KULR Technology Group, Inc.

Welcome to the Cooler Technology Group second quarter earnings conference call. Cooler Technology Group is a publicly traded company on the New York Stock Exchange, traded under the ticker symbol KULR. My name is Stuart Smith, and I will be the moderator for the call today. Today's call will include opening statements from members of the Cooler Management team, including Chief Executive Officer Michael Moe, President and Chief Operating Officer Keith Cochran, as well as Chief Financial Officer Sean Cantor. After that, we will transition to the Q&A portion of the call, and we'll be joined by analysts who have been covering the company. Before I introduce and turn the call over to Michael Moe, please pay attention to the following Safe Harbor statement. The 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 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 Cooler 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 their Form 10-K filed with the Securities Exchange Commission on March 28, 2023. 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 that is 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 the company's future financial performance given Cooler's current contracts, current backlog of opportunities, and conversations with new and existing customers about their products and services. Cooler Technology Group 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 will turn the call over to Chief Executive Officer Michael Mo. Michael, the call is yours.

Thank you, Stuart. Thanks, everyone, for joining the Cooler Q2 2023 earnings call. This is Michael Mo. I'm the CEO and co-founder of Cooler Technology Group. I'm pleased to report that we achieved a record revenue quarter in Q2 2023. While our overall revenue grew approximately 360% year over year, our service contract revenue grew over 2,300% year over year. Our business model and customer engagement process starts with design and testing services for our customers. We expect the strong growth in our service contract revenue as an early indication of our overall revenue growth potential in the future, which will be driven largely by product sales rent. In Q2 of 2023, our product sales revenue grew approximately 250% year-over-year. as multiple customers across multiple product markets started mass production and deployment of their products and services. This impressive growth is largely fueled by our Q1 platform. Since we officially launched the Q1 platform at CES in January this year, the market reception has been overwhelming. In April, Cooler was awarded a $1.13 million U.S. Army contract to develop next-generation high-energy battery packs employing the Cooler One design solutions platform. Cooler will fast-track this new design through prototyping phase and into manufacturing readiness for U.S. Army's advanced aviation applications. Development activities began at the end of April in 2023 and are slated to run through early 2024. Management believe this timeline sets a new standard for what could have historically taken several years. Cooler has also received an additional development contract for a branch within the United States Armed Forces to develop high energy battery packs for uninterruptible power supplies for mobile command centers. Cooler partnered with a world leading provider of drone power delivery service, e-commerce package delivery service, Cooler will leverage our Cooler One platform and proprietary technology for the development of high-capacity lithium-ion battery pack for use in last mile delivery, which is the most expensive and time-consuming part of the shipping process. Cooler has partnered with a top five global manufacturer in the electric vertical takeoff and landing EVTOL market to utilize the CoolerOne platform to test their battery safety. Together, we will further advance EVTOL battery safety as federal regulators look to put forth certification rules for the emerging EVTOL air taxi market. Earlier today, we announced that we received a contract from a world's top-selling automaker for testing and analysis of high-energy battery cells for their next-generation electric vehicles. We will utilize the quarter one design solutions platform to accelerate design readiness for the automaker's advanced EV roadmap. Another growth engine for us is our safe case product line. In June, we announced a joint collaboration with Serpa Solutions to establish a national groundbreaking program for high-wattage lithium-ion battery packaging for recycling. Serpa Solutions is the largest and the most comprehensive battery materials and management processor for end-of-life EV batteries and gigafact manufacturing scraps. This collaboration focuses on developing a safe transportation platform for original equipment manufacturers to store and transport prototype, end-of-life, damaged, defective, and re-quality mount batteries up to 2.5 kWh by utilizing Cooler's SafeCase product line and SERPA's nationwide logistics and recycling services. Together, we're serving some of the largest customers, such as EV manufacturers, smartphone makers, consumer electronics companies, gigafactories, large retailers, and operators for the battery recycling needs. In addition to the CoolerOne and SafeCase, our engineering team continues to advance our energy management platforms across multiple fronts. We'll be integrating wireless sensors, vehicle onboard capabilities, and a cloud-based user interface to the next generation cooler Vibe platform. So it can best serve new markets such as drone delivery, electric aviation, and also industrial applications. We expect to launch this new platform with strategic customers and partners in 2023. Our vision is to integrate all these hardware, software, and services together to generate the most amount of valuable proprietary data across our platforms. We expect to unleash the full potential of this data product and service platform when we integrate machine learning and AI capabilities to provide the most comprehensive data safety intelligence in the industry. Next, Keith Cochran will provide operational updates. Keith, please.

Hello, everyone, and thank you for attending our Q2 23 earnings call. I am pleased to report highlights from our operations. In Q2, our operations team continued to display superior performance while executing our impressive revenue growth. The team held an exhaustive customer quality audit in May and completed the annual ISO 9001 audit in June. In both cases, There were zero non-conformances. This once again demonstrates the organization's commitment to delivering a best-in-class quality management system to support our customers. As discussed in our last call, Cooler has expanded our facilities to Webster in San Leon, Texas. The expansion has gone as planned, and the sites are rapidly growing with the engineering talent. We will continue to see additional expansions as we move into the second half of the year. As noted, our Webster facility is the center of excellence for our Cooler One battery design services. This location supports internal and external battery pack design, fractional thermal runaway calorimetry, IZM mapping, and many other testing services. The team have been very successful in earning the trust of very large automotive OEMs, as well as Tier 1 direct-to-consumer online retailers, which have awarded cooler purchase orders for these services. Our intentions are to further expand our capabilities and facilities in the Houston area as we continue to see significant demand growth. Accordingly, we anticipate moving to a larger facility in Q124 in support of engineering growth, and also as we return a large portion of our thermal runaway shield manufacturing back to the U.S. for automated assembly in-house. We shared last quarter our development of the only fully automated battery cell inspection and test system performing to NASA Work Instruction 37. We were able to process more than 20,000 18650 cells for the quarter, and the automation is working as planned. We are also on track to begin introducing 21700 cell testing in Q423 in line with customer demand. Again, this is the highest battery cell testing standard for NASA and is required for all manned flight missions. We are seeing strong interest from multiple industries and agencies for this level of testing to support mission-critical applications. I am very pleased with the performance of all areas of operations in Q2. And Phil, we are very well prepared to deliver the rest of 23 through this continued time of rapid growth for Cooler. Thank you. And now I will turn the call over to our CFO, Sean Cantor, for a financial overview.