well as strategic transactions and further cost-reduction initiatives in order to extend the Company's liquidity runway. However, there can be no assurance that such efforts will be successful or available on acceptable terms. If the Company is unable to obtain additional funding, consummate strategic transactions, generate additional revenues or further reduce costs, the Company may need to significantly curtail or modify our operations and strategic plans.

The consolidated financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP").

***Use of estimates***

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions.

These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and expenses during the reporting period and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made.

***Financial statements in U.S. dollars***

The currency of the primary economic environment in which REE Automotive Ltd. and its subsidiaries operate is the U.S. dollar. Thus, the functional and reporting currency of the Company is the U.S. dollar.

Accordingly, foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are measured at historical exchange rates. Revenue and expenses are remeasured each day at the exchange rate in effect on the day the transaction occurred.

***Principles of consolidation***

The consolidated financial statements include the accounts of REE Automotive Ltd. and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.

***Cash and cash equivalents***

Cash and cash equivalents consist of cash in banks, bank deposits and money market funds, that have a maturity, at the date of purchase, of three months or less.

***Inventory***

The Company's inventory, which includes raw materials, work in-process, and finished goods, is carried at the lower of cost or Net Realizable Value ("NRV"). Inventory cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. In the case of produced inventories and work in progress, cost includes an appropriate share of production overheads based on operating capacity.

At the end of each reporting period, the Company evaluates whether its inventories are damaged, obsolete, or have material changes in price or other causes, and if so, a loss is recognized in the period in which it occurs. Inventory write-downs are also based on reviews for any excess or obsolescence.

The Company also reviews its inventory to determine whether its carrying value exceeds the NRV upon the ultimate sale of the inventory. NRV is the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion, disposal, and transportation. At the end of each reporting period, the Company determines the estimated selling price of its inventory based on market conditions. Once inventory is written-down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. For the year ended December 31, 2025, the Company recorded inventory write-downs in the amount of $15,936 (see also note 3, Inventory).

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Non-current Restricted cash***

Non-current restricted cash represent restricted bank deposits which are primarily used as a security for the Company's operating lease agreements.

***Impairment for long-lived assets***

Long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

For the year ended December 31, 2025, the Company recorded impairment charges of long-lived assets in the amount of $24,277 . No impairment charges were recorded for the years ended December 31, 2024 and 2023.

***Leases***

The Company determines if an arrangement is a lease at inception in accordance with ASC 842, Leases. The Company currently does not have any finance leases.

Operating lease right-of-use ("ROU") assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. Operating lease ROU assets also include any prepaid lease payments. Some of the leases contain variable lease payments, including payments based on a Consumer Price Index ("CPI"). Variable lease payments based on a CPI are initially measured using the index in effect at lease inception, and will not be subsequently adjusted, unless the liability is reassessed for other reasons. Additional payments based on the change in a CPI are recorded as a period expense when incurred. For short-term leases with a term of 12 months or less, operating lease ROU assets and liabilities are not recognized and the Company records lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.

The implicit rate within the operating leases is generally not determinable, therefore the Company uses the Incremental Borrowing Rate ("IBR") based on the information available at commencement date in determining the present value of lease payments. The Company's IBR was estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset was located.

For the years ended on December 31, 2025, 2024 and 2023 the Company recorded loss from leases termination in the amount of $439, zero and zero, respectively.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Property and equipment, net***

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets below:

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| | | | |
|:---|:---|:---|:---|
| | Years | Years | Years |
| Computers and software | 3 |  | 7 |
| Furniture and fixtures | 5 | 5 | 5 |
| Machinery and equipment | 4 |  | 7 |
| Vehicles | 7 | 7 | 7 |
| Demonstration vehicles  | 2 | 2 | 2 |
| Leasehold improvements | Shorter of the term of the lease or useful life | Shorter of the term of the lease or useful life | Shorter of the term of the lease or useful life |

---

***Pre-production costs related to long-term supply agreements***

The Company incurred pre-production engineering, development and tooling costs related to products produced for its customers under future potential long-term supply agreements. Engineering, testing and other costs incurred in the design and development of production parts will be expensed as incurred.

***Research and development, net***

Research and development costs include personnel-related expenses associated with the Company's engineering personnel and consultants responsible for the design, development and testing of its products and allocated overhead. Research and development costs are expensed as incurred and are presented net of the amount of any grants the Company receives for research and development in the period in which the grant was received.

***Grants***

On August 19, 2021, the Company was awarded approximately $12,272 (£10,141) as part of a total $15,002 (£12,397) grant from the UK government. This grant is part of a $49,571 (£40,963) investment, coordinated through the Advanced Propulsion Centre ('APC'), in which REE will contribute approximately $46,397 (£38,340). The project runs from November 1, 2021 until July 2024. Funds spent on the project are claimed the month after each three month period and paid in the following month. The Company recognized APC's participation in research and development as a reduction from research and development expenses in the amount of zero, $3,636 and $4,667 for the years ended December 31, 2025, 2024 and 2023, respectively.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*I****sraeli severance pay***

Pursuant to Section 14 of Israel's Severance Compensation Law, 1963 ("Section 14"), the Israeli entity's employees are included under this section and entitled only to monthly deposits at a rate of 8.33% of their monthly salary, made on their behalf with insurance companies. Payments in accordance with Section 14 release REE Automotive Ltd. from any future severance payments in respect of those employees. As a result, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from severance obligation to employees once the amounts have been deposited, and the Company has no further legal ownership on the amounts deposited.

For the years ended December 31, 2025, 2024, and 2023, severance pay expenses amounted to $996, $987, and $1,069, respectively.

***Employee benefit plan – Defined contribution plan***

The Company maintains a defined contribution 401(k) retirement savings plan for its U.S. employees. Each participant in the 401(k) retirement savings plan may elect to contribute a percentage of his or her annual compensation up to a specified maximum amount allowed under U.S. Internal Revenue Service regulations. The Company matches employee contributions to a maximum of 4% of the participant annual compensation. For the years ended December 31, 2025, 2024, and 2023 the employer expenses related to the match amounted to $43, $81, and $106 respectively.

The Company maintains a privately administered pension insurance plan in the United Kingdom. Contributions to the plan are recognized as employee benefit expense when due. For the years ended December 31, 2025, 2024 and 2023, the Company matched employee contributions to a maximum of 6% of base salary of the participant annual compensation. For the years ended December 31, 2025, 2024 and 2023 the employer expenses related to the match amounted to $442, $515 and $538, respectively.

***Warranty liability***

Warranty liability provided to customers is accrued in accordance with management's estimate. No material claims were incurred for the years ended December 31, 2025, 2024 and 2023.

As of December 31, 2025, there was no warranty liability. As of December 31, 2024, the warranty liability amount was immaterial.

***Concentration of credit risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and non-current restricted cash.

The Company maintains its cash, cash equivalents and non-current restricted cash with high-quality financial institutions mainly in Israel, the U.S. and the U.K., and regularly monitors their composition and maturities.

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts and option contracts.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Stock-based compensation***

The Company accounts for share-based compensation to employees and non-employees in accordance with ASC 718, "Compensation — Stock Compensation", ("ASC 718"), which requires companies to estimate the fair value of equity-based payment awards on the date of grant based on the fair value of the awards granted.

The Company grants awards that vest upon the satisfaction of service condition.

For graded-vesting awards with no performance or market conditions, the Company recognizes the related share-based compensation expense on a straight-line basis over the requisite service period of the awards. The Company accounts for forfeitures as they occur.

Throughout the fiscal years ended December 31, 2024 and 2023 the Company has granted options with exercise price of up to $0.03. Throughout the fiscal year ended December 31, 2025 the Company did not grant options. The grant date fair value of the awarded options is measured based on the closing market price of the Company's Class A Ordinary shares on or immediately before the date of grant.

The Company measures the grant date fair value of its Restricted Share Units ("RSUs") based on the closing market price of the Class A Ordinary share on or immediately before the date of grant.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Fair value of financial instruments***

Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

A financial instrument's classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial instruments consist, among others, of cash equivalents, other accounts receivable and prepaid expenses, short-term loan, trade payables and other accounts payable and accrued expenses. These financial instruments are stated at their carrying value, which approximates their fair value due to the short time to the expected receipt or payment date. The Company considers its pre-funded warrants to be Level 2. The warrants and derivative liabilities are measured at fair value using Level 3 inputs (see also Note 13, Note 14 and Note 15).

***Convertible Promissory Notes***

The Company applies ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). In accordance with ASC 470-20 the Company first allocates the proceeds to freestanding liability instrument that are measured at fair value at each reporting date, based on their fair value. The remaining proceeds are allocated between the convertible debt and any bifurcated embedded derivatives. In accordance with ASC 815 "Derivatives and Hedging" ("ASC 815"), the Company bifurcates embedded derivatives that require bifurcation and accounts for them separately from the convertible debt.

The Company applies ASC 815, "Derivatives and Hedging" to all features related to convertible debt. When features meet the definition of a derivative, are not clearly and closely related to the characteristics of the convertible debt, and do not qualify for any scope exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The Company has recorded embedded derivative liabilities related to the convertible promissory notes. Bifurcated embedded derivatives are presented in the same line item as the host debt instrument.

For further information regarding the convertible promissory notes, see Note 13.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Warrants liability***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance. The assessment considers whether the warrants and pre-funded warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, are indexed to the Company's own shares and whether the warrants are eligible for equity classification under ASC 815-40. This assessment is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding.

Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value through earnings at each balance sheet date thereafter.

The Company classified the warrants and pre-funded warrants as a liability pursuant to ASC 815-40 since they do not meet the equity classification conditions. Accordingly, the Company measured the warrants and pre-funded warrants at their fair value. The warrants and pre-funded warrants liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statement of comprehensive loss.

For information regarding the Company's outstanding warrants, see Note 14.

***Basic and diluted loss per share***

The Company's basic net loss per share is calculated by dividing net loss attributable to Class A Ordinary shares by the weighted-average number of shares of Class A Ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Ordinary shares are anti-dilutive. The Company's Class B Ordinary shares include voting rights only and therefore are excluded from the loss per share calculation.

The potentially dilutive securities that were excluded from the computation for the years ended December 31, 2025, 2024 and 2023 were 6,722,334, 7,455,172 and 2,679,771, respectively, because including them would have been anti-dilutive.

***Income taxes***

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that a portion or all of the deferred tax assets will not be realized.

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. This standard contains a two-step approach to recognizing and measuring a liability for uncertain tax positions.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (on a cumulative basis) likely to be realized upon ultimate settlement.

***Revenue recognition***

Under ASC 606 "Revenue from contracts with customers", the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for contracts that are within the scope of the standard, the Company perform the following five steps: (1) Identify the contract(s) with a customer, (2) Identify the performance obligations in the contract, (3) Determine the transaction price, (4) Allocate the transaction price to the performance obligations in the contract and (5) Recognize revenue when (or as) the entity satisfies a performance obligation.

The Company recognizes revenue at the time when its customer obtains control of the promised goods which is when the performance obligation is satisfied by transferring the promised product to the customer. Revenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities (e.g., sales tax and other indirect taxes). The Company does not offer right of return to its contracts.

The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring the products to the customer.

Payment terms generally are up to 30 days. The Company applies the practical expedient and does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

For contracts in which the performance obligation has an original expected duration of one year or less, the Company does not provide disclosure on its remaining performance obligations.

Deferred revenues are recognized as (or when) the Company receives consideration prior to performing its obligations under the contract.

In April 2021, the Company entered into a strategic development agreement with a customer, pursuant to which the Company agreed to develop and supply REE platform prototypes. Revenue related to the agreement was deferred and will be recognized upon satisfying performance obligations in the contract. The Company's contracts with customer prepayment terms do not include a significant financing component because the primary purpose is not to receive financing from the customers. For the year ended December 31, 2023, the Company recorded revenues in the amount of $943 upon the termination of the agreement with the customer and recorded capitalized expenses in the amount of $943 in cost of revenues.

In addition, for the years ended December 31, 2025, 2024 and 2023 the Company recorded revenues from sales of SDV prototypes in the aggregate amount of zero, $183 and $665, respectively. Revenue from sales of SDV prototypes is recognized at a point in time when the control of the goods is transferred to the customer, upon delivery. For the year ended December 31, 2025, the Company recorded revenues from SDV development services in the amount of $1,297. Revenue from SDV development services is recognized over time as the services are rendered, based on the progress toward completion of the performance obligations. During the year ended December 31, 2025, the Company provided SDV engineering and development services to certain costumers, including engineering, planning and system integration activities, and recognized revenue of $1,297 upon achievement of contractually defined milestones.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Cost of revenues***

Cost of revenues primarily comprised from the cost of SDVs and includes direct parts, material and labor costs, share-based compensation expenses, production overhead (e.g., depreciation of machinery and tooling), shipping and logistics costs, and reserves including for estimated warranty costs related to the production of SDVs and adjustments to write down the carrying value of inventory when it exceeds its estimated NRV.

***Segment information***

The Company identifies operating segments in accordance with ASC Topic 280, "Segment Reporting" as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker ("CODM"), or decision-making group, in making decisions regarding resource allocation and evaluating financial performance. The Company operates in one operating and reportable segment. Financial information is evaluated regularly by the CODM, who is the Company's CEO, in deciding how to allocate resources and assessing performance. The Company's CODM allocates resources and assesses performance based upon discrete financial information at the consolidated level.

***R&D tax credit***

The research & development (R&D) tax credit in the United Kingdom is a United Kingdom tax relief designed to encourage innovation and increase spending on R&D activities for companies operating in the United Kingdom. This is relevant to the Company's subsidiary engineering center in the United Kingdom. Generally, the United Kingdom R&D tax credit offsets the income tax to be paid and the remaining portion (if any) will be refunded. The R&D tax credit is calculated based on the claimed volume of eligible R&D expenditures by the Company. As a result, the R&D tax credit is presented as a deduction from "research and development expenses" in the consolidated statements of income (loss). During the years ended December 31, 2025, 2024 and 2023, the Company recorded R&D tax credit benefits in the amount of $2,368, $5,697 and $769, respectively.

***Recently adopted accounting pronouncements***

As an "emerging growth company," the Jumpstart Our Business Startups Act ("JOBS Act") allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 during the year ended December 31, 2025, on a prospective basis. The adoption of this ASU affected only the Company's disclosures to its consolidated financial statements (see note 12).

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Recently issued accounting pronouncements, not yet adopted***

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This amendment introduces a practical expedient for the application of the current expected credit loss ("CECL") model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this amendment on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update establishes the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements. The ASU was updated to improve the navigability of the required interim disclosures within ASC No. 270 and to clarify when the guidance applies. This ASU is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU are required to be adopted for interim reporting periods beginning after December 15, 2027, with early adoption permitted, and may be applied either through a prospective or retrospective approach. The Company is currently evaluating the effect of adopting the ASU on its condensed consolidated financial statement disclosures.

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<u>[**Table of Contents**](#ib754f8dbfd9a410ebea6292869b01926_7)</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 3. INVENTORY**

Inventory consisted of the following at December 31, 2025 and 2024, respectively:

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| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Raw materials and work in progress | $— | $3075 |
| Total inventory | $— | $3075 |

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During the years ended December 31, 2025, 2024 and 2023 the Company recorded inventory write-downs of $15,936, $2,276 and $1,970 respectively, to reduce inventories to their net realizable values and for any excess or obsolete inventories.

**NOTE 4. OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES**

Other current accounts receivable and prepaid expenses consisted of the following at December 31, 2025 and 2024, respectively:

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| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Government authorities | $355 | $1501 |
| Prepaid expenses | 275 | 1037 |
| Advances to suppliers | 5 | 4587 |
| Other receivables | 56 | 33 |
| Total | $691 | $7158 |

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 5. LEASES**

The Company's lease agreements include offices and production facilities, as well as leases for vehicles and other equipment, all classified as operating leases. Certain leases include renewal options that are under the Company`s sole discretion. The renewal options were included in the right-of-use assets and liabilities calculations if it was reasonably certain that the Company will exercise the option.

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| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Operating lease cost | $4687 | $4046 | $3598 |
| Short-term lease cost | 177 | 146 | 165 |
| Variable lease cost | 261 | 193 | 170 |
| Sublease income | $(975) | $(572) | $— |
| Total lease cost | $4150 | $3813 | $3933 |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Operating cash flows for operating leases, net: | $4964 | $4254 | $2976 |
| Weighted average remaining operating lease term (years) | 6.10 | 6.26 | 7.39 |
| Weighted average discount rate operating lease | 6.62% | 6.55% | 6.04% |

---

The following table outlines maturities of the Company's lease liabilities as of December 31, 2025:

---

| | |
|:---|:---|
| | **Operating Leases** |
| 2026 | $3435 |
| 2027 | 2502 |
| 2028 | 2457 |
| 2029 | 2458 |
| 2030 | 2465 |
| 2031 and thereafter | 4463 |
| Total undiscounted lease payments | $17780 |
| Less: |  |
| Imputed interest | 3449 |
| Present value of lease liabilities | $14331 |

---

For the years ended on December 31, 2025, 2024 and 2023 the Company recorded loss on lease termination in the amount of $439, zero and zero, respectively.

For information regarding developments subsequent to the reporting date related to the Company's lease agreements in the UK and the U.S., see Note 20, Subsequent Events.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 6. PROPERTY AND EQUIPMENT, NET**

Property and equipment, net at December 31, 2025 and 2024, respectively, consists of:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Computers and software | $4211 | $4208 |
| Furniture and fixtures | 1286 | 1291 |
| Machinery and equipment | 3442 | 14011 |
| Vehicles |  | 173 |
| Demonstration vehicles | 720 | 800 |
| Leasehold improvements | 1308 | 1308 |
| Construction in progress (1) |  | 7123 |
|  | $10967 | $28914 |
| Less - accumulated depreciation and amortization | (7110) | (6804) |
| Total | $3857 | $22110 |

---

(1) &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress as of December 31, 2024, consisted of capitalized costs of production tooling, machinery and equipment related to the UK Launch Factory located in Coventry, United Kingdom and assembly facility located in the United States.

Depreciation expenses of property and equipment were $3,090, $3,182, and $2,255 for the years ended December 31, 2025, 2024, and 2023, respectively.

Throughout the years ended December 31, 2025 and 2024, a total cost of $330 and $208, respectively, and a total accumulated depreciation of $221 and $76, respectively, were disposed from the consolidated balance sheets.

During the year ended December 31, 2025, the Company identified events and changes in circumstances indicating that the carrying value of certain long-lived assets may not be recoverable and, accordingly, performed impairment assessments in accordance with ASC 360, as described in note 2 and note 15. Upon completion of such assessments, the Company impaired certain property, plants and equipment, including, but not limited to, machinery, equipment and assets under construction. For the year ended December 31, 2025, the Company recorded impairment charges of long-lived assets in the amount of $24,277, presented under other expenses.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 7. CREDIT FACILITY**

On August 14, 2023, the Company entered into an agreement with a leading Israeli commercial bank to establish a revolving credit line facility (the "Credit Facility") in the amount of $15,000 which the bank is committed to until December 31, 2024. In December 2023, the terms of the Credit Facility were extended through June 30, 2025. In March 2024, the terms of the credit facility were extended through December 31, 2025. Outstanding loans under the Credit Facility bear a variable interest at the rate of Monthly Term Secured Overnight Financing Rate ("SOFR") plus an annual margin of 3.5%. The interest is payable on a monthly basis. Under the terms of the Credit Facility, the Company is required to keep unsecured deposits in the aforementioned bank in the amount of $20,000. In November 2024, the agreement was amended to increase the Credit Facility amount to $18,000 while the unsecured deposit amount was reduced to $18,000. Under certain terms, the bank has the right to offset loans drawn under the Credit Facility with the deposits kept in the bank. The Company is charged a fee of 0.25% per annum on amounts available for draw that are undrawn under the Credit Facility.

As of December 31, 2025 and 2024 the Company has utilized zero and $18,000, respectively, under the Credit Facility for a short term loan. In January 2025, the short term loan was fully repaid by the Company. As of December 31, 2024 the annual interest rate for the loan utilized under the Credit Facility was 7.86%. The Credit Facility expired on December 31, 2025 and was not renewed thereafter.

For the years ended December 31, 2025 and 2024, the Company recorded interest expenses in the amount of $19 and $41, respectively.

**NOTE 8. OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES**

Other accounts payables and accrued expenses consisted of the following at December 31, 2025 and 2024, respectively:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Employees and payroll accruals | $4125 | $5821 |
| Professional fees | 386 | 128 |
| Non recurring engineering | 585 | 417 |
| Government authorities | 70 | 261 |
| Other payables | 2171 | 1339 |
| Total | $7337 | $7966 |

---

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES**

***Commitments***

The following table summarizes REE's contractual obligations and other commitments for cash expenditures as of December 31, 2025, and the years in which these obligations are due. Certain obligations are reflected in the balance sheet, while other are disclosed as future obligations. This table is not meant to represent a forecast of the Company's total cash expenditures for any of the periods presented.

---

| | |
|:---|:---|
| | **Purchase commitments** |
| 2026 | $1603 |
| Total | $1603 |

---

Open purchase orders that are cancellable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding agreements.

***Guarantee***

A long-term guarantee was issued by a bank in the amount of approximately $1,973 was recorded within non-current restricted cash to secure the Company's office and production locations. See also note 20, subsequent events.

***Royalty bearing grants***

Until 2018, the Company's research and development efforts had been partially financed through grants from the Israeli Innovation Authority ("IIA") for the technology related to the Softwheel legacy activity. Under the research and development agreements with the IIA, if the Company does not generate revenues from products developed with funds provided by the IIA, the Company is not obligated to pay royalties or repay the grants. As of December 31, 2025, the Company's remaining contingent obligation with respect to royalty-bearing participation received or accrued, net of royalties paid or accrued, were $741. Since the Company does not anticipate generating revenues from products developed with funds provided by the IIA, except with respect to a change of control transaction, transfer of assets, or similar transaction, which may trigger repayment under certain facts and circumstances, it does not expect to make any repayments to the IIA.

In 2018, the Company signed a research and development agreement with the Israel-United States Binational Industrial Research and Development Foundation ("BIRD"). Under this agreement, if the Company does not generate revenues from products developed with funds provided by the BIRD, the Company is not obligated to pay royalties or repay the grants. As of December 31, 2025, the BIRD contingent liability with respect to royalty-bearing participation received or accrued, net of royalties paid or accrued, totaled $433. Since the Company does not anticipate to generating revenues from products developed with funds provided by the BIRD, except in the event of a proposed transfer of ownership of intellectual property, and/or technology relating to products developed with funds provided by the BIRD and/or the products themselves, which may trigger repayment under certain facts and circumstances, it does not expect to make any repayments to the BIRD.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES** (cont.)

***Legal proceedings***

On December 16, 2022, a lawsuit was filed to the court in Texas, Austin Division, against REE and its US subsidiaries (in this section, the "Group"), by OSR Group alleging that the Group stole OSR Group's trade secrets. The OSR Group requested the court to grant them the following: (a) a request for an injunction pertaining to the use of such trade secrets; (b) affirmative action to protect the OSR Group's alleged trade secrets; (c) the establishment of a constructive trust to transfer all the relevant Group's legal title and intellectual property to the OSR Group; (d) an award to the OSR Group of monetary damages in an amount of no less than USD 2.6 billion together with exemplary damages in an amount of no less than USD 5.2 billion, such amounts to be determined in the trial, plus interest; (e) an award to the OSR Group for all of its expenses relating to the action; (f) an award to the OSR Group of pre-judgment interest on all damages; and (g) an award of other relief as the court deem fit. On January 4, 2024, the Magistrate Judge entered a Report and Recommendation ("Report"), recommending dismissal of the lawsuit based on forum non conveniens, such that OSR could pursue its claims in an Israeli forum rather than in the United States, assuming that OSR chooses to do so after dismissal. On August 26, 2024, the District Judge adopted the Report, granting REE's motion to dismiss for forum non conveniens and ordering the clerk of the court to close the case. On September 26, 2024, OSR filed a Notice of Appeal to the United States Court of Appeals for the Fifth Circuit, appealing the District Judge's adoption of the Report and dismissal of the case for forum non conveniens. On October 10, 2025, the Fifth Circuit affirmed the District Court's dismissal for forum non conveniens. On November 12, 2025, the Fifth Circuit denied OSR's petition for rehearing. On February 10, 2026, the deadline for OSR to seek appellate review before the U.S. Supreme Court expired. To the Company's knowledge, OSR did not file a motion requesting an extension of time to pursue such review. As of December 31, 2025 and December 31, 2024 the Company did not record a loss contingency.

On August 27, 2025, Schwab Industries, Inc. filed a demand for arbitration with the American Arbitration Association in Michigan against the Company and its U.S. subsidiary, alleging failure to pay amounts purportedly due under a contract. The Company has asserted counterclaims alleging, among other things, mismanagement, unauthorized price increases, errors, unjustified advance payment requests, and failure to perform under the contract. On April 16, 2026, the parties entered into a settlement agreement under which the Company agreed to make a payment to Schwab in exchange for a release of the relevant parties from all claims. Accordingly, as of December 31, 2025 the Company recorded a loss contingency.

Notwithstanding the foregoing, from time to time, REE may become involved in actions, claims, suits, and other legal proceedings, such as requests to disclose information before initiating derivative cases, arising in the ordinary course of the Company's business, including but not limited to claims related to employment, intellectual property and shareholder matters.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 10. SHAREHOLDERS' EQUITY**

***Share split***

On October 18, 2023, the Company effected a reverse share split of the Company's Class A ordinary shares and Class B ordinary shares at the ratio of 1-for-30, such that (i) each thirty (30) Class A ordinary shares, without par value, were consolidated into one (1) Class A ordinary share, without par value and (ii) each thirty (30) Class B ordinary shares, without par value, were consolidated into one (1) Class B ordinary share, without par value. As a result, all Ordinary Class A shares, Ordinary Class B shares, options for Ordinary Class A Shares, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these consolidated financial statements as if the stock reverse split had been in effect as of the date of these consolidated financial statements. Following the reverse share split an additional amount of 15,890 shares was issued to reflect rounding differences resulting from fractional Class A ordinary shares.

***Ordinary shares rights***

Each Class A Ordinary Share has the right to exercise one vote, to participate pro rata in all the dividends declared by the Board of Director's of the Company and the rights in the event of the Company's winding up are to participate pro-rata in the total assets of the Company.

Class B Ordinary Shares, which are held by the founders, are entitled to cast ten votes per each Class B Ordinary Share held as of the applicable record date. Specific actions set forth in REE's Amended and Restated Articles may not be effected by REE without the prior affirmative vote of 100% of the outstanding REE Class B Ordinary Shares, voting as a separate class. Each Class B Ordinary Shares will be automatically suspended upon the tenth anniversary of the closing of the Merger. There are no economic or participating rights to this class of shares.

***Equity transactions***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.On July 14, 2023, the Company entered into the H.C. Wainwright Agreement with H.C. Wainwright, pursuant to which the Company may offer and sell, at its option, up to $35,000 of Class A Ordinary Shares through an "at-the-market" equity program under which H.C. Wainwright act as the Company's sales agent. Throughout the years ended December 31, 2025 and 2024, the Company sold zero and 310,822 Class A Ordinary Shares, respectively, under the ATM Sales Agreement for total net proceeds of zero and $235, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.On March 1, 2024, the Company executed an underwriting agreement (the "Underwriting Agreement") between the Company and Roth Capital Partners LLC (the "Underwriter") pursuant to which the Company conducted an underwritten public offering (the "Public Offering") of 2,000,000 Class A Ordinary Shares, no par value per share (the "Ordinary Shares"), at a purchase price of $6.50 per share, for aggregate gross proceeds of approximately $13,000. Pursuant to the terms of the Underwriting Agreement, the Company has also granted the Underwriter a 20-day option to purchase Ordinary Shares of up to 300,000 Ordinary Shares, or 15% of the number of Ordinary Shares sold in the Public Offering, solely to cover over-allotments, if any. On March 4, 2024, the Underwriter exercised its overallotment option to purchase an additional 300,000 Ordinary Shares in full. The Public Offering, including the shares issuable upon the exercise of the overallotment option, closed on March 5, 2024 (the "Closing Date"). At Closing Date, the Company issued 2,300,000 Ordinary Shares, for aggregate net proceeds of approximately $14,135 to the Company, after deducting the underwriting discounts and transaction costs payable by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.On September 15, 2024, the Company has entered into Securities Purchase Agreements (the "SPAs") with certain investors for the issuance of 7,362,930 of its Class A Ordinary Shares at a price of $4.122 per share. In lieu of Class A Ordinary Shares, certain investors purchased pre-funded warrants exercisable into 3,639,893 Class A Ordinary Shares at a purchase price of $4.121 per pre-funded warrant. The purchase price per share of each pre-funded warrant represents the per share offering price of $4.122 per Class A Ordinary Share, minus the $0.001 per share exercise price of such pre-funded warrant. The total net proceeds were approximately $44,877 after deducting transaction costs, of which $29,877 was recorded in the additional paid-in capital and the reminder was recorded as pre-funded warrants liability.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 10. SHAREHOLDERS' EQUITY** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For further information, see Note 14 (c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.On December 23, 2024, the Company issued 72,780 Class A Ordinary Shares as a result of the partial conversion of the Convertible Notes, as described in Note 13.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.During March 2025, the Company conducted two separate registered direct offerings with certain institutional and accredited investors, providing for a combined issuance of an aggregate of 8,595,807 Class A Ordinary Shares, no par value per share. The Company sold its Class A Ordinary Shares in both offerings at a purchase price of $4.25 per ordinary share, resulting in aggregate gross proceeds of approximately $36.532 million and net proceeds of approximately $34.361 million after deducting each of the respective placement agent fees and other estimated offering expenses payable by the Company.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 11. SHARE-BASED COMPENSATION** 

***Share option plan***

In July 2021, the Board of Directors approved the REE Automotive Ltd. 2021 Share Incentive Plan (the "2021 Plan"). The 2021 Plan provides for the grant of options, ordinary shares, restricted shares, restricted share units ("RSUs"), stock appreciation rights, other cash-based awards, and other share-based awards which may be granted to employees, officers, non-employee consultants and directors of the Company. The Shares reserved under the 2021 Plan will automatically increase on January 1 of each year during the term of the 2021 Plan, commencing on January 1 of the year following the year in which the 2021 Plan became effective, in an amount equal to 5% of the total number of Class A Ordinary shares, as defined in the 2021 Plan, on December 31 of the preceding calendar year, unless the Board of Directors determines, at its discretion, to reduce or eliminate such increase .As of December 31, 2025, the maximum aggregate number of Class A Ordinary shares that may be issued pursuant to awards under this 2021 Plan is 4,724,864.

As of December 31, 2025, 1,884,364 Class A Ordinary Shares were available for future grants under the 2021 Plan. Any share underlying an award that is cancelled, terminated or forfeited for any reason without having been exercised will automatically be available for grant under the 2021 Plan.

In general, options granted under the Plan vest over a three-year period and expire 10 years from the date of grant. The expiration date may not be later than 10 years from the date of grant unless determined otherwise by the board of directors. If a grantee leaves his or her employment or other relationship with the Company, or if his or her relationship with the Company is terminated without cause (and other than by reason of death or disability, as defined in the Plan), the term of his or her unexercised options will generally expire 90 days after the date of termination, unless determined otherwise by the Company.

***Options granted to employees and non-employees***

The following table summarizes option balances as of December 31, 2025, and changes during the year then ended:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of options** | **Weighted-average exercise price** | **Weighted-average remaining contractual term (in years)** | **Aggregate intrinsic value (in thousands) (1)** |
| Outstanding at January 1, 2025 | 3806089 | $4.58 | 5.78 | $26086 |
| Exercised | (44361) | $0.01 |  |  |
| Forfeited | (186820) | $39.83 |  |  |
| Outstanding at December 31, 2025 | 3574908 | $2.80 | 4.74 | $1642 |
| Exercisable at December 31, 2025 | 3387972 | $2.95 | 4.54 | $1505 |

---

<sup>(1)</sup> Intrinsic value is calculated as the difference between the fair value of REE's Class A ordinary shares as of the end of each reporting period and the exercise price of the option.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 11. SHARE-BASED COMPENSATION** (cont.)

The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023 was $4.65, and $10.86, respectively. No options were granted during the year ended December 31, 2025.

The weighted average exercise price of the Company's options granted during the years ended December 31, 2024 and 2023 was $0.00 and $0.03, respectively. No options were granted during the year ended December 31, 2025.

The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $38, $561 and $962, respectively.

***RSUs activity***

The following table summarizes RSUs activity:

---

| | | |
|:---|:---|:---|
| | **Number of RSUs outstanding** | **Weighted-average ordinary fair value per share at grant date** |
| Outstanding at January 1, 2025 | 1582803 | $5.73 |
| Granted | 129186 | 6.16 |
| Vested | (624869) | 6.95 |
| Forfeited | (136532) | 5.85 |
| Outstanding at December 31, 2025 | 950588 | $4.97 |

---

The weighted average grant date fair value of restricted share units granted during the years ended December 31, 2025, 2024 and 2023 was $6.16, $4.27 and $9.67, respectively.

The total fair value of RSUs, as of their respective release dates, was $1,359, $5,522 and $1,341 during the years ended December 31, 2025, 2024 and 2023, respectively.

***Equity-based compensation expense***

The total equity-based compensation expense recognized in the Company's consolidated statements of operations are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Research and development | 2444 | 4205 | 8397 |
| Selling, general and administrative | 2623 | 5380 | 7881 |
|  | $5067 | $9585 | $16278 |

---

As of December 31, 2025, unrecognized compensation costs related to share options and unvested RSUs were $843 and $3,737, respectively. These costs are expected to be amortized over a weighted average remaining period of 1.2 and 1.53, respectively.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 12. INCOME TAXES**

***Tax rates applicable to the Company***

The taxable income of Israeli company is subject to a corporate tax rate of 23% for the years 2025, 2024 and 2023. The Company's subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.

Loss before taxes is comprised as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Domestic (Israel) | $(32706) | $(113276) | $(107889) |
| Foreign | (25093) | 3585 | (7679) |
| Total | $(57799) | $(109691) | $(115568) |

---

***Deferred income taxes***

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company's deferred tax assets are comprised of operating loss carryforward and other temporary differences.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 12. INCOME TAXES** (cont.)

The following table presents the significant components of the Company's deferred tax assets and liabilities:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Deferred tax assets: |  |  |
| Operating loss carryforward | $106161 | $73665 |
| Share based compensation | 94764 | 94527 |
| Research and development | 15038 | 15449 |
| Accrued social benefits and other | 471 | 559 |
| Other costs | 1067 | 442 |
| Operating lease liability | 2992 | 4085 |
| Property and equipment, net | 1819 |  |
| Deferred tax asset before valuation allowance | $222312 | $188727 |
| Valuation allowance | (219013) | (182851) |
| Total deferred tax assets | $3299 | $5876 |
| Property and equipment, net | (26) | (2923) |
| Operating lease right-of-use asset | (3273) | (4735) |
| Deferred tax liabilities | $(3299) | $(7658) |
| Net deferred taxes | $— | $(1782) |

---

Management currently believes that because the Company and its subsidiaries have a history of losses on a consolidated basis it is more likely than not that the deferred tax regarding the loss carry forward and other temporary differences will not be realized in the foreseeable future.

The net changes in the total valuation allowance for each of the years ended December 31, 2025 and 2024, are comprised as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Opening balance | $182851 | $164848 |
| Additions during the year | 36162 | 18003 |
| Ending balance | $219013 | $182851 |

---

Taxes on income (tax benefit) are comprised as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Current | $(210) | $(330) | $(749) |
| Deferred | (1782) | 2393 | (611) |
|  | $(1992) | $2063 | $(1360) |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Domestic | $57 | $84 | $92 |
| Foreign | (2049) | 1979 | (1452) |
|  | $(1992) | $2063 | $(1360) |

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 12. INCOME TAXES** (cont.)

***Uncertain tax positions***

A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Opening balance | $— | $685 |
| Tax positions reversed in current year related to previous years |  | (685) |
| Tax positions taken in current year |  |  |
| Accrued interest |  |  |
| Ending Balance | $— | $— |

---

Substantially all the balance of unrecognized tax benefits, if recognized, would reduce the Company's annual effective tax rate. The Company recognizes interest and penalties, if any, related to unrecognized tax positions in income tax expense. The Company believes that its income tax filing positions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.

***Reconciliation of the theoretical taxes on income (tax benefit) to the actual taxes on income (tax benefit)***

The reconciliation of the amount that would result from applying the Company's statutory tax rate in Israel to net loss before income tax to the reported amount of taxes on income (tax benefit) is as follows:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
| | **Amount** | **Percent** |
| **<u>Tax at Israeli statutory rate</u>** | (13294) | 23% |
| **<u>Foreign Tax Effects</u>** |  |  |
| **UK** |  |  |
| Change in valuation allowance | 3945 | (7)% |
| Other | (421) | 1% |
| **US** |  |  |
| Change in valuation allowance | 828 | (1)% |
| Other | 82 | 0% |
| **Other foreign jurisdictions** | 1 | 0% |
| Change in valuation allowance | 18184 | (31)% |
| **Non taxable or non deductible items** |  |  |
| Share-based payment awards | 1107 | (2)% |
| Warrants and derivatives remeasurements | (11978) | 21% |
| Other | 277 | 0% |
| **<u>Tax credit</u>** |  |  |
| R&D Tax Credit | (592) | 1% |
| **<u>Other Adjustments</u>** | (131) | 0% |
| Effective tax rate | $(1992) | 3% |

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 12. INCOME TAXES** (cont.)

For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the primary reconciling items between the Company's statutory tax rate and the effective tax rate were nondeductible expenses and the provision for a valuation allowance against deferred tax assets related to tax benefits from carryforward tax losses, due to uncertainty regarding their realization.

***Tax paid during the year for taxes on income***

---

| | |
|:---|:---|
| | **Year ended December 31, 2025** |
| Domestic (Israel) | $62 |
| Foreign | 17 |
| Tax paid during the year for taxes on income | $79 |

---

***Tax assessments***

The Company has subsidiaries around the world subject to tax in the jurisdictions in which they operate. The significant jurisdictions in which the Company's subsidiaries are subject to tax are Israel, the U.S, and the U.K.

Income tax returns are open for examination for the tax years 2020-2025 in Israel, 2015-2025 in the U.S., and 2021-2025 in the U.K. In Israel, the Company is currently undergoing a routine Israeli withholding tax audit by the Israeli Tax Authority for the tax years 2020 through 2023. As a global organization, the Company may be subject to a variety of transfer pricing challenges by taxing authorities in various jurisdictions. While management believes that adequate provision has been made in the consolidated financial statements for any potential assessments that may result from tax examinations for all open tax years, the completion of tax examinations for open years may result in changes to the amounts recognized in the consolidated financial statements.

***Net operating loss carryforward***

As of December 31, 2025, the Company and its subsidiaries had net operating carry forward losses for tax purposes which may be carried forward and offset against taxable income in the future for an indefinite period.

---

| | |
|:---|:---|
| **Name of Subsidiary** | **Net Operating Loss Carryforwards** |
| REE Automotive Ltd | $460005 |
| REE Automotive UK Limited | $643 |
| REE Automotive USA Inc. | $864 |
| REE Automotive Japan K.K. | $84 |

---

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 13. CONVERTIBLE PROMISSORY NOTES** 

On November 27, 2023, the Company entered into Securities Purchase Agreements ("SPAs") with certain investors, pursuant to which the Company agreed to issue and sell Convertible Promissory Notes (the "Notes") in the principal amount of $8,000, in the aggregate, at a conversion price of $5.09 per share (subject to adjustment as provided therein), and Warrants to purchase up to an aggregate of 1,571,710 of the Company's Class A Ordinary Shares at an exercise price of $4.42 per share (subject to adjustment as provided therein). Closing under these SPAs occurred on December 3, 2023, pursuant to which the above Notes and Warrants were issued to the applicable shareholders.

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 at a conversion price of $5.74 per share (subject to adjustment as provided therein), and additional Warrants to purchase up to 130,662 Class A Ordinary Shares, at an exercise price of $5.74 per share (subject to adjustment as provided therein). Closing under this SPA occurred on December 20, 2023, pursuant to which the above Notes and Warrants were issued to the applicable shareholder.

Pursuant to the SPAs, the Notes have a five-year term since issuance and bear interest at 10% per annum, compounding annually. The Notes are not prepayable before maturity and are convertible at a price subject to customary adjustments and anti-dilution protections, with a minimum conversion price of $1.02 and $1.15 per share, respectively.

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, 2025 and 2024, no events of default have occurred.

On December 23, 2024, the Company received a notice of conversion for $300 of the principal amount, including accrued interest, of the Notes. As a result, the Company issued 72,780 Class A Ordinary shares at conversion price of $4.122.

The Warrants to purchase up to 1,571,710 Class A Ordinary Shares are exercisable at an exercise price of $4.42 per Class A Ordinary Share (subject to customary adjustments) and will have a term of five-years from the date of issuance, which was December 3, 2023. The Warrants to purchase up to 130,662 Class A Ordinary Shares are exercisable at an exercise price of $5.74 per Class A Ordinary Share (subject to customary adjustments) and will have a term of five-years from the date of issuance, which was December 20, 2023.

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. As of December 31, 2025 and 2024 the amortized cost of the debt host was $3,706 and $1,883, respectively.

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 14. WARRANT LIABILITIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Pursuant to the Merger Agreement, the Company assumed warrants previously issued by 10X Capital consisting of 183,333 Private Placement Warrants and 335,417 Public Warrants, which were converted into warrants to purchase 518,750 Class A ordinary shares. The warrants to purchase 518,750 Class A Ordinary Shares gave the holder the right to purchase such shares at a fixed amount for a period of five years subject to the terms and conditions of the warrant agreement.

In September 22, 2022, a total of 2 Public Warrants were exercised into 2 Class A Ordinary shares of the Company.

On September 22, 2022, the Company completed a registered exchange offer (the "Exchange Offer") for its 518,750 outstanding warrants. A total of 434,445 warrants were exchanged for 86,890 Class A ordinary shares at an exchange ratio of 6.00 Class A Ordinary shares per warrant, which were settled on October 4, 2022. In connection with the Exchange Offer, the Company entered into Amendment No. 1 to the Warrant Agreement, dated September 23, 2022, granting the Company the right to mandatorily exchange the remaining 84,303 warrants for Class A ordinary shares at an exchange ratio of 5.40 shares per warrant. On the same date, the Company exercised this right, resulting in the issuance of 15,192 Class A ordinary shares on October 11, 2022.

The change in fair value of warrant liabilities was recorded through the date of exchange as change in fair value of warrant liabilities within the consolidated statements of comprehensive loss. Additionally, the fair value of the warrant liability as of the exchange date of $3,104 was reclassified to additional paid-in capital within the consolidated balance sheets as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.As described in Note 13 above, on December 3, 2023 and December 20, 2023 (the" Closing Date") the Company agreed to issue and sell Warrants to purchase up to an aggregate of 1,571,710 and 130,662, respectively, of the Company's Class A Ordinary shares at an exercise price of $4.42 and $5.74, respectively, per share (subject to adjustments). As of December 31, 2025 1,702,372 Warrants are outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.On September 15, 2024, the Company has entered into Securities Purchase Agreements with certain investors for the issuance of Pre-Funded Warrants to purchase 3,639,893 at a price of $4.121 per pre-funded warrant. The purchase price per share of each pre-funded warrant represents the per share offering price of $4.122 per Class A Ordinary Share, minus the $0.001 per share exercise price of such pre-funded warrant. The total net proceeds from pre-funded warrants were $15,000. As of December 31, 2025, 3,639,893 pre-funded warrants are outstanding (see note 10 (c)).

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 15. FAIR VALUE MEASUREMENTS**

The following table presents information about the Company's assets and liabilities fair value at December 31, 2025 and 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| | **Level 1** | **Level 2** | **Level 3** |
| **Assets:** | | | |
| Money market fund | $910 | $— | $— |
| Total | $910 | $— | $— |
| Amounts included in: |  |  |  |
| Cash and cash equivalents | $910 | $— | $— |
| Total | $910 | $— | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| | **Level 1** | **Level 2** | **Level 3** |
| **Liabilities:** | | | |
| Derivative liabilities at fair value | $— | $— | $1124 |
| Warrants liability |  | 2675 | 522 |
| Total | $— | $2675 | $1646 |

---

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 15. FAIR VALUE MEASUREMENTS** (cont.)

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** |
| **Assets:** | | | |
| Money market fund | $28843 | $— | $— |
| Bank deposits |  |  |  |
| Total | 28843 |  |  |
| Amounts included in: |  |  |  |
| Cash and cash equivalents | $28843 | $— | $— |
| Short-term investments |  |  |  |
| Total | $28843 | $— | $— |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** |
| **Liabilities:** | | | |
| Derivative liabilities at fair value | $— | $— | $12875 |
| Warrants liability | $— | 32140 | 9010 |
| Total | $— | $32140 | $21885 |

---

***Fair value of warrants liability***

The Warrants issued as part of the SPAs mentioned in Note 13 were valued using Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. As part of the inputs used in the Black-Scholes model to determine the fair value of these Warrants, the expected volatility of the Class A Ordinary shares was estimated based on the historical volatility of the Company's own publicly traded shares.

The following table provides the inputs used for Level 3 fair value measurements of warrants liability:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| Stock price | $0.74 | $0.74 | $8.83 | $8.83 |
| Strike price | $4.42 | $5.74 | $4.42 | $5.74 |
| Term (in years) | 2.89 | 2.94 | 1.5 | 2.5 |
| Volatility | 122.22% | 122.90% | 97.80% | 116.20% |
| Risk-free rate | 3.62% | 3.63% | 4.19% | 4.30% |
| Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |

---

The pre-funded warrants mentioned in Note 14 are classified as Level 2 due to the use of observable market data for similar instruments. The fair value of the pre-funded warrants is determined to be consistent with the fair value of the Company's Class A Ordinary share due to the nominal exercise price.

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 15. FAIR VALUE MEASUREMENTS** (cont.)

***Derivative liability at fair value***

Derivative liability at fair value was valued using a Monte-Carlo simulation, which was considered to be a Level 3 fair value measurement. The Monte-Carlo simulation primary input utilized in determining the fair value of the Derivative liability was the expected volatility of the Class A ordinary shares. The expected volatility was based on the historical price of the Company's Class A ordinary shares.

The following table provides the inputs used for Level 3 fair value measurements of derivative liability:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| Stock price | $0.74 | $0.74 | $8.83 | $8.83 |
| Term (in years) | 2.89 | 2.94 | 1.5 | 2.5 |
| Volatility | 122.22% | 120.90% | 95.00% | 96.54% |
| Risk-free rate | 3.62% | 3.63% | 4.48% | 4.49% |
| Cost of Debt (Rd) | 15.72% | 15.96% | 7.64% | 7.64% |
| Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |

---

***Changes in the fair value of Level 3***

The following table presents the changes in the fair value of Level 3 warrants and derivative liabilities for the year ended December 31, 2025 and 2024:

---

| | |
|:---|:---|
| | **Total Level 3 Financial Liabilities** |
| Balance at December 31, 2024 | $21885 |
| Change in fair value of derivative liabilities at fair value | (11751) |
| Change in fair value of warrants liability | (8488) |
| Balance at December 31, 2025 | $1646 |

---

---

| | |
|:---|:---|
| | **Total Level 3 Financial Liabilities** |
| Balance at December 31, 2023 | $7526 |
| Change in fair value of derivative liabilities at fair value | 9143 |
| Partial conversion of convertible notes | (394) |
| Change in fair value of warrants liability | 5610 |
| Balance at December 31, 2024 | $21885 |

---

In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject long-lived assets to nonrecurring fair value measurements. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting impairment is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. In determining fair value, management utilized the market approach with Level 3 inputs (see Note 6).

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 16. FINANCIAL INCOME (EXPENSES), NET**

The components of financial income (expenses), net are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Interest income | $1523 | $2874 | $4488 |
| Foreign currency translation income (loss), net | (608) | 80 | (549) |
| Interest expenses | (959) | (924) | (80) |
| Income (loss) from derivatives remeasurement | 11751 | (9143) | 240 |
| Other expenses | (1049) | (699) | (171) |
| Financial income, net  | $10658 | $(7812) | $3928 |

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 17. BASIC AND DILUTED NET LOSS PER SHARE** 

The following table sets forth the computation of basic and diluted losses per share:

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Numerator: |  |  |  |
| Net loss for basic and diluted loss per share | $(55807) | $(111754) | $(114208) |
| Denominator: |  |  |  |
| Weighted average number of Class A Ordinary shares used in computing basic and diluted net loss per share | 32140321 | 15933291 | 10087691 |
| Basic and diluted net loss per Class A Ordinary shares  | $(1.74) | $(7.01) | $(11.32) |

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 18. REPORTING SEGMENT AND GEOGRAPHIC INFORMATION**

The Company operates as a single operating segment, with its Chief Executive Officer acting as the Chief Operating Decision Maker (CODM). The CODM regularly reviews the financial information on a consolidated basis and evaluates the segment's performance based on its operating loss and net loss, as reported in the consolidated statements of comprehensive loss. This financial metric is used to assess overall business performance, support resource allocation decisions and annual budgeting process.

The CODM does not review segment-specific asset information when evaluating the Company's performance, and therefore, such details are not presented.

The following table presents financial information with respect to the Company's single operating segment for the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Revenues | $1297 | $183 | $1608 |
| Cost of revenues non-recurring costs (1) | 15936 |  |  |
| Cost of revenues | 1635 | 3681 | 3270 |
| **Gross loss** | $**(16274)** | $**(3498)** | $**(1662)** |
| &nbsp;&nbsp;Research and development employee labor costs (excluding share based compensation expenses) | 19167 | 21821 | 24068 |
| &nbsp;&nbsp;Other research and development expenses | 24579 | 29131 | 37959 |
| &nbsp;&nbsp;Research and development share based compensation expenses | 2444 | 4205 | 8397 |
| &nbsp;&nbsp;Research and development non-recurring expenses (2) | (758) | (5697) | 12238 |
| &nbsp;&nbsp;Selling, general and administrative employee labor costs (excluding share based compensation expenses) | 7884 | 10609 | 11330 |
| &nbsp;&nbsp;Other selling, general and administrative expenses | 8990 | 10182 | 15707 |
| &nbsp;&nbsp;Selling, general and administrative share based compensation expenses | 2623 | 5380 | 7881 |
| &nbsp;&nbsp;Selling, general and administrative non-recurring expenses (3) | 491 |  | 650 |
| &nbsp;&nbsp;Impairment of long-lived assets (4) | 24716 |  |  |
| Total operating expenses | 90136 | 75631 | 118230 |
| **Operating loss** | $**(106410)** | $**(79129)** | $**(119892)** |
| &nbsp;&nbsp;Income (Loss) from warrants remeasurement | 37953 | (22750) | 396 |
| &nbsp;&nbsp;Financial income (expenses), net | 10658 | (7812) | 3928 |
| Net loss before income tax | (57799) | (109691) | (115568) |
| &nbsp;&nbsp;Taxes on income (tax benefit) | (1992) | 2063 | (1360) |
| Net loss | $**(55807)** | $**(111754)** | $**(114208)** |

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<u>**Table of Contents**</u>

**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 18. REPORTING SEGMENT AND GEOGRAPHIC INFORMATION** (cont.)

(1) Includes inventory write-downs to net realizable value and write-offs of inventory that currently has no operational use and one-time costs related to the pause in production.

(2) Includes one-time expenses related to reduction-in-force of R&D employees in the amount of $1,610 and R&D tax credit income in the amount of $2,368 during the year ended December 31, 2025 and R&D tax credit income during the year ended December 31, 2024.

(3) Includes one-time expenses related to reduction-in-force of SG&A employees during the year ended

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2025.

(4) Impairment charges of long-lived assets and loss from lease termination (see Note 5 and Note 6).

***Entity wide disclosures***

The Company attributes revenues from external customers to individual countries based on the customer's billing address.

Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Germany | $801 | $— | $— |
| Japan | $408 | $— | $— |
| France | $60 | $11 | $1398 |
| United States | 28 | 172 | 210 |
| Total | $1297 | $183 | $1608 |

---

Long-lived assets other than financial instruments attributed to countries that represent a significant portion of consolidated assets are as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Israel | 17% | 14% |
| United Kingdom | 53% | 64% |
| United States | 30% | 22% |

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 19. RELATED PARTY TRANSACTIONS**

***Agreements with Directors and Officers***

The Company has entered into the following agreements, which were approved by REE's board of directors in accordance with Israeli law, and also by REE's shareholders to the extent required by Israeli law.

*Joint Ownership Agreement for Company Vehicle.* During 2021, REE entered into an agreement with co-founder, director, and CEO Daniel Barel, relating to joint ownership of a company car. REE undertook to provide Daniel Barel with a company car, the value of which is an amount of up to NIS 300 thousand to be borne by REE. The excess cost of the car purchased for such purpose has been, and the ongoing fixed cost of the car will continue to be, borne by Daniel Barel. Such car is registered under REE's name, but Daniel Barel is entitled to an ownership portion of such car, corresponding to the excess acquisition cost thereof borne by him. In October 2025, the Company sold the company car in the amount of approximately $92 and recognized a capital gain of approximately $44. In accordance with the terms of the agreement, a portion of the proceeds from the sale, reflecting Mr. Barel's ownership interest in the vehicle, was remitted to Mr. Barel.

*Employment of Daniel Barel's Father-in-Law*. Since 2021 co-founder, director, and CEO Daniel Barel's father-in-law was employed by the Company in the selling, general, and administrative department. His employment with the Company ended during the year 2025.

*SpecterX Transaction*. On October 29, 2021, REE entered into a license agreement with SpecterX for secure file exchange services. The co-founder and CEO of SpecterX is the brother of co-founder, director, and CEO Daniel Barel. Daniel Barel is also the Chairman of the Board and an investor of SpecterX. Prior to entering into the agreement with SpecterX, REE conducted an extensive analysis of the available solutions, and determined that SpecterX best met REE's needs. On May 14, 2026, the Company reviewed and re-approved the license agreement with SpecterX.

*Agreement with Samvardhana Motherson International Limited ("Motherson") and REE.* In September 2024, the Company entered into SPAs, with Motherson included as one of the investors (see Notes 10(c) and 10(e)). Motherson has agreed to provide services relating to development, management, and optimization of the Company's supply chain which shall also include supplier development and management, part development cost management, contract and purchase order management, supply chain management including logistics, compliance and regulatory adherence, crises and risk management, resource planning, and information and technology system integration. The Company has agreed to pay Motherson, on a quarterly basis, an amount equal to fifty percent (50%) of certain cost improvements that would be achieved under the Motherson Agreement ("Quarterly Fees") in addition to annual payments for such resources required to be deployed by Motherson for the purpose of rendering the services under the Motherson Agreement, which shall be agreed upon by REE and Motherson. During the year ended December 31, 2025 the Company has incurred $256 under this agreement.

Transactions with the related parties were as follows:

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| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** | **2023** |
| Selling, general and administrative expenses, net | $80 | $126 | $41 |

---

Balances with the related parties were as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Employees and payroll accruals | $— | $51 |

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**REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025**

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

**NOTE 20. SUBSEQUENT EVENTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.In January 2026, the Company executed executed additional measures under its cost reduction plan, including an additional reduction-in-force. As of the date of this Report the Company incurred one-time expenses of $206 in connection with the reduction-in-force.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.In March 2026, the Company, through its UK subsidiary (REE Automotive UK Limited), entered into an agreement with the landlord and a third-party assignee, for the assignment of its lease agreement relating to its facility in Coventry, UK, originally expiring in 2032. As part of the assignment, the Company was released from its lease obligations effective March 10, 2026. The Company received a gross refund of its rent deposit in the amount of approximately $2,316 (£1,735). Pursuant to the assignment agreement with the third party, the Company provided a rent deposit in the amount of approximately $761 (£570) in connection with the assignee's lease, which will be released upon the expiration of the original lease term in 2032. In addition, the Company incurred certain costs in connection with the assignment of the lease in the amount of approximately $238 (£178).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.The Company, through its U.S. subsidiary (REE Automotive USA Inc.), had a leased facility in Austin, Texas with an original term through 2032. The Company has not utilized this facility in 2026 and the landlord retook possession of the property. In May 2026, the U.S. subsidiary entered into an agreement with its landlord to terminate the lease and the obligations therein. As a result, the lease agreement was terminated effective May 8, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.In April 2026, the Company entered into an agreement with the landlord to permit the use by a third party of approximately one-third of the total office space in its corporate offices in Glil-Yam, Israel. According to the agreement, the Company's lease payment and municipal tax payment will be reduced to approximately two-thirds of the original lease payment amount. Additionally, the third party will reimburse the Company for approximately one-third of its average monthly total utility expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.On May 5, 2026, REE Automotive UK Limited, a private limited company organized under the laws of England and Wales ("REEUK"), and a wholly-owned subsidiary of the Company, commenced an administration process in the United Kingdom. Immediately prior to this process, certain REEUK employees were transferred to REE Software UK, a newly organized entity in the United Kingdom. Following the appointment of an administrator, such administrator will seek to sell any or all of REEUK's assets to one or more third parties, in order to maximize recoveries for creditors, and to wind down any remaining operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.On April 27, 2026, the Company approved a financing arrangement with Daniel Barel, the Company's CEO, co-founder, and director, and Ahishay Sardes, the Company's CTO, co-founder, and director, pursuant to which each agreed to defer certain termination-related entitlements, including accrued vacation days and notice period payments, totaling an aggregate amount of approximately $1.3 million. The deferred amounts constitute bridge financing to the Company and accrue interest at an annual rate of 18%, with a minimum interest owed of 25% of the total deferred amounts. Such financing shall be payable only upon the consummation of a strategic transaction, with full priority rights for the deferred principal amounts *pari passu* with other creditors with respect to any interest owed. Such financing may also be payable in the event of a forced liquidation or voluntary wind-down of the Company, provided that there are sufficient assets available to make all or part of such payment. The Company determined that the arrangement constituted a non-extraordinary transaction with controlling shareholders under the Israeli Companies Law, 5759-1999.

## Exhibit 4.24

**Exhibit 4.24**

**<u>Summary of a Letter Agreement to the Company's Headquarters Lease Agreement</u>**

This summary outlines the main terms and provisions of a letter agreement, dated April 7, 2026 ("Letter Agreement"), to the original lease agreement, dated August 23, 2020, between REE Automotive Ltd. (the "Company") and Kibbutz Glil Yam Co-operative Society (the "Lessor"), which is drafted and signed in Hebrew (the "Lease Agreement").

The Letter Agreement describes the arrangement in connection with a grant by the Company of a right of use to a third party of approximately 1,100 square meters (the "Relevant Area") of its principal offices in Kibbutz Glil Yam.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Vacating of Relevant Area</u>: As of the commencement of the third party's use (the "Commencement Date"), the Company shall vacate the Relevant Area of all persons, while leaving existing furniture and installations in place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Ongoing Obligations</u>: As of the Commencement Date until termination of the Lease Agreement, the Company shall retain responsibility for the entire property, including the Relevant Area, in accordance with such Lease Agreement, subject to a reduction in applicable payments as set out therein. Notwithstanding the foregoing, the Company shall pay full usage fees for the Relevant Area for a limited initial period following the commencement of such use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Third Party Payments</u>: The third party shall pay usage fees and municipal taxes with respect to the Relevant Area directly to the Lessor. The third party shall reimburse the Company for 1/3 of the costs associated with utilities, including electricity and water costs, which shall be based on the Company's average consumption for the three months preceding the Letter Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Areas</u>: Certain portions of the Relevant Area may be designated for shared use between the Company and the third party, without affecting the Company's payment obligations under the Lease Agreement. The Company also shall retain full and exclusive use of certain specified rooms in the Relevant Area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Cooperation and Insurance:</u> The Company shall cooperate in good faith with the third party to enable use of the Relevant Area and shall continue to insure the full property under its existing policy. The Company may include the third party as an additional insured, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Lessor Undertaking</u>: The Lessor shall use its best efforts to enter into an agreement with a third party for a right of use in the Relevant Area in accordance with the terms and conditions as described above.

## Exhibit 8.1

**Exhibit 8.1**

**Subsidiaries of REE Automotive Ltd.**

REE Automotive USA Inc. (United States)

REE Automotive UK Limited (United Kingdom)\*

REE Software UK Ltd (United Kingdom)\*

REE Automotive GmbH (Germany)

REE Automotive Japan, K.K. (Japan)

\*On May 1, 2026, REE Automotive UK Limited commenced an administration process in the United Kingdom in connection with its corporate wind down. In connection therewith, REE established REE Software UK Ltd, a newly organized entity in the United Kingdom. For further information, see Item 5.A. under the section titled "United Kingdom Administration".

## Exhibit 11.1

**REE AUTOMOTIVE LTD.** 

**INSIDER TRADING POLICY**

This Insider Trading Policy (the "**Policy**") of REE Automotive Ltd., and its direct and indirect subsidiaries (collectively, "**REE**" or the "Company") establishes the policies and procedures that govern trading by REE personnel in REE securities. The securities of any other company about which such personnel learns material, nonpublic information while performing his or her duties for REE are also covered by this Policy (except for Sections 4 through 7 which are specific to REE).

The Policy has been adopted by REE to fulfill its responsibilities as a public company under United States federal securities laws to prevent insider trading and to assist its personnel to avoid the severe consequences associated with violations of the insider trading laws. The Policy is intended to prevent even the appearance of improper conduct on the part of anyone employed by or associated with REE. Should you have any questions regarding this Policy, please contact the Company's Compliance Officer.

Under the federal securities laws, it is unlawful for any director, officer, or employee of, or any person otherwise associated with, a public company to trade, or to enable others to trade, in the securities of that company while in possession of material, nonpublic information. Violators may be subject to criminal prosecution and/or civil liability.

A criminal prosecution can result in a fine of up to $5 million (no matter how small the profit or even if there is a loss) and imprisonment for up to 20 years. Civil actions may be brought by a private plaintiff or the SEC. A person who has been found in a civil action brought by the Securities and Exchange Commission ("SEC") to have violated the prohibition on insider trading by purchasing or selling a security while in possession of material, nonpublic information, or by communicating such information to another person who engages in such trading, can be held liable for a penalty up to three times the profit gained, or the loss avoided, by the person who traded while in possession of material, nonpublic information. The SEC also has the authority to obtain a court order that bars a person who has engaged in insider trading from serving, either permanently or for a period, as a director or officer of a public company. There are no limits on the size of the transaction that can trigger insider trading liability. Small trade has in the past occasioned civil and criminal investigations and lawsuits.

Insider trading also can generate significant adverse publicity and, as a result, cause a substantial loss of confidence in REE and its securities on the part of the public and the securities markets. This could have an adverse impact on the price of REE shares and other securities to the detriment of REE and its shareholders.

Remember, anyone scrutinizing your transactions in REE securities or Derivative Securities (defined below) will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any transaction, you should carefully consider how enforcement authorities and others might view the transaction in hindsight.

**IT IS IMPORTANT THAT ALL REE PERSONNEL REVIEW THIS POLICY CAREFULLY. NONCOMPLIANCE WITH THIS POLICY IS GROUNDS FOR** 

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**DISCIPLINARY ACTION, INCLUDING AND UP TO IMMEDIATE TERMINATION. FAILURE TO COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH BELOW ALSO MAY RESULT IN A SERIOUS VIOLATION OF U.S. FEDERAL SECURITIES LAWS BY THE PERSON TRADING, LEADING TO POTENTIAL CIVIL AND CRIMINAL PENALTIES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Scope of Policy**

All directors, officers, and other employees of REE, and all contractors or consultants who devote at least part of their time to REE, are subject to the prohibitions set forth in this Policy. Additionally, if designated by the Compliance Officer, (a) all directors, officers and other employees of a joint venture in which REE has a financial interest (such a joint venture is referred to as a "**Related Company**") and/or (b) a Related Company, can be subject to the prohibitions set forth in this Policy. Each person listed above as subject to the Policy is referred to as a "**Covered Person**".

The restrictions imposed by the Policy apply to trading in any REE securities ("REE Securities"), as well as any instrument that derives its value from the price of REE Securities, including but not limited to, puts, calls, warrants, options and convertible securities whether or not issued by REE (collectively "**Derivative Securities**"), subject to the qualification, as provided in Section 4 of this Policy, that all Covered Persons are prohibited from engaging in certain types of transactions, including short sales of (and economically equivalent transactions relating to) REE Securities. The restrictions imposed by the Policy also apply to trades in securities of any Related Company, industry peer company (*e.g*., a competitor of the Company), another company that operates a business that is economically linked to the Company (e.g., supplier, vendor), and any other company about which any Covered Person learns material, nonpublic information in the course of performing his or her duties for REE, such as securities of any company with which REE may be entering into or negotiating major transactions, and derivative securities of any of the foregoing securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. Additional Persons Subject to this Policy**

The policies and procedures under this Policy that are binding on a Covered Person also apply to the Associates of such Covered Person (*i.e*., any reference to a Covered Person's obligations under this Policy also relates to his or her Associates).

"**Associates**" consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)anyone, whether a Family Member or not, who resides in the household of a Covered Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)any Family Member who does not live in the household of a Covered Person but whose transactions in REE Securities or Derivative Securities are directed by or subject to the influence or control of a Covered Person (such as parents or children who consult with a Covered Person before they trade in REE Securities or Derivative Securities).

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INSIDER TRADING POLICY

"**Family Member**" consist of the following persons: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse (or comparable co-habitation relationship), sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, in each case including adoptive relationships.

This Policy applies to any entities that a Covered Person controls, including any controlled corporations, partnerships or trusts, and transactions by such entities should be treated for the purposes of this Policy as if they were for the account of the Covered Person, unless the entity engages in the investment

of securities in the ordinary course of its business (e.g., an investment fund or partnership) and confirms to the reasonable satisfaction of the Compliance Officer that it has established its own policies and procedures for compliance with insider trading restrictions under applicable securities laws.

Situations may exist where a Covered Person has a record ownership of or beneficial interest in securities, but has no responsibility for investment decisions, such as, for example, where the investment decisions have been delegated to an investment adviser. In such cases, this Policy is not intended to proscribe dealings in securities so long as the Covered Person has neither discussed the merits of the investment with, has control or influence over, nor provides inside information to, the person or persons having the decision-making investment responsibility. Similarly, this Policy does not prohibit the purchase, sale or holding of an interest in a publicly traded mutual fund, even if the fund holds or trades in REE Securities or Derivative Securities.

As set forth in a separate Addendum to this Policy and subject to Section 5 below, all directors and officers of REE, and any other Covered Person listed in the Addendum (as designated and amended by the Compliance Officer from time-to-time) (each of the foregoing is referred to as an "**Addendum Covered Person**") are required to obtain prior approval for all trades in REE Securities or Derivative Securities and are prohibited from holding REE Securities or Derivative Securities in a margin account or pledging such securities.

FOR THE AVOIDANCE OF DOUBT, EVEN IF IT IS NOT EXPLICITLY STATED SO IN THE VARIOUS SECTIONS OF THIS POLICY, ALL PROHIBITIONS, POLICIES AND PROCEDURES DETAILED IN THIS POLICY APPLY TO EACH COVERED PERSON, AS WELL AS TO HIS OR HER ASSOCIATES AND ALL PERSONS AND ENTITIES LISTED IN THIS SECTION 2. EACH COVERED PERSON IS RESPONSIBLE FOR MAKING SURE THAT ANY ASSOCIATE OR OTHER PERSON/ENTITY LISTED IN THIS SECTION 2 THAT IS SUBJECT TO THIS POLICY COMPLIES.

**3. General Insider Trading Prohibition**

Any Covered Person who possesses knowledge of any "material information" concerning REE that has not been disclosed to the public is prohibited from (i) trading in REE Securities or Derivative Securities, (ii) advising others to trade or to refrain from trading in REE Securities or

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INSIDER TRADING POLICY

Derivative Securities, or (iii) disclosing the material information to any other person for the purpose of enabling such person to trade or to refrain from trading in REE Securities or Derivative Securities. These restrictions remain in effect until the information is fully disclosed to the public or until the information, although not disclosed, ceases to be material.

Any Covered Person who obtains, in the course of his or her employment with or engagement by REE, knowledge of any "material information" concerning any other company (including suppliers, customers or an economically linked company such as a competitor of the Company) that has not been disclosed to the public is prohibited from (i) trading in securities of such other company or derivative securities of such other company, (ii) advising others to trade in securities of such other company or derivative securities of such other company, or (iii) disclosing the material information to any other person for the purpose of enabling such person to trade in securities of such other company or derivative securities of such other company. These restrictions remain in effect until the information is fully disclosed to the public or until the information, although not disclosed, ceases to be material.

**FOR THE AVOIDANCE OF DOUBT, EVEN IF IT IS NOT EXPLICITLY STATED SO IN THE VARIOUS SECTIONS OF THIS POLICY, ALL PROHIBITIONS, POLICIES AND PROCEDURES DETAILED IN THIS POLICY (EXCEPT FOR SECTIONS 4 THROUGH 7 WHICH RELATE TO REE ONLY) APPLY TO SECURITIES OR DERIVATIVE SECURITIES OF ANY OTHER COMPANY ABOUT WHICH A COVERED PERSON LEARNS MATERIAL, NONPUBLIC INFORMATION IN THE COURSE OF PERFORMING HIS OR HER DUTIES FOR REE.**

For purposes of insider trading liability, it does not matter that delaying the transaction until the material, nonpublic information is disclosed or ceases to be material might cause the Covered Person or an Associate of a Covered Person to incur a financial loss, or whether there is some independent reason for the transaction (such as the need to raise money for an emergency expenditure). In addition, except in the limited circumstances discussed below (see "**Approved Trading Plans**"), it does not matter that a Covered Person or an Associate of a Covered Person may have decided to engage in a transaction before learning of the undisclosed material information. Further, it also is irrelevant that publicly disclosed information about REE, a Related Company or any other applicable company would, without consideration of the undisclosed material information, provide a substantial basis for engaging in the transaction. The federal securities laws do not recognize any such mitigating circumstances and further, even the appearance of an improper transaction must be avoided to preserve REE's reputation for adhering to the highest standards of conduct.

<u>Material Information</u>

In general, information is considered material as it relates to any company if there is a substantial likelihood that a reasonable investor would consider the information important in deciding to buy, hold or sell securities of such company. While this standard is not always easy to apply, any information that could be expected to affect the price of a company's securities (or any other securities that derive value from such securities), whether positive or negative, should

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be considered material. Some examples of information that is almost always regarded as material include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant transactions such as pending or proposed mergers, tender offers, acquisitions or dispositions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial forecasts (especially earnings estimates) and/or financial results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• corporate restructurings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory rulings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unanticipated changes in the level of sales, earnings or expenses or earnings that are not consistent with the consensus expectations of the investment community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• material changes to previously filed financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• credit rating changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• events regarding REE's Securities (*e.g.,* stock splits, repurchases, or changes in dividend policy);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• stock dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• equity or debt offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• management changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cybersecurity events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant pricing changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant litigation exposure, or threaten litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• entry into or loss of a substantial contract not in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• impending bankruptcy or the existence of severe liquidity problems; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any of the above with respect to a subsidiary, or other affiliate of the Company.

Any Covered Person who has questions as to the materiality of any nonpublic information is advised to contact the Compliance Officer for guidance. When unsure of any nonpublic information, Covered Persons should not trade.

<u>Public Disclosure</u>

Disclosure of material information to the public means the disclosure of the information in a filing with the SEC (such as REE's annual report on Form 20-F or current reports on Form 6-K) or otherwise released broadly to the marketplace (such as by a press release)*.* More limited dissemination of the information, such as in a Company communication to employees (even if it is to all employees generally) does not qualify as public disclosure. To ensure adequate disclosure, <u>one full trading day</u> must pass following public disclosure to allow the securities markets an opportunity to digest the news.

<u>Tipping</u>

Covered Persons who cannot trade in REE Securities, securities of any other company, or Derivative Securities, by reason of the possession of material, nonpublic information also may not either

(i) disclose such information to any other person for the purpose of allowing the other person to trade in the above securities or (ii) provide trading advice with respect to the above securities

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INSIDER TRADING POLICY

(even though the non-public information that provides the basis for the advice is not disclosed to the person). Such restrictions also apply to the securities of other companies (including, but not limited to, suppliers, customers or an economically linked company such as a competitor of the Company), to the extent you have learned material nonpublic information about these companies as a result of your role with the Company. Any such disclosure or trading advice constitutes a violation of the federal securities laws (referred to as "tipping") and can result in liability for both the tipper and the tippee, as well as for REE and supervisory personnel.

**4. Blackout Periods**

COVERED PERSONS ARE PROHIBITED FROM TRADING IN REE SECURITIES OR DERIVATIVE SECURITIES DURING BLACKOUT PERIODS, REGARDLESS OF WHETHER THEY ACTUALLY POSSESS MATERIAL NONPUBLIC INFORMATION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Semi-Annual Blackout Periods

There are two blackout periods with respect to trading per year (the "**Semi-Annual Blackout Periods**"). Each Semi-Annual Blackout Period begins at the close of the market (Eastern time) on the fourteenth (14th) calendar day preceding the end of a semi-annual period or fiscal year (*i.e.* 16:01 p.m. Eastern time on December 18 and 16:01 p.m. on June 17) and ends at 11:59 p.m. Eastern time on the close of trading on the second full trading day following the public dissemination day by REE of its semi-annual or annual financial results by press release to the national wire services or by making a filing with the SEC. Covered Persons are prohibited from trading in REE Securities or Derivative Securities during Semi-Annual Blackout Periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>B. Designated Blackout Periods</u>

Any Covered Person, at any time and from time to time, may be informed by the Compliance Officer that he or she, and his or her Associates, are subject to a designated blackout period due to such person's involvement in or knowledge of a particular matter (a "**Designated Blackout Period**", and together with a Semi-Annual Blackout Period, a "**Blackout Period**"). Covered Persons so advised are prohibited from trading in REE Securities or Derivative Securities until they receive further written notice from the Compliance Officer. A Designated Blackout Period will not be announced other than to those subject to it. Any Covered Person or their Associates made aware of the existence of a Designated Blackout Period should not disclose the existence of such blackout for any reason.

**IT IS IMPORTANT TO KEEP IN MIND THAT, EVEN IF A BLACKOUT PERIOD IS NOT IN EFFECT, THE PROHIBITION ON TRADING ON MATERIAL, NONPUBLIC INFORMATION CONTINUES TO APPLY AT ALL TIMES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. Approved Trading Plans**

Transactions by Covered Persons and their Associates pursuant to a written trading plan (an "**Approved Plan**") will not violate this Policy and are not subject to the Blackout Period restrictions or pre-approval procedures if the following conditions are met:

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INSIDER TRADING POLICY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Approved Plan, any change or amendment thereof, and trades thereunder must meet the requirements of the Company's guidelines for Rule 10b5-1 Plans (as established by the Compliance Officer in consultation with the Company's outside counsel from time-to-time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Compliance Officer must approve the Approved Plan prior to it being adopted, modified, or terminated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Approved Plan must comply with the requirements of the Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "**1934 Act**"), including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)it must be a written, binding contract, instruction or plan entered outside of a Blackout Period and at such time when the Covered Person is not in possession of material, nonpublic information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the Approved Plan must expressly specify the amounts, prices and dates of transactions (specifically or through a written formula, or a combination thereof) or confer discretionary authority on another person (who is not a Covered Person or Associate and otherwise is not in possession of material nonpublic information) to effect one or more purchase or sale transactions for the account of the instructing person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)the instructing person may not exercise any subsequent influence over how, when or whether the transactions are affected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the purchase or sale must occur pursuant to the Approved Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)no other trading plans are outstanding at the time of adoption of an Approved Plan (subject to certain exceptions (*e.g.,* sale-to-cover plans)), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)(A) for Covered Persons that are directors and officers, no purchase or sale occurs until after the later of either (1) the passage of ninety (90) days from an Approved Plan's adoption (inclusive of any modification thereto), or (2) two business days following the release of the Company's earnings; subject to a maximum of 120 days from the Approved Plan's adoption, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) for Covered Persons that are not directors, officers, or the Company, no purchase or sale occurs until after thirty (30) days following the adoption or modification of the Approved Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Directors or officers must include a representation that (1) he or she is not in possession of material nonpublic information at the time of adoption (or modification) of an Approved Plan, and (2) that the plan is entered into in good faith and not as part of a plan or scheme to evade insider trading laws.

The Compliance Officer will approve any Approved Plan that complies with the terms of Section 5. A contract, instruction or plan of the type described above will typically be used by an Addendum Covered Person and other persons who routinely encounter material nonpublic information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. Section 16 Reporting Persons – Control Stock and Section 16 Reports**

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The Company's executive officers and directors subject to the reporting obligations under Section 16 of the 1934 Act are also subject to additional restrictions and obligations under this Policy. Section 16 requires the Company's directors and officers (as defined in Section 16 of the 1934 Act) to make public electronic filings with the SEC reporting their beneficial ownership and to disclose their transactions in the Company's securities.

Specifically, directors and executive officers of REE (as listed in the Company's Annual Report on Form 20-F), among other things, (1) are subject to restrictions on sales by control persons (Rule 144 under the Securities Act of 1933, as amended), and (2) must provide the Company's General Counsel (or the designee thereof) advanced notice of all REE Securities transactions (even if pre-clearance is not required) to allow the Company to help you meet your Section 16 public reporting requirements (*i.e*., the filing of Forms 3, 4, or 5, as applicable). In particular, current Company directors and executive officers must file an initial Form 3 by March 18, 2026 and any new director or executive officer after such date must file such form within 10 days of appointment/election. Each director and executive officer must also file a Form 4 within two business days following any trade date. Transactions effected pursuant to an Approved Plan under Section 5 above must be reported on such report as well.

As a reminder, any transaction in REE Securities by any person in this Section 6 includes the transactions by any person listed in Section 2 above (*e.g*., a Family Member, controlled entity). These holdings and transactions must also be reported in such Section 16 reports.

<u>Applicable directors and executive officers have the sole responsibility to comply with Section 16</u> <u>reporting obligations</u>*<u>.</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. Short Term Speculation; Hedging Transactions; Restrictions on Pledges**

REE considers it improper and inappropriate for any Covered Person or their Associates to engage in short-term or speculative transactions in REE Securities/Derivative Securities or in other transactions in REE Securities/Derivative Securities that may transfer the full risks and rewards of ownership over such securities. Therefore, it is REE's policy that Covered Persons and their Associates may not engage, in any of the following transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Publicly Traded Options*. A transaction in options is, in effect, a bet on the short-term movement of REE Securities and therefore creates the appearance of trading based on inside information. Transactions in options also may focus attention on short-term performance at the expense of long-term objectives. Accordingly, transactions in puts, calls or other Derivative Securities, on an exchange or in any other organized market, are prohibited. Option positions arising from certain types of hedging transactions are governed by the next paragraph below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Standing Orders*. A standing order placed with a broker to sell or purchase REE Securities at a specified price leaves the shareholder with no control over the timing of the transaction. A transaction pursuant to a standing order – which does not meet the standards of an Approved Plan – executed by the broker when the Covered Person is

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INSIDER TRADING POLICY

aware of material nonpublic information may result in unlawful insider trading. Accordingly, standing orders are prohibited during any Blackout Period and at any time that the Covered Person is aware of material, nonpublic information. Any pending standing order must be cancelled before the commencement of any Blackout Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Hedging Transactions*. Certain forms of hedging or monetization transactions allow Covered Persons to lock in much of the value of their REE Securities, often in exchange for all or part of the potential for upside appreciation in the securities. These transactions allow the Covered Person to continue to own the covered REE Security, but without the full risks and rewards of ownership. Such transactions may use methodologies or financial instruments including short sales, puts, calls, collars, prepaid variable forward contracts and exchange funds. When that occurs, the Covered Person may no longer have the same objectives as REE's other securityholders. Therefore, Covered Persons are prohibited from employing any such methodologies or using any such financial instruments with respect to a REE Security absent prior written approval of the Compliance Officer. Any Covered Person that wishes to seek such approval must submit a request to the Compliance Officer at least two weeks prior to the proposed execution of documents related to such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Margin Accounts and Pledges.* A Covered Person may not hold REE Securities/Derivative Securities in a margin account or pledge such securities as collateral because a margin or foreclosure sale may occur when such Covered Person is aware of material nonpublic information or otherwise prohibited from trading. Under certain circumstances an exception may be granted for a Covered Person to pledge REE Securities/Derivative Securities as collateral for a loan (not including margin debt) where the Covered Person clearly demonstrates the financial capacity to repay the loan without resorting to the pledged securities. Any Covered Person that wishes to do so must submit a request for approval to the Compliance Officer at least two weeks prior to the proposed execution of documents evidencing the proposed pledge and the Compliance Officer shall have absolute discretion over approving or rejecting such proposed pledge.

Any Covered Person who has questions as to whether a particular strategy would violate the Policy is advised to contact the Compliance Officer.

**8. Application of the Policy to Specific Transactions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Incentive Plans*. The Policy does not apply to the grant or the cash exercise of share options granted under REE's equity incentive plans as in effect from time to time, and also would not apply to the delivery of shares to any entity administrating said plans on behalf of REE upon exercise of such options to the extent such transactions are permissible under the equity incentive plans. However, the delivery of REE shares to any third party in payment for the exercise price of a share option and/or for tax withholding, known as a "cashless" or "same-day sale" exercise, as well as any sale to a third party of REE shares acquired upon the exercise of a share option, is subject to the same restrictions that apply to any other sale of REE securities, including the Prior Approval Requirement set forth in the Addendum if the person effecting any such transaction is an

------

INSIDER TRADING POLICY

Addendum Covered Person. These restrictions also apply to any Associate who acquires a transferred stock option.

The Policy also does not apply to the vesting or delivery of restricted shares or restricted share units. The sale of REE shares acquired on the date of vesting or delivery of shares issued pursuant to such awards to any third party (including for tax withholding purposes) is subject to the same restrictions that apply to any other sale of REE Securities, including the Prior Approval Requirement set forth in the Addendum if the person effecting any such transaction is an Addendum Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Gifts*. Gifts of REE Securities or Derivative Securities during a Blackout Period may only be made with the prior written approval of the Compliance Officer. This includes bona fide gifts involving REE Securities or transfers for estate planning or tax planning purposes; provided, however, that this Policy does not apply to transfers of REE Securities that effect only a change in the form of ownership without involving a change in beneficial ownership or pecuniary interest (such as certain estate planning transfers that do not involve any changes in beneficial ownership). To the extent approval is granted, the recipient of a gift who is a Covered Person or an Associate of a Covered Person would be subject to the restrictions of this Policy in connection with any subsequent sale of the gifted securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Employee Share Purchase Plan*. This Policy does not apply to purchases of REE ordinary shares pursuant to any employee share purchase plan resulting from a Covered Person's periodic contribution of money to such a plan pursuant to the election he or she made at the time of his or her enrollment in the plan. This Policy also does not apply to purchases of REE ordinary shares resulting from lump sum contributions to such a plan, provided that the Covered Person elected to participate by lump sum payment at the beginning of the applicable enrollment period. This Policy does apply, however, to a Covered Person's election to participate in such a plan for any enrollment period, and to his or her sales of REE ordinary shares purchased pursuant to such a plan.

**9. Post-Termination Transactions**

The restrictions imposed by the Policy, including any Blackout Period then in effect, will continue to apply to a Covered Person and their Associates after the termination of his or her employment with or engagement by REE for such period of time as such Covered Person is aware of material, nonpublic information until that information has become public or is no longer material. If a Covered Person's employment or engagement has ended within a Blackout Period, he or she shall be subject to the Blackout Period restrictions detailed above.

**10. Waiver**

The Compliance Officer is empowered to grant waivers under this Policy from time-to-time, within his/her sole discretion, however any such exception(s) should occur only in limited circumstances.

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INSIDER TRADING POLICY

**11. Conclusion**

REE will strictly enforce the prohibitions against insider trading and the additional restrictions and procedures set forth in this Policy. Any Covered Person, or their Associate, of REE or any Related Company who is uncertain regarding the applicability of the Policy is urged to contact the Compliance Officer prior to executing any sale or purchase transaction involving REE Securities or Derivative Securities to determine if he or she may properly proceed. Any decision made by the Compliance Officer pursuant to this Policy shall be considered final, and the basis for a particular decision may not necessarily be disclosed by the Compliance Officer. Directors and officers of REE should be particularly careful, since avoiding the appearance of engaging in share transactions based on material, nonpublic information can be as important as avoiding consummating a transaction based on such information.

\*\*\*

Adopted: July 22, 2021

Updated: August 15, 2022, June 23, 2025, September 21, 2025, February 3, 2026

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INSIDER TRADING POLICY

**ADDENDUM TO REE AUTOMOTIVE LTD. INSIDER TRADING POLICY APPLICABLE TO DIRECTORS, OFFICERS, AND CERTAIN DESIGNATED EMPLOYEES**

In addition to compliance with the general insider trading prohibition, subject to Section 4 of the Insider Trading Policy of REE Automotive Ltd., all directors and officers of REE, and any other Covered Person designated below by the Compliance Officer, as may be amended from time-to-time, (each such person subject to the Addendum is referred to as an "***Addendum Covered Person***") are required to adhere to the following additional restrictions and procedures when trading in REE Securities and Derivative Securities.

In addition to the Blackout Periods and compliance with the general prohibition on insider trading, an Addendum Covered Person must obtain the approval of the Compliance Officer before effecting a trade in REE Securities or any Derivative Security (the "***Prior Approval Requirement***") (including to the extent that such persons are permitted to trade consistent with the restrictions described in Section 6). The Prior Approval Requirement also applies to Associates of the foregoing individuals. A request form for prior approval should be submitted at least two business days prior to the proposed transaction date (or the waiting period required by the bank/broker, if applicable). It should contain a representation that the Covered Person does not hold any MNPI. Covered Person with questions about Prior Approval Requirement should contact the Compliance Officer.

**Designated Addendum Covered Persons**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Director level Covered Persons in the Finance Department

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Commercial and securities counsels in the Legal Department

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.V.P level employees across all departments

## Exhibit 12.1

**Exhibit 12.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO**

**EXCHANGE ACT RULE 13A-14(A)/15D-14(A)**

**AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Daniel Barel, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of REE Automotive Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| |
|:---|
| /s/ Daniel Barel |
| Daniel Barel |
| Chief Executive Officer |

---

Date: May 15, 2026

## Exhibit 12.2

**Exhibit 12.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO**

**EXCHANGE ACT RULE 13A-14(A)/15D-14(A)**

**AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Hai Aviv, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of REE Automotive Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| |
|:---|
| /s/ Hai Aviv |
| Hai Aviv |
| Chief Financial Officer |

---

Date: May 15, 2026

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this annual report on Form 20-F of REE Automotive Ltd. (the "Company") for the twelve months ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel Barel, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Daniel Barel |
| Daniel Barel |
| Chief Executive Officer |

---

Date: May 15, 2026

## Exhibit 13.2

**Exhibit 13.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this annual report on Form 20-F of REE Automotive Ltd. (the "Company") for the twelve months ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Hai Aviv, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Hai Aviv |
| Hai Aviv |
| Chief Financial Officer |

---

Date: May 15, 2026

## Exhibit 15.1

**Exhibit 15.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Registration Statement (Form F-3 No. 333-276757) of REE Automotive Ltd., and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Registration Statement (Form S-8 No. 333-261130, 333-272145, 333-278319, 333-282346, 333-287381, 333-293676) pertaining to Key Employee Share Incentive Plan (2011) of REE Automotive Ltd., Employee Stock Purchase Plan of REE Automotive Ltd., and 2021 Share Incentive Plan of REE Automotive Ltd.

of our report dated May 15, 2026, with respect to the consolidated financial statements of REE Automotive Ltd. included in this Annual Report (Form 20-F) of REE Automotive Ltd. for the year ended December 31, 2025.

/s/ KOST FORER GABBAY & KASIERER

A Member of EY Global

Tel Aviv, Israel

May 15, 2026

<br>