Magnis reveals $US665m in battery sales are dead as iM3NY battery gigafactory set to be dumped from accounts

Magnis will dump its battery factory from its company accounts after revealing every off-take agreement for iM3NY is dead.

To date, Magnis has banked no revenue from its iM3NY factory.

Magnis Energy Technologies has revealed at least $US655m ($1bn) in offtake agreements for its battery gigafactory are dead, warning investors it would now dump the operation from its accounts in a bid for a “positive impact” on its “reported financial position”.

In an update posted after market close on Monday, Magnis revealed its battery gigafactory imperium3 NY “no longer has any operative off-take agreements” with its customers.

The announcement, which Magnis marked as not market-sensitive, also revealed three deals for the purchase of millions of dollars in batteries from the gigafactory had not been renewed.

This was despite Magnis touting the deals, worth a combined $US147m ($223m) in October.

Magnis told investors in October a key customer of iM3NY, Premier Solar, had dumped its $US20m deal but assured the markets a further $US965m in deals were in play.

However, on Monday Magnis told investors the new directors of iM3NY, who were appointed after the lenders to the factory seized the asset, had revealed the remaining agreements had lapsed due to the battery factory failing to supply cells by their due dates.

Magnis has previously boasted of the potential return from its investments in iM3NY, which were set to grow from $80m in 2022 to $360m in 2023.

By 2027 iM3NY was expected to deliver $1.8bn in revenue.

However, to date, Magnis has banked no revenue from iM3NY, instead handing over $540,000 to purchase cells from the factory for its Tanzanian mining operations.

Magnis told The Australian although it had paid for the cells, it had not received them.

Magnis has funnelled millions into iM3NY, of which it owns 73 per cent after buying out several partners in the gigafactory.

IM3NY has also taken on at least $US100m in debts to fund its operation, with the lender moving to take over the gigafactory in upstate New York after it missed interest payments and ran up millions in debts to suppliers.

Magnis angered Atlas Credit Partners, iM3NY’s lender, after attempting to seize control of the board of the battery factory.

However, all of the Magnis directors at the battery factory have resigned, amid a court dispute with its joint venture partner Charge CCCV.

Magnis told investors it would deconsolidate iM3YN from its accounts, noting it had flagged the move on December 18.

But Magnis’s announcement to the market on December 18 struck a different tone, noting it was possible “Magnis will no longer be required to consolidate its financial statements” with iM3NY if it was unable to “procure a resolution to the alleged breaches under the Credit Facility”.

Magnis told investors the move to dump iM3NY from its books came “after discussions last week with the company’s auditors Hall Chadwick”.

“Magnis will no longer treat LLC and Inc as subsidiaries in its financial reports (meaning that the company’s accounts will no longer report consolidated figures in respect of those entities), which, subject to finalisation of the half-year financial report, is anticipated to have a positive impact on Magnis’ reported financial position,” the company said.

Magnis is due to file its quarterly accounts in coming days. In October Magnis revealed it only had 1.6 quarters of funding remaining, with $14.9m in the bank.

But Magnis assured investors it had plans to raise up to $6.4m, in addition to $1.9m in funds “still to be received by the company”, as well as a further $400,000 from two directors from shares.

However, Magnis has made no market placements since October, after the ASX pulled the company from trade after its annual general meeting warning of potential breaches of continuous disclosure requirements.

Magnis is also facing an investigation from ASIC.

Originally published as Magnis reveals $US665m in battery sales are dead as iM3NY battery gigafactory set to be dumped from accounts