KULR Technology Group, Inc.

Welcome everybody to Cooler Technology Group first quarter 2023 earnings call set for today, Monday, May 15th, 2023. With me on the call today is Michael Moe. He is the CEO of Cooler Technology Group, as well as Keith Cochran, President and COO, and Sean Cantor, Chief Financial Officer of Cooler Technology Group. Now, as we have done on prior calls, we will have opening statements from management, followed by a Q&A section with some analysts that will be joining us later on the call. But before we begin this call, please allow me to read the following Safe Harbor statement regarding statements that are made on this call. 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 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 the risk factors disclosed in their Form 10-K filed with the Securities and Exchange Commission on March 28, 2023. Forward-looking statements include statements regarding their 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 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 in this call, whether as a result of new information, future events, or otherwise. With that, I would like to turn the call over to the CEO of Cooler Technology Group, Michael Moe. Michael, the call is yours.

Thank you, Stuart. Good afternoon. This is Michael Moe. Thank you, everyone, for joining us today. Cooler's mission is to build industry-leading energy management platforms to accelerate the global transition to a sustainable electrification economy. Over the past two years, we've worked very hard to transform Cooler from a niche component supplier to NASA and Department of Defense to a company with multiple platforms powering the electrification economy. Cooler is now solidly a growth stage company. Our first quarter, 2023, revenue grew 778% over the same quarter in 2022 to reach approximately $1.8 million. In 2023, we're focusing on revenue growth. We continue to broaden our customer base to include names beyond our initial space and military marquee clients. We're experiencing increasing customer demand across multiple vertical markets. We believe we are well positioned to service the increasing customer demand that we have in these large and fast-growing markets. Specifically, areas like lithium-ion battery market is estimated to be over $150 billion by 2030. And battery recycling is to reach $23 billion in 2030. We view our product and service platforms as mission critical across multiple sectors, given that we sit at the intersection of sustainability, electrification, clean energy, and mobility. The increasing demand from consumer, commercial, industrial, and government markets, along with the growing regulatory requirements in these areas, drive further demand for tested and proven solutions. McKinsey estimates the global lithium-ion battery market to be approximately $400 billion by 2030. Cooler operates in the approximately $200 billion portion of the market that includes battery cells, battery packs, and recycling. Lithium-ion battery safety is a critical bottleneck for the growth of this industry. We believe Cooler provides the leading platform solution for this challenge. Energy storage is the largest market opportunity for Cooler in 2023. We launched the Cooler One platform at CES this past January. It's a modular, safe, intelligent, and sustainable energy storage unit that can serve multiple applications like electric mobility and commercial energy storage. The CoolerOne Design Solutions Platform is our holistic methodology to solve battery safety issues with patented technologies such as our thermal runaway shield, safe case technology, and internal short circuit device, which Cooler is the exclusive licensing partner for NASA. We're seeing significant customer demand for our CoolerOne Design Platform. We recently announced that we received a $1.13 million contract from U.S. Army to develop their next-generation high-energy battery pack utilizing our CoolerOne design solutions platform. We're seeing customer engagement in electric vehicles, electric aviation, and energy storage for fast-charging infrastructure for the CoolerOne platform. Our customer engagement process starts with analysis and design. This is where our expert engineers evaluate the battery cells, understand its energy release, provide multi-physics modeling, which is a fancy way to say using a computer to simulate what happens in real life, and design the battery pack based on that analysis. This process can take anywhere between three months to a year historically, depending on the customer requirements. After analysis and design, we build a prototype and do a lot of testing. After testing and any necessary refinements, we help the customer go through the safety certification for the applications. During this process, as I've described so far, Cooler generates mostly service revenue. When the customer's product goes into volume production, Cooler generates product sales revenue because our solutions are built into the customer's product line. When a customer's production scales up in volume, Our revenue scales up with it as our solutions are built into the products that are specifically certified and designed. We anticipate that with increasing customer wins, our CoolerOne Design Solutions platform will be able to shorten the cycle time from design to manufacturing. Our goal is to be at one year or less. Like what we're doing with the U.S. Army battery pack design, where we start the design in April 2023 and get to manufacturing readiness by April 2024. We think we can get there accelerating both our customers' return on investment and our product sales map. Next, Keith Cochran, our President and Chief Operating Officer, will provide operational updates.

Keith? Hello everyone and thank you for attending our Q1 23 earnings call. I am pleased to report highlights from our operations. In Q1, our operations expanded to Webster in San Leon, Texas. Our Webster facility is the center of excellence for our Cooler One battery design services. This location will support internal and external battery pack design, fractional thermal runaway calorimetry , which measures the total heat output of a cell in thermal runaway and the fraction of the total heat that is released through a cell's casing versus through its ejected material. This testing is crucial to understanding a cell's thermal event properties so proper protections are designed into a battery pack And we also do BOM calorimetry, which measures the thermal and gas characteristics in a cell thermal runaway. The facility is conveniently located to our customers near Houston, is close to a major international airport, and being in the middle of the country allows for short trips from our U.S.-based customers who want to visit our facility. Our San Leon facility is established to execute destructive testing for internal and external lithium-ion battery pack designs. Our testing facilities are modular and portable if needed. We will continue to expand our capacity as demand continues to increase. At present, we have significant backlog and expect further expansion of capacity in Q4-23. I am also excited to share COOLER has now deployed the only fully automated battery cell inspection and test system performing to NASA Work Instruction 37. This standard, which is the highest battery testing standard for NASA, is required for all manned flight missions. The system went live in Q1 to deliver fully tested and traceable cells to NASA, Department of Defense, and EVATOL, electrical vertical takeoff and landing customers. Further, we have received and executed our first NASA Johnson Space Center order for this advanced testing. We believe this exacting standard may also be adopted for EVATOLs acting as human taxis in the future. Again, we stand as the only fully automated inspection and testing option capable of meeting the standard. Cooler designed the system as modular, such that we can be flexible with capacity and mix. The equipment can test both 18650 and 21700 cells to adjust to mix and can easily be replicated as capacity demands increase. We have already done the hard work of establishing our manufacturing here in North America, limiting our future CapEx requirements and providing us with capital planning flexibility We should only have to invest in significant CapEx as we hit capacity constraints on our testing and screening equipment due to increasing customer demand. Over the past two years, Cooler focused on getting our brand and our capabilities recognized. We have successfully built significant brand recognition and are just in the early innings of monetizing that investment. Accordingly, we will reduce our spend in brand marketing in favor of targeted customer acquisition activities. As I mentioned, we anticipate continuing to invest behind our customer demand. Lastly, the team continues to focus on operational excellence. As such, we recently conducted an external audit of our quality management system, QMS, in preparation for our upcoming ISO 9001 annual audit. The results of the audit were outstanding, with the auditors giving high praise to our cooler team for elevating our QMS system during a significant growth ramp for the company. There were zero non-conformances found during the audit. I highlight this as our focus on quality and delivery has been recognized by our customers as industry leading. Their recommendations to other companies have led to multiple recent wins for cooler. And that is the best marketing of all. The team and I are quite proud that our customers are singing our praises to their peers. As such, we have now expanded operations to accommodate that growth. I am pleased with the performance of all areas of operations in Q1 and feel we are very well prepared to deliver the rest of 23. Thank you. And now I will turn the call over to our CFO, Sean Cantor. Sean?