Filed Pursuant to Rule 424(b)(3)
Registration No. 333-258963
PROSPECTUS SUPPLEMENT NO. 1
(to prospectus dated April 11, 2022)
REE AUTOMOTIVE LTD.
39,041,351 Class A Ordinary Shares
5,500,000 Warrants to Purchase Class A Ordinary Shares
15,562,500 Class A Ordinary Shares Underlying Warrants
This prospectus supplement updates, amends and supplements the prospectus dated April 11, 2022 (the “Prospectus”) which forms a part of our Registration Statement on Form F-1, as amended and supplemented, including by Post-Effective Amendment No. 1 thereto (Registration Statement No. 333-258963). This prospectus supplement is being filed to update and supplement the information included in the Prospectus with the unaudited interim consolidated financial statements as of and for the three months ended March 31, 2022 contained in Exhibit 99.2 to our report of foreign private issuer on Form 6-K, furnished to the Securities and Exchange Commission (the “SEC”) on May 17, 2021 (the “Form 6-K”). Such financial statements from the Form 6-K are attached to this prospectus supplement.
This prospectus supplement updates, amends and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
Our Class A ordinary shares, without par value (“Class A Ordinary Shares”), and warrants to purchase Class A Ordinary Shares (“Warrants”) are traded on The Nasdaq Global Market (“Nasdaq”) under the symbols “REE” and “REEAW,” respectively. The last reported sale price of the Ordinary Shares on May 16, 2022 was $1.79 per share, and the last reported sale price of the Warrants on May 16, 2022 was $0.21 per warrant, as reported on Nasdaq.
You should read the Prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Investing in the Company’s securities involves risks. See “Risk Factors” beginning on page 13 of the Prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or passed upon the adequacy or accuracy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is May 17, 2022.
Consolidated Interim Balance Sheet | |||||
Consolidated Interim Statements of Comprehensive Loss | |||||
Consolidated Interim Statement of Changes in Shareholders’ equity | |||||
Consolidated Interim Statement of Cash Flows | |||||
Notes to the Interim Consolidated Financial Statements |
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 238,976 | $ | 275,772 | |||||||
Restricted cash | 138 | 138 | |||||||||
Other accounts receivable and prepaid expenses | 13,324 | 12,162 | |||||||||
Total current assets | 252,438 | 288,072 | |||||||||
NON-CURRENT ASSETS: | |||||||||||
Non-current restricted cash | 1,002 | 1,005 | |||||||||
Other accounts receivable | 5,351 | 1,184 | |||||||||
Operating lease right-of-use assets | 17,365 | — | |||||||||
Property and equipment, net | 3,772 | 2,675 | |||||||||
Total non-current assets | 27,490 | 4,864 | |||||||||
TOTAL ASSETS | $ | 279,928 | $ | 292,936 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Trade payables | $ | 5,232 | $ | 4,538 | |||||||
Other accounts payable and accrued expenses | 13,501 | 16,018 | |||||||||
Operating lease liabilities | 2,526 | — | |||||||||
Total current liabilities | 21,259 | 20,556 | |||||||||
NON-CURRENT LIABILITIES: | |||||||||||
Deferred revenues | 943 | 943 | |||||||||
Warrants liability | 5,704 | 21,034 | |||||||||
Operating lease liabilities | 14,526 | — | |||||||||
Total non-current liabilities | 21,173 | 21,977 | |||||||||
TOTAL LIABILITIES | 42,432 | 42,533 | |||||||||
Commitments and Contingencies (Note 6) | |||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||
Ordinary shares | — | — | |||||||||
Additional paid-in capital | 875,019 | 864,911 | |||||||||
Accumulated deficit | (637,523) | (614,508) | |||||||||
Total shareholders’ equity | 237,496 | 250,403 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 279,928 | $ | 292,936 |
Three Months Ended | |||||||||||
March 31, 2022 | March 31, 2021 | ||||||||||
Revenues | — | 6 | |||||||||
Cost of sales | 538 | 11 | |||||||||
Gross loss | (538) | (5) | |||||||||
Operating expenses: | |||||||||||
Research and development expenses, net | 22,397 | 7,149 | |||||||||
Selling, general and administrative expenses | 15,288 | 5,448 | |||||||||
Total operating expenses | 37,685 | 12,597 | |||||||||
Operating loss | (38,223) | (12,602) | |||||||||
Income from warrants remeasurement | (15,330) | — | |||||||||
Financial income, net | (472) | (4) | |||||||||
Net loss before income tax | (22,421) | (12,598) | |||||||||
Income tax expense | 594 | — | |||||||||
Net loss | (23,015) | (12,598) | |||||||||
Net comprehensive loss | (23,015) | (12,598) | |||||||||
Basic and diluted net loss per Class A ordinary share | (0.08) | (0.07) | |||||||||
Weighted average number of ordinary shares and preferred shares used in computing basic and diluted net loss per share (1) | 289,747,646 | 193,705,500 |
Ordinary shares - Class A (1) | Ordinary shares - Class B (1) | Preferred shares (1) | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance – January 1, 2021 | 45,271,559 | $ | — | — | $ | — | 130,799,440 | $ | — | $ | 154,959 | $ | (109,178) | $ | 45,781 | ||||||||||||||||||||||||||||||||||||||
Exercise of warrants | — | — | — | — | 8,619,406 | — | 2,350 | — | 2,350 | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | 4,106 | — | 4,106 | |||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (12,598) | (12,598) | ||||||||||||||||||||||||||||||||||||||||||||
Balance – March 31, 2021 | 45,271,559 | $ | — | — | $ | — | 139,418,846 | $ | — | $ | 161,415 | $ | (121,776) | $ | 39,639 | ||||||||||||||||||||||||||||||||||||||
Balance – January 1, 2022 | 234,262,636 | $ | — | — | $ | — | — | $ | — | $ | 864,911 | $ | (614,508) | $ | 250,403 | ||||||||||||||||||||||||||||||||||||||
Exercise of options | 4,181,942 | — | — | — | — | — | 1,633 | — | 1,633 | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | 8,475 | — | 8,475 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (23,015) | (23,015) | ||||||||||||||||||||||||||||||||||||||||||||
Balance – March 31, 2022 | 238,444,578 | $ | — | — | $ | — | — | $ | — | $ | 875,019 | $ | (637,523) | $ | 237,496 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (23,015) | $ | (12,598) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 767 | 74 | |||||||||
Share-based compensation | 8,475 | 4,106 | |||||||||
Remeasurement of warrant liability | (15,330) | — | |||||||||
Decrease in inventory | — | 4 | |||||||||
Decrease in trade receivables | — | 26 | |||||||||
Increase in other accounts receivable and prepaid expenses | (5,329) | (396) | |||||||||
Increase in operating lease right-of-use assets and liability | (827) | — | |||||||||
Increase in trade payables | 631 | 1,502 | |||||||||
Increase (decrease) in other accounts payable and accrued expenses | (2,517) | 973 | |||||||||
Other | 3 | 92 | |||||||||
Net cash used in operating activities | (37,142) | (6,217) | |||||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | (1,290) | (325) | |||||||||
Proceeds from bank deposits | — | 1,667 | |||||||||
Net cash provided by (used in) investing activities | (1,290) | 1,342 | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of options | 1,633 | — | |||||||||
Proceeds from exercise of warrants to preferred shares | — | 2,350 | |||||||||
Transaction costs | — | (371) | |||||||||
Net cash provided by financing activities | 1,633 | 1,979 | |||||||||
Decrease in cash, cash equivalents and restricted cash | (36,799) | (2,896) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 276,915 | 45,507 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 240,116 | $ | 42,611 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Non-cash activity: | |||||||||||
Deferred transaction costs | $ | — | $ | 2,117 | |||||||
Purchase of property and equipment included in accounts payable or accrued | $ | 63 | $ | 22 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Supplemental cash flow: | |||||||||||
Cash received from interest | $ | 410 | $ | 22 |
March 31, | |||||||||||
2022 | 2021 | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents | $ | 238,976 | $ | 41,815 | |||||||
Restricted cash | 138 | 796 | |||||||||
Non-current restricted cash | 1,002 | — | |||||||||
Total cash, cash equivalents and restricted cash | $ | 240,116 | $ | 42,611 |
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Deferred revenues, non-current | $ | 943 | $ | 943 |
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Government authorities | $ | 1,736 | $ | 897 | |||||||
Prepaid expenses | 3,765 | 5,151 | |||||||||
Advances to suppliers | 7,468 | 5,734 | |||||||||
Other receivables | 355 | 380 | |||||||||
Total | $ | 13,324 | $ | 12,162 |
March 31, 2022 | |||||
(Unaudited) | |||||
Operating lease cost: | $ | 653 | |||
Short-term lease cost: | 138 | ||||
Variable lease cost: | 17 | ||||
Net lease cost: | $ | 808 | |||
March 31, 2022 | |||||
(Unaudited) | |||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows for operating leases: | $ | 586 | |||
Supplemental cash flow information related to operating leases: | |||||
Adoption of "Leases (Topic 842)" | $ | 8,857 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities: | $ | 9,031 | |||
Weighted average remaining operating lease term | 7.21 | ||||
Weighted average discount rate operating lease | 3.83 | % |
Operating Leases | |||||
(Unaudited) | |||||
2022 (remainder) | $ | 2,246 | |||
2023 | $ | 3,228 | |||
2024 | $ | 2,840 | |||
2025 | $ | 2,793 | |||
2026 and thereafter | $ | 8,911 | |||
Total undiscounted lease payments | $ | 20,018 | |||
Less: | |||||
Imputed interest | $ | 2,966 | |||
Present value of lease liabilities | $ | 17,052 |
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Employees and payroll accruals | $ | 5,381 | $ | 8,262 | |||||||
Professional fees | 523 | 600 | |||||||||
Non recurring engineering | 3,526 | 4,800 | |||||||||
Government authorities | 2,054 | 648 | |||||||||
Other payables | 2,017 | 1,708 | |||||||||
Total | $ | 13,501 | $ | 16,018 |
Purchase commitments | |||||
(Unaudited) | |||||
2022 | $ | 4,063 | |||
2023 | — | ||||
2024 | — | ||||
2025 | — | ||||
2026 and thereafter | — | ||||
Total | $ | 4,063 |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
(Unaudited) | (Audited) | ||||||||||||||||||||||
Authorized | Issued and outstanding | Authorized | Issued and outstanding | ||||||||||||||||||||
Number of shares | Number of shares | ||||||||||||||||||||||
Class A Ordinary shares, no par value (1) | 1,000,000,000 | 238,444,578 | 1,000,000,000 | 234,262,636 | |||||||||||||||||||
Class B Ordinary shares, no par value (2) | 83,417,110 | 83,417,110 | 83,417,110 | 83,417,110 | |||||||||||||||||||
1,083,417,110 | 321,861,688 | 1,083,417,110 | 317,679,746 | ||||||||||||||||||||
Three months ended | |||||||||||
March 31, 2022 | March 31, 2021 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Cost of sales | $ | 70 | $ | — | |||||||
Research and development | 3,207 | 1,645 | |||||||||
Selling, general and administrative | 5,198 | 2,461 | |||||||||
$ | 8,475 | $ | 4,106 |
March 31, 2022 | March 31, 2021 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Current | $ | 594 | $ | — | |||||||
$ | 594 | $ | — | ||||||||
March 31, 2022 | March 31, 2021 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Foreign | 594 | — | |||||||||
$ | 594 | $ | — | ||||||||
Net loss before income tax | (22,421) | (12,598) | |||||||||
Effective tax rate | (2.65) | % | 0.00 | % | |||||||
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Opening balance | $ | 856 | $ | — | |||||||
Tax positions taken in current year | 418 | 856 | |||||||||
Ending Balance | $ | 1,274 | $ | 856 |
Description | Level | March 31, 2022 | December 31, 2021 | |||||||||||
(Unaudited) | (Audited) | |||||||||||||
Liabilities: | ||||||||||||||
Warrant Liability – Public Warrants | 1 | $ | 3,119 | $ | 10,364 | |||||||||
Warrant Liability – Private Warrants | 3 | $ | 2,585 | $ | 10,670 |
March 31, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Share price | $ | 1.90 | $ | 5.55 | |||||||
Strike price | $ | 11.50 | $ | 11.50 | |||||||
Term (in years) | 4.3 | 4.6 | |||||||||
Volatility | 80.0 | % | 65.0 | % | |||||||
Risk-free rate | 2.4 | % | 1.2 | % | |||||||
Dividend yield | 0.0 | % | 0.0 | % |
Private Placement | |||||
Fair value as of January 1, 2022 | $ | 10,670 | |||
Change in fair value | (8,085) | ||||
Fair value as of March 31, 2022 | $ | 2,585 |
Three months ended | |||||||||||
March 31, 2022 | March 31, 2021 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Interest income and bank fees, net | $ | (240) | $ | (24) | |||||||
Foreign currency translation adjustments - expense (income) | (362) | 20 | |||||||||
Interest expense | 130 | — | |||||||||
Financial income, net | $ | (472) | $ | (4) |
Three months ended | |||||||||||
March 31, 2022 | March 31, 2021 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Numerator: | |||||||||||
Net loss for basic and diluted loss per share | $ | (23,015) | $ | (12,598) | |||||||
Denominator: | |||||||||||
Weighted average number of Class A ordinary and preferred shares used in computing basic and diluted net loss per share | 289,747,646 | 193,705,500 | |||||||||
Basic and diluted net loss per Class A ordinary and preferred shares | $ | (0.08) | $ | (0.07) |