KULR Technology Group, Inc.

You are in the right place for the Cooler Technology Group first quarter 2026 earnings call for today, Thursday, May 14th. The call begins at 4.30 p.m. Eastern. Please hold on the line. You are in the right place for the Cooler Technology Group first quarter 2026 earnings call for today, Thursday, May 14th. The call begins at 4.30 p.m. Eastern. Please hold on the line. You are in the right place for the Cooler Technology Group first quarter 2026 earnings call for today, Thursday, May 14th. The call begins at 4.30 p.m. Eastern. Please hold on the line. You are in the right place for the Cooler Technology Group first quarter 2026 earnings call for today, Thursday, May 14th. The call begins at 4.30 p.m. Eastern. Please hold on the line. All right, welcome to the Cooler Technology Group first quarter, 2026 earnings call. I'm your host, Stuart Smith, and in a moment, I'll be joined by management from Cooler Technology Group. But before we can begin this call, please listen to these forward-looking statements covering the comments and the call today. The call today may contain certain forward-looking statements based on the company's current expectations, intentions, and assumptions that involve risk and uncertainties. Forward-looking statements made on this call today are based on information available to the company as of the date hereof. Cooler Technology Group'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 31st. 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 words such as anticipate, believe, could, estimate, expect, intend, may, should, and would, or similar words. All such forward-looking statements that are provided by management on this call are based on the information available at this time, and management expects that internal expectations may change over time. These statements are not guarantees of future performance and are subject to known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, the company assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise. Now with that, the call today will begin with opening comments. from Chief Executive Officer Michael Moe. We will then pivot to a question and answer portion where management will field questions that you have submitted via social media, email, and other medium. With that, I'll turn the call over to CEO Michael Moe. Michael, the call is yours.

Thank you, Stuart. Good afternoon, everyone. Thank you for joining. On our last earnings call, We told you 2026 will be measured by product revenue growth, gross margin improvement, and cost . Q1 showed progress against each of these priorities. Total revenue grew 98% year-over-year to $4.8 million compared to $2.4 million in Q1 2025. Product sales grew 84% year-over-year to $2.1 million. Overall blended gross margin was approximately 29% up from 8% of Q1 2025. Product sales gross margin was 26%. Total loss from operations decreased approximately 22% year over year. As we move from platform development into production scaling, we signed a new lease for additional 25,000 square feet of manufacturing space to support new battery production lines and high volume customer programs. We remain in solid financial position with approximately $19 million in cash as of today and approximately 1,085 Bitcoin in our treasury. We're committing all of our financial resources to our battery business and not acquiring any Bitcoin with cash. The only Bitcoin acquisition is through our existing BTC mining contracts. One quarter does not make a turnaround. A Q1 is evidence that the vision and discipline we commit to for 2026 is starting to translate into measurable results. Cooler is beginning to scale its battery business with better cost discipline and improved operating leverage. The core objective of 2026 is straightforward. Scale the Cooler One platform to build more batteries, sell more batteries, while converting customer traction into margin of creative revenue. Let me start with Kula One Air. Before walking through the program updates, I want to remind everyone why Kula One Air is positioned the way it is. On our last earnings call, I explained that the high-growth markets Kula serves, autonomous platforms, direct energy systems, and digital infrastructure share one common technical constraint, power density. Drums, robots, and other autonomous systems do not need batteries that simply store energy. They need batteries that can deliver power at 5 to 20 times the discharge rate of a standard battery, sustain that output through repeated high-demand cycles, and manage heat generated without failure. That's the engineering problem CoolerOne was built to solve. And it's the reason why our platform is gaining traction we're able to walk through. Power is the wedge. Every program update that follows is downstream from the core advantage. Quota One Air continues to gain strong traction with U.S. and NDA-compliant drone manufacturers. Our 6S3P lift battery is seeing broad adoption. In this quarter, we expanded to lift pack family with additional configurations designed specifically for long-duration flight applications. We've also advanced the Quota One Air power class for agriculture and heavy lifting applications. On the BMS side, we're on track with a customer for 6S, 12S, and 18S battery management systems targeting large UAV platforms. These are high-volume, high-demand applications and quarters well-positioned to serve them. We've also completed design of mil-spec EMI-resistant BMS for drone-based defense applications. Customer development activities is increasing across defense, aerospace, space, and unmanned systems. we're seeing especially strong growth in our UAS battery programs. Existing customers are launching new drone models that require entirely new battery systems. We have also expanded the platform's reach into two important directions, into humanoid robots, where we are now engaged with two customers, and into large Class 2 and Class 3 drones. Working with a broad base of battery cell providers in cylindrical, pouch, and prismatic format is central to building out the quarter one ecosystem. The same platform architecture paired with the best available cell technology is what gives quarter one a roadmap that extends well beyond current production configurations. Hulu One Air is now actively exploring configurations with NDA-compliant solid-state and lithium metal battery cell providers capable of exceeding 380 watt-hours per kilogram. I'm very excited about these developments. The same engineering discipline, build the architecture first, then bring the best cell technology to it, is what defines our work in space in Trident, which I'll cover next. On the space side of our operation, I want to start with the point that we made in our last earnings call. Cooler One Space is not just a product line. It's the program that sets the performance standard for the entire Cooler One portfolio. Space operates in an environment where battery failure is not recoverable. Every performance requirement met in a spacecraft, propagation resistance, thermal stability under extreme conditions, Certification under scrutiny raises the engineering baseline that Corolla 1 Air, MAX, and our maritime platforms inherit. Customers in defense drone, electric aviation, and AI data center programs are buying interconnected architecture that has already been qualified in the most demanding operating environments. With that as context, I'm pleased to report that Corolla 1 Space was selected by several additional LEO and GEO missions this quarter. This continues the validation that the platform and the trust our customers are placing in us for mission-critical applications. Our XLT and Reach series batteries remain in active deployment across multiple satellite programs in both LEO and GEO. Recent investments in our BMS are enabling higher radiation tolerance and improved current carrying capabilities, both critical for expanded space missions. I also want to give you a brief update on our Kula-1 Triton, our maritime battery family. Prime extends the same engineering principle I just described. the architecture-first, safety-first standards developed for space into autonomous surface and subsea systems. We're developing and testing Triton in partnership with several OEMs, bringing aerospace-grade and Navy 9310 reliability standards to a market where battery failure underwater carries similar non-recoverable consequences. Consistent with the self-partnership theme I covered earlier, We're currently testing trying across multiple chemistries, solid state, nickel metal hydride, and small format lithium iron to identify the optimal configuration for next generation autonomous maritime vehicles. It's an exciting and fast-growing market and Quora's building the right foundation to compete in it. Moving to our data center platform, on our last earnings call, we described the ship underway in the industry. If AI workloads grow and hardware becomes more power-intensive, battery backup is moving out of the dedicated UPS room into computing rack itself. A battery operating next to the processor it protects must meet higher safety standards, handle higher voltage, and respond faster than conventional backup systems. This is the opportunity for Quora 1 Max is built for. This quarter, Quora attended the Open Compute Projects European Summit, where we met with major data center OEMs. Our focus was to license our PPR and thermal management IP for data center BPU applications. The data center market is enormous, and Corda's PPR architecture and thermal expertise give us a technology edge that OEMs want access to. We'll continue to advance the design and optimization of our Corda One Max, our 48-volt high-power PPR BPU platform. Progress this quarter includes advance in power conversion efficiency, continued development of our custom distributed BMS, and PPR testing for higher energy 21700 cells. We're targeting edge, AI data center, and telecom infrastructure with this platform. Speaking of telecom infrastructure market, we observed a shift underway in telecom industry 5G rollouts and rising uptime requirements are pushing operators away from legacy lead asset systems towards lithium-ion. And at the same time, operators are looking to move battery backup assets off the balance sheet entirely, shifting CapEx from non-recurring revenue assets into lower-cost OpEx models with clear total cost of ownership advantages. Quota's position in this market is unique. we're demonstrating to operators that we have a proven safe and reliable option to contract the mission critical DC power as a full service and never have to buy a battery again. Our platform pairs the crew level and battery architecture with operational and financial structure. Operators need to make that transition. On execution this quarter, we delivered production battery pack against our existing supply commitments. and we remain on track with the manufacturing consolidation milestones we outlined on our last earnings call. Beyond those committed programs, we now have over half a dozen engagements with telecom service providers on cooler one battery as a service, a clear sign that the market opportunity that we described in March is materialized. Next, I'd like to address the board changes we announced on April 28th. We appointed two new directors, Ben Frank from Microsoft and Mr. Mike Kimmel, and at the same time, streamlined the board to three members, two of whom are independent. The smaller, more focused board is itself part of the operating principle message. It reduces SG&A and ensures that every director seat directly contributes to expertise that we need to scale. These two appointments are not generic board additions. Each one was able to fill a specific gap that becomes critical as Cooler moves from platform development into platform monetization. Mr. Frank is the Director of Workforce AI Solutions Engineering at Microsoft, where he leads engineering teams supporting large enterprise customers deploying AI platforms within Microsoft's energy and resource organizations. Microsoft is one of the best technology companies in the world that won its markets by building an ecosystem platform and then opening that platform to broad range of partners, customers, and developers. That's the playbook Cooler is running with CoolerOne. The CoolerOne ecosystem is built as follows. Opening the architecture to multiple cell chemistry partners across cylindrical, pouch, and prismatic formats. Build the battery management software electronics to increase customer stickiness to the quota one platform. Pursuing IP license for AI data center BPU applications and expand the customer base in defense, aerospace, maritime and humanoid robotics. Ben brings firsthand experience from inside the most successful enterprise ecosystem company of the modern era. applying directly to AI-driven industries that are core, cooler, and markets. Dr. Kimmel has more than 30 years of experience as corporate executive, consultant, and academic, specifically focused on pricing strategies and margin performance. He holds a PhD in economics from UCLA and has previously held senior pricing positions in OmniSource, Toyo Tires, and Sears Holdings. His expertise is perfectly aligned with our 2026 mission, build and sell more batteries for product revenue growth, higher margins, and reduced costs. Dr. Kimball's appointment is how we institutionalize that progress, bring discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top-line growth. Before turning the call over, I want to share one observation about where the industry is headed. In recent weeks, a publicly traded UAV component company has agreed to acquire a US drone battery manufacturer for over $50 million. Adding battery capabilities to a portfolio that over the past 12 months has been assembled through separate acquisitions of drone software, motor manufacturing and distribution, alongside a 75 million strategic materials purchase. We viewed this as validation. The UAV and broader autonomous system supply chain is consolidating around three requirements. NDA compliance, domestic vertical integration, and a complete component ecosystem rather than a single product. That's exactly the platform that Cooler has been building organically with in-house engineering for the last few years. Let me put our position in context. Cooler already operates over 31,000 square feet of vertically integrated R&D and production facility in our headquarter in Webster, Texas. And we're adding another 25,000 square feet of manufacturing capacity in Q2. Our portfolio span NDA compliant battery packs, custom battery management system and electronics, thermal management IP, and platform architecture qualified across strong space, maritime, AI data center, and telecom applications. We engineered the battery cell partnerships, the cell agnostic architecture, the BMS, and the safety system together, and we're doing it for end markets that extend well beyond UAVs alone. When the industry is paying over $50 million for a battery pack manufacturing operation for UAV, It tells you what the market now believes domestic vertical integrated battery capabilities can be valued at. The market will be moving and evolving towards an ecosystem platform that Cooler has been investing and building for multiple end markets for many years. We're focused on building more batteries and selling more batteries. Now back to you, Stuart.

All right. Thank you, Michael. Now let's pivot into the investor questions that have been sent in. Here is the first question, Michael, and it is, what were the primary drivers of Q1 2026 revenue? And how should investors think about revenue visibility for the remainder of 2026?