KULR Technology Group (NYSE-AMER: KULR, $KULR) is doing something other companies can’t in a bear market- GROW. And while KULR’s share price is lower, likely because of its place in and the decline in the Russell Microcap Index, don’t be misled. KULR is doing the right things at the right time. Moreover, almost every stock in the Russell Microcap Index is lower, so KULR’s decline appears more market-related than company-specific.
But rather than dwell on the short-term market dynamics, the more appropriate consideration is to look for investment opportunities that present value and sustainable growth for the long term. KULR checks both boxes. Proof of that is on the wires, with KULR announcing several impressive deals expected to strengthen the revenue-generating trajectory of KULR in the back half of 2022.
In addition to its new contracts and follow-on orders from its existing, KULR is also better positioned than ever to accelerate the impact of the proceeds after announcing a funding agreement providing up to $55 million to help expedite growth and streamline operations. That deal should also help expedite KULR’s new presence in the Metaverse, which results from its most recent announcement to work with an international technology conglomerate to develop products and technology needed to shape that sector.
Still, while single deals present enormous opportunities for KULR in the back half of this year, the sum of its parts makes the investment thesis compelling. And with multiple shots on revenue goals and most already generating revenues, investors are taking notice.
A Significant Deal With E-One Moli
They should. KULR recently announced a working partnership with E-One Moli, scoring an initial order for over 75-megawatt hours of Li-ion battery cell capacity from Taiwan’s E-One Moli Energy Corporation (Molicel) to design and build battery applications with the highest safety ratings. In addition, as part of the strategic relationship, KULR is queued to purchase over 700MWh of battery energy capacity to accelerate its production and supply chain localization initiatives within North America. It’s a substantial deal that can get even bigger. Moreover, it positions KULR with another industry leader.
Molicel, a subsidiary of publicly traded Taiwan Cement (1101.TW), is a leading innovator in the Li-ion battery industry for over four decades and has focused on developing the high-power cylindrical cell segment as a top-tier global supplier. The excellent news for KULR is that the deal likely opens new opportunities in addition to aligning them with a world-class manufacturer of high-performance rechargeable Li-ion cells and battery pack products. Remember, Molicel is the first organization in the world to produce high-power Li-Ion cells for high discharge rate applications, including the world’s first Li-Ion power tool system. They also supplied the first NASA Spacesuit Li-Ion battery on the STS-133 mission.
Michael Mo, CEO of KULR, is bullish, saying, “This collaboration ensures that KULR has access to world-class Li-ion battery capacity – an increasingly scarce resource given today’s global supply chain challenges. As a total battery safety platform solution provider, we will incorporate our core technologies into battery pack design, testing, and production to create the safest batteries for high-value applications.”
He added, “This is an inflection point for KULR as it positions our thermal safety solutions platform to become better entrenched in the marketplace, ultimately providing us with an opportunity to optimize logistics and to more effectively capture full value for our shareholders. As we described earlier this year, we plan to continue investing in the localization of our production and supply chain to North America. Securing this Molicel battery cell supply accelerates our ability to provide total solutions to high-value customer applications with revenue potential that could exceed $350 million.”
Still, while this deal can be a revenue-generating game changer, so can others.
Lockheed Martin Orders More
Validating prior work, KULR announced receiving a follow-on order for its space-developed phase change material (“PCM”) heat sink technology from leading aerospace and defense company Lockheed Martin Corporation (NYSE: LMT). KULR’s Phase change material heat sink technology reduces system temperature excursions and extends the life of critical components within the thermal storage process.
KULR highlighted that its solution is most useful for compact and high-performance devices that require bursts of computational power in short time intervals. And because its PCM heat sink technology is compact, reliable, and lightweight, it has been utilized by U.S. aerospace and defense leaders. Of course, repeat business is a testament to product strength.
But it also shows the ability of KULR to engineer, test, and design products with capabilities that meet stringent requirements, including, in this case, those needed in long-range weapon systems. But LTM may be just the initial client leaning on KULR’s expertise.
Others are also likely to embrace KULR’s years of experience designing lightweight and durable heat sink technologies, setting KULR up well to capture an additional share of the thermal design market for military precision strike weapons. Lockheed Martin could provide plenty of reputation referrals to make that happen.
There are more tangibles creating value.
KULR Steps Into The Metaverse
A recent deal that could add exponentially to revenue growth is its deal to supply proprietary carbon-fiber solutions essential in producing the core components in groundbreaking nerve sensor technology to develop parts of the Metaverse. This technology is more than an accent contribution, with coverage suggesting these sensors could represent the future of navigating digital environments and provide a new and preferred approach to using virtual reality to navigate the internet.
It’s a deal that also appears to align KULR with another global business giant. While the client is unnamed in its release, speculation is that it’s indeed a company leading the Metaverse movement, perhaps even Meta ($FB). Although that’s also speculation, with KULR describing the deal as one made with a “multinational technology conglomerate,” in any case, it creates a relationship with an industry giant to benefit from an industry likely worth trillions before the end of the decade.
Some of those opportunities may already be in play. Moreover, in addition to this deal opening KULR up to other potentially lucrative collaborations with original equipment manufacturers in the Metaverse sector, it strengthens KULR’s reputation in adjacent industry spaces, potentially creating new revenue streams in the process.
Still, while the Metaverse sector puts substantial shots on revenue-generating goals into play over the next few quarters and years, KULR is doing plenty to create shareholder value in the real world.
Expanding Its Work With NASA
KULR continues to work closely with NASA to help develop specialized battery safety technology. Its most recent announced agreement has KULR assisting in developing battery safety parts in the space agency’s Artemis program, the newest U.S.-led international manned spaceflight program. KULR has already been processing upwards of 10,000 lithium-ion battery cells weekly.
Like others, that deal could help create additional client interest. In fact, with other agencies and private-sector companies advancing controlled spaceflight programs, such as the Department of Defense (DoD), SpaceX ($TSLA), and Blue Horizon ($AMZN), KULR could attract business as being a vital player in a sector where reputation and proof of concept matters. With KULR “continuing” its work with NASA, catching a positive reference may not be difficult.
Speaking of the DoD, KULR announced new contracts with their prime contractors to assist in developing new covert weaponries. These projects use the company’s carbon fiber cathode solutions, enabling the advancements of projects in high-power magnetic and pulse weaponries.
Like others, these affiliated deal helps strengthen KULR’s reputation as the go-to vendor for specialized products and services related to battery safety and energy storage. Not only that, as a development partner in several hard-to-reach programs, KULR stands to earn and participate in follow-on contracts and programs. So, while the here and now puts growth in play, the pipeline can stay busy, which helps justify higher multiples.
There’s still more to like.
Maritime PPR Market Can Be Massive
KULR announced releasing its new Passive Propagation Resistant (PPR) KULR-Tech Safe Case solution, the latest in its maritime battery safety technology line. This product is more than a continuation of its compelling and unrivaled battery-safety technology; it’s also the only known battery-safety product meeting new and stricter requirements set by the U.S. Coast Guard for maritime safety. And KULR could literally own the opportunity. Why?
Because, in addition to KULR’s PPR Safe Case being market-leading and even first to market, KULR’s IP could keep competitive interest at bay, with competing products finding it potentially hard to get around KULR’s IP protecting the technology embedded to prevent battery fires and even deadly explosions.
Perhaps best of all is that the opportunity to monetize this opportunity is a near-term proposition. Not only that, the market should get bigger. In addition to its initial requirements for certain commercial vessels, the USCG is expected to expand the criteria to those in the cruise line, shipping, and fishing industries.
Hence, the combined market opportunity has the inherent potential to become a multi-billion-dollar opportunity.
Strength In A Bear Market, KULR Is Getting Stronger
Perhaps the best part of the combined KULR opportunity is that more than signing potentially lucrative and long-term deals, KULR is laying the groundwork to ensure its revenues fall faster toward the bottom line. They noted using some of its $55 million funding to streamline its operations by relocating much of its production capabilities to North America. That results in reduced overhead, a likely strengthening of operating margins, and helps eliminate the potential continuation of logistical supply-chain headwinds. Those moves may prove timely, especially with reports indicating supply-chain disruptions may last longer than expected.
Moreover, its assets, including IP, add inherent and tangible strength supporting a combined value proposition getting too big to ignore. And with multiple contracts, well-funded, pioneering new sectors, and an IP portfolio keeping competitive threat at a distance, investors shouldn’t.
Indeed, KULR is doing its part to transform itself into a powerful technology and product supplier in multiple battery safety applications. And while it’s been said often that KULR is in its best position to capitalize on and maximize near and long-term revenue-generating opportunities, it’s worth repeating…KULR, after all, keeps getting better.
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