KULR Technology Group Reports First Quarter 2022 Financial Results
May 16 2022 - 1:36PM
KULR Technology Group, Inc. (NYSE American: KULR)
(the "Company" or "KULR"), a leading developer of next-generation
lithium-ion battery safety and thermal management technologies,
today reported results for the first quarter ended March 31, 2022.
First Quarter 2022 and Recent Operational
Highlights:
- Selected by a multinational technology conglomerate to supply
proprietary carbon fiber solution for core component in the sensing
of electrical nerve signals to control navigation through virtual
environments. This foundational partnership marks KULR’s entry into
the Metaverse, where the Company believes it has additional
opportunities to support this growing industry.
- Secured a battery safety contract with NASA to test the
Company’s lithium-ion cells for future battery packs designed for
the Artemis Program, a series of US-led international human
spaceflight programs. KULR is processing up to 10,000 lithium-ion
cells per week as well as preparing for tests performed by NASA,
the Department of Defense (“DoD”), and others performing manned
flighted missions.
- Awarded three additional contracts with DoD prime contractors
to implement the Company’s carbon fiber cathode solution for
high-power magnetic and other covert pulse weaponry
initiatives.
- Appointed former NASA Johnson Space Center senior leader Dr.
William Walker as Director of Engineering. Dr. Walker will work
with the Company’s engineering team on its next generation
high-performance computing (“HPC”) and hypersonic vehicle thermal
management initiatives.
- Released a passive propagation resistant (“PPR”) solution in
its KULR-Tech Safe Case product family for maritime lithium-ion
battery safety. The PPR solution meets the upcoming United States
Coast Guard’s new safety requirements for the passenger vessel
industry and provides additional battery safety options for the
cargo, fishing, and cruise verticals. The Company’s solution
prevents cell to cell thermal runaway propagation as well as heat,
fire, and explosion from exiting the KULR-Tech Safe Case
enclosure.
Subsequent EventsOn May 13, 2022, KULR entered
into separate transactions for both a note and a standby equity
purchase agreement, allowing the Company to access up to $55
million in additional capital for procuring battery cell supplies
as well as other key materials. The Company is securing inventory
allocations in anticipation of ongoing demand from its key end
markets. In total, KULR expects to procure lithium-ion battery
cells providing up to 500-megawatt hours (“MWh”) of energy
capacity, enough to power approximately 40,000 homes using
currently available domestic energy storage options. Within
applications for the energy storage and e-mobility markets, the
battery cell supplies would equate to a revenue opportunity of
$250-$350 million. To further control supply chain and
manufacturing costs and risks, the Company also intends to use
these funds to bring much of its production capabilities to North
America.
Additional details regarding the transactions can be found in
the Company’s Form 8-K filing with the Securities and Exchange
Commission.
Management Commentary“In the first quarter we
took demonstrable steps to support our current operations and
future-proof our business in the face of ongoing supply chain
challenges and mandated COVID-19 lockdowns in China,” said KULR CEO
Michael Mo. “During the period we saw significant inventory buildup
in China that delayed over $300,000 in revenues, which we expect to
report in the coming quarter. In response to these challenges and
potential roadblocks going forward, we’ve taken decisive action in
solidifying our access to capital and procuring high-value and
high-demand battery supplies. Over the coming year, we expect to
procure battery cell supplies equaling up to 500 MWh of energy
capacity to ensure we can continue to meet the outsized customer
demand we are seeing. Longer term, we plan to consolidate many of
our production activities to the U.S. as well.
“We are continuing to invest and focus on our core growth
segments in energy storage, e-mobility and safe transportation of
lithium-ion batteries with the full battery management lifecycle.
As we further commercialize these areas, we will leverage our
innovative R&D capabilities and products and also reference our
partnerships in aerospace, defense, government and regulatory
sectors.”
First Quarter 2022 Financial
Results Revenues: In the first
quarter ended March 31, 2022, revenue decreased to $200,000 from
$418,000 reported in the same year-ago period. The decrease in
revenue was primarily due to decreased product revenue caused by
mandated COVID-19 lockdowns in China, which impacted the Company’s
ability to ship finished goods. Lockdown protocols were alleviated
in early second quarter of 2022, allowing these products to ship
and the Company booked revenue of $325,000 related to the affected
sales in Q2 of 2022.
Cash: As of March 31, 2022, the Company had
$10.1 million of cash compared to $6.2 million in the same year ago
period.
Gross Margins: Gross margin was 39% in the
quarter ended March 31, 2022, compared to 34% in the same year ago
period.Selling, General and Administrative (SG&A)
Expenses: SG&A expenses increased to $3.5 million
in the first quarter of 2022 from $1.5 million in the same year-ago
period. The increase in SG&A expenses was due to stock-based
compensation issued to employees and consultants, labor costs, and
general sales and marketing activities.R&D
expenses: R&D expenses in the first quarter of
2022 increased to $721,000 from $123,000 in the same period last
year. The increase was due to increases in new engineering hires,
investments in manufacturing automation, new product developments,
and research in high-areal capacity battery electrodes and
solid-state electrolyte.Operating Loss: Loss
from operations was $4.2 million for the first quarter of 2022,
compared to $1.5 million from the same period last year. The
increased operating loss was driven by higher SG&A and R&D
costs combined with a year-over-year gross profit decrease of 46%,
as a result of impacted product revenue caused by COVID-19
lockdowns in China. Net Loss: Net loss
for the first quarter of 2022 increased to $4.1 million, or a loss
of $0.04 per share, compared to a net loss of $1.7 million, or a
loss of $0.02 per share from the same period last year.
Conference CallThe Company has scheduled a
conference call for Monday, May 16th, 2022, at 4:30 pm ET to
discuss these results. Michael Mo, KULR’s CEO; Keith Cochran,
President & COO, and Simon Westbrook, CFO, will provide a
business update for the Company followed by a question-and-answer
period.To access the call:Dial-In Number:
1-857-232-0157Access Code: 422095Please call the conference
telephone number 10 minutes prior to the start time. If you have
any difficulty connecting with the conference call, please contact
Gateway Investor Relations at 949-574-3860.The conference call will
be available for replay here and via the Investor
Relations section of KULR’s website.About KULR Technology
Group Inc. KULR Technology Group Inc. (NYSE American:
KULR) develops, manufactures and licenses next-generation carbon
fiber thermal management technologies for batteries and electronic
systems. Leveraging the company’s roots in developing breakthrough
cooling solutions for NASA space missions and backed by a strong
intellectual property portfolio, KULR enables leading aerospace,
electronics, energy storage, 5G infrastructure, and electric
vehicle manufacturers to make their products cooler, lighter and
safer for the consumer. For more information, please
visit www.KULRTechnology.com. Safe Harbor
StatementThis release does not constitute an offer to sell
or a solicitation of offers to buy any securities of any entity.
This release contains certain forward-looking statements based on
our current expectations, forecasts and assumptions that involve
risks and uncertainties. Forward-looking statements in this release
are based on information available to us as of the date hereof. Our
actual results may differ materially from those stated or implied
in such forward-looking statements, due to risks and uncertainties
associated with our business, which include the risk factors
disclosed in our Form 10-K filed with the Securities and Exchange
Commission on March 28, 2022. Forward-looking statements include
statements regarding our 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 in this
release 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 our future financial performance
given our current contracts, current backlog of opportunities and
conversations with new and existing customers about our products
and services. We assume no obligation to update the information
included in this press release, whether as a result of new
information, future events or otherwise.Media
Relations:Annika HarperThe Antenna
GroupKULR@antennagroup.comInvestor Relations:Tom
Colton or Matt Glover Gateway Investor RelationsMain: (949)
574-3860 KULR@gatewayir.com
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