The sum of KULR Technology's (NYSE-Amer: KULR, $KULR) parts continues to strengthen. In fact, KULR showed during its Q2 financials on Monday that despite the most challenging business climate in decades, they are better positioned now than ever for potentially exponential growth within the next twelve months. And that timeline is the stretch length of the presumption.
Deals and operational initiatives could inspire growth much sooner than that. Thus, while earnings on a comparative basis were about 6% shy of 2021 levels, the more timely message conveyed in its report is that KULR is locked and loaded for a potentially transformational growth period during the remainder of this year.
Yes, it's a bullish assumption. But keep in mind that KULR isn't shying away from that optimistic assessment, either.
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A Bullish Proposition In-Play
On the contrary, they told investors they are taking advantage of considerable revenue-generating opportunities that put them on the precipice of transforming themselves into a potential revenue-generating juggernaut by 2023. The better news is that their optimistic sentiment is supported by the substantial foundational groundwork laid during the past twelve months.
Actually, that work did more than deliver KULR to a precipice for a breakout; it brought them to an inflection point with investments made across Research and Development, facility infrastructure, SG&A, and assembling a high-caliber workforce in the past year translating toward near-term customer sales.
That's not all. The more excellent news is that several revenue streams are expected to contribute to a common goal- achieving bottom line profitability sooner than later. And that could make KULR a potential exception to the rule that small-cap stocks will continue to struggle in 2022-23 as economic headwinds hit specific sectors. Although many undoubtedly will, KULR has positioned itself to weather what could be remnants of a global economic storm.
KULR Thrived As Others Struggled To Survive
In fact, while others struggled to survive in 2021-22, KULR is proving it can thrive, with strategic investments resulting in the build-out of its holistic, total battery safety platform to provide customers with an extensive set of solutions to achieve battery sustainability within their respective ecosystems.
As noted, the initiatives are expected to provide multiple sources of income and allow KULR to expand its go-to-market efforts by upselling and cross-selling to new and existing customers the individual components of its comprehensive platform through a product sales or subscription model. In other words, KULR has created an innovative way to attract and keep customers for the long term. That means new clients become long-term revenue drivers that provide rapid revenue growth and sales visibility. Better yet, it's an excellent sales model that can keep on giving. And from multiple sources.
Why and how? Because the versatility of KULR's holistic platform provides speed and allowance to penetrate potentially lucrative untapped sectors and markets. Additionally, they're already showing they can attract significant customer interest across several verticals, including energy storage, battery recycling, electric aviation, industrial and power tools equipment, and e-mobilities. All tolled, those markets present over 300 enterprise and government organizations that can be immediately added to the sales pipeline. For KULR, it's a case where sales ambitions can translate to dollars in the bank.
Beating The Macro Issues To Ramp Sales
And that could happen faster than many think as the headwinds within the supply chain stabilize in the sectors KULR targets. There's more to fuel the bullish argument. As macro-economic pressures ease, an expected result from a new spending bill, KULR is again ideally positioned to ramp sales volumes as they begin to monetize growing customer engagements over the coming quarters. Thus, with momentum in creating deals and making its legacy ones stronger, KULR could be in its best operating position ever to generate a significant increase in shareholder value. In other words, a higher share price could be imminent.
Based on management commentary, that's likely. Remember, in addition to KULR selling the highest standard of battery safety technology that puts up to billions in the revenue-generating crosshairs from aerospace and defense companies, the momentum generated from developing other accretive platforms could put them as a leading provider and enabler of the circular electrification economy.
Keep in mind that Q2 sales may have been comparably flat, but that's historical news. The critical takeaway is that guidance is decidedly bullish. Several deals prove the point, one with its recycling partner that provides KULR immediate and open access to commercial partners and customers after securing United Parcel Service ("UPS") shipping certification. That certification allows for the shipment of batteries utilizing the KULR Safe Case products through UPS' vast shipping network. It does more.
The permit also allows the United States Department of Transportation compliant "Safe Case" to be used as a safe and reusable shipping container for Li-Ion battery transportation up to 2.1KWh, providing KULR's major recycling partner a safe shipping container that can handle batteries above 300Wh. Those wondering, these certifications aren't easy to get.
More importantly, KULR can earn premium prices for services rendered, and the revenue-generating opportunity can be enormous, with billions of batteries needing to be disposed of. Again, that's one significant opportunity. There's plenty more.
New Licensing And Follow-On Deals
KULR also announced completing the licensing and starting the construction of its Fractional Thermal Runaway Calorimetry (FTRC). Further, they noted having multiple customer engagements already in queue and three purchase orders expected to close in September 2022. Accounting for those, Q3 could be a fuse to light a substantial end-of-year revenue rally. And that's still not all.
KULR also secured four major commercial accounts for its Safe Case products, with deployment trials underway. Forecasts from that opportunity indicate several multi-million-dollar recurring commitments over the next 18 months are in the crosshairs. That adds to a follow-on order from leading aerospace and defense company Lockheed Martin (NYSE: LTM, $LTM) for its space-developed phase change material (PCM) heat sink technology. Yes, there's still more.
KULR also highlighted the near-term potential of its biosensing solution for its Fortune 50 Metaverse customer. In its earnings commentary, KULR said its recently revised engineering design improves pliability, increases conductivity, and enhances softness to the skin. Also important, the next shipment to the customer is expected in late August 2022, with customer testing to occur shortly after that. Again, new revenues are in play.
Other near-term value drivers include benefitting from its partnership with E-One Moli Energy Corporation to advance KULR's total battery safety and thermal management solutions strategy. Also adding value is the expected installation of a fully automated battery testing program with an initial processing capability of roughly 500,000 18650/21700 lithium-ion cells annually in support of NASA's manned flight specification EP-WI-037.
That initiative and system installation is scheduled to conclude in Q3 2022, with full capability processing beginning in Q4 2022. Once completed, screened cell capacity will be allocated to NASA and the United States Department of Defense battery cell deployments, including internal requirements related to KULR's qualified commercial cell deployments.
Right Things At The Right Time
The bottom line is simple to understand- KULR is doing the right things at the right time. Also easy to comprehend is that its well-timed initiatives are expected to boost revenues considerably as early as this quarter. It gets better. From a competitive perspective, KULR is distancing itself from others that may have an interest in poaching.
Actually, it may be hard to infringe on KULR's technical turf, with an IP portfolio providing substantial competitive insulation and making the barriers of entry for others extremely high. Moreover, KULR's commitment to developing a universal modular battery product by combining its PPR technology and CellCheck for E-mobility, enterprise energy storage, data center, and crypto-mining applications may be more than a way to earn diversified market share; IP could allow them to own the billion-dollar spaces they target.
Remember, there may be companies trying to do what KULR does on a singular basis. But, few, if any, can boast of solidifying its market presence and earning as significant a share in as many market applications as KULR. And by manufacturing and licensing next-generation carbon fiber thermal management technologies for batteries and electronic systems, partnering with NASA to create breakthrough cooling solutions for space missions, having a robust intellectual property portfolio enabling leading aerospace, electronics, energy storage, 5G infrastructure, and electric vehicle manufacturers to make their products cooler, lighter and safer for the consumer, it's a position they will likely maintain.
Thus, is KULR a value investment opportunity too good to ignore? Facts and performance indicate yes. And with plenty of cash in the bank to support and grow its ongoing mission, KULR is doing more than checking all the right boxes. They are positioned better than ever to close a valuation disconnect, which for investors, makes consideration at recent prices a timely and compelling proposition.
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