Business Context and Reporting Period
This Form 10-K covers FREYR Battery, Inc. for the fiscal year ended December 31, 2023. The request metadata identifies T1 Energy Inc., but the supplied filing is for FREYR Battery, Inc. (NYSE: FREY and FREY WS), which completed its redomiciliation from Luxembourg to Delaware on December 31, 2023.
FREYR is an early-stage developer of clean battery solutions targeting energy storage systems, marine applications, commercial vehicles, and ultimately electric vehicles. As of year-end, it had not begun manufacturing or generated revenue from its principal business activities.
Key Financial Metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | No revenue from principal activities | No revenue from principal activities | No comparable operating revenue |
| General and administrative expense | $108.1 million | $107.4 million | Up 1% |
| Research and development expense | $28.5 million | $13.6 million | Up 110% |
| Restructuring charge | $6.0 million | — | New in 2023 |
| Loss from operations | $143.0 million | $122.5 million | Loss increased 17% |
| Other income | $70.6 million | $23.4 million | Up 202% |
| Net loss | $73.1 million | $99.1 million | Loss decreased 26% |
| Net loss attributable to stockholders | $71.9 million | $98.8 million | Loss decreased 27% |
| Basic and diluted loss per share | $0.51 loss | $0.83 loss | Improved |
| Cash flow from operating activities | $(87.9) million | $(90.0) million | Use decreased 2% |
| Cash flow from investing activities | $(187.0) million | $(175.0) million | Use increased 7% |
| Cash flow from financing activities | — | $250.1 million | Decreased 100% |
Cash, cash equivalents, and restricted cash totaled $275.7 million at December 31, 2023, including $21.4 million held in escrow for Giga Arctic. Current liabilities were $49.2 million. Cash and cash equivalents alone were $253.3 million.
Total assets were $732.2 million, including $366.4 million of property and equipment, while total liabilities were $97.5 million. The company reported no conventional debt balance in the supplied balance sheet; liabilities included a $2.0 million warrant liability, $22.2 million of operating lease liabilities, and $27.4 million of other long-term liabilities.
Material Changes Versus the Prior Comparable Period
- R&D expense more than doubled because operations at the Customer Qualification Plant began ramping in the second quarter of 2023.
- Operating losses increased despite lower net losses, primarily because other income rose by $47.2 million.
- Other income included a $31.8 million gain from warrant-liability fair-value adjustments, a $20.9 million foreign-currency transaction gain, and $9.9 million of net interest income. These items are not indicative of recurring operating performance.
- Capital spending remained significant: purchases of property and equipment were $187.8 million, compared with $180.8 million in 2022.
- Financing cash inflows fell to zero in 2023 from $250.1 million in 2022, when the company completed a 23.0 million-share public offering.
- In November 2023, the company announced a restructuring involving spending reductions, reporting-line changes, and a reduction in force. Notices were issued to 58 employees and 20 full-time consultants; most affected personnel were expected to leave during the first quarter of 2024.
- FREYR substantially completed initial Giga Arctic groundworks and structures but suspended work on the planned Norwegian gigafactory.
- The company converted a $20.0 million convertible note from 24M into preferred stock in March 2023 and recorded the investment at $21.0 million at conversion.
Guidance, Outlook, Risks, and Unusual Items
- FREYR targets completion of fully automated customer-testable cell production at the Norwegian CQP during 2024, but acknowledges that commissioning has been more challenging and time-consuming than expected.
- The company expects to make a final investment decision on Giga America by the end of 2024. The project may use 24M technology, conventional battery technology, or both.
- Preliminary projected capital costs for the initial 24M-based Giga America track are $2 billion to $3 billion. Costs for the conventional-technology track have not been determined.
- Management expects a significant reduction in total cash spending in 2024 and intends to limit significant capital expenditures until additional funding is secured. It believes existing liquidity can support planned operations for at least 12 months and seeks to extend the liquidity runway to more than two years without additional financing.
- Completion of Giga America and other long-term plans will require substantial additional financing. Potential sources include the U.S. Department of Energy Title 17 program, project-level equity, debt, or additional equity issuance, which could involve financing risk, restrictive covenants, or dilution.
- Giga Arctic spending is expected to remain limited in 2024 while FREYR seeks a more competitive Norwegian and European policy response to U.S. Inflation Reduction Act incentives.
- Key risks include failure to commercialize the 24M technology, equipment-integration and commissioning delays, cost overruns, dependence on third-party suppliers and technology licensors, insufficient customer commitments, raw-material and electricity-price volatility, changing government incentives, and the need for additional capital.
- The company reported no material litigation and no cybersecurity threats that had materially affected, or were reasonably expected to materially affect, the business as of the filing date.
- Management and the independent auditor concluded that internal control over financial reporting was effective as of December 31, 2023. The audit identified impairment assessment of property and equipment as a critical audit matter, although no material impairment was recorded.
Important Facts for Investors to Verify
- Confirm the issuer identity: the supplied filing is FREYR Battery, Inc., not T1 Energy Inc.
- Verify the company’s ability to begin automated CQP production and deliver customer-testable cells during 2024.
- Assess whether the company can finance the estimated $2 billion to $3 billion Giga America 24M track and any conventional-technology alternative.
- Monitor the 2024 cash-spending reduction, liquidity runway, restricted cash release, and timing of potential additional financing.
- Evaluate whether conditional offtake agreements become binding sales contracts and whether the company begins generating operating revenue.
- Review the commercial performance, exclusivity, and termination provisions of the 24M license and the progress of any conventional technology partnership.
- Consider dilution and potential share issuance from 24.6 million public and private warrants exercisable at $11.50 per share, plus other outstanding warrants and employee options.
- Reassess the carrying value and recoverability of the company’s substantial property and equipment, particularly assets associated with suspended Giga Arctic development.