Since the first all-electric Tesla (NASDAQ:TSLA) rolled off the production line over a decade ago, the brand has been the subject of investigations related to their lithium-ion (Li-ion) batteries bursting into flames, several of which have been recorded and shared in viral videos. An article in The Washington Post this week rekindled electric vehicle safety concerns while positing the problem could reside in the nascency of the market for the lack of uniform safety standards as of yet. If that is indeed a contributing factor, there are solutions to explore now, including that of KULR Technology Group, Inc. (OTCQB:KULR), whose next-gen carbon fiber thermal management products are trusted in space by the likes of NASA, Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT) and more.
With its flag firmly planted in aerospace, KULR last year began turning its attention to commercializing its portfolio of temperature-control solutions for batteries and electronic systems. Amongst other things, KULR designs and manufactures proprietary carbon fiber-based goods like Thermal Runaway Shields, ARA Thermal Capacitors and Phase Change Materials (PCM) heat sinks, lightweight and highly efficient products that protect against both battery combustion and spread should a fire ignite in the first place.
These efforts resulted in the company forging partnerships with a diverse group of international corporations seeking alternatives to conventional battery technologies, a market that is extremely ripe for innovation. Applications abound, including EVs, energy storage, battery safety, 5G infrastructure, cloud computing and defense, to name a few. As is typical, most names remain confidential, but KULR was able to disclose that it is working with supercar maker Drako Motors, as well as a Tier-1 automaker, a large medical device manufacturer and a major power tool manufacturer.
While KULR wasn’t mentioned in the WaPo article covering the need for improved EV battery safety, the timing was fortuitous, as KULR was prominently featured in an article published on Business Insider the same day. Coverage by mainstream media isn’t something new to KULR; the company has been featured on CNN, The Wall Street Journal and ABC in the past discussing its cutting-edge technology, an anomaly for a small, OTC-traded company.
To that point, KULR says it is working on meeting the requirements to leave the OTC and graduate to a national exchange, likely the Nasdaq, which should provide for even greater exposure to investors.
Shares surged on Monday’s news reports, gaining 71% to close the day at $2.12, the highest mark for the stock since June, when shares climbed as high as $3.70.
To fund its growth efforts, KULR on Tuesday said it has entered into a stock purchase agreement with institutional investors that will raise at least $8.0 million. Per the agreement, the investors are buying shares of KULR at $1.25, which is accompanied by a warrant to buy another share at the same price any time within 60 months from the date of issuance. If all warrants are exercised, KULR will have raised total gross proceeds of $16.0 million from the direct offering.
Given the rise in the stock on Monday and the spike in volume (a record ~1.3 million shares traded), it’s not a huge surprise that shares of KULR pulled back on Tuesday, as traders banked some gains from Monday’s run. In the process, volume was cut in half, suggesting many people are holding, which dovetails with a bounce off technical support at $1.50 during today’s intraday action.
As explained in this annotated video chart, KULR was making a nice upward channel defined by higher lows since printing 74 cents in August. The missing link was a new higher high, which was delivered with Monday’s rise. Going forward, technicians will be watching for the strong support at $1.50 to hold with additional support underneath that at $1.30 before the stock would touch the bottom of the trendline again.
To the upside, there is some secondary resistance around $1.88, with a more important level of resistance at $2.14. Should KULR break and close over that point, the likelihood of another rise towards June levels is greatly increased, which has technical traders and fundamental traders alike watching to see what the future holds for this innovative company.
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