Iakul wrote a note · May 22, 2024 14:33

KULR Analysis

I find that the ones who have researched a particular stock extensively tend to be bullish about it. Nothing wrong with that, there’s not much point researching a stock that you don’t think has any potential. Except that this does lend a certain slant to stock analysis in general, where the downsides are downplayed or ignored, and the upsides are emphasised. So, I’m going to start with the cons first, since I feel that those are less likely to be already covered.

Compliance

Trade penny stocks frequently, and you’ll soon be aware that there’s requirements to remain listed on the stock exchange. Currently KULR is on a plan, where they are required to regain compliance with NYSE listing standards by June 20, 2025. This does not mean there’s no danger they will be delisted until that date. KULR will be subjected to quarterly reviews to determine if they are making progress.

Requirements for continued listing: Stockholder equity of $6 million or more if listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years.

Translation: Assets of the company need to be at least 6 million, or the company needs to start turning a profit to remain listed. KULR has assets of around 1.2 million, so it’ll be turning profitable they’ll be aiming for.

Now, here’s the part that trips people up. There’s multiple sections in the NYSE listing standards regarding remaining compliant.

There’s another section about trading below certain prices. KULR announced on May 6th that it had received written notification from NYSE that it had “resolved the continued listing deficiency with respect to the low selling price of its common stock”. So at it’s current price range, not going to trigger non-compliance, although that might change.

Score: 3/5. Currently looks safe, with the company expected to turn profitable way before the deadline, but not exactly out of the woods yet. On compliance for price side, also ok for now, but also not totally safe yet.

Cashflow

This is the major issue. Currently, they are projected to have about $2.1 million in cash, which will see them through Q2, and they should be profitable in Q3, but that’s playing it really tight. CEO, Michael Mo has said they have no plans to dilute their shares, which does signal that he’s confident in the timeline. Also has no debt, so that’s another plus point for them. Purely speculation on my part, but the newest member of their board of directors, Donna Grier, specialises in mergers and acquisitions, so that’s also a possibilty they could be exploring.

Score: 2/5. Operating on a tight timeline, looks like they’ll make it, and have options available that’ll not involve share dilution, but it’s going to be the major concern.

Now that we have got the major concerns out of the way, let’s talk about what KULR actually does.

They are in the business of thermal management technologies. Holds a number of patents used in battery protection. Notable clients include Lockheed Martin, NASA, U.S Army, among others. So, to put it in laymen’s terms, they are involved in batteries for miltary drones, battery packs for spacecrafts, thermal shields for electric planes, heat sinks for missiles.

Score: 5/5. They are involved in a number of emerging industries and their client list does look really impressive.

So all this is all well and good, but we are investors, it’s one thing to tell us we are going to get big bucks if we invest, but when exactly do we expect to get returns?

Projected timeline for KULR is to achieve profitability exiting Q2. Q2 isn’t over yet, but we have seen them taking on quite a number of new clients and contracts so far, so they seem to be on track. It’s actually possible they are already profitable in Q2, but analysts earnings forecast is currently at -0.03/share for Q2. So we are looking at 3 to 6 mths before we are expected to get returns on our investment.

Score: 3/5. As timeframes go, not too long, but it’s not the sort of quick money timeframe traders might be looking for.

So that gives me 5/10 on the Risks side, and 8/10 on the Rewards side. KULR is a speculative buy, with middling risks, and the potential for huge returns in the mid to long timeframe.

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Birdistheword : Nice dd here. thanks for sharing.

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BelleWeather : I also have a position in KULR that I started last month. I’m eager for the share price to improve. :)

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Iakul

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