TEL AVIV, Israel, Sept. 26, 2024 (GLOBE NEWSWIRE) -- REE Automotive Ltd. (Nasdaq: REE) (“REE” or the “Company”), an automotive technology company and provider of full by-wire electric trucks and platforms, today announced financial results for the three months ended June 30, 2024 alongside significant updates.
“The past few months have been pivotal for REE, marking key milestones we’ve worked toward for years. Our strategic manufacturing agreement with Motherson Group (“Motherson”), a global leader in engineering and automotive supply, is transformational, which we believe will enable us to scale faster while avoiding common operational challenges faced by others in the EV space,” said Daniel Barel, Co-founder and CEO of REE. “We believe our product offering is the best in an underserved market, and demand continues to grow from fleets and OEMs. With our recent investment round, our funding is solid, and we’ve begun U.S. production of our P7 line with Roush. We’re executing our strategy, focusing on technology leadership and cost reduction. I’m grateful to Motherson, M&G, and our long-term investors for their support, and to our global teams for their dedication.”
Recent Highlights:
Operations:
Business:
Financials:
A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
REE AUTOMOTIVE LTD. Condensed Consolidated Statements of Comprehensive Loss U.S. dollars in thousands (except share and per share data) (Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
Revenues | $ | — | $ | 160 | $ | 943 | $ | 160 | $ | 943 | |||||||||
Cost of revenues | 651 | 804 | 943 | 1,455 | 943 | ||||||||||||||
Gross loss | $ | (651 | ) | $ | (644 | ) | $ | — | $ | (1,295 | ) | $ | — | ||||||
Operating expenses: | |||||||||||||||||||
Research and development expenses, net | 8,063 | 15,358 | 19,337 | 23,421 | 38,211 | ||||||||||||||
Selling, general and administrative expenses | 6,931 | 7,170 | 8,087 | 14,101 | 18,930 | ||||||||||||||
Total operating expenses | 14,994 | 22,528 | 27,424 | 37,522 | 57,141 | ||||||||||||||
Operating loss | $ | (15,645 | ) | $ | (23,172 | ) | $ | (27,424 | ) | $ | (38,817 | ) | $ | (57,141 | ) | ||||
Income (loss) from warrants remeasurement | 2,586 | (706 | ) | — | 1,880 | — | |||||||||||||
Financial income, net | 2,130 | 131 | 1,076 | 2,261 | 2,137 | ||||||||||||||
Net loss before income tax | (10,929 | ) | (23,747 | ) | (26,348 | ) | (34,676 | ) | (55,004 | ) | |||||||||
Income tax expense (income) | (142 | ) | 1,436 | (137 | ) | 1,294 | (171 | ) | |||||||||||
Net loss | $ | (10,787 | ) | $ | (25,183 | ) | $ | (26,211 | ) | $ | (35,970 | ) | $ | (54,833 | ) | ||||
Net comprehensive loss | $ | (10,787 | ) | $ | (25,183 | ) | $ | (26,211 | ) | $ | (35,970 | ) | $ | (54,833 | ) | ||||
Basic and diluted net loss per Class A ordinary share (1) | $ | (0.84 | ) | $ | (2.28 | ) | $ | (2.61 | ) | $ | (3.01 | ) | $ | (5.49 | ) | ||||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share (1) | 12,844,769 | 11,023,880 | 10,031,625 | 11,934,325 | 9,996,616 |
(1)OnOctober 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. 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 above as if the stock reverse split had been in effect as of the date of these periods. For further details,seethe Company’s 20-F filed with SEC on March 27, 2024.
REE AUTOMOTIVE LTD. Condensed Consolidated Balance Sheets U.S. dollars in thousands (except share and per share data)
June 30, 2024 | December 31, 2023 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 36,274 | $ | 41,232 | |||
Short-term investments | 24,227 | 44,395 | |||||
Accounts receivable | — | 455 | |||||
Inventory | 2,048 | 463 | |||||
Other accounts receivable and prepaid expenses | 12,435 | 6,959 | |||||
Total current assets | 74,984 | 93,504 | |||||
NON-CURRENT ASSETS: | |||||||
Non-current restricted cash | 2,481 | 3,008 | |||||
Other accounts receivable and prepaid expenses | 2,224 | 2,871 | |||||
Operating lease right-of-use assets | 19,826 | 21,418 | |||||
Property and equipment, net | 17,407 | 17,099 | |||||
Total non-current assets | 41,938 | 44,396 | |||||
TOTAL ASSETS | $ | 116,922 | $ | 137,900 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Short term loan | $ | 15,015 | $ | 15,019 | |||
Trade payables | 4,209 | 3,703 | |||||
Other accounts payable and accrued expenses | 11,132 | 14,046 | |||||
Operating lease liabilities | 3,640 | 2,411 | |||||
Total current liabilities | 33,996 | 35,179 | |||||
NON-CURRENT LIABILITIES: | |||||||
Warrants liability | 1,520 | 3,400 | |||||
Convertible promissory notes | 4,019 | 4,806 | |||||
Deferred tax liability | 436 | — | |||||
Operating lease liabilities | 14,068 | 16,440 | |||||
Total non-current liabilities | 20,043 | 24,646 | |||||
TOTAL LIABILITIES | 54,039 | 59,825 | |||||
SHAREHOLDERS’ EQUITY: | |||||||
Ordinary shares of no par value | — | — | |||||
Additional paid-in capital | 934,989 | 914,211 | |||||
Accumulated deficit | (872,106 | ) | (836,136 | ) | |||
Total shareholders’ equity | 62,883 | 78,075 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 116,922 | $ | 137,900 |
REE AUTOMOTIVE LTD. Condensed Consolidated Statements of Cash Flows U.S. dollars in thousands (Unaudited)
Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (35,970 | ) | $ | (54,833 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 1,608 | 1,085 | |||||
Accretion income on short-term investments | — | (588 | ) | ||||
Share-based compensation | 5,638 | 8,870 | |||||
Change in fair value of warrants liability | (1,880 | ) | — | ||||
Change in fair value of derivative liability | (1,448 | ) | — | ||||
Amortization of discount of convertible promissory note | 224 | — | |||||
Interest expenses | 433 | — | |||||
Decrease in accrued interest on short-term investments | 168 | 333 | |||||
Increase in inventory | (1,585 | ) | — | ||||
Decrease in accounts receivable | 455 | — | |||||
Increase in other accounts receivable and prepaid expenses | (4,829 | ) | (205 | ) | |||
Change in operating lease right-of-use assets and liabilities, net | 449 | 176 | |||||
Increase (decrease) in trade payables | 506 | (197 | ) | ||||
Decrease in other accounts payable and accrued expenses | (2,237 | ) | (256 | ) | |||
Increase in deferred tax liability | 436 | — | |||||
Decrease in deferred revenue | — | (943 | ) | ||||
Other | — | 103 | |||||
Net cash used in operating activities | (38,032 | ) | (46,455 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (1,916 | ) | (2,743 | ) | |||
Purchases of short-term investments | — | (66,864 | ) | ||||
Proceeds from short-term investments | 20,000 | 96,516 | |||||
Net cash provided by investing activities | 18,084 | 26,909 | |||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of Ordinary shares, net | 14,463 | — | |||||
Proceeds from exercise of options | — | 119 | |||||
Repayment of short term loan | (15,000 | ) | — | ||||
Proceeds from short term loan | 15,000 | — | |||||
Net cash provided by financing activities | 14,463 | 119 | |||||
Decrease in cash, cash equivalents and restricted cash | (5,485 | ) | (19,427 | ) | |||
Cash, cash equivalents and restricted cash at beginning of year | 44,240 | 59,925 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 38,755 | $ | 40,498 | |||
Reconciliation of GAAP Financial Metrics to Non-GAAP U.S. dollars in thousands (except share and per share data) (Unaudited)
Reconciliation of Net Loss to Adjusted EBITDA
Three Months Ended | Six Months Ended | ||||||||||||||||||
Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | |||||||||||||||
Net Loss on a GAAP Basis | $ | (10,787 | ) | $ | (25,183 | ) | $ | (26,211 | ) | $ | (35,970 | ) | $ | (54,833 | ) | ||||
Financial income, net | (2,130 | ) | (131 | ) | (1,076 | ) | (2,261 | ) | (2,137 | ) | |||||||||
Income tax expense (income) | (142 | ) | 1,436 | (137 | ) | 1,294 | (171 | ) | |||||||||||
Loss (income) from warrants remeasurement | (2,586 | ) | 706 | — | (1,880 | ) | — | ||||||||||||
Depreciation, amortization and accretion | 1,633 | 1,640 | 1,235 | 3,273 | 2,295 | ||||||||||||||
Share-based compensation | 2,815 | 2,823 | 4,212 | 5,638 | 8,870 | ||||||||||||||
Adjusted EBITDA | $ | (11,197 | ) | $ | (18,709 | ) | $ | (21,977 | ) | $ | (29,906 | ) | $ | (45,976 | ) |
Reconciliation of net cash used in operating activities to Free Cash Flow
Three Months Ended | Six Months Ended | |||||||||||||
Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | ||||||||||
Net cash used in operating activities | (16,807 | ) | (21,225 | ) | (20,025 | ) | (38,032 | ) | (46,455 | ) | ||||
Purchase of property and equipment | (1,051 | ) | (865 | ) | (1,474 | ) | (1,916 | ) | (2,743 | ) | ||||
Free Cash Flow | (17,858 | ) | (22,090 | ) | (21,499 | ) | (39,948 | ) | (49,198 | ) |
Reconciliation of GAAP operating expenses to Non-GAAP operating expenses; GAAP net loss to Non-GAAP net loss, and presentation of Non-GAAP net loss per Share, basic and diluted:
Three Months Ended | Six Months Ended | ||||||||||||||||||
Jun 30, 2024 | Mar 31, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | |||||||||||||||
GAAP operating expenses | 14,994 | 22,528 | 27,424 | 37,522 | 57,141 | ||||||||||||||
Share-based compensation | (2,815 | ) | (2,823 | ) | (4,212 | ) | (5,638 | ) | (8,870 | ) | |||||||||
Non-GAAP operating expenses | 12,179 | 19,705 | 23,212 | 31,884 | 48,271 | ||||||||||||||
GAAP net loss | (10,787 | ) | (25,183 | ) | (26,211 | ) | (35,970 | ) | (54,833 | ) | |||||||||
Loss (income) from warrants remeasurement | (2,586 | ) | 706 | — | (1,880 | ) | — | ||||||||||||
Income (loss) from derivatives remeasurement (2) | (1,889 | ) | 441 | — | (1,448 | ) | — | ||||||||||||
Share-based compensation | 2,815 | 2,823 | 4,212 | 5,638 | 8,870 | ||||||||||||||
Non-GAAP net loss | $ | (12,447 | ) | $ | (21,213 | ) | $ | (21,999 | ) | $ | (33,660 | ) | $ | (45,963 | ) | ||||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share (1) | 12,844,769 | 11,023,880 | 10,031,625 | 11,934,325 | 9,996,616 | ||||||||||||||
Non-GAAP basic and diluted net loss per share (1) (2) | $ | (0.97 | ) | $ | (1.92 | ) | $ | (2.19 | ) | $ | (2.82 | ) | $ | (4.60 | ) |
(1)OnOctober 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. 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 above as if the stock reverse split had been in effect as of the date of these periods. For further details,seethe Company’s 20-F filed with SEC on March 27, 2024.
(2)Non-GAAP net loss and non-GAAP net loss per share for the three months ended March 31,2024were retroactively adjusted from $21,654 to $21,213 and from $1.96 to $1.92, respectively, to reflect the adjustment of Income from derivatives remeasurement to non-GAAP net loss.
Non-GAAP Financial Measures
We have provided in this release financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.
We believe that adjusted EBITDA, non-GAAP net loss, non-GAAP operating expenses, non-GAAP basic and diluted net loss per share, reflect additional means of evaluating REE’s ongoing operating results and trends. We believe that these non-GAAP measures provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
We believe that Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash used in our operational activities and capital expenditures. Free Cash flow burn represents the negative cash outflow used in our activities as explained above.
To learn more about REE Automotive’s patented technology and unique value proposition that positions the company to break new ground in e-mobility, visit www.ree.auto.
About REE Automotive
REE Automotive (Nasdaq: REE) is an automotive technology company that allows companies to build electric vehicles of various shapes and sizes on their modular platforms. With complete design freedom, vehicles Powered by REE® are equipped with the revolutionary REEcorner®, which packs critical vehicle components (steering, braking, suspension, powertrain and control) into a single compact module positioned between the chassis and the wheel. As the first company to FMVSS certify a full by-wire vehicle in the U.S., REE’s proprietary by-wire technology for drive, steer and brake control eliminates the need for mechanical connection. Using four identical REEcorners® enables REE to make the industry’s flattest EV platforms with more room for passengers, cargo and batteries. REE platforms are future proofed, autonomous capable, offer a low total cost of ownership (TCO), and drastically reduce the time to market for fleets looking to electrify. To learn more visit www.ree.auto.
Media Contact
Malory Van Guilder Skyya PR for REE Automotive +1 651-335-0585 ree@skyya.com
Investor Contact
Dana Rubinstein Chief Strategy Officer | REE Automotive investors@ree.auto
Caution About Forward-Looking Statements
This communication includes certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. For example, REE is using forward-looking statements when it discusses its belief that the strategic manufacturing agreement with Motherson will enable it to scale faster while avoiding common operational challenges faced by start-ups, that it expects to start U.S. production in Michigan with Roush as contract manufacturer for full vehicle assembly in Q4 2024 and deliveries in 2025, its belief that its product offering is the best in an underserved market, and demand continues to grow from fleets and OEMs, that the collaboration with Motherson is expected to drive operational and manufacturing improvements to REE’s production line, supply chain management, lower bill of materials (BOM), improved productivity and cost structure, that the strategic supply chain management agreement with Motherson and the U.S. production kickoff at Roush are expected to materially accelerate its ability to service customers at scale, its anticipation of significant order growth, the update on its production plan and the timing thereof, its belief that its continued expansion of its market leadership and continued execution on its strategic vision will result in the opportunity to license our XBW technology, making REE the “intel Inside” of automotive and Airbus’ expectation to see Powered by REE® tested in a full flight in 2 years in the A350 with more platforms to come. In addition, any statements that refer to plans, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “aim” “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would”, “designed,” “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 communication may include, among other things, statements about REE’s strategic and business plans, technology, relationships and objectives, including its ability to meet certification requirements, the impact of trends on and interest in our business, or product, intellectual property, REE’s expectation for growth, and its future results, operations and financial performance and condition.
These forward-looking statements are based on REE’s current expectations and assumptions about future events and are based on currently available information as of the date of this communication and current expectations, forecasts, and assumptions. Although REE believes that the expectations reflected in forward-looking statements are reasonable, such statements involve an unknown number of risks, uncertainties, judgments, and other factors 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 communication 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.
Uncertainties and risk factors that could affect REE’s future performance and could cause actual results to differ include, but are not limited to: REE’s ability to commercialize its strategic plan, including its plan to successfully evaluate, obtain regulatory approval, produce and market its P7 lineup; REE’s ability to maintain and advance relationships with current Tier 1 suppliers and strategic partners; development of REE’s advanced prototypes into marketable products; REE’s ability to grow and scale manufacturing capacity through relationships with Tier 1 suppliers; REE’s estimates of unit sales, expenses and profitability and underlying assumptions; REE’s reliance on its UK Engineering Center of Excellence for the design, validation, verification, testing and homologation of its products; REE’s limited operating history; risks associated with building out of REE’s supply chain; risks associated with plans for REE’s initial commercial production; REE’s dependence on potential suppliers, some of which will be single or limited source; development of the market for commercial EVs; risks associated with data security breach, failure of information security systems and privacy concerns; risks related to lack of compliance with Nasdaq’s minimum bid price requirement; future sales of our securities by existing material shareholders or by us could cause the market price for the Class A Ordinary Shares to decline; potential disruption of shipping routes due to accidents, political events, international hostilities and instability, piracy or acts by terrorists; intense competition in the e-mobility space, including with competitors who have significantly more resources; risks related to the fact that REE is incorporated in Israel and governed by Israeli law; REE’s ability to make continued investments in its platform; the impact of the COVID-19 pandemic, interest rate changes, the ongoing conflict between Ukraine and Russia and any other worldwide health epidemics or outbreaks that may arise and adverse global conditions, including macroeconomic and geopolitical uncertainty; the global economic environment, the general market, political and economic conditions in the countries in which we operate; the ongoing military conflict in Israel; fluctuations in interest rates and foreign exchange rates; the need to attract, train and retain highly-skilled technical workforce; changes in laws and regulations that impact REE; REE’s ability to enforce, protect and maintain intellectual property rights; REE’s ability to retain engineers and other highly qualified employees to further its goals; and other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in REE’s annual report filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 27, 2024 and in subsequent filings with the SEC.