FREYR Battery AS (“FREY”) is constructing an “ESG friendly” battery factory in Mo i Rana, Norway within Mo Industripark, owned and operated by Mo Industripark AS (“MIP”).

Until 2021, Helgeland Invest AS (“Helgeland Invest”) owned 49.3% of MIP. Øijord & Aanes AS (“Øijord & Aanes”) owns 20.4% of MIP and is a local contractor that builds electrical dams, bulkheads, road infrastructure, weather towers, etc.

MIP owns the land underneath FREY’s future battery factory. MIP also generates and sells its own electricity, its own shipping port to onload/offload, its own steel mill, and over 100+ occupied tenants that pay for rent and ancillary services.

On November 20, 2020, FREY signed a lease letter of intent with MIP to use an existing warehouse for a Customer Qualification Plant (“CQP”) and develop an empty lot for FREY’s battery gigafactory (“Giga Arctic”).

In November 2020, Bjørn Rune Gjelsten via Gjelsten Holdings (“Gjelsten”) acquired a majority interest in Helgeland Invest, MIP’s largest shareholder.

Helgeland Invest’s 2020 Annual Report disclosed ownership interests in both FREY and MIP and that its shareholder list included Øijord & Aanes. We believe that Helgeland Invest and Øijord & Aanes are undisclosed FREY insiders.

FREY’s lease letter of intent with MIP does not entitle FREY to leasehold improvement reimbursements, rebates, or credits, which makes the owners of the industrial park (undisclosed FREY insiders) are outsized beneficiaries of FREY infrastructure investments.

From 2019 to 2021, MIP’s historical carrying value was US$ 24 million. As of 3Q’22, FREY invested over US$ 103+ million to improve MIP’s land with casted foundation structures and basic infrastructure such as footings, grading, trenching, drainage, etc. With US$ 103 million invested and MIP worth US$ 24 million, why didn’t FREY buy MIP or develop a factory on land owned by FREY?

More expenditure planned. On June 29, 2022, FREY forecasted total estimated Giga Arctic construction costs of US$ 1.7 billion.

We think that FREY concealed the truth about MIP’s ownership because (1) negotiations about build out costs would have been significantly different with an independent third party at arm’s length and (2) FREY investment increases the value of MIP which is secretly owned by FREY insiders.

Investors rely on mangement and board representations to make investment decisions. Leasehold improvement expenditures should have been finalized and related party transactions disclosed, but were not.

Minority investors were not protected by FREY’s Board to negotiate reasonable terms at arms length. FREY did not disclose its relationship with MIP or its affiliated service providers.

FREY is constructing battery production lines using a US$ 20 million license from 24M Technologies who has partnered with other large formidable competitors with access to the same tech patents and processes (Kyocera, Volkswagen, Itochu).

FREY is a pre-revenue company that continues to invest heavily in land secretly owned by FREY insiders with no discernable proprietary technology that (somehow) obtained a US$ 2 billion valuation using a SPAC merger in 2021.

We are short FREY and think its stock is going lower.