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FREYR Battery Reports First Quarter 2024 Results

08 May 2024

NEW YORK & OSLO, Norway & NEWNAN, Ga. / May 08, 2024 / Business Wire / FREYR Battery, Inc. (NYSE: FREY) (“FREYR” or the “Company”), a developer of sustainable, next-generation battery cell production capacity, today reported financial results for the first quarter of 2024.

Highlights of the First Quarter 2024 and Subsequent Events:

  • Operations Update. Approaching first automated unit cell production trial at the Customer Qualification Plant (“CQP”). Following the achievement of key interim milestones at the CQP earlier this year, FREYR’s Asset Mo teams are preparing for the start of unit cell production with the full automation of the Casting and Unit Cell Assembly, which remains on track for H1 2024. In recent weeks, the team has been focusing on integrating casting webs across the cathode, anode, and merge units using the highly complex Multi-Carrier System (“MCS”), which is the largest of its kind globally according to FREYR’s automation partner Siemens AG.
  • Executing plan to accelerate path to market and first revenues. FREYR is prioritizing two potential pathways to fast-track the Company’s commercial and financial development, which include finalizing a conventional technology agreement with an established cell producer, and an inorganic opportunity targeting a value chain adjacency. Advanced discussions between the relevant parties are ongoing and the Company intends to share details of the agreements as appropriate.

“Our teams continued to make meaningful progress to advance our strategic objectives during the first quarter,” commented Birger Steen, FREYR’s Chief Executive Officer. “Thanks to the tireless efforts of Mike Brose, SVP of Asset Mo, his team, and our partners, we are approaching a major milestone on the SemiSolidTM platform at the CQP with our first unit cell production trial using the full automation of the Casting and Unit Cell Assembly. The pace of commercial and strategic discussions has also accelerated in recent months as we evaluate and pursue several promising opportunities under the FREYR 2.0 growth initiative. In the coming weeks, our teams will remain focused on our important work at the CQP and finalizing these transformational agreements to generate sustainable long-term value for our shareholders.”

Recent news

  • FREYR strengthens Board of Directors. On April 19, 2024, the Company announced the appointments of Todd Kantor, Tore Ivar Slettemoen, and David Manners to FREYR’s Board of Directors. The appointments of Mr. Kantor and Mr. Slettemoen, two of FREYR’s founding investors, underscore FREYR’s commitment to shareholder alignment and long-term value creation. With his decades of public and private sector experience, Mr. Manners brings deep expertise in the energy sector, geopolitics, public policy, and government affairs to the FREYR Board.
  • FREYR’s rapidly expanding stationary storage opportunity. On April 29, 2024, energy ministers from the Group of Seven (“G7”) major industrialized economies issued a draft statement targeting a 6.5-fold increase in energy storage capacity across the power sector from 230 GW in 2022 to 1,500 GW in 2030. Referencing recent analysis from the International Energy Agency (“IEA”), the G7 ministers reiterated a shared commitment to a targeted tripling of renewables deployment through 2035. The draft statement and associated targets align with FREYR’s commercial strategy to focus on the battery stationary storage market.

Business update

  • Giga Arctic. FREYR continues to evaluate use cases for the winterized and secured Giga Arctic buildings and site, which could include its original design as a gigafactory based on SemiSolidTM technology, battery component manufacturing, or other related battery industrial applications. In addition, FREYR has received unsolicited inquiries regarding a potential sale of the 75,000 square meter facility to third parties for possible use cases which include repurposing it as a data center. The Company will continue to actively assess the future of the asset, which carries a book value of $225 million, with a focus on optimizing shareholder value.
  • Conventional cell production technology. FREYR continues to scope the conventional cell production facility project at Giga America. The Company believes that the maturity of conventional technology and associated supply chains will enable the fastest path to the market, financing, and anticipated equipment deliveries at Giga America. FREYR is currently in advanced negotiations pertaining to several aspects of the project and expects to be in position to make announcements during Q2 2024.
  • FREYR 2.0 Growth Initiative. The Company has streamlined its project pipeline though ongoing diligence and commercial discussions to focus on four distinct projects tied to ESS and commercial E-mobility use cases. As part of this initiative, FREYR is currently in advanced negotiations to potentially reach two strategic agreements that align with the Company’s objective to accelerate the timeline to market and initial revenues.
  • Overview of the SemiSolidTM manufacturing process. Unlike conventional lithium-ion battery manufacturing, which involves producing electrodes on separate equipment before assembling them into cells, the SemiSolidTM technology employs a continuous and integrated process. The SemiSolidTM process starts with electrode coating and proceeds to electrode stacking. The next-generation production line equipment (“PLE”) then creates independent “unit cells”, each containing a cathode, anode, and separator.

    The subsequent steps required to produce a complete cell in a pouch – which is a stack of multiple unit cells, have already been developed and validated on the SemiSolidTM platform. As such, producing these unit cells continuously and with the full automation of the Casting and Unit Cell Assembly is expected to constitute a significant technical achievement.

Results Overview, Financing, and Liquidity

  • FREYR reported a net loss attributable to stockholders for the first quarter of 2024 of $(28.5) million, or $(0.20) per diluted share compared to net loss for the first quarter 2023 of $(12.7) million or $(0.09) per diluted share. The increase in net loss in the first quarter of 2024 was primarily due to a $1.5 million net foreign currency transaction gain for the three months ended March 31, 2024, compared to a $16.0 million gain for the three months ended March 31, 2023.
  • As of March 31, 2024, FREYR had cash, cash equivalents, and restricted cash of $252.8 million, and no debt.

Business Outlook

FREYR is focused on advancing the following strategic mandates and milestones:

  • The CQP and SemiSolidTM technology. Commencing production of unit cells using the full automation of the Casting and Unit Cell Assembly in H1 2024 to validate FREYR’s technical and operational credentials as a battery production company.
  • Conventional technology strategy. FREYR is advancing discussions to finalize a potential conventional technology agreement, which the Company believes presents an accelerated path to market and first production.
  • Capital formation. The Company is pursuing several capital formation opportunities in parallel to unlock FREYR’s commercial development at scale. Ongoing activities include the Title 17 application with the U.S. Department of Energy’s Loans Program Office, exploring options for project level equity for Giga America, and financing solutions related to potential strategic agreements that are under evaluation. With a robust balance sheet and solid liquidity profile, a secondary common equity raise is not currently under consideration.
  • Commercial development. FREYR is focused on accelerating its path to market and first revenues while the work continues at the CQP. The Company is currently pursuing four major project opportunities and advancing discussions related to two potential strategic agreements that would accelerate FREYR’s commercial ambitions.

Presentation of First Quarter 2024 Results

A presentation will be held today, May 8, 2024, at 8:30 am Eastern Daylight Time (2:30 pm Central European Time) to discuss financial results for the first quarter 2024. 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 States: 1 (646) 307-1963
United Kingdom: +44 20 3481 4247
Norway: +47 57 98 94 30
Denmark: +45 32 74 07 10
Spain: +34 910 489 958
Germany: +49 69 589964217
Sweden: +46 8 505 246 90

The participant passcode for the call is: 7135736

A webcast of the conference call will be broadcast simultaneously at https://app.webinar.net/J6PeRg4rGl5 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 is a developer of sustainable, next-generation battery cell production capacity. The Company’s mission is to accelerate the decarbonization of global energy and transportation systems by producing sustainable, cost-competitive batteries. FREYR seeks to serve the primary markets of energy storage systems (“ESS”) and commercial mobility, and the Company maintains an ambition to serve the passenger electric vehicles market (“EV”). FREYR is operating its Customer Qualification Plant (“CQP”) for technology development in Mo i Rana, Norway, and the Company is continuing development of the Giga America battery manufacturing project in Coweta County, Georgia, in the U.S. To learn more about FREYR, please visit www.freyrbattery.com.

Cautionary Statement Concerning Forward-Looking Statements

All statements, other than statements of present or historical fact included in this press release, including, without limitation, FREYR Battery, Inc.’s (“FREYR”) ability to conduct initial unit cell production trials, commencing initial volume production in Q2 2024; FREYR’s cost and capital efficiency; FREYR’s plan to expand on the battery value chain into high value adjacencies and cultivate partnerships across the cell production technology spectrum; FREYR’s efforts to accelerate the path to commercialization; the pursuit of four major project opportunities in accordance with the FREYR 2.0 growth strategy; potential inorganic growth opportunities and the ability to generate revenue in the near-term through possible acquisitions; approaching milestones at FREYR’s CQP; the Company’s application with the U.S. Department of Energy through the Title 17 application under the Loan Programs Office; the development, financing, construction, timeline, capacity, and other usefulness of FREYR’s CQP, Giga Arctic, Giga America, and other planned or future production facilities or Gigafactories; any potential project equity raise for the development of Giga America; any potential benefits of the U.S. Inflation Reduction Act; establishing and/or announcing a conventional technology agreement; FREYR’s ability to reduce spending; any potential benefits of redomiciling to the U.S.; the giga-scalability of the 24M platform; and the implementation and effectiveness of FREYR’s overall business, technology, capital-raising, and liquidity strategies are forward-looking statements.

These forward-looking statements involve significant risks and uncertainties that could cause the 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 subsequent post-effective amendment thereto filed on January 5, 2024, (ii) FREYR Battery, Inc.’s Registration Statement on Form S-4 filed with the SEC on September 8, 2023 and subsequent amendments thereto filed on October 13, 2023, October 19, 2023, and October 31, 2023, and (iii) FREYR’s annual report on Form 10-K filed with the SEC on February 29, 2024 and 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 presentation. Should underlying assumptions prove incorrect, actual results and projections could differ materially from those expressed in any forward-looking statements.

FREYR intends to use its website as a channel of distribution to disclose information which may be of interest or material to investors and to communicate with investors and the public. Such disclosures will be included on FREYR’s website in the ‘Investor Relations’ sections. FREYR also intends to use certain social media channels, including, but not limited to, Twitter and LinkedIn, as means of communicating with the public and investors about FREYR, its progress, products, and other matters. While not all the information that FREYR posts to its digital platforms may be deemed to be of a material nature, some information may be. As a result, FREYR encourages investors and others interested to review the information that it posts and to monitor such portions of FREYR’s website and social media channels on a regular basis, in addition to following FREYR’s press releases, SEC filings, and public conference calls and webcasts. The contents of FREYR’s website and other social media channels shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

FREYR BATTERY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

     

 

 

March 31,

2024

 

December 31,

2023

 

 

 

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

249,855

 

 

$

253,339

 

Restricted cash

 

 

2,911

 

 

 

22,403

 

Prepaid assets

 

 

1,770

 

 

 

2,168

 

Other current assets

 

 

13,636

 

 

 

34,044

 

Total current assets

 

 

268,172

 

 

 

311,954

 

 

 

 

 

 

Property and equipment, net

 

 

354,479

 

 

 

366,357

 

Intangible assets, net

 

 

2,775

 

 

 

2,813

 

Long-term investments

 

 

22,147

 

 

 

22,303

 

Right-of-use asset under operating leases

 

 

22,684

 

 

 

24,476

 

Other long-term assets

 

 

9

 

 

 

4,282

 

Total assets

 

$

670,266

 

 

$

732,185

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

8,460

 

 

$

18,113

 

Accrued liabilities and other

 

 

31,419

 

 

 

30,790

 

Share-based compensation liability

 

 

162

 

 

 

281

 

Total current liabilities

 

 

40,041

 

 

 

49,184

 

 

 

 

 

 

Warrant liability

 

 

1,869

 

 

 

2,025

 

Operating lease liability

 

 

17,252

 

 

 

18,816

 

Other long-term liabilities

 

 

27,442

 

 

 

27,444

 

Total liabilities

 

 

86,604

 

 

 

97,469

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding as of both March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.01 par value, 355,000 shares authorized, and 139,705 issued and outstanding as of both March 31, 2024 and December 31, 2023

 

 

1,397

 

 

 

1,397

 

Additional paid-in capital

 

 

929,303

 

 

 

925,623

 

Accumulated other comprehensive (loss) income

 

 

(44,870

)

 

 

(18,826

)

Accumulated deficit

 

 

(303,542

)

 

 

(274,999

)

Total stockholders' equity

 

 

582,288

 

 

 

633,195

 

 

 

 

 

 

Non-controlling interests

 

 

1,374

 

 

 

1,521

 

Total equity

 

 

583,662

 

 

 

634,716

 

 

 

 

 

 

Total liabilities and equity

 

$

670,266

 

 

$

732,185

 

FREYR BATTERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

(Unaudited)

   

 

 

Three months ended

March 31,

 

 

 

2024

 

 

 

2023

 

Operating expenses:

 

 

 

 

General and administrative

 

$

22,901

 

 

$

30,002

 

Research and development

 

 

11,745

 

 

 

4,844

 

Share of net loss of equity method investee

 

 

156

 

 

 

25

 

Total operating expenses

 

 

34,802

 

 

 

34,871

 

Loss from operations

 

 

(34,802

)

 

 

(34,871

)

 

 

 

 

 

Other income (expense):

 

 

 

 

Warrant liability fair value adjustment

 

 

146

 

 

 

1,405

 

Interest income, net

 

 

1,405

 

 

 

3,003

 

Foreign currency transaction gain

 

 

1,477

 

 

 

16,048

 

Other income, net

 

 

3,084

 

 

 

1,715

 

Total other income

 

 

6,112

 

 

 

22,171

 

Loss before income taxes

 

 

(28,690

)

 

 

(12,700

)

Income tax expense

 

 

 

 

 

(203

)

Net loss

 

 

(28,690

)

 

 

(12,903

)

Net loss attributable to non-controlling interests

 

 

147

 

 

 

177

 

Net loss attributable to stockholders

 

$

(28,543

)

 

$

(12,726

)

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

 

139,705

 

 

 

139,705

 

Net loss per share attributable to stockholders - basic and diluted

 

$

(0.20

)

 

$

(0.09

)

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

Net loss

 

$

(28,690

)

 

$

(12,903

)

Foreign currency translation adjustments

 

 

(26,044

)

 

 

(33,718

)

Total comprehensive loss

 

$

(54,734

)

 

$

(46,621

)

Comprehensive loss attributable to non-controlling interests

 

 

147

 

 

 

177

 

Comprehensive loss attributable to stockholders

 

$

(54,587

)

 

$

(46,444

)

 

 

 

 

 

FREYR BATTERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

   

 

 

Three months ended

March 31,

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(28,690

)

 

$

(12,903

)

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

 

 

 

 

Share-based compensation expense

 

 

3,551

 

 

 

1,477

 

Depreciation and amortization

 

 

2,211

 

 

 

208

 

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

 

 

277

 

 

 

399

 

Warrant liability fair value adjustment

 

 

(146

)

 

 

(1,405

)

Convertible note fair value adjustment

 

 

 

 

 

(1,074

)

Share of net loss of equity method investee

 

 

156

 

 

 

25

 

Foreign currency transaction net unrealized gain

 

 

(1,359

)

 

 

(15,488

)

Changes in assets and liabilities:

 

 

 

 

Prepaid assets and other current assets

 

 

2,852

 

 

 

(3,403

)

Accounts payable, accrued liabilities and other

 

 

5,879

 

 

 

21,477

 

Operating lease liability

 

 

(949

)

 

 

(1,862

)

Net cash used in operating activities

 

 

(16,218

)

 

 

(12,549

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Proceeds from the return of property and equipment deposits

 

 

19,021

 

 

 

 

Purchases of property and equipment

 

 

(21,455

)

 

 

(64,067

)

Investments in equity method investee

 

 

 

 

 

(1,655

)

Purchases of other long-term assets

 

 

 

 

 

(1,000

)

Net cash used in investing activities

 

 

(2,434

)

 

 

(66,722

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Net cash provided by financing activities

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(4,324

)

 

 

(8,998

)

Net decrease in cash, cash equivalents, and restricted cash

 

 

(22,976

)

 

 

(88,269

)

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

 

 

275,742

 

 

 

563,045

 

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

 

$

252,766

 

 

$

474,776

 

 

 

 

 

 

Supplementary disclosure for non-cash activities:

 

 

 

 

Accrued purchases of property and equipment

 

$

9,981

 

 

$

24,402

 

 

 

 

 

 

Reconciliation to condensed consolidated balance sheets:

 

 

 

 

Cash and cash equivalents

 

$

249,855

 

 

$

392,536

 

Restricted cash

 

 

2,911

 

 

 

82,240

 

Cash, cash equivalents, and restricted cash

 

$

252,766

 

 

$

474,776

 

 

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