Non-Reliance on Previously Issued Financial Statements
On January 14, 2025, the management of Polestar Automotive Holding UK PLC (the “Company”), in consultation with the Audit Committee of the Board of Directors (the “Audit Committee”), concluded that the Company’s previously issued audited financial statements included within Annual Reports on Form 20-F for the years ended December 31, 2022 and December 31, 2023 (the “Audited Affected Financials”) and the unaudited interim financial information included within Current Reports on Form 6-K for the quarterly periods ending on and falling between September 30, 2022 and June 30, 2024 (the “Unaudited Affected Financials” and together with the Audited Affected Financials, the “Affected Financials”) contain errors that warrant restatement of the Audited Affected Financials and the interim financial information for the six-month periods ended June 30, 2023, and June 30, 2024.
The primary reason for this restatement decision relates to balance sheet errors concerning the Company’s unique tooling (further explained below), which have resulted in an underreporting of assets and accrued liabilities in matching amounts for the periods referenced above. The correction of these balance sheet errors will have no impact on previously reported revenue, operating loss, net loss, adjusted EBITDA or net assets, nor do these corrections affect the Company’s underlying business operations, cash position, or liquidity.
As previously disclosed, the Company owns unique tooling which is used in the manufacturing of its vehicles. This unique tooling has previously been recognised as property plant and equipment once either the production standard part process test is conducted or production utilizing the unique vendor tools has occurred. Management has determined that certain unique tooling should have instead been recognised as assets under construction (“AUC”) according to the progression of work, resulting in a material understatement of AUC and a corresponding understatement of accrued liabilities in the Affected Financials. The reconsideration of AUC recognition will change the timing of recognising AUC but will not change the expected total amount of AUC recognised.
A reclassification of cash flows between operating and investing activities and other smaller errors that have been identified will also be corrected as part of this restatement process.
As a result of the above noted accounting errors, the Audit Committee, based on the recommendation of, and after consultation with, the Company’s management, have further concluded that the Affected Financials should no longer be relied upon, including the associated report of the Company’s independent registered public accounting firm, Deloitte AB (“Deloitte”). Similarly, any quarterly results issued during the aforementioned periods, press releases, shareholder communications, investor presentations or other communications describing relevant portions of the Affected Financials should no longer be relied upon.
The Company is in the process of finalizing the restatement adjustments and evaluating the impact of the above accounting errors on its assessment of the effectiveness of internal control over financial reporting. The Company intends to restate the Audited Affected Financials in an amendment to its Annual Report on Form 20-F for the year ended December 31, 2023. Regarding the Unaudited Affected Financials, the Company intends to restate the interim financial information for the six-month periods ended June 30, 2023, and June 30, 2024, through an amendment to its Current Report on Form 6-K filed with the U.S. Securities and Exchange Commission on September 30, 2024. Except as described in the preceding sentence, the Company does not expect to restate the quarterly Unaudited Affected Financials.
The conclusions of the Audit Committee and Company management described above have been discussed with Deloitte.
Forward-Looking Statements
Certain statements in this Form 6-K may be considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or the future financial or operating performance of Polestar including the number of vehicle deliveries and gross margin. For example, projections of revenue, volumes, margins, cash flow break-even and other financial or operating metrics and statements regarding expectations of future needs for funding and plans related thereto are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “forecast”, “plan”, “seek”, “future”, “propose” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.
