SOR Share Price Flat on Self-Charging Battery Cells Update (ASX:SOR)

Strategic Elements Ltd [ASX:SOR] announced that its self-charging battery cells bent 2,000 times, showing potential for use in flexible electronics.

The SOR share price is up as much as 4.7% in early morning trade.

At time of writing, the SOR share price is trading largely flat, down slightly at 1.5%.

Strategic Elements’s share price is up 100% YTD and up more than 1,000% over the last 12 months.

ASX SOR - Strategic Elements Share Price ChartSource: Tradingview.com

Strategic Elements overview

As we’ve previously covered, Strategic Elements is a Pooled Development Fund (PDF) that focuses on the technology and resources sectors.

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PDFs are venture capital funds established under the Pooled Development Funds Act 1992 to increase the supply of capital to small- and medium-sized enterprises (SMEs) through investments.

PDFs and their shareholders receive tax benefits on income derived from equity investments.

While the PDF scheme is now closed and no new registrations are accepted, some legacy PDFs remain.

Just like Strategic Elements.

In an investor presentation on 4 March, Strategic Elements pointed out it does not operate like a typical venture fund.

Instead of holding a large portfolio of investments with 10–20% minority stakes, SOR seeks to ‘venture generate 100% owned companies in collaboration with teams of leading scientists or innovators.’

SOR sole funds its subsidiaries’ development and seeks returns through trade sales, listings of its subsidiaries or licensing deals.

Strategic Elements explained that it develops technologies driven by what it believes are four of the largest megatrends: robotics and automation; data and analytics; renewable energy technologies; and computer and memory storage.

SOR’s self-charging battery cells announcement

Today, SOR announced a ‘milestone’ after it was able to fabricate its self-charging battery technology onto a flexible textile cloth and mechanically bend it more than 2,000 times.

Why is this significant?

According to SOR’s release, current battery technologies like alkaline, coin, and lithium are not suitable for flexible electronics or small, thin devices.

On the other hand, SOR believes that battery ink technology shows ‘strong potential’ to be a flexible power source for electronics.

The company estimates that the battery ink technology is capable of a 6mm bending radius, which is smaller than the average adult human finger.

Voltage output was measured for two hours before the 2,000 bending cycles and then for two hours after bending, ‘with minimal change in voltage occurring over the comparative periods.’

The testing device was generating a constant voltage of approximately 0.7 volts prior to the bending cycles and the device’s voltage output ‘remained approximately constant’ after the bending cycles.

For context, many wearable sensors function on voltages as low as 0.8 volts.

What does this all mean?

Strategic Elements explained that the self-charging battery ink technology generates electricity from humidity in the air or one’s skin surface.

The central goal for the technology is to become a hybrid electric generator.

What today’s announcement addresses is a ‘potential competitive advantage’ of the technology over current battery technologies that SOR describes as bulky and rigid.

SOR anticipates that today’s flexibility testing results will make battery ink technology a natural fit for the electronic skin patch sector.

Strategic Elements cited figures that suggest this sector already produced US$10 billion in revenue in 2019 and — ‘notwithstanding the bulk and rigidness limitations of current batteries’ — the sector is forecasted to grow to US$40 billion by 2030.

The initial market focus for SOR will be on wearables and the Internet of Things related to cosmetic, pressure, environmental, and health devices as these have lower energy output requirements.

As examples, SOR cited diabetes and cardiovascular monitoring.

Further out, the company expects to target ‘higher performance applications’ by developing a capacitor for energy storage and regulation.

SOR stated that is currently attempting to develop battery ink cells up to four times smaller than existing battery ink cells.

Further information relating to its battery ink technology development will be released once the outcome of the battery size reduction development program has been received and assessed by the company.

Strategic Elements AxV announcement

Today’s update follows the company’s announcement last week that its subsidiary Stealth Technologies succeeded in demonstrating the potential of its automation and robotics platform (AxV) in the ‘multi-billion-dollar global agricultural sector.’

On 25 March, Strategic Elements announced that Stealth achieved early stage validation with the help of the University of Western Australia School of Agriculture and Environment (UWA) and the Australian Herbicide Resistance Initiative (AHRI).

In the release, SOR explained that Stealth, UWA, and AHRI collaborated on a weed detection prototype hardware that was able to detect — on a limited data set — 100% of weeds with a height threshold of 20cm above crop canopy.

SOR share price outlook

While today’s announcement suggests that battery ink technology is firmly in the testing phase, Strategic Elements believes the results are encouraging.

On top of that, the company can clearly conceptualise the addressable market and commercial uses for the technology it is researching.

This may allow it to move quickly and capture a swathe of the market if future testing fully validates the technology.

However, as with any emerging technology, uncertainty abounds.

Further tests may reveal complications or a competitor may come out detailing better results.

Indeed, companies like Apple, Samsung, Garmin, and Google-owned Fitbit already produce wearable tech so Strategic Elements may have to dislodge some of these companies.

So far, with SOR shares up 100% YTD, investors seem willing to wait and back the company.

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Regards,

Ryan Clarkson-Ledward,

For Money Morning


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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