KULR Technology (NYSE-AMER: KULR) hit its Q4 performance metrics out of the park. They reported a 267% surge in revenues, increased its cash position by $6 million, grew team headcount six-fold, and billed more clients than at any time in its history. In addition to that, they reached several operational milestones, enhanced its already deep management team, and took steps to improve the commercialization of its products this year to make 2022 its potentially best year in history.
Better still, they are increasing the space between itself and a competitive landscape that falls well short of having anywhere near the technical and performance depth of KULR’s innovative multi-sector battery safety technology. Thus, while Q4 and 2021 were phenomenal, milestones reached during the year also have enormous potential to turn into catalysts to send this $2.37 stock appreciably higher.
The best news of all is that KULR makes its own case to justify share price appreciation. And with its shares trading lower in sympathy with broader market weakness, the sum of KULR’s parts makes the value proposition too good to ignore.
A Very Bullish Proposition
In fact, trading lower from its 52-week high of $3.81 makes little sense. KULR did more in 2021 to increase shareholder value than ever before. Moreover, its moves are accretive to a near and long-term strategy and enhance a growth trajectory that puts more record-setting performance in its crosshairs. Thus, if investors are looking only at the bottom line number for 2021, they are missing the point since everything above it signals that KULR is doing all the right things, at the right times, and in the right markets. Not only that, they could literally own the spaces they serve.
Yes, KULR’s operating loss increased. But when more than 44 new team members are added in a single year, R&D rises to support a surge in demand, and a few likely one-time global logistical hiccups get factored in, the 2021 loss becomes a bloated lagging indicator. In fact, more than lagging, it may misrepresent just how strong KULR is. So, by shares not soaring on KULR’s financial update, investors are provided another chance to scoop shares at a price disconnected from a valuation more appropriate to a company whose operating portfolio is more robust than ever.
And not just in a single sector. KULR is accelerating its mission to be the lead contributor for battery safety solutions in energy storage, e-mobility, safe transportation of lithium-ion batteries within the full battery management life cycle, aerospace, defense, government, and regulatory sectors. Hence, KULR is a multiple shot on revenue-generating goals opportunity. And its investment to expedite growth in each segment is a testament to just how strong KULR can become over the next several quarters.
Milestones Become Catalysts
Here’s another thing to consider. Milestones reached often become catalysts. And KULR is intent to make that happen. They recently appointed former NASA Johnson Space Center senior leader, Dr. William Walker, as its new Director of Engineering to work with its engineering team on its next-generation high-performance computing (“HPC”) and hypersonic vehicle thermal management initiatives. Expect results from his expertise to show sooner than later.
In addition, for the first time, KULR released a passive propagation resistant (“PPR”) solution in its KULR-Tech Safe Case product family for maritime lithium-ion battery safety. It’s a potential first-to-market PPR solution meeting the upcoming United States Coast Guard’s new safety requirements for the passenger vessel industry. Not just pleasure boats, either. The battery safety solution also targets massive commercial markets, including battery safety options for the cargo, fishing, and cruise verticals.
Moreover, as the only known solution to prevent cell to cell thermal runaway propagation and prevent heat, fire, and explosion from exiting the KULR-Tech Safe Case enclosure, they should benefit from an extraordinary demand. In fact, with the Coast Guard behind requiring PPR solutions, that’s likely.
That’s not all. KULR announced receiving a three-year multi-million-dollar deployment order for its PPR solution suite from Volta Energy Products, a subsidiary of Viridi Parente, Inc. That PPR solution, which includes the patented thermal runaway shield (“TRS”) product, will be used for Volta’s stationary and mobile lithium-ion battery power systems. Better yet, revenues are on the way, with about $1.6 million worth of initial deployment orders executed for immediate delivery. Higher volume shipments are expected throughout 2022.
Yes, it gets even better. Last year, KULR also acquired the patented intellectual property rights from Centropy AB, bringing their advanced carbon fiber based heatsink technology for HPC applications into the KULR portfolio of thermal management solutions for cloud computing, AI, and crypto mining applications. It goes without saying that those markets bring with them enormous revenue-generating opportunities. Better yet, they can be quickly integrated into KULR’s existing technology portfolio to strengthen its competitive position to meet demand from air and liquid-cooling of HPC applications such as crypto mining, cloud computing, and AR/VR simulations markets.
KULR Inks Deals With Major Global Conglomerates
If those combined value drivers don’t inspire immediate investment action, consider this as well. KULR is inking deals with some of the world’s largest and most respected aerospace, defense, and consumer products companies.
KULR received an initial order totaling approximately $500,000 for its PPR battery systems from the Lockheed Martin Corporation (NYSE: LMT). Again, this order was for immediate delivery and is expected to be just the starting point in the partnership as LMT leverages KULR’s technological advancements in PPR energy products for its Advanced Energy Systems. It’s a partnership that could deliver potentially company-changing revenues in the next few quarters. Undoubtedly, if LMT finds value in KULR’s products, orders probably won’t stay at sub-million dollar levels. On the contrary, contract values can quickly surge to the tens of millions of dollars.
That’s not the only big name. KULR joined Clarios in the U.S. Department of Energy’s lithium-ion battery lifecycle initiative to develop the manufacturing and reuse of lithium-ion batteries and their chemical elements in the United States for the domestic national interest. They also expanded its services agreement with Heritage Battery Recycling as a result of HBR’s merger with Retriev Technologies, creating the largest lithium-ion battery recycler in North America. That embellishes an original target market serving existing e-bike and scooter customer programs, including providing safe transportation logistics to Retriev’s battery collection operations in North America.
There’s still more to like. And in each, the common denominator in what can be considered a transformative period for KULR is that they are growing at scale supported by design and test services from larger customers that could lead to potentially massive contract wins this year. At the end of last year, KULR said it had 25 such customers that could change ambition into results. More will probably be added this year.
Positioned To Surge In 2022
The best part of KULR in 2022, besides its potentially lucrative contract pipeline, is that they are well-capitalized to turn opportunities into revenues. KULR reported having cash balances of $14.9 million as of December 31, 2021, compared to $8.9 million in the same period last year. They added that its current account should provide an ample runway to expand operations, support new business, and fund ongoing product development. Thus, near-term dilution should not be an investor concern. Even if it were, KULR spends money to make money. So, if the company did tap the equity markets, dilution would likely be met with multiple disclosed revenue-generating opportunities.
And, keep in mind that KULR’s targeted markets don’t linger in the single million dollar range. They are addressing billion-dollar global needs. Its deal with Centropy alone targets a current $9.6 billion industry opportunity that is expected to become a $26 billion one by 2027. Remember, too, KULR technology is not a luxury but rather a necessity, especially with client computers in that sector operating 24/7/365. Those clients know that earnings can drop to zero without functioning and reliable computer power in a hurry. Hence, don’t underestimate KULR’s reach into that sector.
Deals with NASA and Andretti Enterprises add additional revenue-generating firepower. KULR already helped in the 2020 Mars Perseverance ROVER program and is working with the Andretti team to create EV battery safety solutions that could have tremendous consumer and professional market implications. Leidos (NYSE: LDOS) and Marshall Space Center are two other names that contribute to the KULR investment proposition. They, too, add massive earnings potential into the KULR pipeline.
A Powerful Sum Total Of Its Parts
Undoubtedly, KULR’s sum of its parts presents a compelling proposition. Frankly, the value of those parts is considerably more valuable than the share price presents. Remember, KULR is leading, and targeting, safety solutions for a lithium-ion battery market expected to eclipse $116 billion within ten years and $300 billion by 2040. And with technology advancing by the day combined with the global effort to go “green,” even those lofty projections could be conservative. Frankly, it’s a likely outcome.
High-powered compact energy storage devices are already filling a need to power everything from battery-operated tools to hypersonic missiles. And the significant safety measures embedded are more apparent than ever. In fact, with the FAA, the DOD, and a slew of commercial clients already recognizing the need to harness the enormous power of these compact energy sources, those implementations can come much faster than many expect. The Coast Guards recently announced safety requirements substantiate that presumption.
Thus, few will argue that KULR is not in the right markets at the right time. And even though there are two sides to a trade, the better one for KULR appears to be from the long side. Granted, small-caps like KULR can be bumped and bruised on their path to all-time highs, but that doesn’t take away from the value inherent to a long list of fundamental and portfolio strengths. In those respects, KULR is strong.
Better yet, things are only getting better. And that’s more than excellent news for KULR; it is for their investors as well. Thus, current prices expose an investment opportunity that is timely and attractive. But, as KULR stock has shown, valuation gaps can close quickly, making investment consideration sooner than later a wise consideration.
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