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/
Investor contact: Jeffrey Spittel Vice President,
Investor Relations jeffrey.spittel@freyrbattery.com Tel:
(+1) 281-222-0161
Media contact: Katrin Berntsen Vice President,
Communication and Public Affairs
katrin.berntsen@freyrbattery.com Tel: (+47) 920 54 570
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