FREE

BES: Positive Operational Update

What you need to know:
• Braille Battery will be expanding its product offering for motorcycles, ATV/UTVs, and personal watercrafts. Braille Battery will also begin outsourcing its e-commerce business, allowing it to focus on manufacturing.
• Product development of Electrafy’s back-up system is nearing completion with the Company beginning discussions with potential customers.
• Firebulb is completing commercial development and considering various monetization options.

This morning, Braille Energy Systems (BES:TSXV) provided an operational update on its three divisions, Braille Battery, Electrafy, and Firebulb. We view the update as a strong positive, contributing to the execution of our investment thesis for each segment of the business. We are maintaining our BUY rating and $0.15/share target price on Braille Energy Systems.

Braille Battery
BES announced that it will be expanding its product range of “Made in USA” Power Sports Batteries to provide additional ultra-high cranking and high-capacity lithium batteries for its Motorcycle V-Twin segment, ATV/UTVs, and personal watercrafts. Management believes this market has potential to be larger than its current motorsports business due to brand equity and organic demand growth in the segment. Furthermore, Braille Battery has outsourced its e-commerce business to allow for large and more efficient product runs. We view this as a positive development given that Braille Battery’s strength and focus is its manufacturing capabilities, rather than marketing. The Company also announced that it is pursuing new revenue streams including OEM and white-label opportunities.

Electrafy
Braille announced that Electrafy’s product development for its residential and industrial back-up power system is nearing completion (including its certifications) and that the Company has begun discussions with industry leading organizations to bring the product to North America residential and industrial customers. Management reiterated that its product will be the most cost-effective critical circuit back-up system at US$7,000 while meeting all provincial and state electrical standards. The product will be well suited for high-density housing, taking advantage of the product’s quiet features.

Firebulb
The Company also announced that after seven months of originally acquiring the technology, the commercial development of Firebulb is also nearing completion. The product has various potential applications including 1) In-home charging with alarm notification prior to a fire event occurring, 2) Integrated charging disconnect system for lithium batteries, 3) Peak Shaving and solar-based Residential Lithium Energy Storage Systems, and 4) Industrial Lithium ESS Systems. We reiterate that safety is becoming a major concern with lithium batteries and providing this extra layer of protection has potential to become the gold standard.