Thank you for standing by. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to the FREYR Battery Third Quarter 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Jeff Spittel, VP of Investor Relations. Please go ahead. Jeffrey Spittel Hello and welcome to FREYR Battery's third quarter 2023 earnings conference call. With me today on the call from are Birgir Steen, our Chief Executive Officer; Oscar Brown, our Chief Financial Officer; Jan Arve Haugan, our Chief Operating Officer; Jeremy Bezdek, Executive VP of Corporate Development and President FREYR Battery US. During today’s call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about risk factors that could materially affect our business are available on FREYR’s S-1 and annual report on Form 10-K filed with the Securities and Exchange Commission, which are available on the Investor Relations section of our website. With that, I'll turn the call over to Birgir.

Thanks Jeff and hello to everyone, for joining today's call. We'll start today with an overview of what we believe is FREYR compelling equity story where value propositions based on the premise that electrification is both inevitable and reliable mass deployment in batteries. But in today's higher-for-longer cost of capital environment, the companies who will emerge as the next leaders of the energy transition, must balance growth aspirations with rigorous financial discipline. Our team at FREYR is unified in that vision of the business and we're committed to build upon a unique competitive position with that approach. With that in mind, we're excited about the opportunities we have to establish FREYR as a leading developer and scaler of battery technologies across the energy storage and electric mobility sectors. Tesla asserted earlier this year, the long-term growth potential in our core markets is profound and aligned with decarbonization initiatives. Western Energy Security that a plummeted public policy highlighted by the Inflation Reduction Act in the US. As stewards of your precious capital, our responsibility is to maintain the liquidity we need to convert these opportunities, which are punctuated by growing universe of real options into lasting shareholder value. We intend to do that by protecting our strong balance sheet and deploying capital selectively, while we advance our ongoing transformation initiatives. Diversifying on the technology spectrum and battery value chain, maximizing the IRA incentives and finally developing our highest return projects. Turning to slide four. Let's review our key messages this quarter. As you saw on this morning's release, we're contending with the delay in our progress to fully automated reduction at the CQP and we have implemented a detailed plan to address the complex challenge of scaling the 24M semi solid platform. In light of the current CQP calendar, the US…

Thank you, Birgir. Please take a look at slide nine for the Giga America update. As we highlighted in the second quarter earnings call in August, continued feedback from potential investors related to the Giga America financing has stressed the importance of technology validation at the customer qualification plan. The CQP delays that Birgir mentioned have impacted our ability to close the Phase 1A two-line fast track project financing within the previously discussed timelines. With that, the Giga America team has decided to take a refreshed look at the project and the business case. The value of the time advantage related to the fast track project has decreased significantly, leading us to make the decision to terminate the two-line project. We see significant value in adjusting our focus to the larger project, Phase 1B. That was the original plan for the site. We believe that with validation at the CQP to come, we have the right roster of potential investors to secure the equity financing for a 24M based production facility in Georgia. Additionally, the larger project aligns well with our DOE financing plan that Oscar will discuss. We are now working toward a potential FID of the larger 24M base project, along with potential DOE and equity financing, some point late in 2024. Additionally, we are pursuing a second track for Giga America as Birgir mentioned. We are currently in multiple conversations with potential conventional technology partners around advancing a project, utilizing that conventional technology at the Georgia site. Due to the lack of technology risk involved with that option, timing of both FID and startup production could provide us an earlier entry into the US market. Our plan involves making a technology and partner selection in the near-term, and we will announce that decision when that selection is made. We are excited about the opportunity to get into the US market with production assets sooner, and the site in Georgia is large enough to accommodate both a conventional and the 24M production facility with plenty of room to spare. We look forward to providing you more updates on both tracks as we progress through the end of the year and into 2024. I will now turn it over to Oscar to provide a general finance update as well as an update on the redomicile affiliation efforts. Oscar?

Thank you, Jeremy. On slide 10, we provide an update regarding our announcement to redomicile from Luxembourg to the United States. This move dramatically expands our opportunity for equity index inclusion. Today, only an estimated 3% of our shares are held by index funds paired with a peer average of over 20%. Redomiciling has the potential to drive incremental holdings of up to 45% of our current market capitalization if we were held by all the index funds we would qualify for, as well as associated actively managed funds who benchmark against those indices. Moving our domicile to the US also has the added benefit of aligning flare with the country that has offered the highest bids for battery manufacturing at scale in the world, as well as the world's largest market for our products. The US and Delaware have well understood corporate governance and disclosure requirements, and we will still be able to maintain our European strategies alongside our US efforts. The transaction to move from Luxembourg to the US requires an extraordinary shareholder meeting, which is now set for December 15th for shareholders of record as of October 25th. The transaction requires 50% of our outstanding shares to vote in order to ensure a forum and two-thirds of those shares voting must vote in favor of the transaction for it to close. It's very important that all shareholders vote. Details of the transaction can be found in filings under FREYR Battery Inc. on the SEC's website and through links on our own website. We expect to close the transaction by year-end. Moving on now to slide 11, the financial update slide of the earnings deck, I will review our recent financial results. The quarter ended September 30th, 2023, FREYR reported a net loss of $10 million or $0.07…

Thanks Oscar. Before we take your questions, let's close with a look at FREYR path forward on slide 13. In today's high discount rate environment, cash is king. We have a clean balance sheet with no debt, and we are reducing our cost to extend our liquidity runway to two plus years and beyond. We will not authorize any significant new CapEx in 2024 until new financing is committed. We are pursuing conventional technology partnerships, advancing the redomicile into the US, progressing through the commissioning and 24M scale up processes at the CQP. We will communicate news on all three fronts with the investment community as things develop. Our partnership approach to industrialization is generating dozens of interesting strategic conversations with our customers, with members of the Energy Transition Acceleration Coalition and other partners, all of which are focused on commercial opportunities and catalyzing FREYR's next wave of capital formation. Norway in Europe, we're working with key stakeholders to establish a globally competitive incentive center program while we preserve Giga Arctic's option value. And finally, we're executing our strategic plan with clear priorities. And as we have learned over the last two and a half years as a public company, adaptability is paramount to succeeding in a highly volatile environment. I'll conclude by emphasizing our appreciation for the continued support of our investors and all our partners in our mission to decarbonize energy storage and transportation systems by producing the world's cleanest batteries. The FREYR team is unified in our purpose, and we're dedicated to rewarding your faith in us on this exciting journey. And with that, I'll turn it call back to Jeff and we'll take your questions.

Thanks Birgir. Operator, we're ready to open the line for Q&A.

Great. Thank you. [Operator Instructions] And your first question comes from the line of Adam Jonas with Morgan Stanley. Adam, go ahead.

Thanks everybody and appreciate the extra details on the cash outlook. That's helpful. But so much of the story really does rely on the technology of 24M. So at a high level, Birgir, how much of FREYR's success is tied to 24M? If this turns out to be a dud, and I'm curious at what -- when will you -- when would you potentially be in a position to understand whether 24M really is scalable as you originally anticipated or not? Because it does seem that everything else kind of triggers off of that and I appreciate the diversification strategy, but it's important for shareholders to know how tied the entire story is to 24M specifically. So if you could realize it's a qualitative question, but I would appreciate your impressions, please.

Sure. Sure, Adam. The first, as you indicate, we think of two tracks. We've now indicated towards getting started in Giga America is one track where we have some technology risk, we'll talk more about in a second. And even that's geopolitical advantage and very low risk. Then pursue another track, which will be licensed in conventional technology with essentially the opposite characteristic. Some geopolitical risk, but very low technology risk. So two uncorrelated paths, if you will. And then inside of the 24M path, I think it's fair to say that as we progress towards the last commission packages that we're delivering in the CQP and getting ready for production, we're also getting into some of the harder stuff. And it's also fair to say that we are discovering aspects of our chosen solution that I might not have had the technology readiness level that we would've anticipated in making choice and until now, in fact. That's just a part of getting the stages we're at now, very difficult to foresee upfront. All of that said is we haven't discovered anything that says this is not a viable way to get to a scalable automated cell reduction. And we think we see a path through to that. We're making a few changes to make sure that we debottleneck and unblock that path. We continue to have, and I think we've spoken about before, the delivery of cells in an automated way at the CQP as company priority number one. And along with, selected members in my leadership team start every day 9:00 AM with a daily follow up call to make sure we remove all blocks from the path in front of that. We have all fair battery talent now engaged at the CQP. We might have been more…

Thanks Birgir. And just to follow up on the runway discussion. I was going to ask whether the two-year-plus runway began at the end of the third quarter or the end of the fourth quarter, but I think Oscar, your comments about getting into 2026 answers that question, just confirming that the two-year-plus runway.

That's great.

Oscar, also I want to know whether that two-year-plus bakes in a minimum cash level to run the business for payroll expenses, et cetera, or whether that was a mathematical, down to near zero cash flow. Sorry for the housekeeping there, but just wanted to assume whether you had a minimum cash in there, and if so, what that would be. And then what specific cost cuts are required? You alluded to in the release that you would take in addition to pausing the CapEx subject to project financing or funding, what OpEx cuts are being considered, and are there any upfront costs related to those cuts? What I'm trying to get at Oscar is, is the two-year-plus runway a really conservative base case, something you really have line of sight to, and that's achievable? And is that base case or is it kind of more of a stretch goal? Thanks.

Yeah. No, great questions, Adam. Thank you. So there a couple of things. So just reconfirming, yes, the runway 250 starts at the end of 2023. Now runway extends into 2026. The amount of cash you needed just to hold on the balance sheet to sort of run the business like a working capital is very low. So that's not significant. Just responding to, and from a burn rate perspective, we'll have the quarterly burn rate well under $30 million a quarter. Also keep in mind when you look at 2023 and our cash spending, the largest component of that was the Giga Arctic, that we're pausing now until we get any kind of new financing related to that. So that's a significant piece of the puzzle, but clearly that's a more focused level of activity with the CQP. And then, Giga American development and the ones that Birgir mentioned, that requires a different organization. So we are looking at the organizational structure. We've made a lot of progress on that. So we're going through that process there. So this is not an aspirational goal. This burn rate reduction is happening right now. And so we're pretty confident or very confident in that.

I think we're not providing numbers on headcount today, Adam. But the priorities that the company was pursuing up until quite recently were more than what we have now. We're very laser-focused now on delivering sales and expanding runway and keeping optionality around our operations. And that's going to allow us to take down headcount quite dramatically without infecting our key priorities. So that's what we're doing. We've had all-hands meetings across the company today. There's perhaps unfamiliar territory from somebody, but there's a fairly straightforward process of running reduction-in-force processes in Norway where we have most of work staff to, we're well advanced and executing on those in accordance regulation, and no barriers [technical difficulty]. So this is, as Oscar said, not aspirational. This is stuff that's in the machine, the processor.

Thanks Birgir and thanks Oscar. Just one last follow up, just to clarify, my second question, I'll finish the questions here. The time to get to $30 million per quarter burn rate, would that be -- is that something that would take a couple of quarters to settle on, given some -- perhaps some adjustments to get there, including some one-time payments, or I didn't know if you had an idea of when a $30 million burn rate would be achievable within -- presumably sometime in 2024, but I didn't know if it was the first half was achievable to get there. Thanks.

Yeah. Thank you. And so reemphasizing -- the burn rate will be below $30 million a quarter, and it will be as of January 3rd. We will take a small kind of single digit, one-time charge related to severance. But the fact you'll see this out of the box in Q1.

Right.

Very clear, January 1, Q1.

Thanks.

All right. Great. Your next question comes from the line of Tyler DiMatteo with BTIG. Tyler, please go ahead.

Yeah. Good morning, everyone. Thanks for taking the time and the questions. I wanted to follow up on the -- some of the comments and the prepared remarks related to the CQP and the plans to prevent further delays that you highlighted some comments about partners and vendors. I'm just curious, how are you thinking about maybe leveraging more of your partners and vendors to ensure, or at least kind of really work through some of the challenges of the CQP that's undergoing right now? Just how can you really leverage some of those partnerships as you go into 2024? Really, any other color there.

Yeah. It may be too much sausage making, but we have -- as I said, every morning we get together and look at the critical path progress versus 24 hours ago. And we have key partners and vendors involved once or twice a week, but every week, and those calls -- we also go through detailed plans on the part of the vendors detailed expectations on the part of the customers. And we have the subject matter experts from all three sides engaged in problem solving, where we identify a roadblocks and to remove barriers for the team on the ground. And this is -- it is really creating that full right to left transparency. We also share this throughout the facility. So there's a lot more eyeballs on potential issues and also solutions as we go than we've had previously. So quite a bit of changes in operating model and all of them related to unblocking and debottlenecking progress towards first sales.

Okay. Great. And then just at a higher level here, kind of given some of the delays at the CQP, I mean, does this change how you think about maybe ESS versus EV, realizing that ESS was always the core near-term approach, but I mean, does this dynamic now change given the current state of play or -- and if so, how?

So I think the semi solid technology was always a very promising technology as it relates to producing thick electrodes and thereby achieving the electrochemical properties you want for vacations like ESS. So if anything, our conviction that this is going to be a very good market for the technology, we're advancing the strengthen, and we're just going to keep executing towards that.

Okay. Great. Thank you for the time. I really appreciate it. I'll turn it back to the queue.

Great. Thank you so much, Tyler. Your next question comes from the line of Gabe Daoud with TD Cowen. Gabe, go ahead.

Thanks everyone. Thanks for all the great detail this morning. I was hoping we could maybe level set Giga America again. So going back to the original plans, could you just remind us what the capacity targets are for both tracks? And then, any color you can give. I know a lot has to kind of go right from now until then, but any updated thoughts now on start of production from Giga America? I think the fast track plan was two and a half gigawatt hour at capacity, early starting production by the summer of 2025. So maybe just level set and give us a little bit of an update on the initiatives now at Giga America.

Yeah, so this -- yeah, it's Jeremy here. Gabe, thanks for the question. Some of this is still being worked as we're refreshing the business model, but let me give you some thoughts. So on track one as it relates to the 24M technology, because we are in the DOE process, the timeline to sort of closing the financing, the equity will likely line up with the DOE process. And so that'll kind of dictate when we can close financing, which then allows us to order the long lead equipment and then that will take the start of production. So as we think about the DOE process for the 24M plant, that's likely to take us through most of 2024. We hope to be able to get a conditional commitment before the end of the year. If we're able to do that, we believe the equity financing will line up quite well with that. We will, of course, feel good about where we're at in the CQP and be able to move forward with ordering long lead equipment and then that puts us in a start of production late 2026. From a capacity standpoint, again, still sort of working on this. It has somewhat to do with how we end up designing the process, which of course, will be educated again coming out of the CQP performance. So my guess is you're probably looking at anywhere from 15 to 20 gigawatt hours of capacity in that kind of a plant. But of course, that will be a bit TBD still. So we should be able to report more on that, as we get into the early part of 2024. On the second track, timing is a little bit -- it's a little bit more certain because, of course, you have, as Birgir said, you don't have any sort of technology risk, but we are working with multiple partners to try to lock down terms around licensing the technology and assuming we can do that in a short term period, it's going to allow us to likely beat that start of production timing I just mentioned for track one with the track two plan. So -- and then really no way to really comment on capacity yet on track two, that's still being negotiated obviously with the potential licensed partners. So more to come on that.

Thanks Jeremy. That's great caller and super helpful. Maybe as a follow up then, can you talk a little bit about what you may be looking for in a tech partner? I'd imagine it's someone with LFP chops if you will, just considering the market focus on energy storage and anything else that. Maybe you're looking for in a tech partner. And then maybe specific to Nidec. I mean, could you pivot and contract two or phase two, I guess be the sole source of supply for Nidec. Like, Nidec doesn't necessarily care if it's 24M technology, is that correct?

Yeah. So let me answer your first question first. As far as the conventional technology partner, I do think we want to focus around LFP, and I also think we want to continue to focus on the ESS market. As Birgir mentioned, we're excited about that market. We're excited about the growth opportunities there. And frankly, the speed to validation with customers. And so that's important. So I think that would be -- the way I would characterize our potential conventional technology partners. As it relates to, to Nidec, the one difference here for them as our module impact partner is the 24M cell design is different than a conventional cell design. So it will be two different module designs that, that go with that. So we're working very closely with them on both track one and track two. And so the way we would envision the relationship moving forward is to be as transparent as possible on what cell design looks like so they can follow with module design and get us into a DC block product, which we think the market desires.

Okay. Got it. Got it. Great detail. Thanks Jeremy. Thanks guys.

Thanks Gabe.

Thank you. Your next question comes from the line of Alex Rappel [ph]. Alex, go ahead.

Hey, guys. Thanks for taking my question. I'm curious, with the -- these sort of rejiggering of plans here towards Giga America specifically, how are you guys thinking about the offtake environment for ESS moving forward? It seems like almost when you came out, we were kind of in one very panicked environment. Today, we're hearing something really different from buyers. They're seeing rather steep price cuts in ESS. They're much more confident on supply, I mean specifically to the US. So relative to sort of either track one or track two, my understanding is, you do need to show some offtake to get through the DOE alone process. How are you thinking about the contracting environment, and in ESS and sort of like what underpins your excitement looking at it today versus say two years ago? Thanks.

Yeah. Thanks for the question, Alex. I'll take a stab at that and then if anybody wants to join in, feel free. The compliant demand drives price, right? And so yes, it'll be a cyclical market. We know that. We still believe that the ESS market, the growth potential is strong. And so we do feel like there will be periods where there are significant margin and there'll be periods where there are tighter margin. And that's why relying on the competitive advantage that we can build into both our scale and our technology partners is going to be helpful as we survive the cyclical nature of what will be a commodity type market. So no concerns about today's market, feel very strongly still about ESS growth. As it relates to offtake, yes, there will still need to be offtake in either track, no question to secure the financing that we need. And we feel pretty good actually about many of the relationships that we've established, not just with Nidec, but with others as well. And we hope as we kind of continue into 2024 and we start to line up the alternatives with both tracks that you'll see, and actually this isn't a hope, we believe you will start to see some additional offtake announcements happen.

Yeah. I guess, just for clarity, we haven't heard any -- we haven't heard any objections when it comes to the LTSAs and moving volumes between Giga Arctic and Giga America. And the other note I'll make is, the notion of a Western technology based ESS solution has a lot of enthusiasm, a little bit in the market. We're getting very strong responses and trade shows and elsewhere on the concept. So coming with a technologically derisked solution and a geopolitical derisk solution seems like a really winning combination.

Got it. You already answered part of my follow up as far as the transferability of offtake across the Atlantic. But maybe a follow on, right, Birgir, you've alluded to sort of the technology versus the geopolitical risk. Obviously there are some large players today that are licensing battery technology from various parts of the world that's been contentious in certain cases. I'm curious how you think about that, that sort of trek to -- what are you looking to see? Again, you just mentioned sort of a US platform, and I think that there's sort of consequences or ramifications that go along with that. How are you thinking about that path specifically relative to some of the things you've already seen as far as the US reshoring, but also not necessarily having these core technical capacities as others do in the rest of the world? Thanks.

Yeah. That kind of goes to the conclusion again, right? Because in an environment where you get a lot stronger, lot stricter restrictions on the origin of your IP or your process or the ownership of the asset or the licensor. Clearly, the 24M solid -- semi solid platform, it's going to be significantly advantaged. And conversely, an environment that sort of doesn't go farther in that direction, would derisk through a high maturity dimensional LFT solution. It's going to be advantage. So I think we can play to both sides of this argument. That said, we're, of course, paying very close attention to it. We're spending time in BC to understand what's -- what might be percolating and staying close to the people who might providing non-diluted funding for us to ensure that we have a good picture of the risks.

Got it. Makes sense. If I could just sneak a quick follow up. Just on the effective, I guess, capital plan for Giga Arctic. I think you guys talked in the past about your ability to cold stack. Just wondering if there's any ongoing costs beyond capital that we should be aware of with -- where the plan sits. Currently, I understand that capital could resume with some financing coming in the door, but just curious if there's any like additional costs, right, that we should be aware of there. Thanks.

We see the cost of keeping the Giga Arctic option alive and possible to hot start, as it were somewhere been $3 million and $4 million a year. So not significant in our runway perspective, as we've discussed it to them.

Got it. Thanks. That's super clear. Take the rest offline.

Thanks, Alex.

Great. Thank you. Your next question comes from the line of Jose Asumendi [JP Morgan]. Jose, please go ahead.

Thank you very much. I want to come back please to slide six. Can you maybe just provide a few more details with regards to what's going on the ground? Like what are the changes you're doing to -- as you see on the slide further -- prevent further delays and can you elaborate a little bit more on this dedicated technology advisory board? Thank you very much.

Yeah. So our Technology Advisory Board is chaired by our Board member Dr. Dan Steingard out of Columbia University. And just this last month spent time on the CQP with our, of course, our technology team as well. And as I alluded to previously, we're also strengthening and we probably -- or we will continue to strengthen our own in-house technology muscle to ensure that we build our own ability to scale not only in this permutation of semi solid, but also in the next permutation. So that's what's going to air out our confidence that the semi solid platform is the right bet for Western Hemisphere based set of IP for battery cell production. In terms of what we're doing every day, I guess probably could invite you into our morning meetings and you'd see all the sausage making, but I'm not sure how that would play. Let's -- rest assured, this is taking up and the attention span of the key people in FREYR, we're all on this -- on the daily, if not hourly basis.

Thank you.

Thank you. [Operator Instructions] sorry. Go ahead.

Go ahead, Jessica.

[Operator Instructions] Okay. There is no further questions in the queue. So with that, I will turn the call back over to Jeff Spittel, VP of Investor Relations. Jeff, go ahead. End of Q&A:

Hey, thank you, Jessica. Thank you all for your time today. Please follow up with us. I know we have additional questions and we will get to all of them, so reach out to me, and we'll put some time on the calendar and then we look forward to seeing a number of you in person on the road and virtually over the next several weeks. Thanks for your time and this will conclude the call.