(By Balachander) A123 Systems Inc. (NASDAQ:AONE) unveiled a new lithium ion battery technology - dubbed Nanophosphate EXT - which it claims can potentially reduce or eliminate the need for thermal management.
The announcement sent the company's shares 26.92 percent higher in early trade on Tuesday.
The Waltham, Massachusetts-based developer of energy storage systems said the new technology should significantly reduce or eliminate the need for heating or cooling systems, creating sizeable new opportunities within the transportation and telecommunications markets, among others.
The news comes just less than two weeks after the company warned of significant net losses and negative operating cash flows over the next several quarters, raising substantial doubt on its ability to continue as a going concern.
In a regulatory filing with the federal regulators on May 30, the company said it is taking actions to raise additional capital to fund cash requirements and evaluating other strategic alternatives.
Last month, the company amended its revolving credit facility with its lead bank to eliminate its borrowing facility and provide for up to $15 million as security for letters of credit. In March, A123 estimated costs related to replacement of defective prismatic cells at $51.6 million.
The company said Nanophosphate EXT offers performance advantages for a number of applications, including micro hybrid vehicles, electric vehicles, telecommunications backup and military systems, among others.
David Vieau, chief executive of A123 said Nanophosphate EXT offers high power, energy and cycle life capabilities over a wider temperature range and the new technology will dramatically enhance the business case for deploying A123's lithium ion battery solutions for a significant number of applications.
Strategy consultancy Roland Berger forecasts that the global automotive lithium ion battery market will reach more than $9 billion by 2015.
A123 said its Nanophosphate EXT technology is scheduled to enter volume production in its prismatic pouch cell during the first half of 2013 and added it is evaluating plans to potentially offer Nanophosphate EXT across its complete portfolio of cell products.
At 10.33 am ET Tuesday, the stock jumped 28 cents to trade at $1.32 on the NASDAQ. Over the past year, shares have been trading between $0.82 and $5.91.