SINGAPORE - noco-noco Inc. (NASDAQ:NCNC), a leader in lithium-ion battery technology, has announced a significant step in its growth strategy by acquiring manufacturing equipment that incorporates the innovative X-SEPA™ technology from 3DOM Alliance and noco-tech. The technology is expected to increase battery lifespans by up to five times, particularly in high-temperature environments.
The acquisition, finalized on October 11, involves the transfer of X-SEPA™ separator manufacturing equipment worth approximately $9 million in exchange for roughly 90 million new shares from noco-noco Inc. at a reference price of 10 cents per share. This deal will allow noco-noco to produce separators capable of delivering up to 35MWh, which will help the company expedite sample deliveries to its customers and speed up the execution of its energy storage system (ESS) projects.
X-SEPA™ technology is designed to prevent dendrite formation, a common cause of battery degradation, by using high-viscosity electrolytes. Its three-layer membrane structure allows for uniform current distribution, resulting in improved reliability and longevity of batteries. The technology also adapts to different battery cell types and performs well under rapid charging and discharging cycles, as well as extreme temperatures.
noco-noco anticipates that the new production capability will contribute to its profits, with an expected annual revenue of up to $3 million USD. This initial revenue stream will come from paid sample provisions requested by 40 companies and will subsequently be bolstered by small-scale ESS projects. The company aims to build a track record and operational know-how for larger scale production facilities and grid-scale ESS projects. This strategic move is also projected to strengthen noco-noco's position in the APAC separator market, which is forecasted to expand from approximately $6 billion to $30 billion USD over the next decade, according to Precedence Research.
In addition to enhancing operational and commercial capabilities, the asset transfer is seen as a crucial step in improving the shareholder equity position of noco-noco, setting a solid foundation for future financing opportunities. This press release statement is based on current information available to noco-noco and contains forward-looking statements that involve risks and uncertainties. These statements should not be seen as guarantees of future performance or results.
In other recent news, technology solutions firm noco-noco Inc has announced several significant developments. The company has secured a $150 million standby equity line of credit (ELOC) with Arena Business Solutions, which is expected to enhance its financial flexibility and support the commercialization of its X-SEPA™ technology. This battery separator technology, known for its durability and high heat resistance, is part of noco-noco's broader commitment to sustainable energy storage solutions.
In addition to this financial maneuver, noco-noco has also unveiled a comprehensive restart plan to advance its X-SEPA™ battery technology. The plan includes the mass production of high-performance batteries by 2027, in partnership with 3DOM Alliance Inc and noco-tech Co., Ltd. This development is expected to significantly extend the life of lithium-ion batteries, especially in high-temperature environments.
Furthermore, noco-noco is expanding its operations into grid-scale and commercial energy storage solutions. The company is planning to secure a 1 GWh project in Japan and is collaborating with Singapore-based B2G Energies Pte Ltd on renewable energy projects across the Asia Pacific. These recent developments underline noco-noco's ongoing efforts in both technological advancement and financial stability.
InvestingPro Insights
As noco-noco Inc. (NASDAQ:NCNC) makes strides in expanding its lithium-ion battery technology capabilities, investors should consider some key financial metrics and insights from InvestingPro.
The company's recent acquisition of X-SEPA™ technology manufacturing equipment is a significant move, but it's important to view this development in the context of NCNC's overall financial health. According to InvestingPro data, NCNC's operating income for the last twelve months as of Q2 2024 stands at -$23.96 million, indicating that the company is currently operating at a loss. This aligns with an InvestingPro Tip that highlights NCNC's weak gross profit margins.
Despite the potential for future revenue growth from the new technology, NCNC's current valuation metrics raise some concerns. The company's Price to Book ratio is negative at -1.65, suggesting that the market values the company less than its book value. Additionally, an InvestingPro Tip points out that NCNC's valuation implies a poor free cash flow yield, which may be a consideration for investors looking at the company's long-term financial sustainability.
On a positive note, an InvestingPro Tip indicates that NCNC's stock generally trades with low price volatility, which could be appealing to investors seeking stability in their portfolio. However, it's worth noting that the company does not currently pay a dividend to shareholders, as per another InvestingPro Tip.
For investors interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a fuller picture of NCNC's investment potential. In fact, there are several more tips available on the InvestingPro platform, which could be valuable for those considering an investment in noco-noco Inc. as it navigates this crucial phase of technological expansion and market positioning.
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