by Travis Johnson, Stock Gumshoe | May 2, 2019 4:23 pm
We turn once again, dear friends, to my favorite kind of newsletter teaser ad: the promotion of “one little company” as the linchpin investment for exposure to a huge global trend.
This time, it’s Alex Koyfman[1] promoting his Penny Stock Millionaire[2] newsletter ($999/year) by promising to reveal the name of a little “Super Battery” company that is “taking on the $100 billion lithium[3]-ion market.” Sounds delicious, no?
The big picture stuff you probably won’t quibble with much… “batteries are important” … here’s some of the spiel to get you warmed up:
“In the world of tomorrow — and I don’t mean in 30 years but in the next five, maybe eight — the bulk of the machines you see on a day-to-day basis will become powered by lithium batteries.
“Lithium already has a monopoly on the small devices, but it’s the large ones that will make the most significant impact in the coming years.”
That has been the driver for every pitch about lithium over the past decade: Demand for lithium ion batteries will grow incredibly as soon as the volume of electric car production really picks up, just because electric vehicles demand such large batteries.
And this is not a lithium miner we’re being pitched this time, it’s a technology company that’s apparently building something better than the current lithium-ion battery[4]:
“… the real opportunity this presents isn’t to the makers… It’s to the companies that innovate on the existing product.
“With the race for the highest capacity, the shortest charge time, and the longest service life now in full swing, companies making even incremental improvements to the battery will inevitably be at the center of attention — both for their patents and for their shares.”
It’s not just a small development, either…
“I’m not talking about incremental improvements here, but a dramatic, multilevel evolution that will give us a vastly better battery, while at the same time making the production process simpler, more efficient, and less taxing on the environment.
“This revolutionary new process dramatically reduces the number of required steps, as compared to current industry standards, taking the production cycle down from as long as a week to less than a day.
“The end result: a battery that can last two to three times longer, store more energy over its lifetime, and deliver more power, while reducing operational and raw materials costs, with an overall cost decrease of up to 40%.”
That certainly sounds like a big deal, though similar promises have been touted for a lot of competing companies who are trying to develop new battery technologies of one kind or another.
So how about some specific clues?
“The company I’ve been talking about has more than 40 patents at various stages of issue, funding from the Canadian government, and collaborative product development deals with a major French multinational, as well as a Chinese cathode producer.
“In a climate where the big brand names are scooping up smaller companies with innovative new products, this hits all the desired check marks.”
And what about the actual product this company is making, if any?
“Figure out a way to make a better cathode, and your resulting battery will charge faster, hold more charge, and last for more charge/discharge cycles.
“So it makes sense that if a company is setting out to make the world’s most effiient, cost-effective battery, the cathode is where it’s going to focus its effort….
“Today, that is exactly what this company that I recently discovered is doing.”
We’re also told that it has a market cap under $70 million, is “barely out of the start-up phase,” and has 12 patents granted globally (plus more than 30 pending or in the application phase). Number of patents doesn’t mean much, of course, it’s the value of the patented technology or device or technique that matters (many companies have hundreds or thousands of patents that have no discernible economic value), but having some patents does, at least, lend a little gravitas and protect them if they do have developed something that’s genuinely unique and valuable.
Other clues:
“… with collaborative development deals in place with major European and Asian battery makers, it’s advancing rapidly to bring its technology to the consumer market…
“Not to mention the pipeline of top-level auto companies, cathode manufacturers, and other supply chain strategics they are working with to bring deals across the line.”
And Koyfman also tells us that the company is financed through the first quarter of next year… which doesn’t mean all that much, that’s less than a year and they’ll presumably want to raise money before they start scraping the bottom of the barrel, but it’s at least an indicator that they’re not currently desperate.
What is the opportunity for the company? Apparently it’s in licensing producers who will build new assembly lines to commercialize their cathode technology… so that’s good, huge materials-producing companies tend to have low margins, and you probably don’t want a tiny company that’s trying to build giant industrial cathode plants with its own money:
“Each line that gets built using the companies technology could generate $5 million in revenue per year….
“To meet the demand of the market, 100s of lines would be needed.”
Other clues?
We do get a chart showing the stock’s move from about $1.10 back in September to $1.65 at the February peak, and about $1.30 headed into April. That should help us confirm the Thinkolator’s results.
And, of course, when you trot out the stock charts in a newsletter promo, you can’t stop at one — so they show the gains of the past six months or so in a lovely little chart, with 65% peak gains recently, but they compare this to some other companies you might have heard of and show those charts alongside… so your mind begins to connect the idea being touted by Koyfman with those other companies, which happen to be Netflix (up 3,000%+), Apple (up 2,000%+) and Amazon (up 5,300%+).
That’s not all, though, Kofyman also tells us that the opportunity here is better than the opportunity early Apple, Amazon or Netflix investors faced… because his company “isn’t going to make you wait” until the stock is a household name to let you buy shares. I’d insert a cynical little “harrumpf!” here, but you can probably do that for yourself.
So… what’s going to cause the stock to rise?
Koyfman says, “what we’re waiting on now is one or two major press releases, and things will really pick up.”
So that reminds us that yes, this is a company that will be entirely driven by sentiment and the flow of new investors to the “story” — and what causes a flow of investors? Well, a newsletter recommendation or big promo campaign to investors certainly often helps, which is what we’re seeing today, and so do press releases that grab our attention with big contract wins or joint ventures or things like that. With a penny stock like this, it doesn’t take much.
And, of course, the strongest possible motivation for penny stock touts is “FOMO” — the Fear of Missing Out, which is sometimes the only motivational trigger left when you’re in a soaring market.
So we’ve let the cat out of the bag a little — and yes, I can tell you that I’ve already consulted with the Mighty, Mighty Thinkolator… and this stock is Nano One Materials (NNO.V, NNOMF).
Nano one is, well, small — no surprise there. It’s even small compared to a lot of the silly little startup CSE-listed marijuana[5] stocks, the market cap is only about C$85 million, so if you translate that into real money it’s only $63 million (that’s at the current 96 cents a share, C$1.29… and yes, I’m joking with the “real money” jibe, we love Canadians here at Stock Gumshoe, and knee-jerk reactions mocking Canadian dollars are, well, a dime a dozen up here in New England).
And yes, this is a company that is trying to develop new solid-state battery materials, primarily cathodes, and commercialize them with partners. They’re still at a very early stage, here’s a quote from the CEO in their latest press release[6]:
“There is a global effort underway to increase the energy density and safety of lithium ion batteries, and solid-state batteries are one of the more promising solutions. Nano One has developed a number of cathode materials and processes that have caught the attention of the industry, primarily from within the automotive sector. We have many third-party evaluations now underway with the goal of partnering to make solid state batteries a reality.”
And the clues do all match — they say they’ve received more than $4 million in grants from the Canadian government over the years, that they’re financed through the first quarter of 2020, and that they have a bunch of patents (their investor presentation [7]says 9 patents and 30+ pending, but that was as of October and they’ve gotten three patents approved since then, one each in the US, Canada[8] and China[9]).
The big picture pitch is that “solid state lithium batteries will be huge,” and that’s a contention shared by many in the industry — though there are lots of different competing technologies for building different kinds of solid state batteries. “Solid state” in this case just means a battery that uses some kind of solid — maybe a polymer or some kind of thin film or whatever else — instead of a liquid electrolyte, and that can make for much more flexibility in form factor for batteries but, most importantly, it improves safety… the liquid electrolyte is what presents the most fire risk for lithium ion batteries if they’re pierced or have some similar problem, so it’s understandable that car companies trying to develop safer electric cars are among the first possible customers for solid lithium batteries.
Will Nano One be the company to develop cathodes for that critical technology, or win the technology race? I have no idea. They have, they say, “active opportunities” with 16 battery makers and tier 1 automotive companies, and a pilot plant that they can use to simulate at-scale production for these partners, with preliminary plans for a larger production unit that could handle 3,300 tonnes/year of cathode material (which would be enough for 24,000 smaller-battery electric vehicles), but they’re not actually selling anything to anyone yet. I’m not a part of this industry, but I would assume that all the big automotive electronics and battery companies are partnered with multiple R&D projects and exploring lots of different designs or technologies or materials for next-generation batteries, there’s no reason to commit to a single design or technology until there’s some certainty that it can work and be safe, efficient and cost-effective.
So as far as I can tell (which isn’t very far), pretty much everyone is still in the R&D/exploration stage still with these solid state battery materials, and I don’t know if this is going to be an industry that lends itself to one solution or to hundreds of slightly different solutions, but I’d guess the latter. Since there are dozens of smallish battery tech companies just on the public markets, let alone the many projects and technologies that are still in university labs or more secretive private or venture-funded startups (or within the battery companies themselves), I know only enough to tell you that I don’t really know anything.
The story sounds fascinating, as did the “Quantum Glass Battery” pitch from Matt McCall[10] a few months ago (I went into quite a few of the smaller players in covering that pitch), and the most interesting company touted by McCall back then, Illika, is similar to Nano One in that they’d like to pursue growth through licensing, but if I were to invest in this industry I’d want to understand it a heckuva lot more than I do.
There’s a good rule for investing in R&D or “breakthrough technology” kinds of stocks, whether they’re in biotech or technology or an affiliated area: If you invest in companies like these and you’re not an expert on the competitive landscape in battery technology, you should probably assume that the person who sold shares to you is an expert, and bid accordingly.
I’m often tempted to buy shares of companies who are working in areas that I don’t really understand, and it’s usually a mistake… but the temptation is real, and sometimes the stories do work out. If you do dabble in hugely speculative stocks like these, little R&D projects with no revenue, no real products or orders yet, and an ongoing need for more financing, at least try to think more about risk than about those dreamy 100%-in-a-day returns when you’re deciding on your position size, and think about whether you’re betting on some dumber investor coming along to bid it up in a few months, or are really speculating on the long-term development of a specific technology.
The only way to be really comfortable betting on stocks like these, in my mind, is to get to know them well, try to think about what information you’d want if you were on the board and watch their progress and their description of their progress closely (pre-revenue companies almost habitually “move the goalposts” when talking about their plans and progress)… and then go in with a small position, a lot of patience, and the assumption that you will probably lose 100% of your investment. Think of it as a hobby — hobbies are often expensive and time-consuming, but in indulging your hobby you can also build your experience and expertise (or at least learn some expensive lessons).
The daydreams about 500% or 1,000% (or more) returns in five or ten years are what keep you warm at night and keep you excited about new ideas, but you don’t need anyone to reinforce those, the market is designed to keep that profit-lust fire burning at all times… it’s the sober and firm assumption that you’re risking 100% losses in each position like this that will let you keep high-risk speculations small, and help you to avoid blowing up your portfolio along the way.
So that’s my final sermon for the day: Keep the dumb bets small.
Which means its time to turn it back over to you, my favorite readers — have any thoughts on solid state batteries? Have you developed some industry knowledge that helps you separate the Nano Ones from the Illikas and Solid Powers and Quantumscapes and Ionic Materials of the world? Think one or some of them are a solid bet, or want to nibble on them all? Is this all just a pig in a poke? Let us know with a comment below.
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Thanks Travis. The Thinkolater is the best!
Really enjoy reading these…thanks for your research and down to earth thoughts on the potential…this one seems a little early, BUT could be something and maybe not too long down the road. Worth keeping an eye on for sure.
I bought this stock during June July 2016 at average cost .41, happy so far. It was not a reco from this letter. Have graphite holdings and couple cc this company was mentioned as a threat to that sector so I started following. Only bought 12,000 share so not a big holder.
I hear of numerous new batteries in development but when I read “a battery that can last two to three times longer, store more energy over its lifetime” without saying what it is compared to, it is meaningless. A LiCo manufacturer may claim a life of 500 full cycles while a LiFPO4 manufacturer may claim 3000 full cycles for their current production. The biggest life problem in most applications being calendar life. While LiCo cells are known to be dangerous, I think there is no fire risk in LiFPO4 though a short is a theoretical possibility and there is enough energy stored to produce a lot of heat.
Not having a technical pitch is a red flag for me. I did come across a company chasing this outcome using Silica. But the reason I am commenting is more overreaching–hydrogen-platinum fuel cells are doing well in the prototype testing and seem to have significant potential to win .
Also have read about 3 non-lithium flow redox technologies , Vanadium and others- no clear winner, though the need is very real. Thought it would be Vanadium at first.
Not so sure now, I hope the zinc-air type works as it seems least expensive but hope is not a strategy.
So yes there are probabilities that silica at the cathode of somethings else will come along to improve car batteries- I’ve heard using Nickel Sulfide has some of these benefits with lithium as well
A small bet to put it in your watchlist to start. Hold all the way to zero if you still give it a chance-
I bought some stock in another Canadian company, MGX Minerals (XMG), which is getting ready to spin off MGX Renewables to commercialize its Zinc Air battery. Some background: In December 2017 MGX acquired the company ZincNyx, which developed the battery and claimed then : “ZincNyx has developed a patented regenerative zinc-air fuel cell battery technology that efficiently stores energy in the form of zinc particles and contains none of the traditional high cost battery commodities such as lithium, vanadium, or cobalt. The technology allows for low cost mass storage of energy and can be deployed into a wide range of applications…” Would anyone know enough about this type of battery to comment? The company has 20 patents,claims it has solved the problems with dendrite formation, and also claims costs for its battery are low. Any thought on potential success or impediments?
I want to follow up on my post above re: the zinc-air fuel cell battery company, MGX Renewables, to be spun off MGX (XMG.CSE), probaly later this month or in June (I hope). I was not aware of this video interview until today. The company’s CEO, J. Lazerson, talks about MGX Renewables towards the end. From his words, it appears there is great interest from utilities and companies supplying equipment to utilities (for mass storage applications). Lazerson also mentions another battery technology the company will be seeking to commercialize, involving silicon for anode material (at the beginning of the interview). Other technology the company is deploying involves cleaning oilsands wastewater and potential lithium extraction from brines. I’ve been disappointed in the company’s share price recently, and the company is into too many things, in my view, but it appears the ZincNyx battery storage system is at the point of commercialization.
https://www.youtube.com/watch?v=T-S8sjnyrOU
Just like Vanadium better! No liquid electrolytes to re-invent into a less explosive format as you, “Dr. Thinko “ remarked, and subject to piercing and explosion!
Vanadium mining is a co-product (?) or a byproduct of iron ore mining! As a commercial product has a side dual-commercialization benefit, so it is not a “Johnny-One-Note” product, as also has a defensive marketing angle. In that it is used to make steel girders “springier,” so they bounce quite a bit under a stressed building skeleton situation before the girders snap! Reports have it that China’s first massive modernization construction lay victim to an earthquake in 2010 and huge buildings did not bounce and act resiliently rather their frames of steel snapped, buckled and took the exterior cladding down with the steel! They have spent lots of cash in the process of re-constructing with Vanadium containing steel formulations! Oddly not long before had cut way back on their own mining locales for iron/vanadium! This alloy recipe, it seems from recall is a pretty old American invention! But vanadium batteries are touted to have 20-39 year service lives, and charge faster, and have no explosive risk!
Research history!
A paid pumped was out there pumping a mystery mine in Brazil at a “bargain” $3.33 a share, so his script said “hurry before ‘ some or another’ financial obligation raises the price on ‘Nov 11,18’ (app.). Before this Thinko-Rooter found the trail to her own research by her privately patented (trial & error ) to reverse engineer this pumper’s clues, an old eastern block advisor (US spy?)?and found it was the Mariaches Mine (spelling?,bad at Spanish, speak German as a 2nd.) in remote Brazil! The company seems responsible, has paid off large debts (at my and other pumped-susceptible budget investing underwriters!) The entrepreneur has made a success,
research said, of an older rare earth mining project on which he built his reputation!? ? Later this pumper-snooper, (I),found BOIVF his other mine! Promoted by a lesser pumper listing her booster-info merely on the no-cost “YaHoo Business, Finance” sticks look-up “Conversations” location, and declared this mine already signified by US gov’t as a high value defensive minerals (summarized terminology)? very rare earth mine! It is in very rural Nebraska! It seems the mining operation is currently slowly being “enterprised” stock still hovers at about <.50 cents (only got about 135 shares) but by the same owner! This mine is though not newly his is still formative so his career success-builder must be the other older rate earth success story! The innovator is a geologist and an attorney! His Brazil Vanadium mine went from about $3.33 at first (freshly pumped got 250 shares) then added 250 more! Saw the slide, sold 250 at about $2.26 got something else! Kept 259 shares! Now at $1.23! But all these details you may well know, but does not take away from the value of Vanadium as a real opportunity for more extensive usage than the government privately devised battery (recently revealed) battery logic, now potentially commercially tried in those huge batteries used to commercially store generated green energy to hold for delayed use! Thank you for the insight from the North! Yes this bargain hunter has bought mist stocks starting in the Canadian markets! Believing in diversification despite the explosive risk have some lithium stick, will check the price and will “fill up” on Nano! Have an oddly purposed, peculiarly financed-structured company stock from Nevada, called “LITH” they just re-organized so my 3,033 shares at .017 cents went to 87 shares at about $1.00! As you said not a large investment!
Good digging thanks much!
Vanadium use for flow batteries is very minor still, though the miners certainly hope that demand will continue to increase (and they’re trying to produce more high-purity vanadium for that purpose) — vanadium prices are still driven almost entirely by demand for alloying steel (a little vanadium makes steel much stronger and more resilient), which means vanadium demand should mostly rise and fall with steel production… though last year brought a spike because of changes to the Chinese building code to require higher vanadium content in rebar for cement buildings. The miners expect demand to stay high and are, in a word, flummoxed by the recent weakness in prices, but no one is sure what pricing will be in the future — vanadium is a small market and prices have been wildly volatile in the past, too.
Hello Travis
I have never seen a newsletter or email, I saw it on my TV and to me, It looked like a great advancement in car batteries, they are supposed to last longer giving you more mileage between recharge. I think it was made in Switzerland. FYI to buy batteries for Telsa is about 12,000.00 dollars, quite expensive, Imagine what kind of motor you could put in your car for that much money.
Could that be the Innolith product – https://innolith.com/
It seems that all the teasers from all the “experts” that will make us “so”wealthy are bogus. Can you tell us about another called XYO?
That’s another small-time blockchain company and token. I don’t see the point — some of these companies do things that look interesting or new, and it’s possible that they could become meaningful businesses at some point in the future, but, as we’re also seeing from Amazon and Facebook recently, any company that wants to use blockchain for payment applications or other services can also develop their own. I’ve yet to see a blockchain company or one of the smaller “tokens” that looked at all compelling — maybe I’ll miss something grand, but so far XYO looks to me like a waste of time.
Hydrogen cell stations are popping up in California. Northern and Southern part of state has coverage. Central state has one so far on I-5. Shell will be a player it looks like.
I was at my Audi dealership 2 days ago. The sales rep said by 2026 ALL of their vehicles will be electric. I was astounded. Also became seriously interested in who will profit from 1. batteries, 2. charging stations, 3. any other accessories such as cords, electrical outlets, etc. Hoping you can help us Travis!
As near as I can gather this company is in the early stages of development and although though they claim to be able to expedite the lithium cathode process there are little technical details on their website but a lot of generalizations, e.g.,
“There is a global effort underway to increase the energy density and safety of lithium ion batteries,” explained Nano One CEO, Dan Blondal, “and solid-state batteries are one of the more promising solutions. Nano One has developed a number of cathode materials and processes that have caught the attention of the industry, primarily from within the automotive sector. We have many third-party evaluations now underway with the goal of partnering to make solid state batteries a reality.”
I’d say they are years from any positive scale-up and besides as the NSF study has indicated electrochemically Lithium or other elements energy density cannot double efficiency. EV current capability—- one half mile/pound of lithium battery.
Scale-up is always a bitch and they apparently have many patents but no manufacturing capability. Save your money— it’ll be five-ten years before they will return any money and that requires new sources of Lithium and building non-existing manufacturing facilities alone, or with partners. IMHO.
#Bloom energy
Hey hey….Now we’re getting into REAL specifics!
https://www.bizjournals.com/sanjose/news/2019/05/08/bloom-energy-fuel-cells-outlawed-santa-clara.html?ana=yahoo&yptr=yahoo
The company that has the best vanadium redox battery which is about to be showcased in Munich is a Canadian company called cellcube energy storage systems symbol cube.cn. They also have a 20% interest in an excellent Vanadium deposit in Nevada they have just spun off 80% to their shareholders. THis will soon be listed by a reverse takeover with Regency Gold, name of the new company is v23.
CUBE looks to have excellent prospects . is
HOW IS THE BATTERY BUILD ?
LYER ONE:
LAX YERTWO:
LAYER THREE
BY NNO:V;
BY ILLIKA
BY IONIC MATERIALS
THAT’S THE QUESTION
HAS ANY OF THIS LITHIUM INSIDE OR WORK THEM WITHOUT LI ?
AN OTHER SOURCE OF ENERGY ARE KRSTALL PARTILES OF
A SUPER NOVA EXPLOSION WHICH ARE FALLEN ON THE EARTH TOO
AND AVAILABLE FOR TO COVER THE ENERGY FOR ELECTRIC CARS
OF 150 YEARS. IT WORKED WITH PIZO EFFECT;ARETHIS CRISTALLS CRUSHED AND A CONTENT OF THE SOLID STATE BATTERY? I DON’T
BELIEF: THIS CRISTALLS NEED RADIO FREQUENCES TO SWITCH TO WORK: UNCLEAR IS FOR ME; MUST THIS FREQUENCES BE ALWAYS THERE,UNTIL YOU NEED THEM AND SWITCHED OUT IF YOU NEED
THEBENERGY POWER;ITHINK SO:
THIS LEADS MEBTO THE FRECAST; BATTERIES ARE AKWAS NEEDED
IN HUGE NUMBERS AND FR CAR MOTORS ONLY FOR BETWEEN BATTERIS TO STORE ENEERGY OF A FUELCELL OF MEMBRANE BASIS
OR FOR TOWEN CARS ALLONE: BECAUSE YOU NEED THE RADIO FREQUENCES TO HOLD THEPIZZO EFFECT TO RUN TO PRODUCE
THE ENERGY; NOT PRACTICABLE FOR LONG DISTANCE DRIVING OR YACHT TOURS;IF THE ERECTOR FELLS OUT:
SOLUTION FOR THE CAR INDUSTRY IS THE HYDROGEN FUEL TO
FEED A FEL CELL WHICH PRODUCE THE ELECTRIC ENERGY TO DRIVE
THE EMOTOR AND WITH THEM THE CAR: NDBA BETWEEN BATTERY
TO CAP PEEKS OF ELETRIC ENERGY BY LOWER DRIVING:
OR TO USE HYDROGEN DIRECT WHICH CAN BE CONVERTED BY THE FILLING IN GAS OR OTHER SUBSTITUTE; BY THE;DELIVERY TO THE FILLING STATIONAND THE USER;HAS A MOTOR FRIENLY SOLUTION:
SOLUTION OF HYPOS;LEIPZIG:;ONLY;SOME ALTERANTIV ALTERNATV THINGS ARE TO REGARD AT THE CONVENTIONELL
ENGINE; THE BEST SOLUTION:
Great stuff, Travis!
Then, what’s your opinion of Tesla’s closing today on it’s acquisition of Maxwell Technologies, Inc.(NASDAQ:MXWL)?
Look at graphene.
Question about prophecy development co. ( PCY.TSX) with its Nevada Vanadium mine impact on Redox Batteries , concerning EV VEHICLES, SOLAR POWER AND WIND POWER, storage and power production effects on lithium and other batteries markets value?
I invested in ASX lithium stocks in April this year and it was doing great!! But the recent performance has dropped for lithium shares or stocks have dropped a lot. Great article. It helped me a lot in clearing my view. Looking forward to investing in Tesla company but not so sure now, I hope the lithium-ion batteries and electric vehicles will work as it seems least expensive but this is all a future hope.
There are so many lithium companies providing a very good lithium price on their stocks.
Try to research on those lithium stocks which can give you a very good deal with great profits.
Look at these popular stocks:https://kalkinemedia.com/2018/08/01/9-penny-stocks-listed-on-the-asx/
Followup on ILIKF and NNOMF. ILIKF is working with Toyota and Panasonic to develop batteries for a battery operated car, and NNOMF Nano One® CEO Mr. Dan Blondal is pleased to announce that Nano One submitted a non-binding proposal and letter of intent in March of 2020 to the Chilean Clean Technology Institute, Instituto Chileno de Tecnologías Limpias (ICTL), as part of a joint project proposal with Associated Universities, Inc. (AUI). AUI was announced as the winning bid by the Corporación de Fomento de la Producción de Chile (CORFO) Council on January 4 2021 to build, manage and operate the Institute.