Bear markets can be financially painful for short-term investors. And make no mistake, for even the long-term investors, watching valuations erode, even with the expectation of fundamental recovery, is no welcome sight, either. Still, investors shouldn't lose hope or interest. Bear markets also create opportunities that can be too good to ignore. And KULR Technology Group (NYSE-AMER: KULR, $KULR) is an excellent example.
In fact, KULR's case for consideration is compelling, with some valuation models indicating that the current share price significantly undervalues just the known intrinsic value of the company. But here's the part that should be attracting investors. Considering the potential inherent to several new deals, having a well-fortified IP portfolio, serving a Who's Who client list, and access to $55 million in operating capital, recapturing 52-week highs of $3.81, 154% higher than today, is indeed a near term reachable proposition. But even that lofty increase may be conservative.
And that's not an overzealous presumption; KULR has contracts with multiple global business giants and government agencies that can quickly turn revenue-generating potential into another dose of record-setting performance. Remember, KULR started the new year following the best operating performance in its history. And deals announced YTD are keeping the momentum in place.
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A Significant Deal With E-One Moli
Its most recent working partnership is with E-One Moli, with KULR 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 meeting the highest safety ratings. That's just the front end. The strategic relationship also has KULR queued to purchase over 700MWh of battery energy capacity to accelerate its production and supply chain localization initiatives within North America.
And don't underestimate or underappreciate the value in KULR being partnered with another industry leader, a designation Molicel has. As a subsidiary of publicly traded Taiwan Cement (1101.TW), Molicel has been 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 and investors- the company has a prime opportunity to tap into that success, the results of which can be substantial.
Remember, Molicel is no small player in the sector. They are the first 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. And like KULR, they also work with NASA, suppling the first NASA Spacesuit Li-Ion battery on the STS-133 mission. But know that the collaboration does more than add to an excellent client list. It ensures that KULR has access to world-class Li-ion battery capacity – an increasingly scarce resource given today's global supply chain challenges. And beyond just access, KULR, as a total battery safety platform solution provider, is better positioned to incorporate its core technologies into battery pack design, testing, and production to create the safest batteries for high-value applications. Don't underestimate the deal's value.
For KULR, it can be considered an inflection point that positions its thermal safety solutions platform to become better entrenched in the marketplace, ultimately providing an opportunity to optimize logistics and to more effectively capture untapped value for shareholders. KULR already noted its intention to continue investing in the localization of its production and supply chain to North America earlier this year. And the inking of the Molicel battery cell supply deal does more than expedite that mission; it positions KULR to provide total solutions to its high-value customer applications, with an estimated revenue potential reaching upwards of $350 million.
While the $350 million in its crosshairs from the Molicel deal is an appreciable target, the revenues in play from entering the Metaverse could be appreciably higher.
KULR Steps Into The Massive Metaverse
And it's a world KULR just entered, securing a deal to supply a "multinational technology conglomerate" proprietary carbon-fiber solutions essential in producing groundbreaking nerve sensor technology to develop parts of the Metaverse. Notably, the technology KULR brings to the table is more than an accent contribution; it's expected to be a vital part of the sensor's ability to allow seamless navigation of digital environments and provide a new and preferred approach to using virtual reality to navigate the internet.
And don't forget that this deal again aligns KULR with another global business giant. While the client is unnamed in its release, speculation is that it's indeed a company leading the Metaverse movement, perhaps even Meta ($FB). Although that's speculation, with KULR describing the deal as one made with a sector leader, it, in any case, fosters a relationship with another industry pioneer to benefit from a sector likely to become a trillion-dollar market opportunity before the end of the decade.
Keep in mind that while some of the revenue-generating opportunities inherent to the deal are already in play, there's likely much more to come. Why? Because 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 resume' to attract clients in adjacent industry spaces. In short, multiple new revenue streams can get created.
That's more to like. While the Metaverse puts multiple shots on revenue-generating goals into play, investors get comfort knowing that KULR is working on other deals to create shareholder value in the real world.
Follow-On Orders Are Excellent Leading Indicators
One is with aerospace and defense company giant Lockheed Martin (NYSE: LMT). And the better news is that deal is a follow-on from a prior agreement, which likely validates and strengthens KULR's relationship with LTM. The follow-on order utilizes KULR's space-developed phase change material ("PCM") heat sink technology to reduce system temperature excursions and extend the life of critical components within the thermal storage process.
Moreover, the specialized nature and technology may position KULR ideally for additional contracts. That's a likely proposition, noting that KULR's solution is useful for compact and high-performance devices that require bursts of computational power in short intervals, something competing products lack in ability. And because KULR's PCM heat sink technology is compact, reliable, and lightweight, it has attracted attention from and is utilized by U.S. aerospace and defense leaders. Of course, repeat business from LTM is a testament to product ingenuity and performance in an area where precision and reliability are critical.
More than that, reading between the lines 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. That ability may not show up in the share price, but savvy investors know that low-priced stocks with potent abilities can attract more than business; they become targets. In KULR's case, and for investors, that may not be bad. Still, don't expect KULR to be swept off its feet with low-ball offers. They know the value of their technology, and while it takes time to ramp, those revenue-generating wheels are in motion.
That's still not all supporting the bullish thesis.
Expanding Work Mission With NASA
KULR's relationship with NASA can also be a game-changer in the coming quarters. KULR is already working closely with NASA to develop specialized battery safety technology. And that relationship just broadened, with KULR announcing an agreement to assist in developing battery safety parts in the space agency's Artemis program, the newest U.S.-led international manned spaceflight program. The better news for KULR and investors is that a new revenue stream has been created, with KULR saying it's been processing upwards of 10,000 lithium-ion battery cells weekly.
Like others, that deal could help expand KULR's client reach. In fact, with other agencies and private-sector companies spending billions to advance controlled spaceflight programs, including the Department of Defense (DoD), SpaceX ($TSLA), and Blue Horizon ($AMZN), KULR could attract business as a vital contributor to a sector where safety, reputation, and proof of concept matters. With KULR "continuing" its work with NASA, noting its prior work in the 2020 Perseverance Mars rover, those references may be already earned. Here's proof.
KULR announced new contracts with DoD 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. Obviously, none of KULR's products or technology is an off-the-shelf version. That's, of course, excellent news for KULR on a forward-looking basis. A vendor change from KULR could mean millions in extra testing costs and create logistical issues when integrating technology compatible with KULR's. Moreover, with KULR owning substantial IP protections, that may not even be possible.
There's still more to like.
Maritime PPR Market In-Play
KULR is tapping into a massive market opportunity with its new Passive Propagation Resistant (PPR) KULR-Tech Safe Case solution, the latest in its maritime battery safety technology line. Investors need to consider that release as more than a continuation of its unrivaled battery-safety technology. It's expected to put into play massive revenue-generating potential from being the only known battery-safety product meeting new and stricter requirements set by the U.S. Coast Guard for maritime safety. Importantly, by meeting product specificity and having the IP to keep competition at bay, KULR could own the market opportunity.
But perhaps best of all is that the opportunity to monetize this market is a near-term proposition. And in addition to a sizable market opportunity today, it's expected to get bigger with the USCG expected to expand the criteria to include not just certain commercial vessels but those in the cruise line, shipping, personal watercraft, and fishing industries. Once that happens, the market potential can and likely will increase substantially. And as a first-to-market company with best-in-class battery safety solutions, KULR could be ideally positioned to reap the rewards.
Still, that's just another single shot on goal. KULR has several, and each is active. In other words, the sum of KULR's parts is the real attraction.
Strength In A Bear Market, KULR Is Getting Stronger
Know this too. KULR has access to capital to take advantage of its opportunities. They recently announced a deal to access up to $55 million in cash, with some of that already working to streamline its operations by relocating much of its production capabilities to North America. That work should pay off sooner than later by facilitating revenues to fall faster to the bottom line through reduced overhead, a strengthening of operating margins, and reduced costs associated with prior logistical supply-chain headwinds.
Thus, while value from any one of its deals can justify a higher share price, the combination of all is where investors should be focused. There are just too many companies needing what KULR is selling. Moreover, as the undisputed leader in battery-safety technology, demand is not expected to slow, making investment consideration more than timely; the valuations make it compelling.
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