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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109269445/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 57
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