FREYR Battery (NYSE: FREY) (“FREYR” or the “Company”), a
developer of clean, next-generation battery cell production
capacity, today reported financial results for the fourth quarter
and full year of 2022.
Highlights of the fourth quarter 2022 and subsequent
events:
- With factory acceptance testing completed and final equipment
installations nearing completion, FREYR is on track to commence
operations at the Customer Qualification Plant (“CQP”) in the first
quarter of 2023 as previously communicated. The official opening of
the CQP is scheduled for March 28th, 2023, marking the start of the
GWh scale era for the SemiSolid™ technology platform.
- In January 2023, FREYR announced the Company’s first E-Mobility
offtake agreement with Impact Clean Power Technology (“Impact”) to
supply 10 – 14 GWh of clean, next-generation, LFP-based battery
cells from 2025 - 2030. The agreement will be based on the 24M
Technologies, Inc. (“24M”) SemiSolid™ platform using a similar form
factor to most of FREYR’s energy storage systems (“ESS”) offtake
agreements. FREYR is targeting the commercial and passenger vehicle
markets to complement the Company’s robust commercial traction in
the rapidly growing ESS space.
- In December 2022, FREYR announced that the Company had
finalized the formal establishment of a downstream joint venture
with Nidec Corporation (TSE 6594) (“Nidec”). The joint venture,
called Nidec Energy AS, is intended to develop and supply highly
competitive, integrated battery energy storage solutions and
products with low environmental impact.
- In December 2022, FREYR announced that as one of the
prerequisites to establishing the Nidec Energy joint venture, a
package of 24M sample cells was sent to a leading independent
third-party laboratory for testing on behalf of Nidec. The sample
cells exhibited top quartile gravimetric energy density performance
for LFP graphite batteries, demonstrated very similar and stable
behavior across the cells over several cycles, and exhibited
best-in-class performance for thermal stability, indicating robust
safety characteristics.
- In December 2022, FREYR priced and closed an underwritten
public offering of 23 million Ordinary Shares at a public offering
price of $11.50 per share before underwriting discounts. The gross
proceeds of the offering, which closed on December 5, 2022, were
$264.5 million.
- The Company appointed Jason Forcier and Dr. Dan Steingart as
independent members of FREYR’s Board of Directors effective
December 21, 2022, and January 9, 2023, respectively. Mr. Forcier
and Dr. Steingart collectively bring decades of industry,
technical, and advisory experience in the lithium-ion battery
sector to FREYR.
- On November 11th, 2022, FREYR announced the selection and
purchase of the 368-acre 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 approximately $410 million over the multiple
phase life of the project.
“The fourth quarter was punctuated by our successful secondary
equity offering and the launch of our expansion into the U.S.,
which we have since decided to accelerate further,” remarked Tom
Einar Jensen, FREYR’s Co-Founder and CEO. “Turning our attention to
the road immediately ahead, we are announcing the operational
startup of the CQP on March 28th, which represents the inaugural
launch of clean, next-generation battery technology production on
the 24M platform at GWh scale marking a fundamental milestone for
the SemiSolid™ Technology platform.”
“We expect 2023 to be a truly exciting and transformative year
for FREYR and our 24M licensing partners as we move into live
battery production. Our teams are working tirelessly to achieve key
milestones that include, among other things, producing testable
batteries from the CQP, continuing the construction of Giga Arctic,
running several financing processes in parallel, developing new
strategic relationships, and bringing initial production from Giga
America online as fast as possible. We ended the year with a nearly
identical cash balance to what we started with in 2022 and have in
the meantime made strong progress across our entire value chain
with an opportunity set in front of us which is more robust than
ever.” concluded Jensen.
Business Update
- FREYR is on track to start operations of the CQP in 1Q 2023 as
previously communicated. The Company has successfully completed all
14 of 14 factory acceptance tests and 10 of 14 site acceptance
tests. The projected ramp of production at the CQP following
operational startup is expected to mark initial production of the
24M SemiSolidTM technology and document the viability of the
platform at GWh scale.
- FREYR is accelerating the Company’s expansion in the U.S. by
evaluating multiple options to fast-track the start of production
at Giga America. The decision to accelerate development to a
targeted 2025 start of production in the U.S. is intended to
maximize the financial benefits of the Inflation Reduction Act
(“IRA”) incentive package; aligns with surging customer demand for
dedicated ESS cell production; and is consistent with broadening
interest from third parties to explore strategic and/or financial
partnerships.
- The State of Georgia and Coweta County financial assistance
packages tied to FREYR’s Giga America development are currently in
various stages of proceedings and approvals through the relevant
channels. On February 15th, 2023, the Coweta County authorities
closed a tranche of Industrial Revenue Bonds that are associated
with an estimated $227 million of tax abatements over a 20-year
Giga America project time horizon. Additionally, the Coweta County
Superior Court has validated an approximately $20 million grant to
assist with FREYR’s U.S. plant development, with closing
anticipated in short order. Total incentives from the state and
county amount to approximately $410 million over multiple phases
under certain conditions.
- As the Company approaches the start of operations at the CQP,
several advanced financing processes are ongoing with strategic,
financial, and government stakeholders to explore funding solutions
for key growth initiatives to drive parallel giga scale development
and supply chain localization in the U.S., Norway, and the Nordic
region.
- FREYR is working closely with key stakeholders in Norway and
the European Union (“EU”) to unlock a targeted response to the
incentives under the U.S. IRA. In anticipation of further
regulatory clarity in 2023, the Company is continuing to develop
Giga Arctic at a measured pace to facilitate optimization of
project economics from localized incentives.
- FREYR’s corporate, operational, and technical development is
benefiting from deepening collaboration with partners across the
growing global 24M licensee ecosystem. With the initial projected
start of giga scale production on the 24M platform at FREYR’s CQP
nearing, the strategic alignment throughout the 24M network is
expected to yield continued learnings and strategic partnership
opportunities.
Results Overview, Financing, and Liquidity
- FREYR reported net income attributable to ordinary shareholders
for the fourth quarter of 2022 of $25.3 million, or $0.20 per
diluted share compared to a net loss for the fourth quarter 2021 of
$(28.9) million or $(0.24) per diluted share. The net gain in the
fourth quarter of 2022 was due in part to a non-cash $59.8 million
gain 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.
- For the full year ended December 31, 2022, FREYR reported net
loss attributable to ordinary shareholders of $(98.8) million, or
$(0.83) per diluted share. The net loss was due to corporate
overhead, spending to support FREYR's projects and business
development activities, and research and development spending,
partially offset by gains on changes in warranty liabilities.
- As of December 31, 2022, FREYR had cash, cash equivalents, and
restricted cash of $563.0 million.
Business Outlook
FREYR is focused on advancing the following strategic mandates
and milestones over the next 12 months:
- Successfully complete the start of operations at the CQP in 1Q
2023. The capability to produce sample cells from the CQP is
expected to accelerate and cement customer dialogues, fortify
FREYR’s competitive position, demonstrate the scalability of the
24M manufacturing process, and satisfy key technical performance
milestones.
- Accelerate the Company’s expansion in the U.S. with a new
targeted start of production of 2025 for Giga America to address
customer inquiries for fit-for-purpose ESS solutions and to
maximize the financial impact of the IRA along with state and local
tax incentive packages. FREYR is pursuing fast-tracked development
of the previously planned Giga America project schedule to commence
production by 2025.
- Work with leading strategic, financial, and government
stakeholders to advance FREYR’s capital formation journey. FREYR’s
intensifying financing processes include prospective project and/or
parent-level investment discussions; initial engagement with the
U.S. Department of Energy to secure a financial assistance package;
advancing the Giga Arctic project financing, and a range of
industrial partnership opportunities.
- Progress construction on the Giga Arctic development while
prudently managing capital spending in advance of the anticipated
close of the project financing and expected Norwegian and/or EU
responses to the IRA.
- Advance 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 and accelerate
the Company’s industrialization plan and capital formation.
Presentation of Fourth Quarter and Full Year 2022
Results
A presentation will be held today, February 27, 2023, at 7:30 am
Eastern Standard Time (1:30 pm Central European Time) to discuss
financial results for the fourth quarter and full year 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: 649807
A webcast of the conference call will be broadcast
simultaneously at https://streams.eventcdn.net/freyer/freyr-battery-q4-2022-earnings-conference-call
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 the U.S. and Vaasa,
Finland. 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, Giga
America, and other planned or future production facilities or
Gigafactories (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; FREYR’s targeted
start and ramp up of sample cell production in 1Q 2023; the
progress and development of FREYR’s strategic and financial
partnerships; 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 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 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; 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;
the development of 24M Technologies, Inc.’s technologies and their
use in the FREYR Facilities; 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 U.S. Securities and Exchange
Commission (the “SEC”) on September 1, 2022 and (ii) FREYR's Annual
Report on Form 10-K for the year ended December 31, 2022 that is
expected to be filed with the SEC on February 27, 2023, 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 materially from those expressed in any
forward-looking statements.
FREYR BATTERY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands)
As of December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
443,063
$
563,956
Restricted cash
119,982
1,671
Prepaid assets
8,293
15,882
Other current assets
8,117
1,282
Total current assets
579,455
582,791
Property and equipment, net
210,777
21,062
Intangible assets, net
2,963
—
Convertible note
19,954
20,231
Equity method investments
—
2,938
Right-of-use asset under operating
leases
14,538
—
Other long-term assets
11
11
Total assets
$
827,698
$
627,033
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
6,765
$
3,813
Accrued liabilities and other
51,446
19,773
Share-based compensation liability
4,367
2,211
Total current liabilities
62,578
25,797
Warrant liability
33,849
49,124
Operating lease liability
11,144
—
Long-term share-based compensation
liability
—
6,627
Total liabilities
107,571
81,548
Commitments and contingencies
Shareholders' equity
Ordinary share capital, no par value,
245,000 ordinary shares authorized as of both December 31, 2022 and
December 31, 2021; 139,854 and 139,705 ordinary shares issued and
outstanding, respectively, as of December 31, 2022; and 116,854
ordinary shares both issued and outstanding as of December 31,
2021
139,854
116,854
Additional paid-in capital
772,602
533,418
Treasury stock
(1,041
)
—
Accumulated other comprehensive income
(loss)
9,094
(524
)
Accumulated deficit
(203,054
)
(104,263
)
Total ordinary shareholders' equity
717,455
545,485
Non-controlling interests
2,672
—
Total equity
720,127
545,485
Total liabilities and equity
$
827,698
$
627,033
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except per
Share Amounts)
Three months ended
December 31,
Years ended December
31,
2022
2021
2022
2021
Operating expenses:
General and administrative
$
29,469
$
15,510
$
107,357
$
61,755
Research and development
4,380
2,607
13,574
13,816
Share of net loss of equity method
investee
426
62
1,557
62
Total operating expenses
34,275
18,179
122,488
75,633
Loss from operations
(34,275
)
(18,179
)
(122,488
)
(75,633
)
Other income (expense):
Warrant liability fair value
adjustment
59,771
(10,686
)
14,183
(21,859
)
Convertible note fair value adjustment
(544
)
—
(277
)
—
Interest income, net
1,691
256
1,780
314
Foreign currency transaction (loss)
gain
(2,903
)
498
2,512
1,325
Redeemable preferred shares fair value
adjustment
—
(75
)
—
—
Other income, net
1,227
150
5,171
2,475
Total other income (expense)
59,242
(9,857
)
23,369
(17,745
)
Income (loss) before income taxes
24,967
(28,036
)
(99,119
)
(93,378
)
Income tax expense
—
—
—
—
Net income (loss)
24,967
(28,036
)
(99,119
)
(93,378
)
Net loss attributable to non-controlling
interests
328
—
328
—
Net income (loss) attributable to ordinary
shareholders
$
25,295
$
(28,036
)
$
(98,791
)
$
(93,378
)
Weighted average ordinary shares
outstanding:
Basic
123,455
116,597
118,474
75,363
Diluted
127,889
116,597
118,474
75,363
Net income (loss) per share:
Basic
$
0.20
$
(0.24
)
$
(0.83
)
$
(1.24
)
Diluted
$
0.20
$
(0.24
)
$
(0.83
)
$
(1.24
)
Other comprehensive income (loss):
Net income (loss)
$
24,967
$
(28,036
)
$
(99,119
)
$
(93,378
)
Foreign currency translation
adjustments
26,165
(858
)
9,618
(1,182
)
Total comprehensive income (loss)
51,132
(28,894
)
(89,501
)
(94,560
)
Comprehensive loss attributable to
non-controlling interests
328
—
328
—
Comprehensive income (loss) attributable
to ordinary shareholders
$
51,460
$
(28,894
)
$
(89,173
)
$
(94,560
)
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Thousands)
For the years ended
December 31,
2022
2021
Cash flows from operating
activities:
Net loss
$
(99,119
)
$
(93,378
)
Adjustments to reconcile net loss to cash
used in operating activities:
Share-based compensation expense
8,643
14,818
Depreciation and amortization
478
120
Loss on US joint venture consolidation
1,619
—
Reduction in the carrying amount of lease
assets
1,458
—
Warrant liability fair value
adjustment
(14,183
)
21,859
Convertible note fair value adjustment
277
—
Share of net loss of equity method
investee
1,557
62
Foreign currency transaction net
unrealized gain
(2,868
)
—
Other
2
(131
)
Changes in assets and liabilities:
Prepaid assets and other current
assets
(3,664
)
(16,419
)
Other long-term assets
—
(230
)
Accounts payable, accrued liabilities and
other
17,385
10,163
Operating lease liability
(1,594
)
—
Net cash used in operating activities
(90,009
)
(63,136
)
Cash flows from investing
activities:
Proceeds from property related grants
10,461
—
Purchases of property and equipment
(180,787
)
(13,775
)
Investments in equity method investee
(3,000
)
—
Asset acquisition, cash acquired
300
—
Investments in convertible note
—
(20,000
)
Purchases of other long-term assets
(2,000
)
(12
)
Net cash used in investing activities
(175,026
)
(33,787
)
Cash flows from financing
activities:
Proceeds from issuance of ordinary shares,
net
251,124
—
Repurchase of treasury shares
(1,052
)
—
Proceeds from Business Combination
—
70,836
Proceeds from PIPE Investment, net
—
573,666
Proceeds from issuance of redeemable
preferred shares
—
7,500
Payments for the Norway Demerger
—
(3,002
)
Net cash provided by financing
activities
250,072
649,000
Effect of changes in foreign exchange
rates on cash, cash equivalents, and restricted cash
12,381
(1,395
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(2,582
)
550,682
Cash, cash equivalents, and restricted
cash at beginning of period
565,627
14,945
Cash, cash equivalents, and restricted
cash at end of period
$
563,045
$
565,627
Reconciliation to consolidated balance
sheets:
Cash and cash equivalents
$
443,063
$
563,956
Restricted cash
119,982
1,671
Cash, cash equivalents, and restricted
cash
$
563,045
$
565,627
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230227005311/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 katrin.berntsen@freyrbattery.com Tel: (+47)
920 54 570
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