KULR Technology Group, Inc.

You're in the right place for the Cooler Technology Group fourth quarter and full year 2022 earnings call set for today, Thursday, March 23rd, 2023 at 4.30 p.m. Eastern. All right, everybody. Thank you so much for joining us today. I'm your host, Stuart Smith. And before this call can begin, I need to read some statements for you that can be found at the bottom of every press release using the ticker symbol for the company KULR. That's also the same way you find this information at the Securities and Exchange Commission using the company's name, KULR Technology Group, spelled K-U-L-R. 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, assumptions that involve risks and uncertainties. Forward-looking statements made on this call are based on the information available to the company as of the date hereof. The company's actual results may differ materially from those stated or implied in such forward-looking statements due to risks and uncertainties associated with Cooler's business, which include the risk factors disclosed in Cooler's Form 10-K filed with the Securities Exchange Commission on March 22, 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, believe, could, estimate, expect, intend, may, should, and would or similar words. All forecasts are provided by management on this call are based on the 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. Cooler assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise. Joining me on the call today from the Cooler management team will be CEO Michael Moe, President and COO Keith Cochran, as well as Chief Financial Officer Simon Westbrook. After opening comments are completed by the management team of Cooler Technology Group, we will be joined on the call by Howard Halpern from Taglich Brothers, Theodore O'Neill from Litchfield Hills Research, and Jake Sikelski from Alliance Global Partners for their questions. I will turn the call over now to Chief Executive Officer Michael Moe. Michael, the call is yours.

Thank you, Stuart. This is Michael Mo. Thank you, everybody, for joining our call today. Quora's mission is to develop a world-leading energy management platform to accelerate the global transition to a sustainable electrification economy. We provide the hardware and software solutions for renewable energy and advanced mobility applications. We achieve our mission by helping our customers to use less energy, to use energy more efficiently, to make energy consumption safer and cooler, to use less material to achieve these goals, and to complete the circular economy through recycling. The following are our Q4 and full-year 2022 financial highlights. Our Q4 2022 revenue was $1.81 million, an increase of 137% over Q4 of 2021. Gross margin was 92% in Q4 22 compared to 70% in Q4 21. Revenue for 2022 full year was $3.99 million, an increase of 66% from 2021. Gross margin for 2022 was 59% compared to 54% in 2021. The strong revenue growth in Q3 and Q4 of 2022 and the gross margin expansion were the result of Cooler's long-term investment in our technology portfolio to complete our holistic approach to lithium-ion battery safety. As we gain more traction with large OEM customers, we expect revenue growth momentum to accelerate in 2023. Speaking of Quotr's long-term investment, we'll be investing in our people, our infrastructure, our technology portfolio, and our brand. Keith Cochran will update you on all the important milestones we've accomplished in building our team and infrastructure in North America. I'm particularly proud of our ISO 9001 certification and the completion of the automated cell screening line for NASA Work Instruction 37 and other DoD customers. At the end of 2022, we had $3.19 million in equipment and properties compared to $375,000 in 2021. We've been working on onshoring our manufacturing capabilities in North America in 2022. We had $3.5 million in equipment deposits at the end of 2022 compared to $2.5 million in 2021. We believe that we have done our heavy investments in capital equipment for us to solidly grow our business in 2023. At the end of year 22, we have $1.9 million in inventory compared to $191,000 in 2021. a nearly tenfold increase in inventory as we prepare for the revenue growth acceleration in 2023. In 2023, we're entering into the monetization phase of the investments we've made to build out our key technology platforms. We introduced an all-new modular energy platform called CoolerOne at this year's CES. CoolerOne is a family of revolutionary battery packs accelerating the global transition to a sustainable electrification economy. These new and innovative designs bring a combination of safety, performance, intelligence, modularity, and reliability for the world's most demanding applications. Since the launch of the product in January, CoolerOne has half a dozen development engagements with electrical vehicles, DOD applications, electric aviation, and charging infrastructure customers. We expect CoolerOne to have the revenue opportunity of over $200 million by 2026. CoolerOne Design Solutions is a suite of products and services that comprise of a holistic approach to battery safety. This is the approach that we adopted from the NASA methodology and design flow to address some of the most critical battery safety problems. It starts from deep analysis of the battery cell from the time it's made, understanding how it behaves when it goes into thermal runway through the FTRC test, then take all that data and design the battery pack. It runs through thermal and mechanical analysis before building and testing the battery pack. It provides real-time monitoring analysis through cell check. And our safe case suite of products enable large format batteries to be stored, transported, and recycled safely. Embedded in this process is a lot of proprietary IP, patents, and know-hows that we've gained over the last 10 years. That includes 12 granted patents and many more pending patents. Energy storage is by far the largest market opportunity for us. This market is to reach over $400 billion by 2030. We believe our solution is a fundamental enabling technology that makes sure batteries are safe and compliant with government regulations. Our energy storage customers include Lockheed Martin for Phase II battery testing, ISC testing for the largest automotive manufacturer in the U.S., and Safecase production orders for top-tier Power II manufacturers. We expect to achieve over $100 million in revenue for CoolerOne design solutions over the next three years as we continue to gain traction with large OEM customers and their products begin to ramp in volume. I'm very excited about the next phase of our technology and product development to integrate all these functions together with AI-powered software and solutions. Our cell check technology provides a real-time monitoring of battery to provide state-of-health data to our customers. We've recently acquired CoolerVibe, which is a software technology that identifies and eliminates vibration-related loss of energy in motors. So by incorporating CoolerVibe into our suite of tools, we will provide the capabilities for efficient energy source and energy usage. The future is to integrate AI tools such as GPT in our engineering flow to increase productivity and also into Cooler One design solutions to provide more intelligence and data analysis capabilities. Next, Keith Cochran will provide operational updates. Keith, please.

Thank you, Michael. Appreciate that. Hello, everyone, and thank you for joining our call today. 2022 has been an incredible year for Cooler. So let's take a look back at some important milestones that leave us very well positioned for our future. In Q1, we shared with you Dr. William Walker, former NASA Johnson Space Center senior leader in thermal analysis, was hired as director of engineering to build out our suite of battery thermal management and safety products, as well as our next generation high performance computing thermal management initiatives. It became quickly apparent that Dr. Walker should take the helm of our technological vision and was moved into the CTO role. He and his team have delivered on the initial charter, but rapidly expanded the cooler capabilities to include advanced offerings, such as FTRC, which is fractional thermal runaway calorimetry, bomb calorimetry, and multi-physics modeling. Additionally, with the strategic hires of former NASA battery engineers, The team was able to develop and deliver at CES this January our first CoolerOne battery. The product is highly configurable with a broad range of applications from e-bikes, eVTOLs, CubeSat, and much more. We are now engaged in development work with multiple customers with the goal of delivering in volume starting in the second half of this year. Also in Q1, we noted our impact by COVID lockdowns in China. At that time, we said we were moving quickly to reduce supply chain risk. We delivered on that commitment in Q2 22 by moving our safe case and safe sleeve production to Mexico. While we still have some risk remaining in China, we now have a dual source for TRS manufacturing materials in Mexico. Furthermore, we have placed on order fully automated equipment for TRS manufacturing that is scheduled for delivery this June. The equipment will be put into operation in the U.S. during Q3 of 23, as we seek to provide even more stability to the supply chain and significantly reduce our risk to China exposure. As we moved into Q2, our focus remained strong on operational excellence. Accordingly, the team worked very closely to achieve ISO 9001 certification. The audit found zero nonconformances demonstrating Cooler's dedication in the pursuit of manufacturing excellence and operational controls. This was a significant milestone delivered by our entire organization. As noted in Q2 call, Cooler continued to expand our workforce in the area of sales, supply chain, and engineering. The hires have been critical to delivering the growth in our service offerings, as well the increase in our customer engagements. Moving on to Q3, I shared we had begun to install our automated lithium ion 18650 and 21700 battery cell testing capability, which meets the performance requirements of NASA Work Construction 37, and that Cooler would have the only fully end-to-end automated test system capable of meeting Work Construction 37. This system allows for volume testing of battery cells required for all manned missions by NASA, and many other DOD branches. We communicated on the call. The system would launch operations in December and Kuhler would begin shipping fully tested cells in January 23. While our system was fully operational in January, we did incur a slight delay due to final permitting. Accordingly, the team completed the first fully screened cells in February and hand delivered them to NASA the first week of March. This was a major milestone delivered by our dedicated ops organization. Cooler also announced in Q3 the introduction of Cooler Vibe. We are very pleased to say the response has been extremely positive. Cooler previously announced we have signed a long-term service agreement to support a major helicopter operation. We have also had numerous favorable engagements with the Marine Corps, industrial drone operators, and commercial flight operators. We're very pleased with the progress the team has made to develop a significant sales funnel and align customer demonstrations for the superior balancing and vibration reduction technology. We do expect to see numerous new customer wins very soon. Moving on to Q4, the focus remained on operational efficiency, the delivery of the various platforms and services noted previously, and the startup of our Texas facilities for advanced testing of battery cells and pack development. We are pleased to say that both locations in Texas are fully operational and have already begun to contribute to Cooler's top line growth. We have also continued to hire strategic personnel specifically in the area of battery technology. Cooler currently has 72 employees and has been able to attract and retain our strategic hires. With that said, our hiring in 23 will slow to a few strategic engineering hires and replacement hires. as we are moving our team to focus on the top line growth of the company for the platforms developed over the past two years. We are currently well staffed to deliver 23, and we have a plan for only minor capital outlays this year compared to the last two. We stand well poised to deliver our FY23 vision. At this moment, I would like to say a big thank you to our employees. Their dedication and enthusiasm for where Cooler is going is simply incredible. I also want to recognize our valued shareholders. We appreciate you. While I know the current market is tough, Kula has positioned the company for solid growth and has delivered on the vision presented as far back as Q2 21, with multiple platform developments deployed. These developments took capital investment and time, but they have also now delivered and are poised for significant top line growth in 23. Our Cooler team is committed to delivering for you. Thank you. I will now turn the call over to Simon Westbrook, who will share Cooler's financial highlights. Simon?