KULR Technology Group, Inc.

Welcome everyone to the Cooler Technology Group second quarter 2024 earnings call. Cooler Technology Group is traded on the New York Stock Exchange under the ticker symbol KULR. In just a moment, I will be joined by the CEO of the company, Michael Moe, as well as by the CFO of the company, Sean Cantor. As usual, like the calls in the past, today's call will cover opening comments from both Michael Moe and Sean Cantor, and then it will be followed by a Q&A session where the company representatives will answer questions that were emailed in to the company for this call. Now, before we get started on the call, we do need to cover the safe harbor statements. This call does not constitute an offer to sell or solicitation of offers to buy any securities of any entity. This call contains 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. The 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 their Form 10-K statement with the Securities and Exchange Commission on April 12, 2024, as may be amended or supplemented by other reports the company files with the Securities and Exchange Commission from time to time. Forward-looking statements include statements regarding their expectations, beliefs, intentions, or strategies regarding the future and can be identified by forward-looking statements such as anticipate, believe, could, estimate, expect, intend, may, should, and would, or similar words. All forecasts are provided by management made on this call are based on the information available to them 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 with conversations ongoing, and conversations with new and existing customers about their products and services. The company assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise. With that, I'll turn over the call to Michael Moe. Michael, the call is yours.

Thank you, Stuart. This is Michael Moe. Thanks to everyone for joining us today. I'd like to go over some of the financial and operational highlights with In Q2 2024, we achieved revenue of $2.43 million, up 39% sequentially from Q1. Engineering service revenue increased 76% year-over-year to approximately $1.3 million, a record for Cooler. Total paying customer number increased 42% year-over-year to 27. Service revenue customer increased 100% year-over-year to 14, and product revenue customer increased 25% year-over-year to 15%. In Q2, Cooler makes significant investments to enhance the capabilities and talent within our battery center of excellence located in Webster, Texas. These investments are critical to our goal of driving revenue growth by providing comprehensive in-house product and service solutions that spend the entire lifecycle of battery design, testing, prototyping, and volume production all under one roof. I believe we are well positioned to resume year-over-year revenue growth in the second half of 2024 with our new customer wins. During this quarter, we moved into our new state-of-the-art 17,500 square foot facility. This expanded space was designed specifically to meet the growing demands of our battery design and testing contracts, supporting key industries such as aerospace, defense, electric mobility, and space exploration. This space is approximately 2.1 miles from NASA Johnson Space Center and is next to companies like Axiom Space, Leidos, Blue Origin, and many others. It's an ideal location to provide the one-stop shop for rapid turnaround design, testing, and production service to the surrounding ecosystem of aerospace customers. We now have vast majority of our battery engineering team in Webster, Texas to perform three key functions. Battery cell impact level testing, battery design and analysis, and battery production and engineering services. Our battery design testing capabilities are a key factor in establishing credibility in understanding and mitigating thermal runaway and lithium-ion batteries. We have accumulated extensive data on various cell chemistries, formats, and the reaction to different triggers. This growing data set directly informs ongoing improvements to the CoolerOne architecture. The impact of this work is already evident in this quarter as we secured a contract from top Japanese automaker for testing and analysis of high energy battery cells for the next generation electric vehicles. Once we complete our quarter Texas facility filled out by the end of Q3, we estimate our testing service capacity at approximately $2 million per quarter. These services include the NASA NASA's award-winning FGRC test, as well as various cell impact level abuse thermal runaway tests. These are high margin services that leads us to design better and safer batteries for our customers. Our battery design and analysis capabilities are a key differentiator. We assemble a team of seasoned design experts complemented by advanced computer modeling, and analysis tools allows us to deliver cutting-edge solutions in this critical area. In addition to our proprietary products and components such as thermal runaway shield and ISC trigger cells, we continue to provide and develop new technologies for thermal runaway cell body heating protection and ejecta mitigation. At the system level, We have developed Cooler's own radiation-tolerant battery management system for our space exploration customers. We're incorporating all these capabilities into the design analysis process to build a more robust Cooler One Space, Cooler One Guardian, and Cooler One Air batteries. In Q2, we also expanded our battery production capabilities. Being a one-stop shop for quote-unquote space and quote-unquote guardian customers is a big competitive advantage for us as these customers require speed and quality. We enhance our infrastructure by integrating our expert fabrication and sampling teams with on-site precision machine, which allows us to scale production quickly and efficiently. As you know, our service revenue is an early indication of potential product revenue. As we achieve record engineering service revenue for Q2, we're preparing for these service customers to go into prototype and production build in the near future. This is why we have been carefully and strategically investing in our production capabilities to bring one-stop shop service to our customers. A big driver for our service revenue and our motivation to invest in these capabilities is the cooler one-space market opportunities. The space economy is going to be $1.8 trillion by 2035, according to McKinsey. This is driven by commoditization of the space industry. The space battery market is estimated to grow to $6.35 billion by 2030. We expect our core-to-one space platform to play an important role in this market. Some of the key players in driving this tremendous growth in the space economy include the rapidly growing private companies such as SpaceX of new origin, continued growth of the traditional government prime contractors such as Boeing, Northrop Grumman, and new and upcoming companies like Voyager Space, Axiom Invest. Many of these are already cooler customers. During Q2, we made significant investments in the technology readiness level of our cooler one space battery architecture. which is already being utilized by Voyager Space and other partners for the upcoming missions. The Kula-1 space architecture is a scannable, safety-first battery design, developed with the goal of achieving NASA JSC 20793 certification for human spaceflight applications. Our efforts in Q2 also focus on commercialization of the Q1 space architecture to meet the specific mission requirements of the CubeSat and SmallSat industries. The first off-the-shelf commercial version of the Q1 space is a 200-watt-hour version that will be available in fall of 2024. This off-the-shelf solution is engineered to deliver an optimum balance of performance, quality, safety, and cost advantage positioning as the industry leader. These developments underscore our commitment to provide advanced battery solutions to meet the rigorous demand of this space exploration market and beyond. Next to Codavive. In addition to the traditional helicopter and drone delivery markets, we see good opportunity to apply Codavive to computer server fans and industrial fan applications. If AI demands exponentially more computing power and energy consumption, so does the need for cooling with both air and liquid thermal systems. For air cooling, fan performance is critical to drive enough airflow to cool the latest AI GPUs. Fan performance is limited by the vibration and rotor speed. By removing vibration, Cooler Vive can make fans run at higher speed with less energy, less noise, and generate more airflow, therefore providing more cooling to the AI chips. According to Morgan Stanley, the liquid cooling system for NVIDIA's GB200 Blackwell high-end rack costs more than $80,000, about 15 to 20 times the cost of an air cooling system for an existing rack of NVIDIA H100 chips. More than 95% of the current data centers use air cooling because of its maturity and reliability. There lies our opportunity. We're working on fans used by Facebook's Open Compute project servers. We're also working on higher speed fans that can be used to cool the highest performance AI servers. We expect to report performance results in new customers in the second half of 2024. Next, Sean Cantor will go over financial highlights. Sean?

Thanks, Mike. Our Form 10-Q for the second quarter of 2024 is now available online. Please refer to it for more details. I'd like to highlight three themes that we are focused on. One, growing revenue and relevant KPIs. Two, spending less cash. And three, stronger balance sheet. This slide shows key cooler full-year annual growth trends from 2021 to 2023. Total revenue up over 300%. Product revenue up over 360%. Service revenue up almost 220%. Paying customers up 165%. Revenue per customer up 54%. Huler is a growing business. Here's the trailing 12-month revenue chart starting from the first quarter of 2021. As you can see, growth doesn't always happen in a straight line. When you get a perspective, You can see the growth trend. Trailing 12 months revenue since the first quarter of 2021 is up almost 900% through the second quarter of 2024. Going from a broader perspective, now let's zoom in. Second quarter versus the first quarter of 2024, revenue is up 39%. Cooler is using less cash. Comparing the six months ending June 2023 and 2024, cash used from operating activities is down 7%. Cash used in investing activities is down 82%. For a combined cash use reduction of 13%. Cooler's balance sheet. Comparing the end of 2023 to the end of June 2024, cash plus accounts receivable up 40%. Liabilities, down 42%. Cooler's balance sheet is getting stronger. Back to you, Stuart.