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Another Exploding Hoverboard – Here’s Why KULR Technology Group’s Battery Safety Technology Should Be Mandated (NYSE-AMER: KULR)

Just when consumers that it was safe to hover, another terrifying incident of an exploding lithium-ion battery emerged, showing the powerful impact that these small batteries can have. In fact, the incident in June set an entire family into a panic and nearly burnt down their house. The reporter from Inside Edition described the incident well, saying, 

"It's that terrifying moment when a hoverboard catches on fire inside a house. As the children run for their lives, the hoverboard explodes into flames. Batteries fly in all directions, but quick-thinking mom grabs oven mitts to put out the flames. Her husband was upstairs sleeping when the fire broke out but came down in time to get the fire extinguisher and put it out. The family says they could have easily lost their home if they hadn't had a fire extinguisher." 

Her description builds out the scene during a terrifying moment that can potentially happen in billions of other consumer products worldwide. The excellent news is that battery safety technology is becoming a more increasingly popular discussion. And KULR Technology (NYSE American: KULR) is usually included in that conversation. And for good reasons. 

Patented Lithium-Ion Battery Safety Technology

In fact, after earning its third patent covering Thermal Runway Shield (TRS) technology, KULR is emerging as the leader in battery safety technology. And in a consumer goods market where billions of lithium-ion batteries are sold each year, that's an excellent position to be in. It's also because regulators, including the FAA, are taking a hard look at these small but powerful energy storage capsules. The most recent video exposes an event in June. There are thousands more. 



Video Link: https://www.youtube.com/embed/T2jNHWatZvs

And those events, and others, could perpetuate the discussion to have KULR's battery safety technology included to address ways to stop these terrifying and life-threatening situations. Many companies and government agencies are already deep into the conversation or already use KULR technology.

In fact, NASA already uses this TRS technology to transport to and store batteries aboard the International Space Station. It's also part of Perseverance Mars Rover and is included in the protection of Microsoft (NASDAQ: MSFT) Surface Pro’s aboard the ISS providing passive propagation resistant solutions, too. And that's not by accident.

KULR's technology is included because its technology shows a compelling capacity to mitigate ion-battery malfunctions, including fire and explosion. And that could be why the FAA is evaluating its technology for use in aircraft. And if the FAA concludes, as they should, that the risks of lithium-ion battery use aboard aircraft merit a layer of safety, it could be a company-changing event for KULR. This, too- if KULR technology is good enough to prevent thermal runaway propagations onboard the ISS, it's indeed strong enough to protect human life. 

Moreover, the reasons to implement battery safety far outweigh the costs. And by issuing a mandate that protects the public from catastrophic failures wouldn't come close to being cost-prohibitive to airplane and component manufacturers. In fact, the risks of not mandating safety protocols substantially outweigh the benefits, leading many to speculate that such an order is in the works. In fact, as the evidence mounts, many in the sector believe the FAA will have a hard time not acting on the issue. 

Other companies recognize the value as well. They, too, are protecting billion-dollar assets.

Broad Battery Safety Market Opportunities

In fact, KULR is advancing a dual-use opportunity with the Marshall Space Center to integrate its technology into 3D-printed battery systems for manned and robotic space applications. Also, Leidos and Lockheed Martin (NYSE: LMT) are evaluating KULR technology to include in hypersonic and directed energy defense applications. Those programs are advancing through the development stages. And while those markets can be substantial, its technology applied to the microelectronics sector could deliver the biggest bang for the buck. 

Keep in mind, lithium-ion batteries have become the go-to source to power everything from lawnmowers to power tools, and all require special handling for disposal and recycling purposes. And despite the size, each has an inherent risk of fire and explosion. In fact, the batteries used on the hoverboard are considered small. The same goes for mobile phones, portable devices, and many "smart" home appliances. The batteries are small but dangerous. Thus, the target markets are substantial. 

In fact, opportunities extend to places most people haven't considered. KULR announced deals made with Andretti Technologies, Volta Energy, and Drako, to evaluate the inclusion of its battery safety technology for EV and grid and stationary energy storage modules. Both sectors could provide considerable growth this year. And KULR already suggested that its deal with Volta could start to ramp considerably by the end of this year.

Better still, KULR is uniquely positioned to drive revenues by being one of the few companies to earn special transport permits to dispose of the millions of exhausted batteries. In fact, those two DoT permits could help drive revenues sharply higher as soon as this quarter. And with its Q2 numbers expected to get published in August, investors won't wait long for an update on that front. 

What is known, though, is that KULR's new source of revenues can be substantial. And with lithium-ion battery use soaring in almost every public and private market, those permits add a potentially lucrative long-term value driver. In fact, the revenue-generating potential is already an exponential revenue-generating proposition. 

Best of all, KULR is well-capitalized to meet the demand. 

Capitalized Into 2021-22

During its Q1 conference call, KULR noted they are well-capitalized to accelerate growth through a diversified commercialization strategy. Better still, they expect an ability to meet increased demand and seize new opportunities from its new facility that is roughly 4X larger than its current location. In fact, that's already happening.

Earlier this year, KULR announced its role as the official thermal management and battery safety technical partner for Andretti Technologies, the advanced technology arm of Andretti Autosport. It's a deal that puts them in the multi-billion-dollar EV sector. Moreover, KULR is the point company to develop a thermal management testing and design platform to provide high-performance, specially adapted battery solutions to meet the rigorous technical requirements of Andretti's global racing enterprise. 

The opportunities from that deal can be even more significant. Beyond the Andretti-specific applications, the two companies combine expertise to co-develop and co-market battery and safety technologies to automotive partners for mass-market EV applications. It's a deal that can add tremendous long-term value. In fact, General Motors (NYSE: GM) just threw roughly $45 billion toward its EV efforts. Thus, the partnership, especially with the Andretti brand recognition, could generate substantial market interest and help the team earn a sizable share of that specialized market. And with the EV sector booming, the excellent news is that traction toward that goal can come sooner rather than later. 

In fact, investors are bidding up shares in anticipation of that growth. Year-to-date, KULR shares are higher by more than 58% and were energized when KULR posted a 439% increase in comparative Q1 revenues. Better still, guidance calls for Q2 results to be stronger from several deals made toward the end of Q1 and from revenue recognition from agreements made in the earlier parts of its second quarter. 

Investors also responded well to its successful $8 million capital raise, up-list to the NYSE-American exchange, and ability to secure hard-to-get permits. In fact, the combination of accomplishments and milestones met during the first half of 2021 put KULR in its best operating position in history to capitalize on and maximize near and long-term market opportunities. Investors will hear more about its innovative battery safety solutions when it hosts its Inaugural 2021 KULR Battery Solutions Day on September 21, 2021. 

And that event could add strength to an already excellent year. 

Catalysts In 2H 2021 

Undoubtedly, with KULR shares trading at $2.27 and a market cap of $214 million, there's considerable room for growth. In fact, recent share price weakness has been attributed to a weakening small-cap market, in general. Still, as evidenced by prior runs, KULR tends to outperform to the upside when the small caps attract broad interest. Thus, current price levels may be offering a compelling opportunity. 

In fact, with multiple revenue-generating shots on goal, the investment proposition may have never been better. Better still, KULR's sum of the parts put them in a position to immediately capitalize on multiple billion-dollar market opportunities, making KULR priced for potentially exponential appreciation during the back half of this year.

And with near-term catalysts in view combined with new concerns about consumer product safety, KULR's valuation may start to move higher sooner rather than later.

 

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