REE Announces Closing of Public Offering of Ordinary Shares
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Insights
The completion of REE Automotive's underwritten public offering, raising approximately $14.95 million, is a significant financial event for the company. The offering, which included the full exercise of the underwriter’s overallotment option, indicates a healthy demand for the company's shares, a positive sign for investor confidence. The sale of shares at a minimal discount suggests a stable market valuation for REE, which is crucial for existing shareholders.
REE's decision to allocate the net proceeds primarily for working capital and general corporate purposes, such as product development and commercialization, is strategic. It aligns with the company’s growth trajectory in the highly competitive electric vehicle (EV) sector. This capital infusion could strengthen REE's financial position, enabling it to scale operations and potentially accelerate the development of its by-wire electric trucks and platforms.
Investor participation led by M&G Investment Management Limited, a major shareholder, underscores the backing REE has from established financial institutions. Such support can be pivotal in navigating the capital-intensive nature of the automotive industry, especially for a technology company like REE that is focused on innovative and differentiated products.
REE Automotive operates within the burgeoning electric vehicle industry, where innovation and technology are key drivers of success. REE's x-by-wire technology is a distinctive offering that sets it apart from competitors, potentially offering a competitive advantage in the market. The technology's uniqueness, as emphasized by M&G co-head of APAC Equity Investing, may attract partnerships and customer interest, contributing to the company's order book growth.
The EV market is characterized by significant structural demand with limited supply options, which presents an opportunity for REE. Their business model, which focuses on supplying only the technology-driven aspects of flexible vehicle platforms, suggests a lean approach to capital expenditure. This could result in strong unit economics, which is a positive indicator for profitability in the long term.
The recent FMVSS certification milestone mentioned by REE's CEO is a critical achievement in the automotive industry, as it indicates that the company's products meet U.S. safety standards, potentially opening up a larger market for commercialization.
The offering was conducted under an effective shelf registration statement, a common practice that allows companies to prepare for capital raises in advance and act swiftly when market conditions are favorable. The use of a shelf registration demonstrates REE's proactive approach to capital management. Potential investors and stakeholders should be aware that the final prospectus supplement, along with the accompanying prospectus, contains important legal and financial information. It is imperative for investors to review these documents thoroughly to understand the risks and specifics of the offering.
Given that the offering has been declared effective by the Securities and Exchange Commission (SEC), REE has complied with regulatory requirements, which is indicative of the company's adherence to legal standards and transparency in its financial activities. This compliance is essential for maintaining investor trust and avoiding regulatory pitfalls that could negatively impact the company's reputation and stock performance.
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- Overallotment fully exercised
- Multiple investors participated in the round, led by M&G, REE’s largest investor
TEL AVIV, Israel, March 06, 2024 (GLOBE NEWSWIRE) -- REE Automotive Ltd. (Nasdaq: REE), an automotive technology company and provider of full by-wire electric trucks and platforms, today announced the closing of its previously announced underwritten public offering of 2,300,000 Class A ordinary shares (the “ordinary shares”), which includes the full exercise of the underwriter’s overallotment option. Each ordinary share was sold at a public offering price of
The gross proceeds to REE from the offering are approximately
“REE remains financially and operationally disciplined. We are highly motivated by the confidence and continued support of our customers and our investors, including our largest shareholder, M&G. We continue to execute upon our business plans, as evidenced by the recent FMVSS certification milestone and continued growth in our order book. In a market with significant structural demand and limited supply options, we are seeing customer interest continuing to build,” said Daniel Barel, co-founder and CEO of REE Automotive.
“We continue to be very impressed with REE’s execution and its technological achievements. Let’s not lose sight of the fact that REE’s x-by-wire technology, which sits at the heart of its offering, is unlike anything else commercially available today,” said Carl Vine, co-head of APAC Equity Investing at M&G. “REE’s business model has always been differentiated from other companies that we have seen come and go in this space. By only ever intending to supply the critical, technology-driven aspects of its flexible vehicle-platform, REE has always held the promise of strong unit economics with only modest capital needs.”
The securities were offered pursuant to an effective shelf registration statement on Form F-3 (File No. 333-266902), including a base prospectus, filed with the Securities and Exchange Commission (the "SEC") on August 16, 2022, and declared effective by the SEC on August 25, 2022. A final prospectus supplement has been filed with the SEC and, when available, copies of the final prospectus supplement and accompanying base prospectus may be obtained from Roth Capital Partners, LLC, 888 San Clemente, Suite 400, Newport Beach, CA 92660, (800) 678-9147 or by accessing the SEC's website, www.sec.gov. Before investing in this offering, interested parties should read in their entirety the final prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such final prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
To learn more about REE Automotive’s patented technology and unique value proposition that position 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 fully 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 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
Kamal Hamid
VP Investor Relations | REE Automotive
+1 303-670-7756
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 the proposed use of proceeds and its belief that it continues to successfully execute its business plan. 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 28, 2023 and in subsequent filings with the SEC.
FAQ
How much money did REE Automotive Ltd. raise through the issuance of ordinary shares?
At what price were the ordinary shares sold?
Who led the investors in the round of ordinary shares issuance?
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What type of technology does REE Automotive Ltd. provide?
