KULR Technology Group, Inc.

All right, everybody, thank you for holding on the line. As you just heard, welcome to the Cooler Technology Group first quarter 2022 earnings call. Now on the call with me today are Cooler CEO Michael Moe as well as president and COO of Cooler, and that's Keith Cochran. And finally, from the company, we'll be joined by Chief Financial Officer Simon Westbrook. We will also be joined for a Q&A session by Theodore O'Neill at Litchfield Hills Research and John Nobile at Taglich Brothers. Before we start the call, though, I want to read the safe harbor statements found at the bottom of every company press release. and regulatory filing. Statements made on this call do 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 Cooler's current expectations, forecasts and assumptions. That involve risks and uncertainties. Forward-looking statements made on this call are based on information available to the company as of the date hereof. Cooler's actual results may differ materially from those stated or implied in such forward-looking statements due to risks and uncertainties associated with their business. which include risk factors disclosed in the company's Form 10-K filed with the Securities Exchange Commission on March 28, 2022. 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, predict, Believe, could, estimate, expect, intend, may, should, and would, or similar words. All forecasts are provided by management in this call are based on information available at this time, and management expects that internal projections and expectations may change over time. In addition, the forecasts are entirely on management's best estimate of their future financial performance given their current contracts, current backlog of opportunities and conversations with new and existing customers about their products and services. The company assumes no obligation to update the information included in this call, whether as a result of new information, future future events, or otherwise. With that, I will now turn the call over to Michael Moe. Michael, the call is yours.

Thank you, Stuart, and thank you everybody for joining us today. This is Michael Moe. As I'm sure you all saw, we intentionally issued our earnings press release a bit earlier today in sync with the 8K filing of our financing event that you can find on the SCC website. First quarter was an exciting start of 2022 for Cooler on the product and business development fronts. We shipped our sample products of our carbon fiber solution to a Metaverse OEM customer as a core component in the sensing of electrical nerve signals to control navigation through the virtual environments. This partnership marks Cooler's entry into the metaverse market, where we believe our solution has additional opportunity to support this growing industry. We secured a battery safety contract with NASA to screen lithium-ion battery cells for future battery pack designed for the Artemis program, which is NASA's mission to go to the moon by 2024 with a woman and a personal accountant. Cooler can process up to 10,000 lithium-ion battery cells per week based on instruction from NASA and also the Department of Defense. Cooler was awarded three additional contracts with DoD prime contractors to implement the carbon fiber cathode solution for high-power magnetic and other covert pulse weaponry initiatives. We appointed Dr. William Walker, formerly That's how Johnson Space Center's senior leader in thermal analysis is our director of engineering. Dr. Walker will be an important part of our engineering team to build our suite of battery thermal management and safety products, as well as next-generation high-performance computing thermal management initiatives. We released a cooler tech safe case product for maritime lithium-ion battery storage that meets the upcoming United States Coast Guard's new battery safety requirements for the passenger vessel industry and provides additional battery safety options for the cargo, fishing, and cruise verticals. We continued our R&D program to use carbon fiber substrate materials inside a battery to make them charge faster and make them contain more energy. The configuration is to work with both existing liquid electrolyte and solid-state electrolyte. Our battery cell development has produced our own LLZO solid-state battery electrolyte. It is in prototype stage right now, which we think can be a commercial product for sale in second half of 2022. On the supply chain and logistics side, it was a challenging quarter as we encountered supply chain disruption due to the COVID lockdown in China, like many other companies. We had over $325,000 worth of inventory that we built that could have been recognized as revenue in the first quarter, but ended up not being shipped due to the COVID lockdown. We're pleased to report that these products have been shipped to the customer when the lockdown eased a bit. Much of the COVID-related challenges have meant delays in product shipment, not cancellations. So as the restrictions ease in the coming months, we expect to make up for lost time and revenue as we move through our sizable inventory. We're now taking active steps to reduce our supply chain and logistical risks going forward. We announced today that we have secured $55 million in additional capital to drive two key initiatives. First is that we're working on securing battery cell supplies of over 500 megawatt hours in energy capacity from Tier 1 battery manufacturers. We're securing the inventory in anticipation of fast-growing demand from our key end markets in energy storage and e-mobility. 500 megawatt hours is enough to power approximately 40,000 homes using currently available domestic energy storage options. By integrating our thermal management and battery safety technologies together with the battery cell supplies, Cooler will provide total system solutions to specific high-value energy storage and e-mobility applications with a total top-line revenue potential of between $250 to $350 million. The second initiative is to control supply chain and manufacturing costs and reduce disruptions risk by bringing much of our supply chain and production capabilities to North America. Given the current global macroeconomic condition and geopolitical risks, we believe it's essential that we can shore up our supply chain and take further control of our operations locally. Now we have access to capital to do so. This opportunity will allow us to maintain our margins as improvements in logistics flexibility and response times will more than offset potential increase in labor costs. By securing the resources and infrastructure we need, we can build confidently and be in a strong position to grow. Next, Keith Cochran, our president and COO, will present operational updates. Keith, please.

Thanks, Michael. Here in Q122, Kula was able to produce our backlog per plan, and our operations team did an outstanding job. Unfortunately, as you mentioned, the COVID lockdown that occurred in Shanghai, China at the end of March left our production on the dock with no option to ship. Therefore, we did not achieve our revenue goals that the team had worked so hard to produce. We have since been able to negotiate with the Chinese officials for the release of the shipments, and that revenue will be realized in Q2 2022. We have now taken action to create a buffer stock of materials, which we are in negotiations to have our customers take immediately as a hedge against future potential lockdowns. Based on a thorough review of our geopolitical environment and increased logistics cost, we have opted to onshore productions in North America in most cases. Per our reviews of line of cost, this move will primarily be neutral to margins for Cooler, considering the impacts of rising logistics costs coming from Asia. With this shipment production location, Cooler will also gain the additional benefits of reduced lead times for our customers and more predictable revenue deliveries. Our engineering team has made significant progress to complete the development of Cooler's automated battery cell testing solution and will remain on track for our previous comments to have the lines completely qualified in Q3 and begin full capacity testing by Q4. The automation has been very complex, taking over a year of development, but allows for us to operate this capability in the USA at an acceptable cost level. This platform is completely modular, and we will be expanding it as our customer demand increases. I'm excited to say Cooler Cell Check Baseline platform is now complete, and we are actively seeking new customer engagements. As this platform is designed to be customized by the end customer to work in their specific battery packs and their use cases, we expect initial revenue to be generated by non-recurring engineering charges, followed by a long-term subscription model or licensing and agreement. This platform, which was very software-intensive, has been delivered and developed using our engineering team in the U.S. and our partners in India. The automated battery cell testing solution, as well as CellCheck platform, represent a significant effort for Cooler to deliver mass market applications starting in Q4. We have additional platforms in development, which we will be making announcements for in the coming quarter. All of the platforms we currently have in development are intended for large-scale markets. It is important for Kula to have a global strategy for our development and manufacturing products. Accordingly, management has spent a significant amount of resource the last two quarters to develop additional partners to multi-source our needs in diverse geographies. Our new suppliers have now begun deliveries, and we are pleased with the flexibility, pricing, and quality of their services. We believe this diversity will help increase our ability to rapidly react to customer demand and market uncertainty. Next, Cooler CFO Simon Westbrook will present financial updates. Simon. Thank you.