The board of directors hereby convenes an extraordinary general meeting in FREYR AS to be held on 11 November 2020 at 15:00 (CET) in the offices of Advokatfirmaet BAHR AS at Tjuvholmen allé 16 in Oslo, Norway. Attendance is registered by filling out the Notice of Attendance document enclosed. 

Important: Due to the outbreak of the corona virus Covid-19, shareholders are encouraged to participate by means of prior voting or granting a proxy as described in the notice, and not by appearing in person.

As previously communicated by FREYR, the Company works to ensure the financing of its business plan. In order to cover intermediate funding needs and, potentially, allow the acceleration of the business plan, the board of directors has secured the support of entities advised (or subadvised) by specialty energy investor Encompass Capital Advisors LLC in the form of a USD 7,500,000 funding commitment to be made available against issuance by the Company of shares in a separate class of shares, which will either be converted to common shares or redeemed or acquired by the Company at a price of 105% of the funding provided (equal to USD 7,875,000, corresponding to a cost of funds for the Company of USD 375,000). 

Against this background, the board of directors has proposed that the general meeting resolves a share capital increase by subscription of 7,500,000 new shares in a new class of convertible preference shares against a total share contribution of USD 7,500,000. The convertible preference shares shall automatically be converted into common shares on the earliest of (i) a material direct or indirect investment in the Company, and (ii) at 30 June 2021. The preference shares have (until they are converted into common shares) a preferential right to distribution equal to the share contribution. The shares may only be issued to Encompass Capital Master Fund LP and BEMAP Master Fund Ltd (hereinafter jointly referred to as “Encompass”), and thus the shareholders’ preferential right shall be disapplied. 

The board of directors and Encompass have agreed (subject to the general meeting’s approval) rights for the Company of redemption of shares issued and rights for Encompass to have issued common shares at par, to the effect that the average subscription price paid by Encompass for each common share to which the preference shares are converted, after giving effect to such redemption or issuance of additional shares, as the case may be, will be determined as follows: The subscription price shall be equal to the subscription price under certain material investment directly or indirectly in  the Company’s business, however if no such material investment has occurred prior to 30 June 2021, the subscription price shall be equal to 80% of the volume weighted average price per share over 40 business days on the Norwegian OTC list prior to the 30 June 2021 (or, if not applicable, as determined by separate valuation), provided, however, that the maximum number of common shares that Encompass would acquire in respect of its aggregate investment would not exceed 100,000,000.  

Pursuant to the above, the board of directors has proposed to issue 92,500,000 warrants to Encompass. The warrants are part of the mechanism referred to above to adjust the number of shares which Encompass may be entitled to. Consequently, Encompass may only exercise the number of the warrants necessary to make such an adjustment. For the sake of clarity, in the event that Encompass receives too many shares in the abovementioned proposed share capital increase, no warrants may be exercised. Against this background, it is necessary that the shareholders’ preferential rights are waived also with respect to issuing the warrants. 

Lastly, the board of directors has also proposed that the board of directors shall be authorised to increase the share capital of the Company with up to NOK 22,226.42. Only common shares may be issued to KIC InnoEnergy SE pursuant to this authorisation, and the shareholders’ preferential right shall be disapplied. Upon issuing shares pursuant to this authorisation, the 3,992,792 warrants issued to KIC InnoEnergy SE on 8 July 2020 shall lapse.  

For further information, please contact:
 
Tom Einar Jensen, Chief Executive Officer                                tom.jensen@freyrbattery.com 
Steffen Føreid, Chief Financial Officer                                       steffen.foreid@freyrbattery.com   

 
About Freyr AS:  
A Norwegian company developing, financing, constructing and operating environmentally friendly lithium-ion based battery cell facilities in Mo i Rana, Northern Norway. The company is developing an initial pilot plant, a scalable and modularized 2-25 GWh fast-track facility and a 32 GWh giga-factory using best available technology, globally leading partners and low-cost, renewable hydro and wind energy. FREYR will supply safe, high-density and cost competitive green battery cells to the rapidly growing markets for electric vehicles, energy storage, marine and aviation applications, and offshore segments in Europe and globally. FREYR is committed to supporting cluster-based R&D initiatives and the development of an ecosystem of scientific, commercial and financial stakeholders in Norway, Europe and USA to support the necessary expansion of the battery value chain in our region. For more info, go to: freyrbattery.com