Surf Air Mobility

FREYR Battery Reports Third Quarter 2023 Results

09 November 2023

NEW YORK & OSLO & LUXEMBOURG / Nov 09, 2023 / Business Wire / 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 2023.

Highlights of the Third Quarter 2023 and Subsequent Events:

  • Following operations updates published on September 6, 2023, and October 4, 2023, highlighting the achievements of interim technical milestones, the timeline for completing the highly complex commissioning of the Casting and Unit Cell Assembly equipment at the Customer Qualification Plant (“CQP”) has moved beyond 4Q 2023. FREYR has implemented a plan intended to prevent further delays, which includes enhanced involvement of technology and battery subject matter experts, increased coordination and day-to-day involvement with vendors and partners, and the formation of a Technology Advisory Board consisting of subject matter experts. FREYR will continue to provide updates on the Company’s progress at the CQP as commissioning and testing activity continues.
  • FREYR is positioning the Company for the current capital markets environment by prioritizing balance sheet strength, liquidity runway, and strategic agility tied to real options. Having ended 3Q 2023 with $328 million of cash and no debt, the Company expects to exit 2023 with cash of approximately $250 million after satisfying its remaining commitments and fourth quarter overhead. FREYR has begun to implement cost rationalization initiatives, which include rightsizing the organization, which are expected to result in total 2024 cash uses of less than half that of 2023, aligned with our strategic priorities, equating to a cash runway of two-plus years.
  • FREYR has elected to minimize Giga Arctic spending in 2024. The decision to minimize spending is intended to allow for continued technology development at the CQP while FREYR continues to work with stakeholders in Norway and Europe to establish competitive regulatory framework conditions for scaling battery manufacturing. Norway and Europe have yet to offer a competitive response to the U.S. Inflation Reduction Act (“IRA”) or similar incentives from Canada. Accordingly, FREYR plans to minimize spending on the project in 2024, secure the asset with the remaining committed capital spending, and continue to work with stakeholders in Norway and Europe to develop a mutually attractive policy solution.
  • FREYR is continuing to engage with potential financial sponsors and strategic partners about the Giga America project-level equity raise. As the Company has indicated previously, the timing of the financing is expected to follow technical validation of the 24M manufacturing platform and sample cell performance characteristics at the CQP. In accordance with the updated timeline at the CQP, FREYR’s Giga America team has terminated the two-line project and has updated the development plan to pursue the larger project that was initially planned for the site on two parallel tracks. The Company is pursuing these paths to align the timing of multiple financing options including the U.S. Department of Energy (“DOE”) process and the project-level equity raise. Track 1 is based on the 24M SemiSolidTM platform, and Track 2 is based on conventional production line equipment.
  • On November 6, 2023, FREYR announced that it will be holding an extraordinary general meeting (“EGM”) of shareholders on December 15, 2023, in connection with its previously announced process to redomicile from Luxembourg to the U.S. Proxy materials have been mailed out to the Company’s shareholders of record as of the October 25, 2023, record date. Pending a successful shareholder vote, closing of the planned redomicile to the U.S. is expected to be completed by December 31, 2023. FREYR’s board of directors believes that redomiciling to the U.S. will enhance FREYR’s eligibility for inclusion in equity indexes and trigger associated benchmarking from actively managed funds, thereby potentially delivering an uplift in fund flows to its shares.
  • On October 4, 2023, FREYR published an operations update indicating that the teams at the CQP had successfully begun automatic electrode casting with solvent slurry. This technically complex step was an important milestone in the ongoing commissioning process at the CQP and a precursor to automated production of in-spec, customer-testable cells at the CQP.
  • On September 6, 2023, FREYR published an operations update highlighting the successful start-up and operation of the cathode Multi-Carrier System (“MCS”) at the CQP. The MCS, which is a core part of the Casting and Unit Cell Assembly production line equipment, utilizes a conveyor belt and pallet configuration that is the front end of the automatic cathode casting process. The successful software-hardware calibration of the MCS was an important precursor to automated production of in-spec, customer-testable cells at the CQP.
  • On September 5, 2023, FREYR announced that SAP SE (FSE: SAP; “SAP”), one of the world’s leading producers of software for the management of business processes, had joined FREYR’s Energy Transition Acceleration Coalition (“ETAC”) alongside Nidec Corporation (TSE: 6594), Glencore Plc (LN: GLEN), Caterpillar Inc. (NYSE: CAT), and Siemens AG (GY: SIE).

“FREYR is navigating a highly volatile environment in which time and optionality are valuable,” remarked Birger Steen, FREYR’s Chief Executive Officer. “Against this fluid industry, policy, and financing backdrop, we will prioritize financial strength, make dispassionate business decisions based on the evolving market dynamics, and allocate resources towards key priorities to maximize the value of our real options for our shareholders, customers, partners, and employees. We are excited about the path ahead, and the entire FREYR team is unified in our purpose to establish the Company as a global developer and scaler of clean battery solutions.”

“As stated previously, the speed at which FREYR has been maturing the SemiSolidTM production platform is impressive,” commented Laurent Demortier, President of Nidec’s Energy & Infrastructure Division. ”The extension of the CQP timeline to reach automated production is understandable given the complexity of the commissioning packages, and we are confident that the FREYR team will continue to make strides at the CQP by collaborating with their ecosystem of partners. Nidec remains committed to our long-term partnership with FREYR to develop integrated, fit-for-purpose Energy Storage Systems solutions through our Nidec Energy AS Joint Venture, and we continue to explore avenues to further strengthen our partnership.”

Business Update

  • FREYR’s teams at the CQP continue to progress the commissioning of the Casting and Unit Cell Assembly equipment to enable automated production of in-spec, customer-testable battery cells in 2024. At the end of 3Q 2023 FREYR had completed the handovers of 337 of 388 discrete commissioning and testing packages. At the CQP Test Center, which is a comprehensive modularized test facility with 480 battery test-channels, lab facilities, and data collection systems, all 150 of the additional Test Center commissioning packages have been completed and 137 have been handed over to Operations.
  • Following the announcement in June that FREYR entered into a Heads of Terms (“HoT”) agreement with Sunwoda Mobility Energy Technology Co., Ltd. (“Sunwoda”) to form a partnership with the intention to expand business in the western hemisphere based on Sunwoda’s conventional technology, FREYR continues to pursue its technology diversification strategy. Options under consideration with a conventional technology partner include a potential development track of Giga America based on conventional production line equipment.
  • FREYR is executing a plan to enhance the Company’s competitive and financial positions in the dynamic prevailing industry, regulatory, and capital markets environments. The key tenets of this initiative are to protect the Company’s balance sheet and liquidity runway; continue to pursue non-dilutive growth capital through the targeted Giga America project equity raise, DOE Title XVII loan process, and ongoing grant applications; and to maximize the value of FREYR’s project development opportunities. In accordance with this plan, FREYR is implementing a cost rationalization program that is expected to reduce the Company’s total cash burn rate by 50% as compared to 2023, providing a projected liquidity runway of two plus years.

Overview of Financial Results

  • FREYR reported a net loss attributable to ordinary shareholders for the third quarter of 2023 of $(9.8) million, or $(0.07) per diluted share compared to net loss for the third quarter 2022 of $(93.9) million or $(0.80) per diluted share. The net loss in the third quarter of 2023 was primarily due to corporate overhead, spending to support FREYR's projects and business development activities, and research and development spending, partially offset by a non-cash gain on warrant liability fair value adjustment.
  • As of September 30, 2023, FREYR had cash, cash equivalents, and restricted cash of $327.9 million, and no debt.

Business Outlook

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

  • Complete the commissioning packages of the Casting and Unit Cell Assembly production line equipment and producing in-spec, customer-testable batteries at the CQP.
  • Complete the project-level equity raise for Giga America with strategic and prospective financial partners to start construction of the re-scoped project in 2024.
  • Maintain the Company’s strong balance sheet and liquidity profile while making selected strategic investments to advance FREYR’s strategic development.
  • Finalize the redomiciling process to the U.S. by year-end 2023. The redomiciling to the U.S. is expected to enhance FREYR’s eligibility for inclusion in equity indexes and trigger associated benchmarking from actively managed funds, thereby potentially delivering an uplift in fund flows to FREYR’s common equity.
  • Maximize the value of FREYR’s real options, which include the formalization of a potential conventional technology partnership; the possible development of a cathode active materials production facility; and parallel development tracks for the Giga America project.
  • Complete the current phase of construction at Giga Arctic with previously authorized capital expenditures to secure and protect the asset’s option value.

Presentation of Third Quarter 2023 Results

A presentation will be held today, November 9, 2023, at 8:30 am Eastern Standard Time (2:30 pm Central European Time) to discuss financial results for the third quarter 2023. 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: 4087726

A webcast of the conference call will be broadcast simultaneously at https://app.webinar.net/ZpzL2e52jo0 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.

www.freyrbattery.com/news

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 clean 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 the United States. 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’s (“FREYR”) ability to achieve automated, in-spec, customer-testable battery production beyond 4Q 2023; 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; FREYR’s plan to prevent additional delays; any potential project equity raise for the development of Giga America; the competitiveness of the Norwegian battery cell production and any potential governmental incentives; any potential benefits of the U.S. Inflation Reduction Act; FREYR’s ability to navigate a highly volatile environment; the development of any potential conventional technology partnerships; FREYR’s ability to reduce spending, including in connection with Giga Arctic; 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, (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, (iii) FREYR’s Annual Report on Form 10-K filed with the SEC on February 27, 2023, and (iv) FREYR’s Quarterly Reports on Form 10-Q filed with the SEC on May 15, 2023 and August 10, 2023 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

September 30,

2023

 

December 31,

2022

 

 

 

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

299,419

 

 

$

443,063

 

Restricted cash

 

 

28,442

 

 

 

119,982

 

Prepaid assets

 

 

5,690

 

 

 

8,293

 

Other current assets

 

 

7,317

 

 

 

8,117

 

Total current assets

 

 

340,868

 

 

 

579,455

 

 

 

 

 

 

Property and equipment, net

 

 

349,388

 

 

 

210,777

 

Intangible assets, net

 

 

2,850

 

 

 

2,963

 

Long-term investments

 

 

22,475

 

 

 

 

Convertible note

 

 

 

 

 

19,954

 

Right-of-use asset under operating leases

 

 

23,233

 

 

 

14,538

 

Other long-term assets

 

 

14

 

 

 

11

 

Total assets

 

$

738,828

 

 

$

827,698

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

18,751

 

 

$

6,765

 

Accrued liabilities and other

 

 

27,793

 

 

 

51,446

 

Share-based compensation liability

 

 

1,806

 

 

 

4,367

 

Total current liabilities

 

 

48,350

 

 

 

62,578

 

 

 

 

 

 

Warrant liability

 

 

10,540

 

 

 

33,849

 

Operating lease liability

 

 

18,353

 

 

 

11,144

 

Other long-term liabilities

 

 

27,145

 

 

 

 

Total liabilities

 

 

104,388

 

 

 

107,571

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Ordinary share capital, no par value, 245,000 ordinary shares authorized, and 139,854 and 139,705 ordinary shares issued and outstanding, respectively, as of both September 30, 2023 and December 31, 2022

 

 

139,854

 

 

 

139,854

 

Additional paid-in capital

 

 

783,234

 

 

 

772,602

 

Treasury stock

 

 

(1,041

)

 

 

(1,041

)

Accumulated other comprehensive (loss) income

 

 

(38,915

)

 

 

9,094

 

Accumulated deficit

 

 

(250,847

)

 

 

(203,054

)

Total ordinary shareholders' equity

 

 

632,285

 

 

 

717,455

 

 

 

 

 

 

Non-controlling interests

 

 

2,155

 

 

 

2,672

 

Total equity

 

 

634,440

 

 

 

720,127

 

 

 

 

 

 

Total liabilities and equity

 

$

738,828

 

 

$

827,698

 

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,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

General and administrative

 

$

27,772

 

 

$

25,124

 

 

$

85,405

 

 

$

77,888

 

Research and development

 

 

7,086

 

 

 

3,253

 

 

 

18,295

 

 

 

9,194

 

Share of net loss of equity method investee

 

 

153

 

 

 

668

 

 

 

208

 

 

 

1,131

 

Total operating expenses

 

 

35,011

 

 

 

29,045

 

 

 

103,908

 

 

 

88,213

 

Loss from operations

 

 

(35,011

)

 

 

(29,045

)

 

 

(103,908

)

 

 

(88,213

)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Warrant liability fair value adjustment

 

 

24,399

 

 

 

(70,292

)

 

 

23,248

 

 

 

(45,588

)

Convertible note fair value adjustment

 

 

 

 

 

(224

)

 

 

1,074

 

 

 

267

 

Interest income, net

 

 

1,284

 

 

 

60

 

 

 

6,042

 

 

 

89

 

Foreign currency transaction (loss) gain

 

 

(3,213

)

 

 

4,325

 

 

 

20,546

 

 

 

5,415

 

Other income, net

 

 

2,537

 

 

 

1,326

 

 

 

5,029

 

 

 

3,944

 

Total other income (expense)

 

 

25,007

 

 

 

(64,805

)

 

 

55,939

 

 

 

(35,873

)

Loss before income taxes

 

 

(10,004

)

 

 

(93,850

)

 

 

(47,969

)

 

 

(124,086

)

Income tax expense

 

 

 

 

 

 

 

 

(341

)

 

 

 

Net loss

 

 

(10,004

)

 

 

(93,850

)

 

 

(48,310

)

 

 

(124,086

)

Net loss attributable to non-controlling interests

 

 

219

 

 

 

 

 

 

517

 

 

 

 

Net loss attributable to ordinary shareholders

 

$

(9,785

)

 

$

(93,850

)

 

$

(47,793

)

 

$

(124,086

)

 

 

 

 

 

 

 

 

 

Weighted average ordinary shares outstanding - basic and diluted

 

 

139,705

 

 

 

116,704

 

 

 

139,705

 

 

 

116,795

 

Net loss attributable to ordinary shareholders per share - basic and diluted

 

$

(0.07

)

 

$

(0.80

)

 

$

(0.34

)

 

$

(1.06

)

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Net loss

 

$

(10,004

)

 

$

(93,850

)

 

$

(48,310

)

 

$

(124,086

)

Foreign currency translation adjustments

 

 

6,134

 

 

 

(9,089

)

 

 

(48,009

)

 

 

(16,547

)

Total comprehensive loss

 

$

(3,870

)

 

$

(102,939

)

 

$

(96,319

)

 

$

(140,633

)

Comprehensive loss attributable to non-controlling interests

 

 

219

 

 

 

 

 

 

517

 

 

 

 

Comprehensive loss attributable to ordinary shareholders

 

$

(3,651

)

 

$

(102,939

)

 

$

(95,802

)

 

$

(140,633

)

 

 

 

 

 

 

 

 

 

FREYR BATTERY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

Nine months ended

September 30,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(48,310

)

 

$

(124,086

)

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

 

 

 

 

Share-based compensation expense

 

 

7,859

 

 

 

9,280

 

Depreciation and amortization

 

 

1,922

 

 

 

298

 

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

 

 

1,005

 

 

 

1,096

 

Warrant liability fair value adjustment

 

 

(23,248

)

 

 

45,588

 

Convertible note fair value adjustment

 

 

(1,074

)

 

 

(267

)

Share of net loss of equity method investee

 

 

208

 

 

 

1,131

 

Foreign currency transaction net unrealized gain

 

 

(19,346

)

 

 

(4,864

)

Other

 

 

145

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

Prepaid assets and other current assets

 

 

1,672

 

 

 

(7,059

)

Accounts payable, accrued liabilities and other

 

 

28,401

 

 

 

6,692

 

Operating lease liability

 

 

(3,212

)

 

 

(802

)

Net cash used in operating activities

 

 

(53,978

)

 

 

(72,993

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Proceeds from property related grants

 

 

3,500

 

 

 

10,461

 

Purchases of property and equipment

 

 

(168,811

)

 

 

(77,687

)

Investments in equity method investee

 

 

(1,655

)

 

 

(3,000

)

Purchases of other long-term assets

 

 

(1,000

)

 

 

 

Net cash used in investing activities

 

 

(167,966

)

 

 

(70,226

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Repurchase of treasury shares

 

 

 

 

 

(1,052

)

Net cash used in financing activities

 

 

 

 

 

(1,052

)

 

 

 

 

 

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

 

 

(13,240

)

 

 

(2,765

)

Net decrease in cash, cash equivalents, and restricted cash

 

 

(235,184

)

 

 

(147,036

)

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

 

 

563,045

 

 

 

565,627

 

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

 

$

327,861

 

 

$

418,591

 

 

 

 

 

 

Significant non-cash investing and financing activities:

 

 

 

 

Accrued purchases of property and equipment

 

$

11,187

 

 

$

18,514

 

 

 

 

 

 

Reconciliation to condensed consolidated balance sheets:

 

 

 

 

Cash and cash equivalents

 

$

299,419

 

 

$

416,431

 

Restricted cash

 

 

28,442

 

 

 

2,160

 

Cash, cash equivalents, and restricted cash

 

$

327,861

 

 

$

418,591

 

 

Sign Up To Get Daily Green Stock News In Your Inbox

Please review our Disclaimer and Privacy Policy before subscribing.

STOCK QUOTE

FEATURED GREEN STOCK

DevvStream

DevvStream provides upfront capital for sustainability projects in exchange for carbon credit rights. Through these rights, the company generates and manages carbon credits by utilizing the most technologically advanced...

CLICK TO LEARN MORE

FEATURED GREEN STOCK

Else Nutrition

Else Nutrition is changing the face of early childhood nutrition with clean, sustainable, plant-based products. The company has developed the world’s first whole plant-based infant formula that is targeting the $100+ billion global...

CLICK TO LEARN MORE

COPYRIGHT ©2022 GREEN STOCK NEWS