I think there is a big difference between here and LWP's JV investment with Graphenera and Hipo's 35% investment into Next Battery. The difference is basically the difference between night & day or black & white and it simply comes down to the quality of the people behind the two projects.
1. For LWP - they invested and based their due diligence on the existence of a set of patents supposedly owned by the scientist Victor Volkov with whom they went into a JV.
Unfortunately, it turned out that Viktor Volkov was not only:
a) Not a scientist.
b) Not the owner of the patents.
but he was also
c) the father of a Hells Angels bikie.
d) His lab in Thailand was made up of fake equipment with the star attraction being a set of soft serve ice cream machines, one labelled "Alkaline Electolyte" and the other labelled "Graphene Nano Particle".
The whole thing is hilarious - or would be if this corporate incompetence hadn't cost LWP shareholders so much.
2. Hipo on the other hand have not invested in a made-up project by a Russian con-man who came out of nowhere to claim rights to real patents that he did not own but an actual project run by an America entrepreneur who has a corporate track record going back decades. We know about this corporate track record in part because of the extensive list of court cases that Benton Wilcoxon has been involved in regarding technology that he commercialised for The Composite Technology Corporation and which they patented in the USA in 2002.
We know that Benton Wilcoxon founded The Composite Technology Corporation in 2001 and we know that it patented a technology under his stewardship that subsequently that generated over $150 million in revenues and was worth a 14 year legal battle.
Viktor Volkov appears to be a con-man who ripped off LWP. Benton Wilcoxon is an entrepreneur with a proven track record of developing commercially successful products worth hundreds of millions.
Hipo’s Next Battery deal looks like it has been done with a man who may actually be able to pull it off and as such stands more chance of being successful than most tech companies out there.
In a best case scenario, if Wilcoxon can deliver on Next Battery’s claims and develop a battery that has twice the power of the Tesla 2170 battery for the same weight then this will be the second industry game-changing technology that he has introduced in his career and this time it will be in an industry that is predicted to be worth hundreds of billions of dollars per year over the next decade.
If Next Battery do deliver what they say that they can then Hipo’s 35% stake will be valued in the hundreds of millions at worst.
Make no mistake, this deal COULD be massive for Hipo. It has the risk, of course, that the technology could not work but Next Battery has the experience and track record of Benton Wilcoxon behind it, which gives it a better chance than most.
It is also only one of the three different battery sectors that Hipo are targeting with their assets so this risk (which is relatively minimal in cash terms) is hedged against the potential success of the potential mining and cobalt concessions as well as the refining project. I like the fact that the company has a plan – they have decided to back lithium-ion battery technology both upstream and downstream and they are trying to position themselves so that they can benefit form the a growing market in all areas. It’s a clever, well thought through strategy and I like it. I also like the way that they are diversifying within a limited sphere and the lithium and cobalt mining projects are directly linked to the refining and technology projects – no eyes are being taken off the ball here.
That said, much as I like the mining and refining side of things - if it all comes off and Next Battery deliver what they say that they are going to then I expect the Next Battery investment to be worth more to Hipo than all their other assets put together.
HIP Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
(20min delay)