Ree Automotive plans to scale up production by end of 2024

The company said, “We remain disciplined and focused on reducing our operating costs as we continue to progress with our production plan. Our third quarter U.S. generally accepted accounting principlesnet loss was $24.1 million, compared to $26.2 million in Q2 2023 and $33.5 million in Q3 2022, a decrease of 28% year-over-year in GAAP net loss, and a decrease of 8% compared to the previous quarter. The year-over-year decrease was mainly driven by grants received from the UK government in Q3 2023, a decrease in share-based compensation expenses and operational efficiencies we implemented which decreased payroll and related expenses and other operational expenses. These decreases were partially offset by an increase in cost of sales attributed to material purchases for pilot vehicle builds and an increase in engineering development costs. Our Non-GAAP net loss in the quarter was $20.1 million, compared to $22.0 million in Q2 2023 and $27.3 million in Q3 2022, a decrease of 26% year-over-year and a decrease of 9% compared to the previous quarter. During the third quarter we sold approximately 2.28 million shares as part of our At-the-Market program for gross proceeds of approximately $0.7 million and we secured a bank credit facility of $15 million. We ended Q3 2023 with liquidity of $101 million comprised of $86 million cash, cash equivalents and short-term investments, and a $15 million credit facility. On November 27, 2023, we entered into a securities purchase agreements with certain investors led by our largest institutional shareholder, London-based M&G Investment Ltd. The agreement includes convertible promissory notes of $8 million in the aggregate, and warrants to purchase up to an aggregate of 1,571,710 of our Class A ordinary shares. The closing of the notes is expected to occur on or before December 11, 2023. The notes will have a term of five years, accrue interest at a rate of ten percent per annum and are convertible into our Class A Ordinary Shares, at a conversion price of $5.09 per share. We may not repay any portion of the outstanding principal amount of the notes prior to the maturity date. The conversion price of the notes is subject to customary adjustments, as well as contain certain anti-dilution protection in the event of certain issuances at a price less than the conversion price then in effect. The warrants will be immediately exercisable at an exercise price of $4.42 per ordinary share and will have a term of five years from the date of issuance. Our business plan includes scaling up the production of the low hundreds of vehicles in the US by the end of 2024, upon completion of our tooling investment plan. As a result, we plan to produce a minimum number of demo vehicles from our UK facility that will allow us to collect customer feedback, before we begin mass production in the U.S. Our ability to successfully carry out the 2024 plan is primarily dependent upon completion of the tooling investment, securing availability of materials on time and securing additional funding of approximately $20 million as currently estimated, mainly for working capital purposes.”