REE Automotive Secures $8.75M in Convertible Notes & Warrants
Ticker: REE · Form: 6-K · Filed: Jan 5, 2024 · CIK: 1843588
| Field | Detail |
|---|---|
| Company | Ree Automotive Ltd. (REE) |
| Form Type | 6-K |
| Filed Date | Jan 5, 2024 |
| Risk Level | medium |
| Pages | 2 |
| Reading Time | 3 min |
| Key Dollar Amounts | $8,000,000, $750,000, $5.74 |
| Sentiment | mixed |
Complexity: simple
Sentiment: mixed
Topics: convertible-debt, warrants, capital-raise, dilution-risk
TL;DR
**REE just raised $8.75M via convertible notes and warrants, boosting cash but risking future dilution.**
AI Summary
REE Automotive Ltd. closed an offering on December 3, 2023, raising $8,000,000 through convertible promissory notes and warrants for 1,571,710 Class A ordinary shares. Additionally, on December 6, 2023, REE entered into a Securities Purchase Agreement with an accredited investor for a $750,000 convertible promissory note and warrants for 130,662 Class A ordinary shares. The $750,000 note has a five-year term, accrues 10% annual interest, and is convertible at $5.74 per share. This matters to investors because REE is raising capital through debt that can convert into shares, potentially diluting existing shareholders, but also providing necessary funds for general corporate and working capital purposes.
Why It Matters
This filing shows REE Automotive is raising capital through convertible debt, which provides immediate funding but could dilute existing shareholders if the notes convert into new shares.
Risk Assessment
Risk Level: medium — The issuance of convertible notes and warrants introduces potential future dilution for existing shareholders, which is a moderate risk.
Analyst Insight
An investor should monitor REE Automotive's future share count and conversion activity, as the potential for dilution from these convertible notes and warrants could impact per-share value. While the capital infusion is positive for operations, the terms of conversion and exercise prices are key to understanding the long-term impact on existing shareholders.
Key Numbers
- $8,000,000 — Convertible Notes Principal (Amount raised in the December 3, 2023 offering)
- 1,571,710 — Warrants Issued (Number of Class A ordinary shares warrants issued in the December 3, 2023 offering)
- $750,000 — Additional Convertible Note (Principal amount of the note from the December 6, 2023 agreement)
- 130,662 — Additional Warrants (Number of Class A ordinary shares warrants from the December 6, 2023 agreement)
- $5.74 — Conversion Price (Price per share for the $750,000 convertible note)
- 10% — Interest Rate (Annual interest rate for the $750,000 convertible note)
Key Players & Entities
- REE Automotive Ltd. (company) — the registrant issuing securities
- $8,000,000 (dollar_amount) — principal amount of convertible notes from the December 3, 2023 offering
- 1,571,710 (dollar_amount) — number of Class A ordinary shares warrants from the December 3, 2023 offering
- December 3, 2023 (date) — closing date of the initial offering
- December 6, 2023 (date) — date of the Securities Purchase Agreement with an accredited investor
- $750,000 (dollar_amount) — principal amount of the convertible promissory note from the December 6, 2023 agreement
- 130,662 (dollar_amount) — number of Class A ordinary shares warrants from the December 6, 2023 agreement
- $5.74 (dollar_amount) — conversion price per share for the $750,000 note
- accredited investor (person) — purchaser of the $750,000 convertible note and warrant
Forward-Looking Statements
- REE Automotive's share price may experience downward pressure due to potential dilution from the conversion of notes and exercise of warrants. (REE Automotive Ltd.) — medium confidence, target: Within 12 months
- The company's liquidity will improve in the short term due to the capital raised. (REE Automotive Ltd.) — high confidence, target: Within 6 months
FAQ
What was the total principal amount of convertible promissory notes issued by REE Automotive Ltd. as disclosed in this filing?
REE Automotive Ltd. issued a total of $8,000,000 in convertible promissory notes on December 3, 2023, and an additional $750,000 convertible promissory note on December 6, 2023, totaling $8,750,000 in principal amount.
How many Class A ordinary shares could be purchased through the warrants issued in connection with these offerings?
The warrants issued allow for the purchase of up to an aggregate of 1,571,710 Class A ordinary shares from the December 3, 2023 offering, and an additional 130,662 Class A ordinary shares from the December 6, 2023 agreement, totaling 1,702,372 Class A ordinary shares.
What is the conversion price for the $750,000 convertible promissory note entered into on December 6, 2023?
The conversion price for the $750,000 convertible promissory note is $5.74 per Class A ordinary share.
What is the interest rate and term for the $750,000 convertible promissory note?
The $750,000 convertible promissory note has a term of five years and accrues interest at a rate of ten percent per annum.
What are the stated purposes for which REE Automotive Ltd. intends to use the net proceeds from these offerings?
REE Automotive Ltd. intends to use the net proceeds from these offerings for general corporate and working capital purposes.
Filing Stats: 675 words · 3 min read · ~2 pages · Grade level 13.7 · Accepted 2024-01-05 17:00:03
Key Financial Figures
- $8,000,000 — issory notes in the principal amount of $8,000,000 in the aggregate and warrants to purcha
- $750,000 — Note”) in the principal amount of $750,000, and a warrant (“Warrant”)
- $5.74 — rdinary Shares at a conversion price of $5.74 per share. The Registrant may not repay
Filing Documents
- ea189608-6k_reeautomotive.htm (6-K) — 17KB
- ea189608ex99-1_reeauto.htm (EX-99.1) — 238KB
- ea189608ex99-2_reeauto.htm (EX-99.2) — 109KB
- ea189608ex99-3_reeauto.htm (EX-99.3) — 82KB
- 0001213900-24-001584.txt ( ) — 447KB
SIGNATURES
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REE AUTOMOTIVE LTD. By: /s/ Avital Futterman Name: Avital Futterman Title: General Counsel Date: January 5, 2024 3