| | On December 23, 2024, FREYR Battery, Inc. ("Issuer") completed the previously announced transactions contemplated under a transaction agreement (the "Transaction Agreement") entered into with Trina Solar (Schweiz) AG, an entity organized under the laws of Switzerland (the "Reporting Person") on November 6, 2024 for the acquisition of all legal and beneficial ownership in the shares of capital stock of Trina Solar US Holding Inc., a Delaware corporation, which owns, directly or indirectly, all legal and beneficial ownership in the shares of capital stock of, or other ownership, membership or equity interest in (a) Trina Solar US Manufacturing Holding Inc., a Delaware corporation ("TUMH"), (b) Trina Solar US Manufacturing Module Associated Entity 1, LLC, a Texas limited liability company ("TUMA"), (c) Trina Solar US Manufacturing Module 1, LLC, a Texas limited liability company ("TUM 1"), and (d) Trina Solar US Manufacturing Cell 1, LLC, an Oklahoma limited liability company ("TUM 2", and together with TUMH, TUMA and TUM 1, the "Acquired Companies") (and such acquisition, the "Purchase").
At Closing of the Purchase, the Company also entered into certain other agreements, including: (a) certain agreements with respect to the development, operation and services of the solar cell and solar module manufacturing facilities, with Trina Solar Co., Ltd., a company incorporated in China ("Trina Parent") or certain other subsidiaries and affiliates of Trina Parent (the "Related Agreements"), (b) a Note Instrument, (c) a Convertible Note Instrument, (d) a Cooperation Agreement and (e) a Registration Rights Agreement (the Purchase, together with (a) through (e) collectively, the "Transaction").
As previously disclosed, under the Transaction Agreement, the Issuer acquired the Acquired Companies for (i) $100 million cash consideration (subject to an adjustment for any leakage); (ii) 15,437,847 Shares (the "Share Consideration"); (iii) a $150.0 million one percent (1%) per annum senior unsecured note due in five (5) years (the "Note Instrument"); and (iv) an $80.0 million seven percent (7%) unsecured convertible note due in five (5) years (the "Convertible Note Instrument"), which, subject to approval by the Committee on Foreign Investment in the United States ("CFIUS"), is convertible in up to two conversions into 30.4 million shares of Common Stock, in aggregate (the "Conversion Shares"). Conversion of the Convertible Note Instrument is subject to the Requisite Stockholder Approval.
The Transaction was subject to customary Closing conditions including, among other things, (i) the absence of any laws, government orders or injunctions that prohibit, restrict, enjoin or otherwise make illegal the Closing; (ii) the parties' certification that the representations and warranties are true and correct; (iii) the absence of any material adverse effect on the Issuer or the Acquired Companies; (iv) the receipt by the Acquired Companies of certain necessary consents, waivers and approvals; (v) the Issuer having isolated, deleted, destroyed, terminated or sold, in each case, all material assets, equipment, and licenses relating to 24M Technologies, Inc.; (vi) the Reporting Person's completion of a certain internal reorganization (the "Reorganization"); (vii) the first tranche of $50.0 million of the equity financing into the Issuer to be implemented on or prior to Closing pursuant to the Preferred Stock Purchase Agreement (the "Purchase Price"); and (viii) the submission of a supplemental listing application to New York Stock Exchange (the "NYSE") in connection with the proposed issuance of the Share Consideration and the Conversion Shares, among other conditions.
Within six (6) months post-Closing, the Issuer will also use its reasonable efforts to dispose, divest, transfer or otherwise sell the assets and operations that constitute its European business (the "Divestiture"), and in case the consideration received is less than $45.0 million, the Issuer shall pay to the Reporting Person an amount equal to nineteen and nine tenths percent (19.9%) of the shortfall between such consideration and $50.0 million. If such Divestiture is not completed within six (6) months from Closing (the "Divestiture Date"), unless waived by the Reporting Person, the Issuer shall pay to the Reporting Person a fee of $2.0 million for each calendar month from the Divestiture Date until completion of the Divestiture.
The foregoing description of the Transaction Agreement is qualified in its entirety by reference to the full text of the Transaction Agreement, a copy of which is incorporated by reference as Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2024. The representations, warranties, and covenants contained in such agreement were made only for purposes of such agreement and as of specific date, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
Following Closing, and in the event that any of the non-voting preferred stock ("Preferred Stock") issued under the Preferred Stock Purchase Agreement is converted into Shares, the Reporting Person shall have the right to acquire from the Issuer such number of Shares so that the Reporting Person's proportionate ownership of the Shares following the conversion of the Preferred Stock will be the same as before the conversion at a price equal to $2.50 per share of Common Stock or such other price as is used in the conversion of the Preferred Stock.
The foregoing description of the Preferred Stock Purchase Agreement is qualified in its entirety by reference to the full text of the Preferred Stock Purchase Agreement, a copy of which is incorporated by reference as Exhibit 10.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2024.
After Closing, the Issuer shall, or shall cause TUM 1 to repay a certain Production Reserve Fee equal to $220.0 million in five installments to TUS and fully owned by the Reporting Person, pursuant to the TUS Offtake Agreement between these TUS and TUM 1, in five installments of $44.0 million, to be paid on each successive anniversary of the Closing, subject to certain exceptions and acceleration provisions.
Following Closing, in the event the parties, after reasonable best efforts, fail to receive CFIUS approval with respect to the Conversions (the "CFIUS Turndown"), if CFIUS requires the Reporting Person to divest, dispose, or otherwise sell the Shares acquired as Share Consideration pursuant to the Transaction Agreement, within sixty (60) days following the date of the CFIUS Turndown, the Issuer shall purchase or redeem from the Reporting Person all such Shares and issue to the Reporting Person an unsecured loan note with a term of ten (10) years and an interest rate lower than the Note Instrument, with an aggregate principal amount equal to the 30-day VWAP of the Share Consideration prior to the issue of such unsecured loan note (the "Secondary Note").
In the event of a CFIUS Turndown or if the Convertible Note Instrument does not become eligible for conversion within twelve (12) months following Closing (as may be extended by the Reporting Person in it is sole discretion), the Issuer shall redeem and repay the Convertible Note Instrument with a newly issued unsecured senior note substantially on the same terms as the Secondary Note.
The foregoing description of the Secondary Note is qualified in its entirety by reference to the full text of the form of the Secondary Note, a copy of which is incorporated by reference as Exhibit 10.4 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2024.
At Closing, the Issuer and the Reporting Person executed the Note Instrument and the Convertible Note Instrument.
As previously disclosed, pursuant to the Note Instrument, the Issuer will repay the principal amount in cash with quarterly repayments of $7.5 million per quarter starting on the first calendar quarter ending after the one-year anniversary of the date of issuance of the Note Instrument and $30.0 million at maturity. Interest will accrue quarterly in arrears at one percent (1%) per annum and will be paid in cash on a quarterly basis starting at Closing. The Issuer, in its discretion, may prepay the Note Instrument, in whole or in part, at any time prior to maturity date without premium or penalty.
Within five (5) days of obtaining CFIUS approval, the Convertible Note Instrument shall partially convert into 12.5 million Shares (the "First Conversion"). Within five (5) days of obtaining Requisite Stockholder Approval, the remaining balance of the Convertible Note Instrument shall convert into 18.0 million additional Shares. Interest shall accrue quarterly at seven percent (7%) per annum commencing on the issuance date, subject to certain adjustments; however, the Convertible Note Instrument shall never convert to more than 30.4 million Shares.
The foregoing descriptions of the Note Instrument and Convertible Note Instrument are qualified in their entirety by reference to the full text of the forms of the Note Instrument and Convertible Note Instrument, copies of which are filed respectively as Exhibits 10.2 and 10.3 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2024.
At Closing, the Issuer and the Reporting Person entered into a Cooperation Agreement, pursuant to which, among other things, for so long as the Reporting Person holds 15.4 million of the Issuer's Shares, it shall be entitled to designate for nomination one (1) director to the Issuer's board of directors (the "FREYR Board") and (ii) for as long as the Reporting Person holds fifteen percent (15%) or more of the Issuer's Shares, it shall be entitled to designate for nomination two (2) directors to the FREYR Board. For so long as there is at least one (1) director designated by the Reporting Person on the FREYR Board and at least one (1) such director is an independent director in accordance with the applicable stock exchange listing rules, the FREYR Board shall appoint a director designated by the Reporting Person to each of (i) the nominating and corporate governance committee and (ii) the compensation committee.
Pursuant to the Cooperation Agreement, the Reporting Person further agreed to customary standstill provisions for so long as the Reporting Person holds the Share Consideration. In addition, subject to limited exceptions, the Reporting Person shall not transfer any Shares during the 1-year lock-up period. For as long as the Reporting Person holds securities of the Issuer, it shall also be entitled to certain anti-dilution rights.
The foregoing description of the Cooperation Agreement is qualified in its entirety by reference to the full text of the Cooperation Agreement, a copy of which is filed as Exhibit 10.5 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 27, 2024, and incorporated by reference herein.
As previously disclosed by the Issuer on November 6, 2024, the FREYR Board appointed Mr. David Gustafson as the incoming Chief Operating Officer of the Issuer effective as of Closing and subject to the terms of the Transaction Agreement.
Capitalized terms used in this Schedule 13D but not otherwise defined herein have the meanings given to them in the Transaction Agreement, a copy of which is filed as Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2024, and incorporated by reference herein. |
