FREYR Battery Reports Second Quarter 2024 Results

Rhea-AI Summary

FREYR Battery (NYSE: FREY) reported Q2 2024 results, focusing on achieving first revenues and EBITDA by 2025. Key points include:

1. Prioritizing conventional technology and less capital-intensive opportunities for faster commercialization.
2. Reducing cash burn to extend liquidity runway to 36 months.
3. Exploring inorganic growth opportunities.
4. Maintaining long-term focus on 24M SemiSolid™ platform.
5. Reported net loss of $(27.0) million, or $(0.19) per diluted share.
6. Cash, cash equivalents, and restricted cash of $221.5 million, with no debt.

The company's new leadership is committed to accelerating the path to profitability while preserving balance sheet strength.

Positive

• Successful production trials at Customer Qualification Plant (CQP) with over 50 individual unit cells produced
• Extended cash liquidity runway to approximately 36 months through spending reductions
• Debt-free balance sheet with $221.5 million in cash and cash equivalents
• Pursuing potential inorganic opportunities to accelerate commercialization efforts
• Focusing on less capital-intensive opportunities in downstream modules and packs for faster revenue generation

Negative

• Increased net loss of $(27.0) million in Q2 2024 compared to $(25.3) million in Q2 2023
• Foreign currency transaction loss of $0.1 million in Q2 2024 versus $7.7 million gain in Q2 2023
• Shift in strategy from original plans, potentially delaying initial revenue expectations

Insights

Financial Analyst

FREYR Battery's Q2 2024 results reveal a net loss of $27.0 million, slightly higher than the $25.3 million loss in Q2 2023. While this might seem concerning, it's important to note the company's strategic pivot. They're now focusing on conventional battery technology and less capital-intensive opportunities in modules and packs to accelerate revenue generation.

The company's cash position of $221.5 million and debt-free balance sheet are positive factors. However, the extended cash runway to 36 months through spending reductions signals a cautious approach. This could be a double-edged sword - it provides stability but might slow growth.

The shift towards conventional technology and potential inorganic opportunities could expedite commercialization, but it's a departure from their original next-gen battery focus. Investors should watch for concrete developments in these new strategic directions.

Tech Industry Analyst

FREYR's pivot to conventional battery technology is a significant shift from their initial focus on 24M's SemiSolidTM platform. While they've achieved production milestones with the next-gen tech, the move towards established methods suggests challenges in scaling or commercializing the innovative technology.

The company's exploration of downstream modules and packs is intriguing. This could allow FREYR to enter the market more quickly and generate revenue while continuing to develop their long-term technological edge. It's a pragmatic approach, balancing immediate market entry with future innovation.

The mention of inorganic opportunities hints at potential acquisitions or partnerships. This could rapidly expand FREYR's capabilities or market access, but also carries integration risks. Investors should closely monitor any announcements in this area, as they could significantly impact the company's trajectory.

Market Strategist

FREYR's strategic shift reflects a broader trend in the battery industry where companies are balancing innovation with immediate market demands. The focus on financeable projects and cash flow generation aligns with investor expectations in the current economic climate.

The company's exploration of opportunities in both the U.S. and Europe is noteworthy. With increasing government support for battery manufacturing in these regions, FREYR could potentially benefit from subsidies or partnerships. However, competition in these markets is intensifying and FREYR will need to differentiate itself.

The leadership changes, including the return of co-founder Tom Jensen as CEO, signal a renewed focus on commercialization. This could instill confidence in investors, but the success of this strategy will depend on tangible progress in the coming quarters. Keep an eye on announcements regarding partnerships or project developments.

NEW YORK & OSLO, Norway & NEWNAN, Ga.--(BUSINESS WIRE)-- FREYR Battery, Inc. (NYSE: FREY) (“FREYR” or the “Company”), a developer of sustainable, next-generation battery solutions, today reported financial results for the second quarter of 2024.

Key Messages:

• FREYR’s new Board of Directors and leadership team executing plan to achieve first revenues and EBITDA as soon as 2025. The Company’s top priority is to focus resources on financeable projects and inorganic opportunities that accelerate FREYR’s commercialization and pathway to cash flows.

• FREYR is prioritizing conventional technology strategy to achieve commercialization. FREYR is advancing discussions and diligence tied to agreements to develop conventional battery technology solutions in the U.S. and Europe under its previously unveiled FREYR 2.0 growth initiative. Within the commercial and project pipelines, the Company is focusing on less-capital intensive opportunities tied to downstream modules and packs which offer the fastest and most readily financeable paths to first revenues and cash flows.

• Maintaining strict financial discipline and balance sheet strength. The Company remains committed to preserving the strength of its debt-free balance sheet by reducing its cash burn rate. The spending reductions currently underway are expected to extend FREYR’s cash liquidity runway to approximately 36 months. As part of the Company’s commitment to value maximization, FREYR is concurrently evaluating value accretive business models and use cases for Giga Arctic.

• Evaluating inorganic opportunities. FREYR is pursuing potential inorganic opportunities to accelerate its commercialization efforts.

• Maintaining ambition to establish long-term competitive moat based on next-generation intellectual property with the 24M SemiSolid^TM platform. As FREYR intensifies its near-term commercialization efforts with its conventional technology strategy, the Company is preserving the option value of its position on 24M’s SemiSolid^TM platform. After hitting several production milestones at the Customer Qualification Plant (“CQP”) in 2024, the Company is exploring new funding and commercial pathways for its next-generation IP to augment its long-term competitive position.

“Following the second quarter’s production achievements at the CQP on the 24M platform, FREYR’s reconfigured Board of Directors and management team have unified the organization’s focus on rapid commercialization while we extend our liquidity runway to 36 months,” commented Tom Jensen, FREYR’s Co-founder, Chief Executive Officer and Board Member. “Having demonstrated that our people have unique technical and operational capabilities, during the last 65 days since the new team was appointed, we have been building momentum with our partners and customers to develop projects in high-return adjacencies on the battery value chain. The discussions we are having with a variety of industry leaders are exciting, and we look forward to sharing additional updates on these important strategic initiatives as they continue to develop.”

Recent news

• Successful production trials at Customer Qualification Plant (“CQP”). Following several prior interim milestones at the CQP earlier this year, in June, FREYR announced that it had become the first company to complete automated production trials on the second-generation 24M SemiSolid^TM manufacturing platform. While simultaneously running the anode casting, cathode casting, and merge units in automatic mode, FREYR produced more than 50 individual unit cells. FREYR is now exploring funding pathways for the long-term development of its next-generation technology stack.

• Leadership changes to support FREYR’s commitment to accelerate path to profitability. In June 2024, FREYR announced the return of Co-founder and previous CEO and Executive Chairman Tom Jensen to the CEO role, and the appointments of Evan Calio as FREYR’s CFO, and of Daniel Barcelo as the Chairman of FREYR’s Board of Directors. FREYR’s Board and management team are focused on key initiatives, including: pursuing organic and inorganic opportunities in the U.S. and Europe to accelerate FREYR’s timelines to revenues and EBITDA and maintaining strict financial discipline to preserve the strength of the Company’s clean balance sheet and extend FREYR’s cash liquidity runway to 36 months.

Results Overview, Financing, and Liquidity

• FREYR reported a net loss attributable to stockholders for the second quarter of 2024 of $(27.0) million, or $(0.19) per diluted share compared to net loss for the second quarter 2023 of $(25.3) million or $(0.18) per diluted share. The increase in net loss in the second quarter of 2024 was primarily due to a $0.1 million net foreign currency transaction loss for the three months ended June 30, 2024, compared to a $7.7 million gain for the three months ended June 30, 2023, partially offset by lower operating expenses mainly from decreases in personnel costs and legal and professional fees.

• As of June 30, 2024, FREYR had cash, cash equivalents, and restricted cash of $221.5 million, and no debt.

Presentation of Second Quarter 2024 Results

A presentation will be held today, August 9, 2024, at 8:30 am Eastern Daylight Time (2:30 pm Central European Time) to discuss financial results for the second 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:

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The participant passcode for the call is: 4087726

A webcast of the conference call will be broadcast simultaneously at https://events.q4inc.com/attendee/250372491 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 solutions. 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 facts included in this press release, including, without limitation, FREYR Battery, Inc.’s (“FREYR”) ability to establish a profitable business; FREYR’s plan to extend its cash liquidity runway to 36 months and first revenue and EBITDA in 2025; the financial benefits of FREYR’s subject matter expertise; FREYR’s plan to expand on the battery value chain into high value adjacencies; FREYR’s efforts to accelerate the path to commercialization; the pursuit of project opportunities in accordance with the FREYR 2.0 initiative; potential inorganic growth opportunities and the ability to generate revenue in the near-term through possible acquisitions; the development, financing, construction, timeline, capacity, and other usefulness of FREYR’s CQP, Giga Arctic, Giga America, and other planned or future production facilities; any potential benefits of the U.S. Inflation Reduction Act; FREYR’s ability to reduce spending; 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, (iii) FREYR’s annual report on Form 10-K filed with the SEC on February 29, 2024; and (iv) FREYR’s Quarterly Reports on Form 10-Q filed with the SEC on May 8, 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)
		June 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	219,560		$	253,339
Restricted cash			1,977			22,403
Prepaid assets			868			2,168
Other current assets			12,016			34,044
Total current assets			234,421			311,954
Property and equipment, net			362,641			366,357
Intangible assets, net			2,738			2,813
Long-term investments			21,969			22,303
Right-of-use asset under operating leases			22,603			24,476
Other long-term assets			9			4,282
Total assets		$	644,381		$	732,185
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	14,688		$	18,113
Accrued liabilities and other			20,495			30,790
Share-based compensation liability			168			281
Total current liabilities			35,351			49,184
Warrant liability			1,817			2,025
Operating lease liability			16,921			18,816
Other long-term liabilities			27,443			27,444
Total liabilities			81,532			97,469
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding as of both June 30, 2024 and December 31, 2023			—			—
Common stock, $0.01 par value, 355,000 shares authorized as of both June 30, 2024 and December 31, 2023; 140,490 issued and outstanding as of June 30, 2024; and 139,705 issued and outstanding as of December 31, 2023			1,405			1,397
Additional paid-in capital			930,781			925,623
Accumulated other comprehensive loss			(40,008)			(18,826)
Accumulated deficit			(330,529)			(274,999)
Total stockholders' equity			561,649			633,195
Non-controlling interests			1,200			1,521
Total equity			562,849			634,716
Total liabilities and equity		$	644,381		$	732,185

FREYR BATTERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per share amounts) (Unaudited)
		Three months ended June 30,						Six months ended June 30,
			2024			2023			2024			2023
Operating expenses:
General and administrative		$	20,107		$	27,631		$	43,008		$	57,633
Research and development			10,493			6,365			22,238			11,209
Share of net loss of equity method investee			178			30			334			55
Total operating expenses			30,778			34,026			65,580			68,897
Loss from operations			(30,778)			(34,026)			(65,580)			(68,897)
Other income (expense):
Warrant liability fair value adjustment			52			(2,556)			198			(1,151)
Interest income, net			1,148			1,755			2,553			4,758
Foreign currency transaction (loss) gain			(122)			7,711			1,355			23,759
Other income, net			2,550			1,851			5,634			3,566
Total other income			3,628			8,761			9,740			30,932
Loss before income taxes			(27,150)			(25,265)			(55,840)			(37,965)
Income tax expense			(11)			(138)			(11)			(341)
Net loss			(27,161)			(25,403)			(55,851)			(38,306)
Net loss attributable to non-controlling interests			174			121			321			298
Net loss attributable to stockholders		$	(26,987)		$	(25,282)		$	(55,530)		$	(38,008)
Weighted average shares outstanding - basic and diluted			140,107			139,705			139,905			139,705
Net loss per share attributable to stockholders - basic and diluted		$	(0.19)		$	(0.18)		$	(0.40)		$	(0.27)
Other comprehensive (loss) income:
Net loss		$	(27,161)		$	(25,403)		$	(55,851)		$	(38,306)
Foreign currency translation adjustments			4,862			(20,425)			(21,182)			(54,143)
Total comprehensive loss		$	(22,299)		$	(45,828)		$	(77,033)		$	(92,449)
Comprehensive loss attributable to non-controlling interests			174			121			321			298
Comprehensive loss attributable to stockholders		$	(22,125)		$	(45,707)		$	(76,712)		$	(92,151)

FREYR BATTERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		Six months ended June 30,
			2024			2023
Cash flows from operating activities:
Net loss		$	(55,851)		$	(38,306)
Adjustments to reconcile net loss to cash used in operating activities:
Share-based compensation expense			5,044			5,201
Depreciation and amortization			4,578			732
Reduction in the carrying amount of right-of-use assets			732			491
Warrant liability fair value adjustment			(198)			1,151
Share of net loss of equity method investee			334			55
Foreign currency transaction net unrealized gain			(1,188)			(23,247)
Other			—			(929)
Changes in assets and liabilities:
Prepaid assets and other current assets			2,038			2,834
Accounts payable, accrued liabilities and other			1,242			19,967
Operating lease liability			(932)			(2,669)
Net cash used in operating activities			(44,201)			(34,720)
Cash flows from investing activities:
Proceeds from the return of property and equipment deposits			22,735			—
Purchases of property and equipment			(29,099)			(128,361)
Investments in equity method investee			—			(1,655)
Purchases of other long-term assets			—			(1,000)
Net cash used in investing activities			(6,364)			(131,016)
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			(3,640)			(13,520)
Net decrease in cash, cash equivalents, and restricted cash			(54,205)			(179,256)
Cash, cash equivalents, and restricted cash at beginning of period			275,742			563,045
Cash, cash equivalents, and restricted cash at end of period		$	221,537		$	383,789
Supplementary disclosure for non-cash activities:
Accrued purchases of property and equipment		$	8,908		$	23,085
Reconciliation to condensed consolidated balance sheets:
Cash and cash equivalents		$	219,560		$	334,364
Restricted cash			1,977			49,425
Cash, cash equivalents, and restricted cash		$	221,537		$	383,789

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240809031799/en/

Investor contact:

Jeffrey Spittel

Senior Vice President, Investor Relations and Corporate Development

jeffrey.spittel@freyrbattery.com

Tel: (+1) 409-599-5706

Media contact:

Amy Jaick

Global Head of Communications

amy.jaick@freyrbattery.com

Tel: (+1) 973 713-5585

Source: FREYR Battery

FAQ

What were FREYR Battery's Q2 2024 financial results?

FREYR Battery reported a net loss of $(27.0) million, or $(0.19) per diluted share, for Q2 2024. The company had $221.5 million in cash, cash equivalents, and restricted cash, with no debt.

How is FREYR Battery (FREY) planning to achieve first revenues?

FREYR is focusing on conventional technology strategies and less capital-intensive opportunities in downstream modules and packs. They are also pursuing inorganic growth opportunities to accelerate commercialization efforts.

What is FREYR Battery's (FREY) current cash runway?

Through spending reductions, FREYR has extended its cash liquidity runway to approximately 36 months, preserving its debt-free balance sheet strength.

What progress has FREYR Battery (FREY) made at its Customer Qualification Plant?

FREYR successfully completed automated production trials at the CQP, producing over 50 individual unit cells using the second-generation 24M SemiSolid™ manufacturing platform.