NEW YORK & OSLO, Norway & LUXEMBOURG--(BUSINESS WIRE)--Nov 14, 2022--

FREYR Battery (NYSE: FREY) (“FREYR” or the “company”), a developer of clean, next-generation battery cell production capacity, today reported financial results for the third quarter of 2022.

Highlights of the third quarter 2022 and subsequent events:

  • On November 11th, FREYR announced the selection and purchase of the site for the company’s Giga America clean battery manufacturing project in Coweta County, Georgia. The project is expected to be developed in multiple phases beginning with an initial battery cell production module of approximately 34 GWh at a preliminarily estimated capital investment of $1.7 billion. Giga America is supported by a combined state and local incentive package of more than $410 million over the multiple phase life of the project.
  • In August 2022, FREYR executed a joint venture agreement with Nidec Corporation (TSE: 6594) (“Nidec”), which included complete terms for a follow-on sales agreement, to supply 38 GWh of LFP Li-Ion battery cells from 2025 - 2030, with options to increase the volume to 50 GWh and to extend the contract beyond 2030. The joint venture will combine FREYR’s clean, next-generation battery cells with Nidec’s expertise as a global leader in the ESS business and will produce modules and packs and generate integrated downstream ESS solutions for industrial and utility grade customers.
  • During the third quarter, a package of 24M Technologies (“24M”) sample cells was sent to a leading laboratory for testing on behalf of a customer. The sample cells exhibited top quartile energy density performance for LFP graphite batteries and demonstrated very strong safety characteristics.
  • In October, FREYR announced a supply chain partnership with ITOCHU Corporation (TSE: 8001) under which ITOCHU will serve as a direct materials supplier for FREYR’s procurement and supply chain operations. The partners intend to establish decarbonized and localized supply chains as FREYR develops its Giga-scale clean battery production.
  • FREYR announced a license and services agreement with Aleees (TWSE: 5227) in October. The agreement, which includes ongoing services and support from Aleees, provides FREYR with a worldwide license to produce and sell LFP cathode material based on Aleees’ technology, and to build production facilities leveraging Aleees’ industrial expertise.

“We are excited with the progress FREYR demonstrated to support our industrialization plan during and subsequent to the third quarter, which included the start of our Giga America project development, securing our first binding long-term sales agreement with Nidec, and completing the initial stage of the project financing process for Giga Arctic” remarked Tom Einar Jensen, FREYR’s Co-Founder and CEO. “With the selection and purchase of the Giga America site now concluded, FREYR is moving rapidly and decisively to advance our strategic goal to become an industrialization partner of choice in the clean battery space on both sides of the Atlantic.”

“Looking through to the fourth quarter and 2023, our team is focused on meeting the key milestones that will further validate the 24M platform, unlock project financing for Giga Arctic, enable strategic capital formation, drive additional sales agreements, and facilitate accelerated development of Giga America,” concluded Jensen.

Business Update

  • FREYR is working through the diligence phase of its project financing process for Giga Arctic in cooperation with its mandated lead arrangers, Export Credit Agencies (“ECAs”) and Multinational Development Financial Institution (“MDFI”) partners after a successful market sounding phase completed in the third quarter. FREYR is targeting conditional credit approvals in 1Q 2023 and financial closing upon satisfying conditions precedent thereafter.
  • The CQP project team continues to work with FREYR’s key vendors to coordinate and finalize deliveries, perform acceptance tests, and commission critical path production equipment with the ambition to reach first sample cell production in 1Q 2023.
  • FREYR’s traction with potential customers outside of the ESS market is accelerating. The company is currently engaged in advanced discussions to secure FREYR’s first electric commercial mobility COA, in addition to detailed conversations with major OEMs to forge potential long-term strategic partnerships and cell supply agreements.
  • FREYR is intensifying and broadening its financing efforts to support the expected capital commitments for the Giga America project in parallel with the ongoing construction of Giga Arctic in Mo i Rana, Norway; the evaluation of highly value accretive potential upstream and downstream modules in the Nordic region and the U.S.; and the continued development of FREYR’s organization.
  • FREYR’s teams continue to progress development of the supply chain in accordance with the company’s long-term strategy to decarbonize and localize key raw materials sourcing and upstream applications. FREYR has secured approximately two-thirds of the raw materials volumes required for Giga Arctic through 2028 and is on track to develop a localized and decarbonized LFP cathode facility in the Nordic region. The company is also evaluating options to co-locate an LFP plant at the Giga America complex in Coweta County, Georgia.
  • In accordance with the initiation of Giga America product development, FREYR has purchased the zoned 368 acres site at the Bridgeport Industrial Park in Coweta Country, Georgia with options for further expansion. The development of Giga America positions FREYR to meet the rapidly growing customer demand for Energy Storage Systems (“ESS”) applications with U.S.-based conditional offtake partners and to leverage the expected financial and strategic benefits of the recently passed Inflation Reduction Act (“IRA”).
  • FREYR finalized its previously announced long-term physical supply agreement with Statkraft, Europe's largest producer of renewable energy, which secures hydropower renewable electricity for Giga Arctic and the Customer Qualification Plant on globally competitive terms.

Results Overview, Financing and Liquidity

  • FREYR reported a net loss for the third quarter of 2022 of $93.9 million or $(0.80) per diluted share compared to a net loss for the third quarter 2021 of $45.4 million or $(0.42) per diluted share. The net loss in the third quarter of 2022 was due in part to a non-cash $70.3 million loss on the fair value adjustment to our warrant liability. This adjustment can vary materially from period-to-period based on several factors, including changes to FREYR’s stock price.
  • As of September 30, 2022, FREYR had cash, cash equivalents, and restricted cash of $418.6 million.

Business Outlook

FREYR is focused on advancing the following strategic mandates and milestones over the next 12 months:

  • Finalize production equipment deliveries and acceptance tests and meet the targeted start and ramp of sample cell production at the CQP in 1Q 2023. The capability to produce sample cells from the CQP is expected to accelerate customer dialogues, fortify FREYR’s competitive position, demonstrate the scalability of the 24M manufacturing process, and satisfy key technical performance milestones.
  • Drive strategic capital formation and meet the conditions precedent to close the Giga Arctic project financing in H1 2023.
  • Accelerate the development of the Giga America project by undertaking and completing detailed plant engineering; applying to the U.S. DOE for a financial assistance package; and working with FREYR’s project teams and key technical personnel at 24M to replicate the major elements of the Giga Arctic project.
  • Develop FREYR’s organizational, financial, and technical capabilities to optimize parallel development of Giga Arctic and Giga America while the company evaluates value-accretive upstream and downstream project opportunities.
  • Progress discussions that will further FREYR’s ambition to be an industrial scaling partner of choice for leading complementary technology platforms that target distinct and additional end market applications across the ESS, passenger EV, and commercial electric mobility markets.
  • Continue to broaden and augment FREYR’s value proposition with the intention to maximize sustainable long-term shareholder value and enhance the company’s competitive position. Key objectives in accordance with this strategy are to continue to forge new strategic and financial partnerships that advance the company’s industrialization plan and capital formation.

Presentation of Third Quarter 2022 Results

A presentation will be held today, November 14, 2022, at 7:30 am Eastern Standard Time (1:30 pm Central European Time) to discuss financial results for the third quarter 2022. The results and presentation material will be available for download at https://ir.freyrbattery.com.

To access the conference call, listeners should contact the conference call operator at the appropriate number listed below approximately 10 minutes prior to the start of the call.

Participant conference call dial-in numbers:

United Kingdom: 020 3936 2999

United States: 1 (646) 664 1960

All other locations: +44 20 3936 2999

The participant passcode for the call is: 303285

A webcast of the conference call will be broadcast simultaneously at https://streams.eventcdn.net/freyer/2022q3 on a listen-only basis. Please log in at least 10 minutes in advance to register and download any necessary software.

A replay of the webcast will be available at https://ir.freyrbattery.com/events-and-presentations/Events-Calendar/default.aspx

About FREYR Battery

FREYR Battery aims to provide industrial scale clean battery solutions to reduce global emissions. Listed on the New York Stock Exchange, FREYR’s mission is to produce green battery cells to accelerate the decarbonization of energy and transportation systems globally. FREYR has commenced building the first of its planned factories in Mo i Rana, Norway and announced potential development of industrial scale battery cell production in Vaasa, Finland, and the United States. FREYR intends to deliver a minimum of 50 GWh of battery cell capacity by 2025, over 100 GWh of annual capacity by 2028, and over 200 GWh of annual capacity by 2030. To learn more about FREYR, please visit www.freyrbattery.com.

Cautionary Statement Concerning Forward-Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, including, without limitation, statements regarding the development, construction, timeline, capacity, and other usefulness of FREYR’s CQP, Giga Arctic, and other planned or future production facilities or Gigafactories in the U.S. (collectively, the “FREYR Facilities”); Giga America’s initial battery cell production module of approximately 34 GWh; the progress and expected outcomes of FREYR’s industrialization plans and capital formation; the expected benefits and progress of any value-accretive upstream and downstream project opportunities; the ability to secure critical path production equipment for the FREYR Facilities in a timely manner; the construction of FREYR’s CQP and its anticipated acceptance tests in H1 2023, as well as the targeted start and ramp up of sample cell production in 1Q 2023; the progress and development of FREYR’s strategic and financial partnerships; FREYR’s ability to convert any conditional agreements into definitive agreements; the progress and development of FREYR’s joint ventures and partnerships; exploration of or progress toward additional debt or equity capital raises, including securing financial support, such as loan guarantees and debt financing support from governments and other entities, to fund FREYR’s planned expansion; FREYR’s ability to advance strategic initiatives to further its aspirations to become an industrial partner of choice in the clean battery space; FREYR’s commitment to accelerating its development plans in the U.S. based on the financial incentives attendant to the proposed Inflation Reduction Act or from any state or local governments; the expectation that the sample cells from the CQP will accelerate customer dialogues, fortify FREYR’s competitive position, demonstrate the scalability of the 24M manufacturing process, and satisfy key technical performance milestones; the progress of securing project financing credit support from ECAs and MDFIs; FREYR’s timeline of the project financing process for Giga Arctic; the progress of discussions that will further FREYR’s ambition to be a scaling partner of choice for leading parallel technology platforms that target distinct and complimentary end market applications across the ESS, passenger EV, and commercial electric mobility spaces; the advancement of FREYR’s augmented value proposition strategy and the ability to meet its key objectives in accordance with this strategy; FREYR’s intention to maximize sustainable long-term shareholder value and enhance its competitive position; FREYR’s intention to establish decarbonized and localized supply chains; and the attainment of operational milestones are forward looking statements.

These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from the expected results. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about factors that could materially affect FREYR is set forth under the “Risk Factors” section in (i) FREYR’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on September 1, 2022, and (ii) FREYR’s annual report on Form 10-K filed with the SEC on March 9, 2022, available on the SEC’s website at www.sec.gov.

Except as otherwise required by applicable law, FREYR disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Should underlying assumptions prove incorrect, actual results and projections could differ material from those expressed in any forward-looking statements.

FREYR BATTERY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

 

September 30,

 

December 31,

 

 

2022

 

2021

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

416,431

 

 

$

563,956

 

Restricted cash

 

 

2,160

 

 

 

1,671

 

Prepaid assets

 

 

9,397

 

 

 

15,882

 

Other current assets

 

 

9,317

 

 

 

1,282

 

Total current assets

 

 

437,305

 

 

 

582,791

 

 

 

 

 

 

Property and equipment, net

 

 

90,392

 

 

 

21,062

 

Convertible note

 

 

20,498

 

 

 

20,231

 

Equity method investments

 

 

1,807

 

 

 

2,938

 

Right-of-use asset under operating leases

 

 

12,730

 

 

 

 

Other long-term assets

 

 

9

 

 

 

11

 

Total assets

 

$

562,741

 

 

$

627,033

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

2,795

 

 

$

3,813

 

Accrued liabilities and other

 

 

34,026

 

 

 

15,077

 

Accounts payable and accrued liabilities - related party

 

 

799

 

 

 

3,316

 

Deferred income

 

 

1,306

 

 

 

1,380

 

Share-based compensation liability

 

 

8,227

 

 

 

2,211

 

Total current liabilities

 

 

47,153

 

 

 

25,797

 

 

 

 

 

 

Warrant liability

 

 

94,712

 

 

 

49,124

 

Operating lease liability

 

 

9,933

 

 

 

 

Long-term share-based compensation liability

 

 

 

 

 

6,627

 

Total liabilities

 

 

151,798

 

 

 

81,548

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Ordinary share capital, no par value, 245,000 ordinary shares authorized and 116,854 issued as of both September 30, 2022 and December 31, 2021 and 116,704 and 116,854 ordinary shares outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

116,854

 

 

 

116,854

 

Additional paid-in capital

 

 

540,561

 

 

 

533,418

 

Treasury stock

 

 

(1,052

)

 

 

 

Accumulated other comprehensive (loss) income

 

 

(17,071

)

 

 

(524

)

Accumulated deficit

 

 

(228,349

)

 

 

(104,263

)

Total shareholders' equity

 

 

410,943

 

 

 

545,485

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

562,741

 

 

$

627,033

 

FREYR BATTERY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In Thousands, Except per Share Amounts)

(Unaudited)

 

 

 

Three months ended
September 30,

 

Nine months ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

Operating expenses:

 

 

 

 

 

 

 

 

General and administrative

 

$

25,124

 

 

$

30,057

 

 

$

77,888

 

 

$

46,245

 

Research and development

 

 

3,253

 

 

 

5,257

 

 

 

9,194

 

 

 

11,209

 

Equity in losses from investee

 

 

668

 

 

 

 

 

 

1,131

 

 

 

 

Total operating expenses

 

 

29,045

 

 

 

35,314

 

 

 

88,213

 

 

 

57,454

 

Loss from operations

 

 

(29,045

)

 

 

(35,314

)

 

 

(88,213

)

 

 

(57,454

)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Warrant liability fair value adjustment

 

 

(70,292

)

 

 

(11,173

)

 

 

(45,588

)

 

 

(11,173

)

Redeemable preferred shares fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

75

 

Convertible note fair value adjustment

 

 

(224

)

 

 

 

 

 

267

 

 

 

 

Interest income

 

 

71

 

 

 

51

 

 

 

132

 

 

 

59

 

Interest expense

 

 

(11

)

 

 

(1

)

 

 

(43

)

 

 

(1

)

Foreign currency transaction gain

 

 

4,325

 

 

 

1,015

 

 

 

5,415

 

 

 

827

 

Other income, net

 

 

1,326

 

 

 

3

 

 

 

3,944

 

 

 

2,325

 

Total other income (expense)

 

 

(64,805

)

 

 

(10,105

)

 

 

(35,873

)

 

 

(7,888

)

Loss before income taxes

 

 

(93,850

)

 

 

(45,419

)

 

 

(124,086

)

 

 

(65,342

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(93,850

)

 

$

(45,419

)

 

$

(124,086

)

 

$

(65,342

)

 

 

 

 

 

 

 

 

 

Weighted average ordinary shares outstanding - basic and diluted

 

 

116,704

 

 

 

108,713

 

 

 

116,795

 

 

 

61,467

 

Net loss per share - basic and diluted

 

$

(0.80

)

 

$

(0.42

)

 

$

(1.06

)

 

$

(1.06

)

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

Net loss

 

$

(93,850

)

 

$

(45,419

)

 

$

(124,086

)

 

$

(65,342

)

Foreign currency translation adjustments

 

 

(9,089

)

 

 

(558

)

 

 

(16,547

)

 

 

(324

)

Total comprehensive loss

 

$

(102,939

)

 

$

(45,977

)

 

$

(140,633

)

 

$

(65,666

)

 

 

 

 

 

 

 

 

 

FREYR BATTERY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

 

Nine months ended
September 30,

 

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(124,086

)

 

$

(65,342

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

Share-based compensation expense

 

 

9,280

 

 

 

14,367

 

Depreciation

 

 

298

 

 

 

54

 

Reduction in the carrying amount of right-of-use assets

 

 

1,096

 

 

 

 

Warrant liability fair value adjustment

 

 

45,588

 

 

 

11,173

 

Redeemable preferred shares fair value adjustment

 

 

 

 

 

(74

)

Convertible note fair value adjustment

 

 

(267

)

 

 

 

Equity in losses from investee

 

 

1,131

 

 

 

 

Foreign currency transaction net unrealized gain

 

 

(4,864

)

 

 

 

Other

 

 

 

 

 

(54

)

Changes in assets and liabilities:

 

 

 

 

Prepaid assets

 

 

4,054

 

 

 

(6,065

)

Other current assets

 

 

(11,113

)

 

 

(236

)

Accounts payable and accrued liabilities

 

 

5,692

 

 

 

8,365

 

Accounts payable and accrued liabilities - related party

 

 

820

 

 

 

738

 

Other current liabilities

 

 

(2

)

 

 

 

Deferred income

 

 

182

 

 

 

1,431

 

Operating lease liability

 

 

(802

)

 

 

 

Net cash used in operating activities

 

 

(72,993

)

 

 

(35,643

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Proceeds from property related grants

 

 

10,461

 

 

 

 

Purchases of property and equipment

 

 

(77,687

)

 

 

(4,099

)

Investments in equity method investee

 

 

(3,000

)

 

 

 

Purchases of other long-term assets

 

 

 

 

 

(12

)

Net cash used in investing activities

 

 

(70,226

)

 

 

(4,111

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Repurchase of treasury shares

 

 

(1,052

)

 

 

 

Proceeds from Business Combination

 

 

 

 

 

70,836

 

Proceeds from PIPE Investment

 

 

 

 

 

600,000

 

Issuance cost

 

 

 

 

 

(26,334

)

Payments for the Norway Demerger

 

 

 

 

 

(3,002

)

Proceeds from issuance of redeemable preferred shares

 

 

 

 

 

7,500

 

Net cash (used in) provided by financing activities

 

 

(1,052

)

 

 

649,000

 

 

 

 

 

 

Effect of changes in foreign exchange rates on cash, cash equivalents, and restricted cash

 

 

(2,765

)

 

 

(730

)

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(147,036

)

 

 

608,516

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

565,627

 

 

 

14,945

 

Cash, cash equivalents, and restricted cash at end of period

 

$

418,591

 

 

$

623,461

 

 

 

 

 

 

Reconciliation to consolidated balance sheets:

 

 

 

 

Cash and cash equivalents

 

$

416,431

 

 

$

622,582

 

Restricted cash

 

 

2,160

 

 

 

879

 

Cash, cash equivalents, and restricted cash

 

$

418,591

 

 

$

623,461

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20221114005428/en/

CONTACT: Investor contact:

Jeffrey Spittel

Vice President, Investor Relations

jeffrey.spittel@freyrbattery.com

Tel: (+1) 281-222-0161Media contact:

Katrin Berntsen

Vice President, Communication and Public Affairs

katrin.berntsen@freyrbattery.com

Tel: (+47) 920 54 570

KEYWORD: NEW YORK NORTH AMERICA UNITED STATES EUROPE NORWAY LUXEMBOURG

INDUSTRY KEYWORD: AUTOMOTIVE AUTOMOTIVE MANUFACTURING TECHNOLOGY MANUFACTURING BATTERIES ALTERNATIVE VEHICLES/FUELS

SOURCE: FREYR Battery

Copyright Business Wire 2022.

PUB: 11/14/2022 06:05 AM/DISC: 11/14/2022 06:06 AM

http://www.businesswire.com/news/home/20221114005428/en

Copyright Business Wire 2022.

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