ALPE: alpha-En receives $1 million grant from New York State Energy R&D Authority

By Steven Ralston, CFA



alpha-En Corp (OTC:ALPE) is a technology development company, primarily focusing on the development of a commercially viable process for the production of high-purity lithium metal and of a thin film lithium anode for use in the next generation of lithium high-energy batteries. The company’s core intellectual property is a patent portfolio that is held by Clean Lithium Corporation (CLC), a wholly owned subsidiary of alpha-En. A U.S. patent on the process was granted in January 2019, and patents have been filed in several international markets (Australia, Canada, China, Europe, Japan, India, Korea and Hong Kong). The company has embarked upon the process of pursuing research, licensing and manufacturing partners to help accelerate the commercialization of the company’s high-purity lithium processes.

View Exhibit I

alpha-En Receives $1 Million Grant

On July 16, 2019, alpha-En announced the receipt a $1 million technology development grant from the New York State Energy Research and Development Authority (NYSERDA). The funding will help alpha-En finance the R&D effort in order to advance company’s disruptive lithium ion anode technology from the laboratory to commercial applications. alpha-En’s process for the electro-deposition of thin films of high purity lithium metal could advance lithium ion anode technology as the next generation technology, especially for electric vehicles. The use lithium ion anode technology would improve the efficiency and lower the weight of electric vehicles compared to the current use of lithium ion batteries, which are based on lithium graphite anodes. Also, alpha-En’s process creates a uniform nanostructure that suppresses the formation of dendrites, which would improve battery safety.

The New York State Energy Research and Development Authority’s mission is to “advance innovative energy solutions in ways that improve New York’s economy and environment” with the objective “to invest primarily in emerging and early-stage companies.” NYSERDA promotes the use of clean energy by supporting programs and initiatives that advance renewable energy sources and improve energy efficiency in order to aim to reduce greenhouse gas emissions, accelerate economic growth and reduce customer energy bills. A critical part of NYSERDA’s effort is to invest in the R&D of clean energy technologies, like alpha-En’s that potentially could be used for electric vehicles and stationary batteries. NYSERDA plans to deploy $800 million to early-stage ventures as direct investments and support for commercialization.

Latest Financial Results

On May 15, 2019, alpha-En reported financial results for the quarter ending March 31, 2019. For the quarter, the company reported a loss attributable to alpha-En common stockholders of $1.32 million ($0.03 per diluted share) versus a loss of $2.35 million ($0.07 per diluted share) in the comparable quarter last year. Total operating expenses increased 83.2% (or $550,000 million), primarily due to a 21% increase in G&A (or $167,000) from approximately $794,000 to $961,000 and an increase in R&D (accounting for $423,000) due to an unusual comparison to the comparable quarter last year in which R&D expense was reported as “income” as a result of a reduction of $444,000 in the fair value in unvested non-employee awards. The purchase of all outstanding shares of the Clean Lithium Corporation subsidiary has reduced the “net loss attributable to non-controlling interest” to zero.

The weighted average number of common shares outstanding increased 17.0% YOY to 39,044,549 compared to 33,358,062 shares at the end of the first quarter in 2018. At the end of quarter, there were also 39,044,549 common shares outstanding. The working capital deficit increased from approximately $70,000 to $654,000 due to the company’s cash burn and the delay of this year’s financing to July.

Pending Private Placement

A few days ago, the company received a $1 million technology development grant from the New York State Energy Research and Development Authority. Still pending is a preferred stock private placement announced on April 9th. The private placement could be up to 1,500 shares of 10% Series B Preferred Stock. Each $1,000 Series B Preferred share would be convertible into 2,000 common shares. Also, each share Series B Preferred share is to be accompanied with a warrant exercisable into 1,000 shares of common stock at $0.75 per share. Gross proceeds could be up to $1.5 million. Through May 14th, alpha-En has raised $770,000 from the issuance of Series B Preferred Stock, including $100,000 in deposits from investors and $50,000 in advances from related parties.

alpha-En’s innovative process not only has a friendly environmental footprint and lowers operating costs, but also has disruptive technological attributes of very high-purity metallic lithium along with the flexibility to adjust the morphology from amorphous to a uniform nanostructure depending on the application. In the quest for the next generation lithium battery, which most scientists consider a viable lithium anode, the enabling technologies appear to be the purity and/or the structure of lithium deposited on the anode’s substrate. Very high purity lithium with respect to base metals content, with well-defined morphologies and reduced surface roughness, may be the key to dramatically inhibit dendritic growth, which is thought to be the main cause of capacity loss/reduced cycle life in lithium metal anode battery technologies. It also appears that the degree of improvement in the next generation of high energy density lithium batteries can be enhanced through the use of nanostructured lithium electrode materials. alpha-En’s process is flexible and has the capability for the manufacture of lithium metal with a relatively uniform nanostructure, which could be a crucial element for the successful advancement and commercialization of the lithium metal anode.

The recent NYSERDA grant helps provide funding for the company’s initiatives. alpha-En is poised to continue advancing its pure lithium metal process. We expect further progress to be made toward commercializing the company’s high-purity lithium metal anode, driven by the company’s fully operational lab and particularly by management’s goal of executing a Go-To-Market Strategy.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $30,000 annually for these services. Full Disclaimer HERE.