KULR Technology Group, Inc.

call. Joining me on the call today will be Michael Moe, the Chief Executive Officer of the company, as well as Sean Cantor, the Chief Financial Officer of the company. I am Stuart Smith, and I will be your moderator for the call today. After we receive opening statements from both Michael and Sean, we will dive into a question and answer portion of the call, which will be the answering of questions submitted by you via email and social media. But before we begin the call, please listen to the following Safe Harbor statement. 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 company's actual results may differ materially from those stated or implied in such forward-looking statements or due to risk and uncertainties associated with Cooler Technology Group's business, which include the risk factors disclosed in their Form 10-K filed with the Securities and Exchange Commission on April 12, 2024, as may be amended or supplemented by other reports Cooler 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 words such as anticipate, believe, could, estimate, expect, intend, may, should and would or similar words. All forecasts provided by management on this call are based on 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 based 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 Technology Group 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 will now turn the call over to Michael Moe, CEO of Cooler Technology Group. Michael, the call is yours.

Thank you, Stuart. This is Michael Moe. Thanks to everyone for joining us today. Cooler closed out 2024 with a record quarter in Q4. Revenue increased to $3.37 million, up 44% from Q4 2023, while our operating loss decreased by 29% year-over-year. Gross margin was 64% in Q4 2024 compared to 29% in the same quarter, 2023. Product sale customers increased 35% to 53% in 2024 compared to 39% in 2023. Service revenue customers increased 100% to 34% in 2024 from 17% in 2023. By the end of 2024, Quoter had approximately $30 million in cash and $20 million in Bitcoin holdings. As of March 26, 2025, we have over $80 million in cash and Bitcoin holdings and no debt. Quoter is in its strongest financial position ever, with a rock-solid balance sheet, and 2025 will be a transformational year for us. Energy consumption and thermal management are the key bottlenecks for artificial intelligence, AI infrastructure, and applications. At Cooler, we will leverage our energy management expertise to serve multiple fast-growing markets in space exploration, robotics, physical AI at the edge, and AI infrastructure platforms. We expect to at least double our revenue in 2025 as we grow our energy management business and expand into new applications. To accommodate our growth, we're expanding our Webster, Texas headquarter. We've signed a lease for over 13,000 square feet of additional office space next door to our current facility, making the total size to over 31,000 square feet of manufacturing and office space. Our headquarter facility has received AS9100 certification, which is a significant milestone reflecting Cooler's dedication to producing the highest quality products within the aerospace and defense industries. AS9100 is the globally recognized quality management standard for organizations that design, develop, and provide aerospace, defense, and aviation products and services. We're now well positioned as the one-stop shop total solution provider to design, test, manufacture, and certified battery products of the highest quality in the United States. As you all know, we've been investing in our CoolerOne battery platform. We're now reaping the benefits of that investment. For our CoolerOne space product, we now have multiple customer engagements to design their 20793 compliant batteries. We're going through 20793 certification process now with NASA for one of our customers. We have quarter one space reference platform for 100, 200 and 400 watt hour batteries. We have our own battery management system, BMS, for both terrestrial and space applications that are radiation tolerant. We're entering production stage for both our quarter one space and Guardian customers in 2025. In addition to CoolerOne Space and Guardian products, we're seeing growing demand for battery-packed design and manufacturing services from U.S. companies developing drones and robotics. Defense tech and warehouse automation are two areas of particular interest. The new generation of defense tech companies are focused on innovating rapidly and delivering cost-effective systems to the battlefield. Bomb costs and performance are more important than ever. And Quota is focused on delivering cost-effective solutions for these companies by leveraging our supply chain and advanced technology portfolio across multiple projects. Robots for warehouse operations is another rapidly growing area, and these solutions are all battery operated. Safety is paramount in these applications, and Quota is able to offer companies in this space a range of solutions to improve safety profile and performance for their battery packs. NVIDIA CEO Jensen Huang has highlighted the emergence of physical AI, AI systems capable of understanding, interacting with the physical world as a significant rapidly growing market opportunity. He has referred to this sector as a multi-trillion dollar opportunity, particularly emphasizing the potential in robotics and autonomous machines. At Cooler, our exposure to this market began through our battery customer interactions. But we quickly realized that this is a massive market opportunity that we must participate in with more than just batteries. We will announce our strategic partnership to enter the robotics and physical AI market in the next few weeks. We announced on Tuesday that we now have 668 Bitcoins, which is more than two-thirds way towards our near-term goal of 1,000 Bitcoins. I get asked a lot about how we stomach the volatility in Bitcoin. Michael Saylor said it best, volatility is vitality. In this age of AI where things are transforming at a crazy rate overnight, someone may call it the deep sink moment, we better get used to volatility. I believe that to survive and to thrive in this new era of AI, Cooler needs to build a culture that embraces volatility so it can reduce the risk of our own deep-seek moments. Bitcoin's treasury strategy serves two objectives for us. One, we believe that Bitcoin is a long-term store of value that beats inflation and gains in value. Number two, it's a training ground for building dynamic corporate culture and execution cadence that positions Cooler to succeed in the new AI era. We're doubling down our commitment to BTC with BTC mining. We're actively exploring partnerships opportunities. As we roll out our AI products and energy management technology applied to AI data centers, we expect to apply them to BTC mining as well to reduce energy costs. Cathie Wood has predicted Bitcoin to reach $1.5 million by 2030. Michael Saylor is projecting Bitcoin to reach $20 trillion in market capitalization within the next four to eight years from the $2 trillion market cap right now. I hope they're both right. Speaking of Cathie Wood, I'd like to wrap up my portion of the presentation with her big ideas for 2025. AI, robotics, energy storage, and blockchain Bitcoin. These ideas are not isolated. Their convergence accelerates innovation, leading to potential growth or exponential growth to profound social impact that are fundamentally and structurally changing our financial systems. At Cooler, although we're a small company with limited resources, but we view this convergence as a generational opportunity for us to participate in. because we are all at the very early stage of AI, and we have not even yet start the physical AI and the robotics age yet. There'll be many deep-seeked moments to come, and we wanna be ready to take advantage of those moments. We'll focus on applications where we can add our expertise, and the existing business is disrupted by AI, and we can pivot to these businesses that could be accretive to cooler quickly. To give some context around our thinking and strategy, I'd like to share with you a couple of data points. In a recent interview at the Tokyo University in Japan, Sam Ellman, CEO of OpenAI, predicted that OpenAI's software programming AI agent will be the top one program in the world by the end of 2025. SoftBank CEO Matsuzawa expects AI intelligence to advance 1,000 times every technology cycle which lasts about two to three years. At that rate, we can expect AI intelligence to be 1 million times more intelligent than what they are today by the end of this decade. As these predictions become realities over the coming months and years, every company in the world will become an AI and software company. Cooler needs to get there as fast as possible. Now, before I hand the call over to Sean, I'd like to encourage you to check out our new website at www.cooler.ai. It's a fresh new look to showcase all of our products and services. Thank you very much. Next, Sean will discuss financial details.

Thank you, Mike. Let's cover some key highlights now for both the fourth quarter and the full year 2024. Topics worth noting include revenue, a record revenue quarter, and record revenue year for Cooler. Gross margin? Gross margin was up 100% fourth quarter 2024 over fourth quarter 2023. Operating expenses were down. We continued the trend of expanding our paying customer base and reduced our customer concentration. Cooler's balance sheet is strong. We have a meaningful net cash position with no material debt obligations. Our cash and Bitcoin holdings are worth over $80 million as of the close on March 25th. We established our Bitcoin treasury position in 2024 and now own 667 Bitcoin. Let's start with our income statement. In the fourth quarter, Cooler set a new revenue record. Revenue was approximately $3.4 million, and this is about 44% higher than the same period last year and 6% higher than the third quarter of 2024, which was then itself another revenue record quarter. In 2024, Cooler delivered $10.7 million of revenue, another revenue record for Cooler. This was up 9% from 2023, which was itself also a revenue record year. In 2024, product revenue was approximately $3.6 million, down 47% year over year, and service revenue was approximately $4.4 million in 2024, up 51% from the same period last year. In 2024, Cooler signed its first two revenue generating license agreements and recorded $2.7 million in revenue. We are excited about this business model and hope to be able to announce similar type deals in the coming quarters. Gross margin for the fourth quarter was 64% versus 29% in the same period last year. For the full year 2024, gross margin was 51% versus 37% in 2023 a 37 percent increase year over year. 2024 versus 2023 full-year R&D expenses were down 34 percent, and SG&A was down 16 percent. 2024 earnings per share improved 55 percent over 2023. Now let's spend a moment on customers. In 2024, Cooler had 71 paying customers, up from 53 in 2023. Paying product customers were up 36% from 39 in 2023 to 53 in 2024. Service customers were up 100% to 34 in 2024. In addition to expanding our customer base, we are reducing our paying customer concentrations. Now a few points on our balance sheet. Compared to the end of 2023, our balance sheet has improved materially. At the end of 2024, our cash balance sheet was $30 million. Our cash on hand was $30 million. Our current accounts receivable was $2.6 million. And we held $20 million in Bitcoin. Total assets were $63 million at 12-31-2024 versus $11 million at the end of 2023, up 479%. And we had no material financial debts. Total liabilities were down 2%. 58% to $5.5 million. Before moving on, as a reminder, we currently hold about 667 Bitcoin. Cooler has decided to early adopt the new FASB rule for marketing to market our Bitcoin holdings. So you'll see on our 2024 income statement, a line item called, quote, change in fair value of digital assets, unquote. At the end of 2024, this line item, was a $719,000 charge. This is a non-cash item. It just reflects the change in value from the purchase date to the mark date, in this case, 12-31-2024. It does not reflect that we sold any Bitcoin. Going forward, our Bitcoin holdings will be marked on a monthly basis. Back to you, Stuart.