KULR - Earnings call transcript Q1 2022 | KULR Technology Group, Inc.

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Operator

Alright, everybody. Thank you for holding on the line as you just heard. Welcome to the KULR Technology Group First Quarter 2022 Earnings Call.

Now, on the call with me today are KULR’s CEO, Michael Mo, as well as President and COO of KULR and that’s Keith Cochran. And finally, from the company will be joined by Chief Financial Officer, Simon Westbrook.

joined Hills Q&A at Research; be O’Neill by Taglich also Litchfield at and will for session a Theodore Brothers. We Juan Noble

expectations, read call found start Safe and every regulatory we the made though, constitute release want offers Before may on an offer Statements this to on forecasts call, This securities company call contain of press Harbor risks forward-looking any assumptions and not the KULR’s sell or at to statements filings. and current to a involve that any buy solicitation bottom based certain do of I of statements uncertainties. the entity.

Forward-looking statements those implied in the available and statements on associated company’s of date the and information made XXXX. XX-K to forward-looking hereof. such business, KULR’s stated on or may factors risk which on disclosed from call based Exchange actual the with materially risks as are XX, to company Securities results uncertainties the this in due include Commission filed with Form March differ their

by similar based should in words. or regarding time, may over include time. are believe, that expectations can change and or intentions regarding strategies forward-looking provided statements All information expectations, intend, beliefs, the internal future forecasts Forward-looking identified call expects expect, would are available management this management on may, estimate, and this at projections such and as the by could, words anticipate, be company’s and statements

customers forecasts to products performance information, conversations call, that, Mo. in Michael, backlog services. over call information the the and yours. the about addition, of on a update of now best current given existing the no is the otherwise. financial With I to – obligation and or events new result In included entirely call contracts, whether turn this Michael future their future as will no assumes new and company With with management’s current of estimate are their their opportunities

Michael Mo

us joining Mo. everybody, and Thank you, you, today. Michael This Stuart, for thank is

As in you find saw, SEC intentionally all that of issued earlier press on we with today our X-K sync event sure filing earnings bit can website. financing I’m the you the release a our

be was shipped nerve into development products of carbon a navigation start sample signals KULR other DoD our convert of and Director control thermal implement team William additional of We cruise fiber the as Coast NASA exciting fishing United as believe the electrical the Johnson battery for Walker for fronts. new well formerly Metaverse meets virtual market, computing This environment. where Defense. our quarter marks fiber product in case in States XXXX Metaverse corner entry on of options the to initiatives. our analysis business solution a tech our product and capital KULR’s customer thermal of First and an initiatives. NASA sensing the core the component Dr. opportunity safety corners verticals. we We OEM has the as Dr. to secured of partnership suite We a based next-generation management lithium-ion to KULR the safety battery color. from high-performance high-power for contractors growing appointed an to released which will Center’s was the solution vessel three management our design battery carbon engineering and prime battery safety build up for on requirements program, moon industry Guard’s battery pack and the with lithium-ion battery instruction personal cargo, upcoming battery support industry. woman cells senior XXXX per contract to by storage. solution and leader lithium-ion the Walker, additional cells a thermal pulse a with a for to products mission safety Department process future passenger to go Artemis additional to NASA’s this maritime contracts with That XX,XXX to and as can also for safe of to provides for magnetic is our Space screen awarded important battery week weaponry We part Engineering. KULR NASA

a our R&D configuration with energy. continued fiber them substrate materials program electrolyte. and use carbon both We to to charge solid make contain electrolyte to more work liquid faster make them existing inside The battery and is

It stage be product electrolyte. XXXX. battery commercial we produced of right own which Our second solid-state has cell prototype a now, LLCO think half development our for is can battery in in sale

encountered was side, a shipped We the ended it On many could due we lockdown. that disruption the other recognized like built we China, first and chain COVID been in COVID worth due being had of lockdown have to as $XXX,XXX inventory as chain over but in quarter challenging up supply supply that not logistics revenue the to quarter the companies.

Much to bit. are a the challenges the not customer when meant lockdown We to eased shipped pleased product the have delays been in products these that COVID-related of report shipments have cancellations.

we as through for make as sizable restrictions So our ease and coming lost to inventory. the time in revenue expect the months, up move we

million active our taking drive X supply today in initiatives. additional chain and now announced We to logistical we secured that going have forward. steps key capital a reduce We’re risks $XX to

from supplies energy that capacity over is Tier on battery securing XXX-megawatt working manufacturers. cell battery of hours X we’re in First

will megawatt in storage in provide solutions anticipation securing top enough to line XX,XXX markets are approximately storage e-mobility a options. suppliers, using with total of management to million and energy homes million. available XXX currently e-mobility. inventory power energy fast-growing the system $XXX applications and high-value revenue between storage thermal demand our battery from $XXX safety our potential of hours the cell energy technologies end together total By specific to cooler with is integrating domestic battery and the We key

North supply The initiative manufacturing bringing capabilities chain supply control production reduce and risk America. by our second much costs and and disruptions, to is of chain to

supply further control locally. geopolitical macroeconomic believe operations we shore our and conditions global chain current up that take risks, essential it’s the and we of Given our can

Now logistics offset times in in be flexibility as we need, This infrastructure maintain opportunity potential excess and more position we response costs. increase and we to than us do of our to By labor in the confidently to build will strong a can and have resources improvements capital so. allow the securing margins will grow.

Next, our operational Keith Cochran, President will COO, updates. please. Keith, present and

Keith Cochran

Michael. Thanks,

to lockdown of achieve that so goals our end our QX docks job. per did an of March, not ‘XX, in Therefore, on the During the produce. the we backlog able occurred left you China team option at revenue operations had worked that mentioned, the KULR Unfortunately, hard produce our and shift. did was to plan, production to COVID outstanding no Shanghai, our as team

and been Chinese with in that to since able of have revenue the release will QX for the realized be We ‘XX. the negotiate shipments officials

hedge now take have to have a immediately have create logistics as production geopolitical in lockdowns. to the and taken onshore future opted a negotiations in our Based we cases. are our America to in environment We buffer of we on thorough customers costs, action potential of stock materials, against increased most which review North

our impacts cooler coming to of Asia. be costs neutral will rising the of primarily For this move from landed logistics considering margins for reviews cost,

also our and will With gain the for location, predictable customers KULR more delivery. reduced lead in revenue production times benefits the ship of additional

to in completely QX track automated Our cell battery begin automation complete we of will in platform their this for I’m we an customer we by development engineering actively use acceptable cost progress to allows customer for and seeking now over level. the say taking but us as excited comments, testing USA on their full specific be operate check tabelize year battery previous very at to cases. significant designed testing a team has demand complete and remain solution, modular, platform completely our in are new qualified our baseline engagements capacity has expanding QX. made This customer been KULR’s is as the end KULR’s the it packs The and customized platform and to by of development is cell complex, capability be this is to and increases. work

battery subscription and followed to and and significant mass as our which market effort very using cell by in applications revenue a platform automated a deliver been to engineering U.S. in starting solution initial cooler long-term developed the represents platform, testing expect nonrecurring by for This engineering was be as has software-intensive, licensing generated our delivered check charges partners our model, well in We India. The agreement. team cell QX.

We making have quarter. additional be announcements we platforms will for in coming which development, the in

geographies. is currently quarters All Accordingly, partners are of important for intended large-scale the multisource in development to spent for global have in of needs manufacture last to products. resource additional It our in markets. to strategy amount our KULR significant the a management a platforms we has diverse and for two develop have development

believe react their our deliveries begun and now have the and help diversity this are with increase will demand to of customer suppliers we new We quality rapidly to pricing pleased uncertainty. Our market and flexibility, services. ability

Next, financial CFO, will Simon KULR’s Westbrook, Simon? updates. present

Simon Westbrook

Keith. our Thanks, and March ended compared XX to I’m last the going results year. to Simon same about is the in financial talk Westbrook, This quarter just for quarter

orders. results for to ability some quarter issues to that our current were For logistics ship restricted by customer COVID-related ongoing the revenue, the meet and chain impacted supply

a our $XXX,XXX to by XXXX result, year. $XXX,XXX in As this reduced sales from XX%

additional increase the marketing expenses, For year. quarter of million non-cash corresponding and kicking year of from selling, and expansion consultants first to the office they out admin of this and facilities. was advertising and in last in expenses, paid due fees the and million XXX% employees increased The to to new stock our $X.X general $X.X compensation and consulting quarter

stock-based as million fees $XXX,XXX marketing in automated R&D from combination included quarter first and The of our results, in quarter quarter and loss this This new million increase implemented non-cash in $X.X first the from million well the of professional Our projects. increases headcount in loss and and operations for last the XXX% equipment, as operating production year. XXXX test increased research quarter and first XXXX to increase payroll, in $X.X the XXX% to reflects $XXX,XXX quarter and expenses compensation last increased the first of of the $X.X expense expenses and advertising from a the Operating XXXX. in for of of year. development first

$X.X Our the quarter of XXXX this net first million loss increased by XXX% first $X.X million in from to in the year. quarter

comparable period for loss net year. $X.XX Our XXXX per last for was $X.XX the first compared the quarter to share of

at over a the over consolidate $XX to ensure States our control uncertainties. of equity face purchase manufacturing operations, expand in United $XX.X Since greater us XX Looking standby XXXX, year. from have funding business At in to million the position. raised of the new XX, at and and million continuing March support million the the reported worldwide agreement. of notes positioned cash we have leaves established quarter well $X.X and warrants This company million compared operations end, cash promissory to $X our this March balances issuance logistics

Now Stuart. back to

Stuart Smith

Alright. that, Thank you for Simon.

So now of O’Neill to Research. I’d our Theodore Litchfield like got call questions. from set the to welcome He’s first Hills

ahead. For the Theo, call is yours. Go Management,

Theodore O’Neill

Thanks I was I two very much. questions. have wondering

First know test battery subcontracts be protocol or I’d will the for its is, pretty is its opportunity will market it’s Wild a who think standardization drive be is on or us color it your supplier assumption – test its ever if can like there test for West? would give little a Wild, more to own will GM sure NASA. also there remain lithium-ion I’m And And that test own do the now cell or testing and Tesla my an you you like ever or their third-party cells, has standardization? it cell there LG.

Keith Cochran

ahead is Keith that. This Cochran. and Thanks for take appreciate question, your that. Theodore, go I’ll Yes.

are the it XXX, which work So is little as previously X comprehensive developed us characterization. NASA today. a develop for complete go fill way Tesla The doing into and or to what year probably I missions. platform lot took automation a significant and space batteries is very order very GM far intensive, designed support test we to over stated, battery above are away and can’t them These

to on heading looking excited put into and QX. track. It’s great, So with full we’re said, that production that into that’s

test. a little asked standardization bit sell about and You

lead we the be level there state regulatory wouldn’t rolls from New on up fires see charge and significant a all maybe I surprised and they think a probably York damage caused capacity at been some I California federal. to if and then that tend battery into have potentially considering

applications as far the As for cells battery diverse. really are standardization,

of at KULR serve we’ve pretty our made broader so modular, what range we done think system is can I markets. we’ve a different

would to could be – know able I’m Tesla’s know For how example, certainly immediate which time. on program, SpaceX will it probably exactly based body on we have stepping would we has. specification. think their to entire see We’d do requirements. don’t But but pretty this, happen support I sure don’t love regulatory to an support them. what to But of similar NASA I I up I guess, I what it. see very over

Stuart Smith

you think had had question. I think I Theo, another Theodore, you follow-up Great. –

Theodore O’Neill

I do Yes. have question. a follow-up

Of And ship sort prepared answered said of remarks. you first good in out of when think I or kind just was going? the of shipping – these they China didn’t Shanghai of were where finished And there on delaying it? the delayed, it products in part were that you the this were they that some where – manufacturing products was aspect was where quarter, they

Keith Cochran

manufacturing No whatsoever. issue Yes.

took had and our that their us, prior the into was end week approximately In we not already lockdown Shanghai. the fact, ship the them they customer that the until completed to release they to are were time X weeks by in ready certifications. to last finished ULXXXX quarter. goods ready experiencing Unfortunately, the And the of shipment released

The there Shanghai to no production shipping whatsoever Wuxi. and over product wasn’t. So went unfortunately, great. issues Shanghai was still the open from Wuxi

Stuart Smith

set like well. you Taglich Juan, Brothers. Well, the going then call a ahead. question as to our looks of Alright. is yours. come now have Noble questions Go for Juan It from at is Keith next

Juan Noble

they potential Yes. you publicly the Several questions. plan plan coolers to to Volta that and order it the XXXX to storage in up plans and in shipments could I an units know XXX has growth XXXX. provide coming that technology, battery increase market that on to XXXX, between XX,XXX the units was bring I to this Volta hoping years, stated in bring for that X,XXX of they to update using

Keith Cochran

couple a things a They Well, for partner. tremendous are of Yes. on both one.

to products. for a type customer. them deal big a a I storage lucky certification. just That’s very team have as We’re earlier, mentioned ULXXXX as we’ve real energy completed

I their regards you we’re I be would ask upon that’s super is So stated. rely to statements, to comfortable be that. KULR. would to from publicly With not And forecast, that about what coming they excited talk by would what public their actually something

Juan Noble

see that this Okay. to say But may fruition. now, not come as is as there that you to far nothing right

actually XXXX. original I was the think order for

this basically a point. it’s to like looks that So, at good go order

Keith Cochran

What nice I Governor of they UL. tell is I for with it’s event in by shipping you June that we can are been believe. be product, looking completely will and York, a And hosting the we certified are New

right of world the we believe stated. have to now, they in as publicly every reason what So,

Juan Noble

with Okay. Metaverse. new the branching And it entry the looks like for you are recent biosensing into applications for our technology into

development? them are So, I how be might looking at? this under may hoping new long this be has to been on you there other call. you that able disclose was any And applications

Keith Cochran

to ahead am Michael. go going and I that flip Yes, to

Michael Mo

to Good Yes. No. from Thanks Keith. you. Juan. Hey, hear

and characteristic application application. this sensitivity for that material carbon electrical is the of thermal of was for this really So, substrate fit fiber good because the connectivity and a our

a a tested of new Yale The to platform then one, up sensing by opportunity done just that signals Metaverse really have applications much now, and a happy with we And from to the bit see the similar market work side applications. years it first be XX pulse the over electric researchers was to larger kind for of the We medical in ago obviously, material characteristics space. actually pick new in actually brain. expect foundational other University quite our many on

are electrolyte up really produce this to now excited a a material about have In just to especially and that our inside the is battery charging to addition safer and produce capabilities, higher own opportunities substrate we as faster opened we more density lot that, energy using able something batteries. innovate for to solid are we really

something that’s about. super are excited we So,

Juan Noble

this I to technology. licensing of Okay. are sensing license – And this is ownership this mean the an I technology? just want of you get idea pulse electric

Michael Mo

Yes. VR/AR wearable to of into It’s to this. we a No, incorporate sell product their are we customer a that licensing piece not the finished physical this glasses. were

Juan Noble

battery May, currently now. Artemis scheduled the are it with Okay. to program question, which in And I your believe was safety another we in. for NASA launch contract

on could provide will if run. was this status So, that a believe program you this long actually any program on you and have I you how information hoping

Michael Mo

Yes.

just program So, The Artemis the particular moon the of clear that be to not program. just by go I main that launch to part into we is the want back XXXX. Artemis, were overall to

So, Keith on based will we later we talked are battery That’s working program automation NASA a started the on getting that And that the in just structure. kick lot and scratching screening year. this testing side now. the more the the versatile surface where scale tasks the pick perform and up about, will right

started just So, we getting are that program. on

Juan Noble

And entered or in to secure the $XX key million into into question markets markets. end end awards of inventory that anticipation demand recently just final just key one that Okay. you from agreement

you So, this And I in how you million to from. stated you about I it of comments, that million the was in where to be revenue. tell satisfy, release, to was us come could need know much able procure hoping believe prepared believe most to in $XXX $XXX would you inventory demand your press will

So, able of type I into of get to market. wanted inventory get tap to an financing you much for need your to that might of kind this be to how idea

Michael Mo

Juan. Good Yes. question,

reliability expect and and the from will most e-mobility products demand come energy performance products. of for high very important we where So, storage is safety, their

And entire test these battery design reliable as PPR to EMA pack all and meet manage such life So, the our markets, management technology necessary product, it safety, we the certification a apply through battery cells pack. entire so to and reliability we and on active fully cells requirements the get from the and of to battery regulatory and solution of the to apply cycle, forth. so portfolio will certification screening starting then most go the them our the in CellCheck will into the them forth

this megawatt-hours it’s which about presents million that is revenue roughly us. – kind approach So, energy, about of potential for – entirety of XXX solution million worth of this cells of XXX XX $XXX

customers we it’s capital efficient both we that want and of $XX so with be the but million nice to ourselves this be capital question that, confidence to of would to In when moment, that’s think vendors, have still terms vendor available possible, how And at in the the build to I we about strategy. as to negotiated our then the much as have supplier. certainly execute – this achieve that’s our

Juan Noble

Thank Well. That’s Thank all have. you. that. Okay. you I for

Stuart Smith

Well, Mo, Keith And call the for all thank you, they the Juan, joining Brothers, and their our Litchfield those us including thank guests Theodore Noble website, Simon shareholders O’Neill on Hills from thank Michael know you, course, to the of like I extend from I Westbrook. would Research. their sure and And of all Cochran to Michael. team, today. be deepest Taglich management today visit everyone, kulrtechnology.com. company’s gratitude Juan

on you will If click presentations. you the see Investors tab,

You find wonderful of some Benzinga well other the and things in calls of as on kinds all XXth will company. like information as all Gateway Conference Annual the of archived these the

Stuart So, for on in tuning this is of so behalf saying, thanks management, much Smith today.

KULR Technology (KULR) 17 May 222022 Q1 Earnings call transcript