Presentations

KULR TECHNOLOGY GROUP 1Q 2021 SHAREHOLDER UPDATE CALL

By June 3, 2021 June 4th, 2021 No Comments

Stuart Smith:

All right, welcome everyone to the KULR Technology Group shareholder update call and discussion of the first quarter results. I am your host for the call today, Stuart Smith of SmallCapVoice.com. Before we get started on the call, I would like to read the safe harbor statement that you can find in all of the company’s filings and press releases.

 

Stuart Smith:

Now, this call does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. This call may contain certain forward-looking statements based on the company’s current expectations, forecasts and assumptions that involve risks and uncertainties. Forward looking statements on this call are based on information available to the company as of the date hereof. KULR actual results may differ materially from those stated or implied in such forward looking statements due to risks and uncertainties associated with the company’s business, which include risk factors disclosed in the company’s form 10K filed with the Securities Exchange Commission on March 19th, 2021. Forward looking statements include statements regarding the company’s expectations, beliefs, intentions, or strategies regarding the future, and can be identified by forward looking words, such as anticipate, believe, could estimate, expect, intend, may, should, and would, or similar words.

 

Stuart Smith:

All forecasts are provided by management in this call are based on the information available at the time. And management expects that internal projections and expectations may change over time. In addition, the forecasts are entirely on management’s best estimates of their future financial performance, given their current contracts, current backlog of opportunities and conversations with new and existing customers about the company’s products and services. KULR assumes no obligation to update the information included in this press release, or excuse me, and included in this call, whether as a result of new information, future events or otherwise.

 

Stuart Smith:

Now that we’re done with the fun stuff, let’s welcome to the show, Michael Mo, Chief Executive Officer of KULR Technology Group, traded on the over-the-counter OTCQB, for now that is, under the ticker symbol, KULR. I won’t steal the headline, but Michael, welcome to the show and thank you for taking the time to speak to your shareholders and to call in today.

 

Michael Mo:

Well, thank you very much, Stuart. This is Michael Moe. I’m the CEO of KULR Technology Group. I’d like to thank everybody’s time today to join our Q1 2021 investor update call. For today’s call, I will first talk about our Q1 business highlights and provide updates on some of the most recent developments. Keith Cochran, our President COO will provide operational updates and Simon Westbrook, our CFO, will then talk about the financial highlights for Q1 2021. Then we will have Q and A questions to conclude our call today.

 

Michael Mo:

First of all, we’re very pleased to announce that KULR has completed all necessary regulatory steps and has been approved to up list to New York Stock Exchange American Exchange by Monday, June 7th, 2021. The ticker will remain unchanged as K-U-L-R, KULR and the stock will begin trading on Monday, June 7th, 2021. The up list New York Stock Exchange represents another important milestone in our company’s history.

 

Michael Mo:

I want to thank our employees for the hard work and the perseverance to achieve this great accomplishment and also our shareholders for their patience and continued support for KULR. Creating on the NYC will provide the company more visibility to a much broader pool of investors, and in turn, increased liquidity. As a result, we’re even more confident of KULR growth potential going forward. KULR’s Q1 revenue increased by 439% year over year as we continued to make significant investments in all areas of our business to sustain and expand in 2021 and beyond. This is a continuation of our strong growth at the end of 2020 into the new year. And also we’re pleased to announce that the company has recently raised $6.5 million in capital on May 20th, 2021. This investment further strengthens our balance sheet with over $10 million in cash and pay down all the debt at the closing of the transaction.

 

Michael Mo:

In March, KULR became the official thermal management and battery safety technical partner for Andretti Technologies, the advanced technology arm of Andretti Auto Sports founded by Michael Andretti. As part of the alliance, KULR will establish a thermal management testing and design platform for high performance battery solutions with the highest safety ratings specifically adopted for the rigorous technical requirements of the Andretti Global Racing Enterprise. Both partners will also focus on co-developing and co-marketing motor sports battery and safety technologies to the automotive partners for mass market EV applications. KULR just received a special permit from the US Department of Transportation, authorized the transport of lithium-ion and metal batteries for recycling. The permit provides exceptions from shipping papers and employee training when shipping lithium-ion batteries exceeding 300 watt hours. This permit authorized the exception based on using KULR’s proprietary specially designed thermal protective packaging, which incorporates the company’s patented thermal runaway shield TRS technology.

 

Michael Mo:

We also recently announced new smart battery product for drone market. This is the first step of KULR’s overall strategy of targeting adjacent markets complimentary to our established battery safety and thermal management products. KULR intends to expanding to additional e-mobility markets in the coming years. The next frontier of development is to utilize our carbon fiber technology for fast charging, lighter and safer batteries. We’re exploring different configurations of these carbon fiber structures to be part of new batteries, whether it’s improvement on existing chemistry or solid state batteries. We started getting inside of the battery cell with the IFC licensing from NASA and NREL in 2019. This is a natural step for that. This is another big step for technology development of carbon fiber technology to play an important role in the development of battery of the future.

 

Michael Mo:

Now I’ll hand over the call to Keith Cochran to provide operational updates for Q1 2021.

 

Keith Cochran:

Thanks, Michael. I appreciate that. This is Keith Cochran, the President and Chief Operating Officer for KULR. In April, KULR announced former Jabil Operations Manager. Antonio Martinez as Vice President of Operations. Mr. Martinez will be responsible for managing day-to-day operation of the company’s manufacturing organization, as well as supporting strategic growth goals. Tony will also be leading the KULR team’s ISO 9001 certification efforts. Mr. Martinez joins KULR with over 37 years of leadership in worldwide manufacturing and operations for the electronics industry.

 

Keith Cochran:

Also during Q1, KULR announced it was expanding its manufacturing presence to a new larger facility in San Diego, California to accommodate continued business growth. This facility is four times larger than our current manufacturing operations. We began the transition to the new facility effective June 1st. We will still maintain our existing facility for a period of time to support critical Department of Defense contracts and allow us the necessary time to have protection certified in our new facility. As an update to our previous announcement, our project for mass automated battery processing remains on schedule and is targeted to be fully operational by year end. That concludes my remarks for today. I’ll hand it back to you, Michael.

 

Michael Mo:

Thank you very much, Keith. Next we’ll have Simon Westbrook, our CFO to provide financial highlights for Q1. Simon.

 

Simon Westbrook:

Thank you, Michael. I’m pleased to provide those highlights for you. We generated revenues of over $420,000 in the first quarter, which ended March 31st this year. That compares to $77,000 in the corresponding prior quarter. This was an increase of over 400%. The increase was mainly due to new orders received for products and engineering services, military and aerospace customers. The company continues to build stronger relationships with a wide range of energy, transport and aerospace partners and actively served 13 of these customers in the quarter ended March 31st, 2021.

 

Simon Westbrook:

These results reflect our commitment to building new customer relationships through a growing pool of referrals and business development leads. Our sale and general admin expenses increased to $1.5 million in the first quarter of this year, compared to just under a half million dollars in the corresponding period of the prior year. This was a 220% increase arising from additional marketing and advertising expenses, consulting fees, a non-cash based stock compensation expense paid to employees and consultants. Our R&D expenses in the first quarter of this year, were $123,000 compared to $112,000 in the same period last year. This increase, approximately 10%, reflected a combination of head counts and process improvements implemented in the first quarter of this year.

 

Simon Westbrook:

Our loss of operations was almost $1.5 million for the first quarter of this year, compared to a half million dollar for the same quarter last year. Higher selling general and admin costs were offset by higher sales. Our net loss for the first quarter of this year increased to $1.7 million or 2 cents a share compared with a net loss of $550,000 or 1 cent per share for the comparable period last year. That concludes my summary of the financial highlights. Back to you, Michael.

 

Michael Mo:

Thank you very much, Simon. Stuart, this concludes the prepared remarks from management. Now we can open up for questions.

 

Stuart Smith:

Excellent. Thank you, Michael. Thank you very much, Keith and Simon as well. And of course, to the shareholders that sent in their questions. We do have to combine a lot of the questions and we make multi-part questions so that we can keep this a concise section, but also address all of your questions, comments, and concerns.

 

Stuart Smith:

Let’s start with this one, Michael, on December 31st, 2020, KULR raised $8 million and it was reported these funds would be used to drive growth and expansion initiatives. On May 20th, 2021, KULR announced another $6.5 million offering. Why has the company raised these additional funds? Go ahead, Michael.

 

Michael Mo:

Yes, Stuart. We raised the capital for a couple of reasons. First, it provides KULR with significant boosts in shareholder equity to meet the up list requirement of New York Stock Exchange. And that obviously has been very helpful. We got the approval for NYSE up list. And in addition, after the deal, KULR has over $10 million in cash. And we paid off all the promissory note debt we had on the balance sheet, after we closed that transaction. And this gives KULR an upgraded balance sheet to accelerate the execution of our business plan for 2021 and beyond. So those are the two main reasons why we did that $6.5 million financing.

 

Stuart Smith:

Okay, next question, where is KULR with product development? So they’re asking about work and efforts to commercialize. It says, when in 2021, can we expect to see “the higher volume production” and consistent revenue growth reported by KULR in last year’s Q3 results?

 

Michael Mo:

Yeah. Great. I think that we have demonstrated somewhat a higher sustained growth rate opportunity in the last couple of quarters, as we stated in the prepared remarks. Our year over year growth for Q4 2020 was over 200%. And for Q1 2021, was over a 400% year over year. And we’re making significant and aggressive investments in all parts of our business to continue this kind of growth. The fact that we closed our $6.5 million in financing, and now are up listing to the NYSE, which has provided further momentum to our growth trajectory.

 

Stuart Smith:

All right, great. So next question. In April, you announced a June, 2021 launch of a new product line of high capacity lithium battery packs. Is that still on track? Follow up to that is, you also announced in that same press release, the company recently secured a global commercial drone manufacturer as a customer. To lend credence to this announcement, when can you announce the identity of this global commercial drone manufacturer? So two part question. One about the drone manufacturer. What about the high capacity lithium battery packs?

 

Michael Mo:

Yes, first of all, the development is on track. We are working very closely with our partner on this product. That drone battery is the first application of this new line of smart and safe battery solutions that we’re introducing to the market. We will be able to announce the name of our customer and partners when the product, with our solution in the customer’s finished product hits the market. And so this is, timing very much depends on our customer’s product launch timing. And as soon as they’re able to announce that, we’ll be sharing with our shareholders.

 

Stuart Smith:

Okay. Next question, then. You’ve announced on various occasions about the company’s continual advancement of the up listing process to a US senior exchange. This has been for some time, I’m smiling now, since we’ve talked about this. How long does the process take? Is this something that investors can assume is imminent or further quarters away? I guess you’ve already touched on that. And once again, congratulations to you and your shareholders to the up listing onto the NYSE. So I guess this question becomes a moot point, but I’ll ask you this then, Michael, obviously this is a big step for you and your company, getting onto the New York Stock Exchange. You talked about increased exposure. Obviously, we know platforms like WeBull and Robinhood don’t trade in over the counter stocks, but they do of course, trade with NYSE. What can we expect from the company now that you’ve taken this big step, Michael?

 

Michael Mo:

Well, thanks for that question and answering the questions, Stuart. Yeah, obviously, we just announced it was yesterday that we got approved and we will be trading on NYSE on Monday. It’s just absolutely a tremendous step for all of our stakeholders, our shareholders, our employees, and then getting more exposure to institutional investors, some of which have been very, very helpful and invest in KULR over the last couple years, as well as retail investors, broader retail investors, broader institutional investors. I think it’s just going to allow us to get the KULR story out there to so much a broader audience and on such a bigger platform. We’re really looking forward to it. We’ve been doing this for eight years, since we started the company. And we’re really looking forward for the next eight years, because the industry that we’re in, the battery market, the EV market, the energy sustainable market is going to be the singular most exciting market going forward.

 

Michael Mo:

And the whole electrification, sustainable energy, all rides on a safe, sustainable energy source, such as the lithium-ion battery or the battery of the future. So we’re super excited to be part of that and that we have a strong technology development and product development roadmap to participate in that. And then we are super excited to have a much broader base of investors with us to participate in this future.

 

Stuart Smith:

Well, thank you for that, Michael, I’m going to turn the call back over to yourself for closing comments. Go ahead.

 

Michael Mo:

Well, great. Yeah. So I would like to thank everybody for their time today, listening to our Q1 2021 updates. I just like to thank our shareholders, employees, customers, partners, and all the stakeholders for their support and contributions of KULR over the last eight years. And we’re looking forward to the next eight years to be more exciting things to come. So thank you so much.

 

Stuart Smith:

All right, everyone, that concludes our call today, but as always, you can continue to send in your questions to us here at smallcapvoice.com. We will always be compiling them and putting them in front of management for upcoming one-on-one CEO interviews and calls just like this. For the management team of KULR Technology Group, this is Stuart Smith saying, thanks so much for listening.