How to 10X Your Money With the Million-Mile Battery INSIDE THIS ISSUE How to 10X Your Money With the Million-Mile Battery: Get ready to say goodbye to your local gas station! Fully electric cars are finally ready to dominate the automobile industry... and it won’t be long before most of the old-fashioned gas guzzlers are off the roads for good. This AI Pioneer Could One Day Save Your Life: This artificial intelligence pure play keeps bolstering its already extensive ties to government and military customers. Portfolio Position: Buy Novonix Ltd. (OTCBB: NVNXF) up to $9.00 per share. Buy Palantir Technologies Inc. (NYSE: PLTR) up to $27.50. Ray Blanco Editor TECHNOLOGY PROFITS CONFIDENTIAL 2 Batteries Are Big Business! The past two decades have seen some incredible breakthroughs in battery technology. Whether we’re talking about smartphones or electric cars, the goals have been exactly the same: Make batteries smaller, more powerful, more convenient and most importantly as inexpensive as possible. Some very smart people have put in a lot of time, effort and money to make it happen. Thanks to their work, the battery market alone is slated to grow by double digits per year, topping $85 billion by 2025. Meanwhile, the batteries for electric cars have become so inexpensive and reliable that the electric vehicle market overall is expected to become larger than that for traditional vehicles by 2040. And that’s assuming battery development stays on its current path. It doesn’t consider a major development like the one Elon Musk has promised. Musk is the driving force behind Tesla Inc., which is probably the first company anyone thinks of when they hear the words “electric car.” And in April 2019, he announced that he was working to equip his Tesla cars with a million-mile battery. To be clear, Musk is not saying the battery will run for a million miles without charging. I’m pretty sure we’ll need to develop entirely new branches of physics before that’s possible. Instead, he’s talking about the battery’s overall longevity. Current electric-vehicle batteries only have an eight-year or 50,000-mile warranty on them. They’re expected to run for as many as 500,000 miles. Past that, they may no longer be able to hold a charge, meaning electric car owners will have no choice but to buy a whole new battery or a whole new car. Now, that might not sound like a big deal. Most folks only drive about 13,500 miles a year. But truckers, taxi drivers, and more could hit that limit much, much faster, which would make them reluctant to switch to electric vehicles. So obviously a battery that can keep charging and recharging after a million miles on the road will be a major game-changer. A Tiny Company With Revolutionary Tech Novonix specializes in improving batteries for phones, laptops, cordless equipment, renewable energy storage, and of course electric vehicles. The company started its life as GraphiteCorp back in 2012.
TECHNOLOGY PROFITS CONFIDENTIAL 3 Graphite is a form of carbon, capable of becoming a diamond with enough heat and pressure. You probably know it best as the “lead” in a pencil. But it’s also a great conductor of electricity, making it an ideal substance for everything from solar panels to batteries. In fact, you literally cannot make a lithium-ion battery like the kind that powers electric cars without graphite. It makes up about 30% of a battery’s total cost. Graphite must be found, mined and processed for use. And that’s exactly what GraphiteCorp initially set out to do, dig graphite out of the ground in Australia to sell to battery manufacturers. A few years later, the company decided to expand its operations, looking to provide more than just the basic materials to build batteries. It acquired a pair of businesses that produced advanced battery materials and offered testing and other services to equipment manufacturers. One of those acquisitions was Novonix, which already had business relationships with Apple, Microsoft, 3M, GM, Dyson, Panasonic and, yes, Tesla. In fact, it was such a high-profile business that Graphite- Corp decided to take Novonix as its name in 2017. That was the same year the company founded a subsidiary called PUREgraphite. It built a facility in Chattanooga, Tennessee, to produce the battery components an electric car company like Tesla would need. Of course, that doesn’t mean Tesla will make a deal with Novonix. In fact, outside the vague mentions of a previous business relationship with Tesla, there are no obvious signs that the two companies are talking at all. But I’ve found three smoking guns that tell me Novonix’s share price is set to skyrocket 10-fold, if not more! Smoking Gun #1: The Tesla-Novonix Connections Novonix’s leadership has some interesting connections with Tesla. Let’s start with Dr. Chris Burns, who founded the original Novonix in 2013 and currently serves as the company’s CEO. He also just happened to be a senior research engineer at Tesla for about two years. More importantly, he started his career at Dalhousie University, where he worked alongside the legendary Dr. Jeff Dahn. Don’t worry if that name doesn’t ring a bell with you. When I call Dr. Dahn legendary, I mean within rechargeable battery circles! He’s a pioneer in lithium-ion batteries responsible for much of the research that led to their widespread use in portable electronics.6 Dr. Dahn also figured out better ways to measure and test battery techniques that Novonix commercialized before it merged with GraphiteCorp. Put another way. Dr. Burns built an entire company around Dr. Dahn’s research. But Dr. Dahn wasn’t done breaking new ground. In 2016, Tesla partnered with Dr. Dahn and his team to explore ways to make batteries hold more charge and last longer. Just a few years later, in 2019, Dr. Dahn published a paper describing exactly how to build the most durable battery ever. In fact, he called it the million-mile battery. Let’s put this all in perspective. Novonix was founded and is currently run by Dr. Burns, using research he developed alongside Dr. Dahn at Dalhousie University. While Dr. Burns worked for Tesla for only a short time, Dr. Dahn is still on Musk’s payroll. And just last year, Dr. Dahn described how to build the exact kind of battery Tesla needs. Now, here’s where things start to get very interesting. TECHNOLOGY PROFITS CONFIDENTIAL 4 Smoking Gun #3: The Technology Tesla Needs My apologies for jumping ahead to Smoking Gun No. 3, but you’ll see why it makes sense here. As I said earlier, one of the biggest drawbacks of lithium- ion batteries is their cost. It’s not so much that the materials are overly expensive, but rather that building the batteries is time- and resource- intensive. Processing the lithium usually involves a piece of equipment called a continuous stirred tank reactor (CSTR). Essentially, the chemicals are combined in a giant vat and then mixed with immense amounts of water. The material is strained and then washed, creating even more wastewater. The process can easily involve up to 25,000 gallons of water per day. Then the material needs to be dried, usually involving heaters and fans. In other words, the plants use tons of electricity. But a team at Dalhousie University — the same place Tesla turned to for battery help — figured out a much simpler way to process battery materials. It’s called dry particle microgranulation (DPMG), and as the name implies, it doesn’t involve any water at all. That also means the material doesn’t have to be filtered and dried. In other words, DPMG lowers lithium battery production costs and produces less waste. I’d imagine Tesla would love to get its hands on this process. The problem is that the research was funded by another company, giving it sole intellectual property and patenting rights. I’m talking about Novonix, of course. Anyone that wants to use this process will need to come knocking on its door. But that’s not all. The Million-Dollar Battery Patent Battery longevity has long been a challenge for electric car makers. If you have a rechargeable electronic device, you probably know the feeling. Our smartphones and tablets start slowly losing power even when they’re idle. Recharging also becomes less effective over time as the amount of power the battery can hold diminishes over time. Without getting too technical, it’s because some of the crystal structures in a lithium-ion battery are cracked and fractured at the molecular level during the standard production process. Without those defects, the battery could hold its charge for much longer and be recharged many more times without losing any efficiency. It would require what’s called a single-crystal cathode. In fact, Dr. Dahn’s million-mile battery depends on a single- crystal diode. The problem is that there isn’t a way to manufacture these specialized materials in bulk, at least not yet. But back in May, Novonix filed for patent application No. 3069168 for a process that can create single-crystal cathodes at a commercial scale. In other words, Novonix will soon have the only patent to create the essential material for a million-mile battery. By all indications, the process is competitive on cost with existing tech, too. That means Novonix’s battery materials can deliver greater efficiency, stability and longevity without substantially increasing production costs! In other words, companies can switch to Novonix’s superior technology without spending much more than they are now. This tech is so essential to Tesla’s plans that Musk must have Novonix in mind. TECHNOLOGY PROFITS CONFIDENTIAL 5 Just consider the companies that we know have partnered with Novonix and the ones that it’s dealing with off the books. Smoking Gun #2: Novonix’s Secret and Not-so-Secret Partners OK, so let’s get back to Smoking Gun No. 2 now. For a company that’s trading for under $9 a share, Novonix sure has a lot of big-name partners. I talked about some of the big names it has worked with in the past, like Apple, Microsoft and GM. Novonix also lists well over a dozen current customers on its website. Here’s a screenshot: You’ll also notice that little box at the bottom declaring this isn’t a comprehensive list. An unknown number of names are missing for confidentiality reasons. Two conspicuous absences are Samsung and Sanyo, two of the biggest battery makers in the world. But don’t worry. Novonix has agreements with both of them. Samsung has contracted to buy 500 tons of Novonix’s materials, with an option to extend the contract if it likes what it gets. Sanyo, meanwhile, has a memorandum of understanding to evaluate Novonix’s materials, which could lead to a purchasing agreement. Recently, the major energy company Phillips 66 agreed to buy a 16% stake in Novonix to support the development of the U.S. battery supply chain. And Tesla may just be another one of Novonix’s secret customers. Musk’s brainchild has already started building batteries of its own in its Gigafactory in Reno, Nevada. Right now it relies on imports for all the lithium and graphite it needs to build them. Obviously, Tesla would be a lot better off if it could buy its materials a little closer to home, say, from Chattanooga, Tennessee. It would be even better if those materials were specifically created with a million-mile battery in mind. And Dr. Burns has said Tesla is the type of company they would be interested in working with for materials. We know the two companies have worked together before. Novonix still lists Tesla as a client in some of its website material. So I will not be one bit surprised if Tesla announces an arrangement with Novonix in the near future. Even if it doesn’t, Novonix still won’t be a $6 stock for long. A Bright Future, With or Without Tesla Novonix is destined to have a very bright future. Its patented technology comes from some of the greatest minds in the field — minds who have worked with Tesla in the past, I should add. The company’s manufacturing process will revolutionize the industry, creating battery materials at lower costs and with less pollution than current methods. They’ll also be manufactured in the United States, sidestepping any environmental and human rights concerns that come from using Chinese suppliers. It’s already made major inroads with some of the biggest battery makers on the planet. And by 2030, Novonix plans to be churning out 100,000 tons of battery material a year. Considering that the world produced a total of 160,000 tons of the stuff in 2019, you get the sense of just how big a player Novonix will be. And don’t forget that its materials will be superior to what’s currently out there with a much longer operational life than anything currently used. Best of all, it’ll be selling to customers in the electric vehicle market, which is expected to increase by double digits for the foreseeable future. The potential is so incredible that I cannot believe anyone can still pick up shares for under $9. TECHNOLOGY PROFITS CONFIDENTIAL 6 We’re talking about a chance to turn $1,000 into $10,000. Read Before You Buy: This small microcap company is speculative. So naturally, the share price can swing wildly and requires professional discipline for buying and selling. Do NOT chase the price higher. Because of the speculative nature of this opportunity, you should never invest more than you are willing to lose. Nothing in investing is guaranteed and this situation is no different. While my ultimate buy-up-to price for right now is $9, you should be able to get in much lower than that. I recommend putting in a limit order around the current market price. Use your own discretion and never chase shares higher than my ultimate buy price. Note from Ray: NVNXF is a very small stock and has the possibility of being very volatile. If you plan on investing in this stock, note the risk before you make any decisions. Remember never risk any money you can’t afford to lose, and don’t chase this stock.
NVX Price at posting:
$8.54 Sentiment: Buy Disclosure: Held