FREYR Battery, Inc. /DE/

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in (i) Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025 (as amended and supplemented by Amendment No. 1 on Form 10-K/A filed with the SEC on April 30, 2025), whi and (ii) Part II, Item 1A, Risk Factors in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 filed with the SEC on May 15, 2025, as amended and supplemented by Amendment No. 1 on Form 10-Q/A filed with the SEC on August 18, 2025, which could materially affect our business, financial condition, results of operations, and cash flows. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently consider immaterial may also materially adversely affect our business, financial condition, results of operations, and cash flows. Except for the risk factors set forth below, there have been no material changes in the risk factors contained in our Annual Report on Form 10-K. 

We identified a material weakness in internal control over financial reporting and determined that it resulted in our internal control over financial reporting and disclosure controls and procedures not being effective during the quarter ended June 30, 2025. If we are not able to remediate this material weakness, or we identify additional deficiencies in the future or otherwise fail to maintain an effective system of internal controls, including disclosure controls and procedures, this could result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. We are required to annually provide managements attestation on internal control over financial reporting. We are also required to disclose significant changes made to our internal control procedures on a quarterly basis and any material weaknesses identified by our management in our internal control over financial reporting during the course of related assessments.

Prior to filing this Quarterly Report on Form 10-Q, management identified a material weakness in the Companys internal control over financial reporting related to its controls over applying technical accounting guidance to nonrecurring events and transactions, specific to the evaluation of information that was known or knowable at the time of the transaction or event. Management determined that such material weakness resulted in the Companys internal control over financial reporting and disclosure controls and procedures not being effective as of June 30, 2025.

Effective internal controls are necessary for us to provide reliable financial statements and prevent or detect fraud. The modiaterial weakness in internal control over financial reporting described above, any new defication, reductiencies identified in the future or any deficiencies in our disclosure controls and procedures, if not timely remediated, could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. We are in the process of implementing a remediation plan to remediate the material weakness we identified, which is designed to improve our internal control over financial reporting. We can provide no assurance that the measures we have taken to-date and any action, eliminations that we may take in the future will be sufficient to remediate this control deficiency, or that such remediation measures will be effective at preventing or avoiding potential future significant deficiencies or material weaknesses in our internal controls.

If the steps we take to remediate the material weakness are ineffective, the material weakness could result in material misstatements to our annual or interim consolidated financial statements that might not be prevented or detected on a timely basis, or expiration of in delayed filings of our required periodic reports. This might lead to investors losing confidence in the accuracy and completeness of our financial reports, the market price of our Common Stock could be adversely affected, and we could become subject to litigation or investigations by NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources.

Furthermore, if we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate our existing material weakness or avoid potential future material weaknesses.

The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.

Our net sales and profits are subject to variability based on the availability and size of government subsidies and economic incentives. Federal, state, and local governmental bodies in many countries have provided subsidies in the form of feed-in-tariff structures, rebates, tax incentives, and other incentives to end users, distributors, system integrators, and manufacturers of PV solar products. Many of these incentive programs expire, phase down over time, require renewal by the applicable authority, or may be amended. To the extent government incentive programs are reduced earlier than previously expected, are changed retroactively, or are not renewed, such changes could negatively impact demand and/or price levels for our solar modules, lead to a reduction in our net sales, and adversely impact our operating results.

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Current regulatory policies, or any future changes or threatened changes to such policies, including those changes as a result of the current U.S. administration and control of the U.S. Congress, may subject us to significant risks, including the following:

a reduction or removal of renewable energy programs and initiatives and the incentives they provide may negatively impact the market for future solar energy off-take agreements and red, slow the retirement of aging fossil fuel plants, including the retirements of coal generation plants, and reduce the ability for solar project developers to compete for off-take agreements, which may reduce PV solar module sales;

any limitations on the value or availability to manufacturers or potential investors of tax incentives that benefit solar energy production, sales, or projects, such as the Section 45X advanced manufacturing production credit, ITC, and PTC, couas seen in the accelerated termination of certain clean energy tax credits under the OBBBA, could result in reducing such manufacturers or investors economic returns and could cause a reduction in the availability of financing, thereby reducing demand for PV solar modules; and

any effort to overturn federal and state laws, regulations, or policies that are supportive of solar energy generation or that remove costs or other limitations on other types of electricity generation that compete with solar energy projects could negatively impact our ability to compete with traditional forms of electricity generation and materially and adversely affect our business.

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Application of trade laws may also adversely impact, either directly or indirectly, our operating results; for example, by impacting our customers project costs, profitability, and their demand for our modules; or by impacting our own costs or disrupting our manufacturing or supply chains, and consequently negatively impacting demand and/or price levels for our solar modules, reducing our net sales, or affecting potential profitability of fulfilling customer contracts. We are therefore potentially subject to various risks, which include the following:

any tariffs that reduce the profitability of contracts, whereby the cost of tariffs exceeds the amount able to be, or willing to be, absorbed by either us or the customer under the provisions of the contract and may lead to the cancellation of such contract, potentially resulting in the reduction of future revenue an, the loss of the contractual right to a termination payment from a customer and/or the required return of a previously received customer down payment; and

any reciprocal or other tariffs may place burdens on our customers supply chains exclusive of module import costs, including through increased costs of trackers, inverters, transformers, and other imported equipment, which are often heavily dependent on Chinese supply chains, due to the lack of availability from other countries. These and other costs could result in an inability for certain projects to generate profitable returns, and may lead to the delay or abandonment of such projects, thereby reducing or removing demand for currently contracted PV module sales.

In some instances, the application of trade laws is currently beneficial to us, and changes in their application could have an adverse impact. The overall impact of trade laws on our business depends on multiple factors, including their duration, their scope and potential expansion thereof, enforcement, retaliatory measures by impacted exporting countries, inflationary effects and broader macroeconomic responses, changes to consumer purchasing behavior, and the effectiveness of our responses in managing these impacts. Recent developments include the following:

United States Reciprocal Tariffs. On April 2As of August 13, 2025, the U.S. administration announcednited States imposes a 10% baseline reciprocal tariffs on all imports from allmost countries, and higher reciprocal tariffs on imports from nearly 60 countries, invoking his authority under theexcluding Canada, Mexico, and countries listed under Column 2 of the Harmonized Tariff Schedule of the United States, such as Russia and North Korea. Interna additional Emergency Economic Powers Act (IEEPA). The 10% baseline, country-specific reciprocal tariffs entered intoof up to 41% took effect on April 5ugust 7, 2025. Howe, cover, on April 9, 2025,ing imports from more the U.S. administration announced a 90-day pause on the implementation of an 60 trading partners. Imports from China are subject to a separate arrangement: the additional, higher r reciprocal tariffs, except for that previously brought those applicable to China. As of May 5, 2025, the U.S. reciprocale effective rate above 125% is currently suspended under a tariff rate on imports from truce. Instead, China was 125%, however the effective ratewhen ese goods are presently subject to a combined with 30% tariff (comprising the 10% baseline and the 20% fentanyl-related IEEPA tariffs of March 4), with this arrangement extended through November 10, 2025was 145%. If the higher r. These increases in country-speciprocalfic tariffs go into effect after the 90-day pause, after July 9, 2025, it  rates could increase the costs to produce our solar modules, which would reduce our profitability. In particular, there is substantial uncertainty about the duration of existing policies surrounding tariffs on Chinese imports, potential changes to existing tariff countermeasures taken by China against the U.S., and whether additional tariffs may be imposed, modified, or suspended, and the impacts of such actions on our business. While the situation remains fluid, we are continuing to evaluate these developments.

United States Section 201 Tariffs on Certain Imported Crystalline Silicon PV Cells and Modules. The United States currently imposes different types of tariffs and/or other trade remedies on certain imported crystalline silicon PV cells and modules from various countries. In February 2022, President Biden proclaimed a four-year extension of a global safeguard measure imposed pursuant to Section 201 of the Trade Act of 1974 that provides for tariffs on imported crystalline silicon solar modules and a tariff rate quota on imported crystalline silicon solar cells. The extension measures tariff rate was originally set at 14.75%, with annual reductions of 0.25 percentage points over the remainder of its four-year term, which expires in February 2026. The current rate is 14.00%. The extension measure also provides an annual tariff-rate quota, whereby tariffs apply only to imported crystalline silicon solar cells above the first 12.5 GW of imports, which was exceeded by approximately 1.4 GW in 2024, according to data from the U.S. International Trade Commission (USITC).

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United States Section 301 Tariffs on Certain Chinese Imports. The United States currently imposes tproduct-specific tariffs ranging from 7.5% to 200% oon mostany articles imported from China, including tariffs of 50% on crystalline silicon solar cells and tariffs of 25% on modules pursuant to Section 301 of the Trade Act of 1974. Currently, crystalline silicon solar cells are subject to 50% tariffs, and modules are subject to 25% tariffs. There are certain product exclusions for these tariffs and the Office of the U.S. Trade Representative (USTR) is accepting product exclusion requests, however, these exclusions will expire on MayAugust 31, 2025.

United States IEEPA Tariffs in response to the Fentanyl and Immigration crises. In February 2025, the U.S. administration announced 25% tariffs on imports from Canada and Mexico, with the exception of products originating under the United States-Mexico-Canada Agreement (USMCA), and 10% tariffs on all imports from China. These tariffs are related to the national security threat posed by trade in fentanyl and other illegal narcotics, as well as illegal immigration. The 10% tariffs on China were subsequently doubled to 20% in March 2025. These tariffs apply in addition to any tariffs imposed under Section 301, ordinary customs duties, antidumping duties or countervailing duties (AD/CVDs), and reciprocal tariffs imposed on Chinese imports. Our operating results could be adversely impacted if these tariffs were to be terminated or reduced.

United States Port Fees on Certain Chinese Vessel Operators and Chinese Vessel Owners. On April 17, 2025, USTR published a notice of action in its investigation under Section 301 of the Trade Act of 1974 into Chinas targeting of the maritime, logistics, and shipbuilding sectors for dominance. The action imposes new port fees on Chinese vessel operators and/or Chinese vessel owners as well as on non-Chinese operators of Chinese-origin vessels beginning on October 14, 2025. The level of fees is on a sliding scale per net ton or, in the case of non-Chinese operators, the higher of a net ton fee or container-based fee. Such fees may impact our logistics services and consequently impact our profitability and results of operations.

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United States Tariffs on Certain Foreign-imported Aluminum and Steel. TEffective July 4, 2025, the United States currently imposes.S. administration increased tariffs of 25% on imported aluminum and steel articles and derivative products under Section 232 of the Trade Expansion Act of 1962, administered by the U.S. Department of Commerce (USDOC) from 25% to 50%. There are certain exemptions to these tariffs including for items that are USMCA-originating. Such tariffs and policies, or any other U.S. or global trade remedies or other trade barriers, may directly or indirectly affect U.S. or global markets for solar energy and our business, financial condition, and results of operations.

United States Potential Tariffs on Processed Critical Minerals and Derivative Products. On April 22, 2025, the U.S. Secretary of Commerce initiated an investigation to determine the effects on the national security of imports of certain critical minerals, as well as their derivative products, under Section 232 of the Trade Expansion Act of 1962 (Section 232). The scope of the investigation includes tellurium and other critical minerals used in solar module manufacturing. In addition, the definition of derivative products covered by the investigation is potentially broad. If this investigation results in the imposition of tariffs or import restrictions on critical minerals and/or derivative products, it could negatively impact demand and/or price levels for our solar modules and limit our growth, lead to a reduction in our net sales, or increase our costs, thereby adversely impacting our operating results.

United States Potential Tariffs on Polysilicon and Derivative Products. On July 1, 2025, the U.S. Secretary of Commerce initiated an investigation to determine the effects on the national security imports of polysilicon and its derivatives under Section 232, a key component in solar panels. If this investigation results in the imposition of tariffs or import restrictions on polysilicon and its derivatives, and in the future we import solar cells and wafers from jurisdictions that are then subject to Section 232 tariffs, it could increase our costs and negatively impact demand and/or price levels for our products and limit our growth, which may lead to a reduction in our net sales, thereby adversely impacting our operating results.

United States AD/CVDs on Certain Imported Crystalline Silicon PV Cells and Modules. The United States currently imposes AD/CVDs on certain imported crystalline silicon PV cells and modules from China and Taiwan. Such AD/CVDs can change over time pursuant to annual administrative reviews conducted by the USDOC, and a decline in duty rates or USDOC failure to fully enforce U.S. AD/CVD laws could have an adverse impact on our operating results. In August 2023, the USDOC issued final affirmative circumvention rulings, finding that solar modules completed in Cambodia, Malaysia, Thailand, and Vietnam using parts and components produced in China circumvent the pre-existing AD/CVD orders on China. Such duties apply to circumventing imports on or after June 6, 2024, as well as any circumventing imports prior to that date that were not used or installed on or before December 3, 2024. Our operating results could be adversely impacted if the USDOC and other U.S. government agencies do not enforce the affirmative circumvention rulings as expected . Conversely, effective enforcement could positively impact our operating results.

United States AD/CVDs on Solar Cells and Modules. In April 2024, the American Alliance for Solar Manufacturing Trade Committee filed AD/CVD petitions with the USDOC and the USITC to impose duties on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam. The investigations have resulted in the imposition of final AD/CVD duties. On April 21, 2025, the USDOC announced final affirmative determinations in the AD and CVD investigations, finding that cells and modules from Cambodia, Malaysia, Thailand, and Vietnam are being dumped and unfairly subsidized at rates ranging from de minimis to over 3,400%, depending on the particular foreign producer (and, in some circumstances, retroactive duties on entries dating back as far as June 2024). Should On June 9, 2025, the USITC make a finotified USDOC of its final affirmative determination on s in the AD/CVD investigations. AD/CVD orders, including the assessment of AD/CVDs and suspension of liquidation of such products, were issued on June 29, 2025. On July 17, 2025, the Alliance for American Solar Manufacturing and Trade

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filed another set of AD/CVD petitions with the USDOC will issue final AD/CVD orders shortly thereafter.and the USITC to impose duties on unfairly traded crystalline silicon solar products from India, Indonesia, and Laos. The USITC is expected to issue its preliminary determination in September 2025. The USDOC is expected to issue its preliminary countervailing duty determinations in December 2025 and preliminary antidumping duty determinations in February 2026. Affirmative determinations in these investigations may increase our operating costs, to the extent we are unable to secure supply of solar cells domestically, until we begin production of solar cells at our planned manufacturing facilities.

As exemplified above, established markets for PV solar development face uncertainties arising from policy, regulatory, and governmental actions. Policy promulgation and market development are especially vulnerable to governmental inertia, political instability, changing government policy and priorities, the imposition or lowering of trade remedies and other trade barriers, geopolitical risk, fossil fuel subsidization, potentially stringent localization requirements, and limited available infrastructure. Any negative impacts from changes in policy, regulatory and governmental actions could negatively affect our business, reduce our net sales, profitability and/or market share, and consequently adversely affect our results of operations, prospects, and financial condition.

Export and import controls could subject us to liability or impair our ability to compete in international markets.

The U.S. and various foreign governments have imposed controls, export license requirements and restrictions on the import or export of certain products, technologies, and software. We must export and import our products in compliance with any applicable controls. We may not always be successful in obtaining necessary governmental approvals, and failure to obtain required import or export approval for our products or limitations on our ability to export or sell our products may adversely affect our revenue. Noncompliance with these laws could have negative consequences, including government investigations, penalties, and reputational harm.

For example, on June 5, 2025 and July 31, 2025 we received notices from CBP relating to potential customs duties on goods imported in 2024 by one of the entities we acquired in the Trina Business Combination. CBP has not quantified the duties it alleges are owed. We continue to assess the notices, but expect to contest them vigorously. For more information, see Item I. Legal Proceedings.

Changes in our products or changes in export, import, and economic sanctions laws and regulations may delay us introducing new products in international markets, prevent our customers from using our products internationally or in some cases, prevent the export or import of our products to or from certain countries altogether. Any change in export or import regulations or legislation; shift or change in enforcement; or change in the countries, persons, or technologies targeted by these regulations could result in decreased use of our products by, or in our decreased ability to, export or sell our products to existing or potential customers with international operations, adversely affecting our business, financial condition, results of operations, and cash flows.

We expect certain financial benefits as a result of tax incentives provided by the IRA. If these expected financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.

T1 expects to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for PV solar modules and certain solar module components manufactured in the United States and sold to unrelated persons. Such credit may be refundable by the IRS or transferable to a third party for cash and is available from 2023 to 2032, subject to phase-down beginning in 2030.

Any changes to the statutes or regulatory guidance regarding Section 45X of the IRC arising, for example, through (i) technical guidance and regulations from the IRS and U.S. Treasury Department, (ii) subsequent amendments to or interpretations of the law by the IRS, the U.S. Treasury Department, or the courts, (iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, or (iv) changes to U.S. government priorities, policies, or initiatives as a result of the change in presidency in 2025, could materially adversely impact our tax expense, financial condition, results of operations, and cash flows. For example, the OBBBA eliminates the availability of certain tax credits for taxpayers that are considered to be a prohibited foreign entity (as defined under the OBBBA). A taxpayer will be considered a prohibited foreign entity if (i) a specified foreign entity has the direct authority to appoint a covered officer of the taxpayer (including but not limited to members of the board of directors and executive-level officers), (ii) a single specified foreign entity owns at least 25% of the taxpayer, (iii) one or more specified foreign entities own in the aggregate at least 40% of the taxpayer, (iv) at least 15% of debt of the taxpayer has been issued, in the aggregate, to one or more specified foreign entities, or (v) the taxpayer made a payment to a specified foreign entity pursuant to a contract, agreement (including commercial agreements and IP licenses) or other arrangement which entitles such specified foreign entity (or an entity related to such specified foreign entity) to exercise effective control (as defined under the OBBBA). A taxpayer, such as us or our customers, also will be prohibited from claiming certain credits if it receives material assistance from a prohibited foreign entity (as defined under the OBBBA). While we are taking measures to achieve compliance with such rules in the OBBBA, we may not be able to fully meet such requirements within the required timeframe thereunder. There is continuing uncertainty on certain aspects of the IRA and related guidance and the OBBBA and forthcoming related guidance. Such uncertainty related to the IRA or changes imposed by the OBBBA, or our inability to comply with the requirements of the OBBBA, may cause customers to delay contracting decisions or may cause customers to delay or cancel existing contracts as they navigate such uncertainty, or impact our ability to obtain external financing on acceptable terms, which could have a material negative effect on our business and results of operations.

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