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De-tease: Koyfman’s “This Sub-$1 Stock Is Destined to Win the “Battery Arms Race”

Ad says, " Find Out Which "Miracle Material" (BBC) Is Vital to the Future of the Battery Industry. Investors Who Get in Now Could Pocket up to 6,908% Profits."

And, of course, the artificial deadline: "It’s Vital You Position Yourself BEFORE October 18..." What are they talking about? Answers below...

By Travis Johnson, Stock Gumshoe, August 21, 2024


I don’t want to take the wind too quickly out of your sails, but this is a story we’ve heard before… and explained before. But questions keep piling up as Alex Koyfman keeps running “battery arms race” ads for his Microcap Insider ($1,999 first year, renews at ??, 90-day refund period)…

And the pitch is both about this “miracle material,” and about how a manufacturing edge will give “one tiny company” an advantage in making batteries out of it… here’s a bit from the beginning of the ad:

“This weird substance may be the most important discovery of our lifetimes.

“It’s bigger than artificial intelligence, crypto, 5G, or any other technology you’ve likely heard of.

“The BBC calls it a ‘miracle material.’

“The New Yorker says it “may be the most remarkable substance ever discovered.”

“And according to The Guardian, it “could change the world.”

“Investors who know how to play this unique opportunity stand to rake in stunning gains…

“It Takes Less Than $1 to Get Started

“And even a small stake could accelerate your retirement by years.

“Because this material conducts electricity 150x better than silicon… the industry standard used in all microchips today.

“Which is why data processing approaches the speed of light thanks to this material.”

So yes, this is all about graphene — the latest wonder material to enter our consciousness, roughly a decade ago, and the solution to so many of our problems. If only someone could make it cheap and abundant and use it to actually build something.

More from the ad….

“Companies in the energy, defense, electronics, medicine, electric vehicles, and mining industries…

“They are about to spend billions on this material.

“In other words, there’s a ton of money up for grabs.

“Once this material reaches the mainstream, there will be millionaires created literally overnight.

“That’s Why This Is a Once-in-a-Lifetime Situation…

“This substance is called graphene and it’s unlike any other element ever discovered…

“Like I said, it’s the thinnest material in the known universe and at the same time the strongest material ever measured.

“It’s 200x stronger than steel…

“Harder than diamond…

“And conducts electricity 150x better than silicon.

“On top of all that, it’s so light that a roll of it can easily sit on a delicate flower.”

Then the bit of promise kicks in, when he tells us that he’s teasing a company that can supply graphene. Maybe making it into an actual commercial product?

“Until recently, this material was extremely expensive.

“A single pound cost as much as $43,500. That’s almost twice as much as gold.

“But one tiny company owns the patent-protected technology to create an abundance of it.

“All it takes is natural gas and a little bit of electricity.

“So as this ‘miracle material’ changes the world…

“The sub-$1 stock making it all possible is set to go parabolic.

“Get in now and I can almost guarantee you’ll thank me 1,000 times by October 18.”

And yes, it’s another teensy one, so that’s the warning…

“Shares are trading for only a few cents….

“This investment won’t be appropriate for everyone. If you can’t manage risk or handle the volatile nature of investing in a newly public company, you may want to pass on this….

“Of course, there are no guarantees in the market. And with small companies like this, it’s important you understand this is a highly speculative bet. Never risk more money than you can afford to lose.”

But it’s also the sales pitch…

“If you were going to put money in one speculative play in the next decade — this company would be it….

“If this company captures 3% of the U.S. battery market, it could grow by as much as 6,908%, according to my calculations.

“Of course, that’s a very conservative projection.

“In fact, a return of 100 times your investment in the next two–three years is not unrealistic.

“I’m required to temper my enthusiasm for legal reasons, of course. The reality is that I believe even that 100x projection is conservative.

“Get in now and you could rake in stunning gains as early as October 18.”

That’s a common tactic — putting something out there which seems completely reasonable, like capturing just 3% of the market, and implying that it’s very conservative. So let’s just be clear: No, it’s not “conservative” to project that a company which hasn’t yet “rolled out” its batteries will take 3% of the largest consumer market in the world. It’s possible, but it’s not conservative.

More of the Koyfman pitch:

“… as soon as this story makes the mainstream media, this profit opportunity will be gone for good.

“And this isn’t the only reason it’s vital you act now…

“Because as this company is about to roll out its revolutionary batteries… commercial partnerships with a giant such as Apple or Tesla could be around the corner.

“Of course, nothing is confirmed yet…

“But if you wait for the official announcement, this ship will have sailed and the chance for life-changing four- or even five-digit gains will have passed.”

Much of the pitch here is about how this company can make graphene batteries which don’t require any lithium

“Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines, says this dependency on minerals like lithium will create ‘the next global energy security threat.’

“Because the U.S. is not able to produce all the lithium we’ll need.

“You see, the U.S. has just one operating lithium mine…

“And accounts for only 10% of the world’s total reserves.

“As mining expert Lewis Black puts it, ‘There is no way there’s enough raw materials being produced right now to start replacing millions of gasoline-powered motor vehicles with EVs.'”

And that means they’ll be the key provider in the future…

“Everyone in charge understands that we can’t wait for a lithium crisis to happen.

“And the sub-$1 stock I discovered holds the key to avert this disaster.

“Because this company figured out how to make batteries with NO lithium whatsoever.

“Its batteries rely on the $11.5 trillion miracle material I showed you earlier.

“And not only does this kind of battery solve our risky dependency on lithium…

“It’s also highly superior to lithium batteries.”

How is it superior? Here’s Koyfman’s spiel…

“This battery charges extremely fast… around 60–70 times faster than lithium batteries. An iPhone could be charged in mere seconds…

“It’s a lot more powerful. Your phone battery would last for three days instead of one…

“And this type of battery is safer because it doesn’t have lithium batteries’ overheating issues.”

OK, sounds impressive. But you said this company can also make graphene, right?

“… the off-the-radar firm I discovered makes this “miracle material” out of nothing but natural gas and a little bit of electricity.

“It’s using a patent-protected plasma process to achieve this feat….

“A lot of attempts have been made to mass-produce graphene in a pure form…

“As American Scientist explains, ‘It may be easy to isolate little flakes of this one-atom-thick carbon material, but it’s surprisingly difficult to produce large sheets for commercial use.’

“However, this little-known company found a way that’s considered to be superior to all the other methods.

“You apply highly concentrated heat to natural gas…

“The heat breaks the gas down into its components…

“And one of these components is a single layer of carbon atoms that forms pure graphene….

“As one chemical engineering professor puts it, ‘this is a real game-changing technology.'”

I would be laughed out of a chemical engineering class as soon as I opened my mouth, so we’ll just take their word on that. What else are we told about this little company? He says that it has a market cap under $50 million, and drops some hints about the people involved…

“… their chief scientific officer…

“He has been researching graphene for energy storage and biomedical applications for over 20 years…

“The company’s CEO has over 20 years of experience in the energy sector working for Shell…

“And their chief technology officer has over 35 years of experience in industrializing hydrocarbon reactions.

“With this concentrated expertise, I expect this company to soon dominate the exploding graphene market.”

And talks up the batteries some more…

“This company doesn’t just produce graphene as a raw material…

“It’s rolling out its own patented graphene batteries in cooperation with the University of Queensland as we speak.

“Like I said, these batteries charge up to 70x faster…

“They last 3x longer than current leading lithium batteries…

“And they’re rechargeable for at least twice the number of cycles lithium batteries are capable of… without a decline in performance.

“These batteries don’t require ANY raw materials that we might run short of, such as nickel, cobalt, or copper

“Because they’re made out of nothing but graphene and aluminum….

“The company’s CEO recently revealed that more than 100 very large companies reached out to them after their announcement to kick off mass manufacturing…”

So while Kofyman says that “big brand partnerships haven’t been officially announced yet,” he does imply that they’re right around the corner. And it’s doing some other stuff, too…

“… it’s selling a special graphene lubricant that radically reduces friction in engines and therefore helps save energy…

“And right now it’s developing so-called graphene supercapacitors in cooperation with the Centre for Biomedical Technologies in Queensland.”

And why does Koyfman use October 18 as his “you gotta buy now” deadline? His explanation:

“That’s when the Graphene Week 2024 takes place in Prague.

“It’s the leading and longest-running event on graphene, where over 500 international experts meet.

“This year’s event has a special focus on energy. And it’s where this company could announce a battery partnership with a key player such as Apple or Tesla.

“Once that happens, the cat will be out of the bag. And I fully expect an investing frenzy to follow.”

I wouldn’t hold my breath on a Tesla announcement in October, but yes, this is yet another tease from Alex Koyfman about the Australian company Graphene Manufacturing Group (GMG.V, GMGMF on the OTCQX).

If you’re paying attention, you might remember that this is the third year in a row in which Alex Koyfman has promoted this stock as an “urgent buy” because of its graphene battery. Through 2022 and 2023, the headlines were along the lines of, “This Sub-$5 Stock Is Destined to Win the ‘Battery Arms Race” — and yes, the “special report” they were peddling back then carried the same title, “Graphene: An Exclusive Guide to the Next Millionaire-Maker.”

The first time we saw and covered a similar ad from Koyfman was in February of 2022, so here’s what the stock has looked like since then (GMGMF in purple… that orange line is the S&P 500, just for context)…

The company has been at this for a while — they developed their graphene production process back in 2017, and initially focused on developing “clean technology” applications for that graphene. It has some revenue, from their paint and lubricant products, mostly Thermal-XR, but it’s very limited, and nowhere near enough to cover their expenses (revenue about $35,000/quarter, expenses around $2 million/quarter), so they’re still a very small graphene producer, and they don’t sell much of it yet. They have the potential to scale up production equipment to make more graphene, they say, but they’re still focusing on maximizing the graphene quality, and then integrating that with their Thermal XR and battery products.

What’s the “time to market” for the pouch battery, which is their real growth focus right now? (The pouch is the basic battery design that might one day be feasibly tested in an EV battery pack, or for a laptop or something similar). Earlier this year they said they’ll have samples this summer (“end of June” was the last date I saw), which would let them begin real testing of the battery, and experimenting with different materials to make it better and more efficient… but the actual samples don’t appear to have been made yet, they’re still at “battery technology readiness level 4”, same as they were a year ago, still tinkering with the battery chemistry. The latest press release, two weeks ago, said that “The performance of the pouch cells will be communicated upon successfully producing a repeatable and 3rd party tested 1000 mAh+ battery pouch cell.”

They have kept their “roadmap” unchanged, per the press release (which is very detailed, if you want more infomration), so they still think they’ll start building their pilot plant this year and will be able to make an investment decision about a commercial scale plant within two years, and commission that commercial scale plant by sometime in 2027. To be fair, they did lose a year or so in the development process because they initially focused on coin batteries, not pouch batteries, and decided to reset that priority about 18 months ago, but they’re still talking more about plans than about accomplishments.

As of March 31, they were down to only about $1.5 million in cash, but they have an at-the-market distribution agreement (a shelf offering) to sell up to $20 million more in shares as needed… and they will need dramatically more than that over the coming years if they’re going to actually build their pilot plant or scale up production, though the hope is that they might get more partnership funding from large companies along the way. It looks like they have already issued eight million shares (and warrants) in May, at C$0.42, so they should have a couple million more dollars to tide them over so far. They haven’t reported their second quarter yet.

The existing Thermal-XR product is in early use from some customers who are testing it, mostly because of either the corrosion-resistance potential of this graphene paint or, more interestingly, because it can make cooling systems more efficient, which has appeal for data centers and LNG plants and other places where a small increase in cooling efficiency makes a big difference. They haven’t applied for EPA approval in the US yet, but hope to do so soon (the latest news is that they hired a consultant to get that process moving), and they say interest is growing and they should get their application filed by October, with a response from the EPA next year.

The list of risks is a long one, as you would expect from a tiny R&D company that’s trying to develop a commercial product while also being very careful with costs… but here’s a little excerpt from the prospectus, just to outline one of the risks that all “next battery design” companies are facing:

“… there is a risk that the Company may or may not ultimately be able to produce a prototype, and may not be able to develop a scalable production process or seek a suitable licensee. For example, the groundwork done on the G+AI Batteries in partnership with the University of Queensland (“UQ”) has potentially identified superior performance results such as high energy density in early coin cell pre- prototypes. Despite these results and the research project that has commenced with UQ, GMG may be unable to develop this into a viable G+AI Battery pouch cell prototype at commercial scale. Thus, even if a high-performance technology is developed, there may be challenges associated with electrochemical development, the material sourcing and component production process and the scaling production of cathodes or cathode material and commercialising the product. Even if GMG develops a high-quality product, which can be produced on a large scale, the Company may not be able to satisfy the specification requirements of prospective customers. For example, if GMG successfully develops a G+AI battery, or cathode or cell which is a component of such a battery, it may not satisfy certain requirements of the electric vehicle industry or other target industries. The occurrence of any of the foregoing circumstances could have a material adverse effect on its business, results of operations and financial condition.”

Remember, even the extremely well-funded Quantumscape (QS), with strong automotive partners (Volkswagen and Continental, among others), and fawning press coverage, along with a secretive process for developing their revolutionary solid(ish) state lithium metal battery to revolutionize electric vehicles, is still burning through hundreds of millions of dollars a year, fifteen years after the company was founded and four years after the SPAC merger that took them public, and will likely continue to do so for at least a couple more years… and it’s now been at least five years since Volkswagen tested their early-stage sample cells, a stage GMG (arguably) hasn’t really reached yet. (Volkswagen’s been a partner and funder of QS since 2012, their target was to establish a solid state battery production line by 2025… QS has had its batteries in testing with OEM auto companies since late 2022, and they’re currently testing a series of prototype designs.)

I say that not to imply that QuantumScape is better, or has it figured out, just to point out that the process of developing a new battery chemistry, figuring out how to produce it effectively, testing it with your potential customers to see if it meets their safety and performance requirements, and iterating to steadily improve the efficiency and develop systems for mass production, is a LONG process, with a lot of pitfalls. Lithium ion batteries have had several decades of head start, but it took a long time for that battery chemistry and mass production to be optimized and become commercial and standardized, too.

GMG is a tiny company, and can’t get that far on its own without a lot more capital, so it’s entirely possible that they’ll sign more or better partnerships along the way, or just keep selling lots of shares as they develop their technology, and it’s also possible that they will be the beneficiary of good news and investor lust if they happen to announce something cool, or catch the eye of battery-focused speculators or graphene enthusiasts, whether at that conference in October or some other time… but the actual business is going to take a long time to develop, so if you’re just betting on a future partnership announcement or some good headlines, be sure to be honest with yourself about what you’re betting on, and what you think the probability of success might be — and know when or if you’ll want to take your cards off the table.

That’s all for me, dear friends — sorry to drag you down this rabbit hole again, after we said quite similar things about GMG back in June, for that George Gilder graphene piece, but at least we can say that there hasn’t been much obvious progress yet this summer. Have graphene favorites? Love the story here? Other next-gen batteries that you think are better positioned? Let us know with a comment below.

Disclosure: I am not invested in any of the companies mentioned above, and will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.

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