KULR Technology Group, Inc. (NYSE : KULR) shareholder update call for 4:30 PM EDT from Tuesday, November 17th, 2020. Michael Mo, KULR’s CEO, answers questions and provide a business update for the Company.
Third Quarter 2020 Financial Highlights: Third Quarter 2020 vs. Second Quarter 2020
Raised $2,300,000 of gross proceeds from issuance of notes payable, net of commitment fees, of which $375,000 was subsequently repaid;
Raised $1,395,000 of gross proceeds from the issuance of common stock;
Increased cash balance by over $2 million to $2,809,656 at September 30,2020 from $767,906 at June 30, 2020;
Increased shareholder equity by $417,779 since June 30, 2020; and
Revenues of $136,849 declined from $201,128 in the previous quarter as a result of supply chain delays in sourcing and delivering materials.
Third Quarter 2020 and Recent Operational Highlights
Partnered with a global electronics and battery manufacturer to build Internal Short Circuit (ISC) battery testing technology and to license KULR’s thermal runaway shield (TRS) technology to the partner in a commercial phase.
Provided the Federal Aviation Administration (FAA) with ISC technology to evaluate passenger lithium-ion battery malfunctions that can cause fire and smoke incidents aboard aircrafts.
Partnered with Airbus Defense and Space for use of KULR’s passive propagation resistant (PPR) solutions for research into lithium-ion battery safety and testing in flight applications.
Awarded contract to supply NASA with fireproof storage solutions for the Microsoft Surface Pro 5 hybrid notebook computers used aboard the International Space Station.
Signed a dual-use technology development agreement with NASA’s Marshall Space Flight Center (MSFC) to build 3D-printed battery systems for manned and robotic space applications.
Awarded two patents by the U.S. Patent and Trademark Office:
- Patent no. 10727462 for the Company’s TRS technology, which reduces hazardous risks associated with thermal runaway in lithium-ion battery packs
- Patent no. 10734302 for the Company’s fiber thermal interface (FTI) technology, a NASA-grade high-performance thermally conductive carbon fiber material developed for a variety of applications, including space, automotive and electronics
Partnered with Silicon Valley-based Drako Motors to use FTI fiber cooling technology for the Drako GTE, a new ultra-high-performance electric supercar.
Former Chief of Strategic Prioritization at the Pentagon, Dave Harden, joined KULR’s advisory board
Signed an agreement with Volta Energy Products to provide passive propagation resistant (PPR) technology for implementation in stationary energy storage modules from the grid.
Active participation in setting industry safety standards, with increasing involvement and collaboration with regulators and industry trade groups.
Participation in U.N. Working Group on lithium-ion classification
Partnership with Hazmat Safety Consulting
Membership with Outdoor Power Equipment Institute
Financial Results: Third Quarter 2020 vs. Third Quarter 2019
Revenues: KULR generated revenues of $136,849 in the third quarter ended September 30, 2020, a decrease of 74% compared with revenues of $526,722 reported in the year-ago period. The decrease in revenue was mainly due to a large DOD contract of about $355,000 received during the three months ended September 30, 2019. The customer has pushed the next shipment of product to 2021.
In spite of the reduction in sales this quarter, we are pleased to have new customers and partners such as Airbus, Drako Motors and Volta Energy, which we expect to contribute revenue by 2021. These additions reflect management’s commitment to build new customer relationships through a growing pool of referrals and business development leads.
Selling, General and Administrative (SG&A) Expenses: Our SG&A expenses increased to $834,582 in the third quarter of 2020 from $546,982 in the corresponding period last year. The 53% increase in SG&A expenses was due to additional marketing and advertising expenses and non-cash stock-based compensation paid to employees and consultants.
R&D expenses: We reduced our R&D expenses in the third quarter of 2020 to $51,820 from $137,970 in the same period last year, reflecting a combination of headcount and salary reductions implemented in the first quarter of 2020.
Operating Loss: Our loss from operations was $810,520 for the third quarter of 2020, compared with a loss of $267,281 for the comparable quarter of 2019. The decline reflects lower sales and higher selling, general and administrative expenses.
Net Loss: Net loss for the third quarter of 2020 increased to $1,012,259, or a loss of $0.01 per share, compared with a net loss of $267,534, or a loss of $0.003 per share for the comparable period in 2019.
Cash Position: Cash was $2,809,656 at September 30, 2020, compared with $108,857at December 31, 2019. Effective February 27, 2020, the Company entered into a 24-month Standby Equity Distribution Agreement (“SEDA”) with an investor, pursuant to which the Company may, at its discretion, sell up to an aggregate value of $8 million in shares of the Company’s common stock at a price equal to 80% of the lowest daily volume-weighted average price for the five days immediately following the date the Company delivers notice requiring the investor to purchase the shares under the SEDA. As of September 30, 2020, we had approximately $5,847,300 available in connection with the SEDA, available to fund our ongoing operations
The Company has filed its Form 10-Q reporting its results for the three months and nine months ended September 30, 2020.