Investors that took a position in KULR (NYSE-AMER: KULR) stock at the start of the year are doing well. Exceptionally well. To date, that investment has returned over 140%. But, there's better news for those committed to the long side of the trade. Those increases may be the precursor of more to come. Why? Because KULR is doing all of the right things at the right time to create sustainable shareholder value. Better still, KULR is doing more than sustaining it; it's increasing it.
In fact, firepower was added to its already surging revenue stream on Tuesday after KULR announced receiving an initial order worth about $500,000 from Lockheed Martin (NYSE: LMT) for its passive propagation resistant ("PPR") battery systems. The better news is that the order is 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.
Keep in mind, this deal is precisely what KULR has been working toward, noting its heritage is hardware thermal energy management components incorporating its patented carbon fiber architecture. In addition, LMT may be helping to create a message. KULR technology works. Moreover, as the industry leader serving DoD and aerospace customers, LMT brings expertise and resources to help KULR perfect its solutions to serve the most mission-critical applications in the world. Perhaps best of all from a forward-looking basis is that the deal brings market exposure. And likely, making a deal with a global business giant will lead to many more of the same.
Still, as good as that news is, and it's blockbuster from a validation perspective, it's only one part of a value proposition that is becoming increasingly compelling. Moreover, with KULR in its best operating position ever to capitalize on multiple and diverse market opportunities, not considering investment at current levels could lead to a severe case of procrastinators remorse.
KULR Is In Best Operating Position In Its History
That's a bold prognosis. But it's only made after recognizing that KULR is in the best operating position in its history. And keep in mind, too, investors aren't ignoring the value proposition. Despite some profit-taking after a surge to new 52-week highs in November, the trend is back to being decidedly bullish. A jump of more than 24% over the past three trading days embellishes that point. Not only that, volume is increasing, helping to set higher lows as the target puts its recent highs back into the crosshairs. From its current $3.50* levels, reaching that $3.81 level is in striking distance. And with the ceiling taken out above that level, KULR could enter 2022 with considerable momentum. (* price on 11/30/21, 9:35est)
In fact, at current prices, very few investors are considering selling to take a tax loss. For most, there aren't any. That's another bullish signal. But beyond its technical presentation, KULR is justifying its own bullish thesis, with 2021 a year of tremendous progress on several fronts. Even better, KULR proves that it can take on an ambitious plan without sacrificing focus on its core business. Better still, for investors that appreciate deals that can generate near-term revenues, KULR is doing that as well. In fact, in addition to its LMT deal, the work completed in 2021 positions KULR for a breakout in 2022.
Indeed, investors are taking notice. Arguably, YTD gains show they have been for quite a while. Rightfully so. Investors turned decidedly bullish after KULR announced a more than 300% surge in comparative Q3 revenues. And while those increases are now historical, what isn't is the guidance KULR gave forecasting for an appreciable commercialization tailwind in each of its core business segments. Not only is there a tailwind, but expect it to strengthen after KULR fortified its diversified business segments to deliver new value sooner than expected. In fact, investors may not need to wait long to find out. A ramp in new partnerships and product development initiatives positions Q4 to deliver another round of record-setting performance.
But, in addition to record-setting Q4 performance, investors should be more excited about what's in store for 2022. And what's known is that KULR is undoubtedly doing business in the right markets at the right time. Moreover, they add value to the markets they serve by increasing their investment and focusing on delivering best-in-class technology and real-time solutions for smart battery platforms, battery cell screen testing automation, and fast charging battery architectures. Those interests take advantage of a surge in customer demand in those sectors. Also, KULR continues to embed its revenue-generating footprint into the aerospace and defense sectors, with assets and IP contributing to significant client interest in those sectors.
Revenue-Generating Momentum In Q4 And Into 2022
Still, the more excellent news is that they each contribute to a common goal; make KULR EPS positive in the coming quarters. Recent deals are helping. In November, KULR announced new partnerships with Clarios and Retriev Technologies. Those deals expedite what KULR referred to as go-to-market initiatives. They also add to the revenue-generating special permits KULR earned from the U.S. Department of Transportation ("DoT"). Those highly-selective permits authorize the transportation of damaged, defective, and recalled ("DDR") lithium-ion cells, batteries, or lithium metal cells contained in or packed with KULR's proprietary Thermal Runaway Shield ("TRS") packaging. Looking beyond the inherent value of those permits, investors should recognize them as a validation of its core technology.
And while it's KULR's core technology, it's not their only. KULR's proving their ability to develop a business interest in multiple directions in an accretive way is indeed a factor in its value proposition. The better news for those owning the company stock is that new investors are taking notice. Hence, recent gains may be the springboard for higher highs. And those gains would be well-deserved.
Moreover, they would coincide with a KULR growth strategy showing no signs of slowing down. And with new attention to the stock, it's a combination that could act as rocket fuel to an already impressive YTD rally. Remember, too. Although KULR is making tremendous inroads into massive markets, they are far from reaching its ultimate goal of providing total battery safety solutions for more efficient battery systems, increased sustainability, and end-of-life battery management. Thus, milestones reached, especially the ones that turn into catalysts, will likely increase shareholder value along the way.
And there's plenty to suggest they will earn that value.
Partnerships And Strong Balance Sheet
Starting Q4, KULR was better positioned than ever to create new value. They held roughly $11 million in cash, which the company noted was more than ample to grow its business and execute its near-term objectives. Moreover, KULR expects its goals to turn into catalysts. Thus, while 2021 is setting up to be a monumental year of increasing shareholder value, 2022 can be a better one. And management is already blazing that trail.
In fact, during Q3, KULR made some excellent deals. In particular, they partnered with Heritage Battery Recycling ("HBR") to provide safe transportation of HBR's battery collection operations across North America through its KULR-Tech Safe Case. It's another validation of KULR technology. Even better, it can become an enormous value driver with HBR, through its subsidiary interests, maintaining access to over 100,000 customer locations, 2,500 employees, and a fleet of over 1,300 power units and 108 facility locations across North America.
That's not all. The agreement enhances a services partnership already in place with HBR arising from their merger with Retriev Technologies. By the way, the deal between HBR and Retriev created the largest lithium-ion battery recycler in North America. While great for them, the better news is that KULR should benefit as well. In addition to the revenue-generating opportunities from existing e-bike and scooter customer programs related to battery safety, KULR expects to extend new value-enhancing services to provide safe transportation logistics to Retriev's battery collection operations throughout North America. Hence, another win-win deal.
And while the deal with Retriev is substantial, so is the one made with Clarios, the largest global producer of lead-acid batteries. It, too, is expected to help generate a potentially massive revenue stream by targeting opportunities in the U.S. Department of Energy lithium-ion battery life cycle initiative. That program intends to develop processes to safely manage and reuse lithium-ion batteries and their chemical elements in the United States. With the millions, potentially billions, of lithium-ion batteries in the market covering all applications, that initiative's scope can lead to a potentially exponential increase in revenues for KULR.
It's also important to note that KULR has business relationships in both the public and private sectors. On the private sector side, its client list is a Who's Who of business.
A Deep Client List Of Best In Breed Companies
Current global clients beyond LMT include NASA and its Perseverance Mars 2020 Rover, Andretti Enterprises, Leidos (NYSE: LDOS), and Marshall Space Center. By the way, those world-class companies are only a small representation of their global customer list.
Many other big names and agencies partner with KULR to take advantage of its state-of-the-art thermal management technologies. And that choice is not by coincidence. KULR is picked because they are creating, and more importantly, able to implement, next-generation battery safety solutions that make batteries cooler, more efficient, safer, and lighter for usage. Most importantly, KULR technology has proven to mitigate the risk of fire and explosion in these lithium-ion batteries. And providing those comprehensive safety measures and advantages is helping KULR to stake its claim.
Moreover, with its clients advancing multi-billion dollar projects, staking a claim is one thing; KULR protecting client assets is quite another. And it's the reason why KULR is attracting attention. They are beyond early-stage trials of its technology. Being a part of the Perseverance Mars 2020 rover proves its products can withstand the intense heat of space travel.
But, consider KULR's ability to impress NASA, while a monumental feat, just one accomplishment. The company intends to impress many others as they focus on and take advantage of a lithium-ion battery market expected to eclipse $116 billion within ten years. By 2040, that market is expected to become a more than $300 billion market. Hence, KULR is in the right markets and is working with the right clients at the right time.
Keep in mind, products from everything battery-operated tools to hypersonic missiles will need KULR technology or some form of it. But, "some form of it" will be difficult to source with KULR's IP portfolio protecting the critical components to create and embed the safety measures that KULR delivers. Indeed, being at the front of the pack will have its advantages.
Energizing A Lithium-Ion Battery Sector
It also attracts attention. The good kind. KULR is earning the spotlight by developing a battery cell screening and automated testing system for its Department of Defense and Aerospace customers. Those clients want two things: extend strategic battery reserves and implement safety thermal runway technology to reduce the risk of fire and explosion. KULR can deliver both.
Not only can they deliver, but KULR is also showing that it can deliver on a grand scale despite its small-cap size. Also, KULR proves it can take a project from start to finish, with its DoD project being built from the ground up through an open-source flight control system. It's also a near-term value driver, with the pilot system being tested expected to be finished in the first half of 2022. The end result has KULR anticipating processing up to 1.2 million 18650 and 21700 cylindrical battery cells per year. Positive results from the pilot initiative could have a tremendous impact on future revenues.
Another high-profile project has KULR intending to show that its carbon-fiber technology can do more than make lithium-ion battery technology safer and faster. After all, they already proved that. They plan to take things a big step further and demonstrate that its carbon-fiber technology can enable lithium-ion batteries to charge faster and last 20 times longer than before. Like its other value drivers, updates on both programs could come in early 2022, if not sooner.
And here's a "what if" deal that could transform KULR into a revenue-generating juggernaut overnight. While details are sparse, a note in a KULR presentation indicated that the FAA may be evaluating its battery-safety system and technology for in-flight use on aircraft. Only one compound word would be needed to suggest the impact to revenues from an FAA decision to implement KULR battery safety technology aboard aircraft. Ca-ching.
And don't underestimate such an approval happening. KULR's technology is not cost-prohibitive to add to the existing fleet and would follow an FAA mandate to ensure the safety of passengers and cargo. Notably, the FAA has asked for more that does far less. So, expect management to be pinged on the subject during its next conference call. A positive response could ignite a rally of its own.
KULR In 2022 Is A breakout Candidate
Hence, the sum of KULR's parts easily creates a bullish proposition even after 140% gains since the start of the year. In fact, with its new NYSE-American listing, impressive balance sheet, and earning business from a plethora of global industry giants, KULR stock is valued at a price that should attract growth stock investors that manage both conservative and aggressive portfolios.
Thus, while already noted that KULR's YTD and monthly gains give investors reasons to celebrate, more updates in Q4 may add additional substance to cap off a transformational year for the company. In short, the news on Tuesday may be warming up the presses.
Remember, taking into account everything that is happening, KULR has a lot to talk about. And with news from KULR historically being of the value-creation type, investors trading ahead of expectations may do well. Indeed, from a historical precedent, when KULR talks, investors want to listen.
Hence, two words sum it up. Stay tuned.
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