KULR’s Q1 revenue increased by 439% year-over-year as we continue to make significant investments in all areas of our business to sustain and expand in 2021 and beyond. We are pleased to announce the Company recently raised $6.5 million in capital on May 20, 2021. Our belief is that this investment validates the value our new investors see in KULR’s ability to commercialize within additional e-mobility markets. This funding is expected to significantly strengthen the Company’s balance sheet and further advance KULR’s up listing process to a senior U.S. exchange.
KULR’s business model continues to evolve as the Company focuses on near-term commercialization opportunities for its technology in the energy storage, electrical transportation, and battery transportation markets. We recently announced our first new smart battery product for the commercial drone market. This is the opening step of KULR’s overall strategy to target adjacent markets complimentary to our established battery safety and thermal management products to expand into additional e-mobility markets in 2021. Additionally, we have targeted using our carbon fiber technology inside battery cells to make lighter and safer batteries with fast charge capability.
First Quarter 2021 and Recent Operational Highlights
In April 2021, KULR announced the June 2021 launch of a new product line of high-capacity lithium battery packs targeting the $127 billion commercial drone market, according to PricewaterhouseCoopers. The Company recently secured a global commercial drone manufacturer as a customer and expects to secure additional customers in the second half of 2021.
In March 2021, Keith Cochran joined KULR as President and COO. Mr. Cochran was previously SVP of Global Business Unit at Jabil where he was responsible for the $3.7B smartphone business and managing over 65,000 employees in US and Asia. Keith brings over 25 years of experience in business operations, supply chain management and large-scale manufacturing automations.
KULR became the official thermal management and battery safety technical partner for Andretti Technologies, the advanced technology arm of Andretti Autosport, founded by Michael Andretti. As part of the alliance, KULR will establish a thermal management testing and design platform for high performance battery solutions with the highest safety ratings specially adapted to the rigorous technical requirements of Andretti’s global racing enterprise. Both partners will also focus on co-developing and co-marketing motorsports’ battery and safety technologies to automotive partners for mass market EV applications.
KULR strengthened its Board by the appointments of Joanna D. Massey and Morio Kurosaki as directors, contingent upon the Company’s common stock being approved for up listing to a senior national exchange and expect their involvement to strengthen our corporate governance and strategic direction.
In April 2021, KULR announced former Jabil Operations Manager, Antonio Martinez, as new Vice President of Operations. Mr. Martinez will be responsible for managing day-to-day operations of the Company’s manufacturing department as well as supporting strategic growth goals. Mr. Martinez joins KULR with over 37 years of leadership and worldwide manufacturing experience in Electronics Manufacturing and Operations.
KULR announced it was expanding its manufacturing presence to a new, larger facility in San Diego, CA to accommodate continued business growth.
Financial Results: First Quarter 2021 vs. First Quarter 2020
Revenues: KULR generated revenues of $417,905 in the first quarter ended March 31, 2021, an increase of 439% compared with revenues of $77,500 reported in the same period of 2020. The increase in revenue was mainly due to new orders received for products and engineering services for military and aerospace customers. The Company continues to build its relationships with a wide range of energy, transport and aerospace partners and actively served 13 customers in the quarter ending March 31, 2021.
These results 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 $1,492,811 in the first quarter of 2021 from $465,410 in the corresponding period last year. The 220% increase in SG&A expenses was due to additional marketing and advertising expenses, consulting fees and non-cash stock-based compensation paid to employees and consultants.
R&D expenses: We increased our R&D expenses in the first quarter of 2021 by 10% to $122,983 from $111,713 in the same period last year, reflecting a combination of headcount and process improvements implemented in the first quarter of 2021.
Operating Loss: Our loss from operations was $1,473,157 for the first quarter of 2021, compared to $529,666 for the comparable quarter of 2020. Higher selling, general and administrative costs offset higher sales.
Net Loss: Net loss for the first quarter of 2021 increased to $1,714,723 or a loss of $0.02 per share, compared with a net loss of $550,253, or a loss of $0.01 per share for the comparable period in 2020.
Cash Position: On March 31, 2021, we reported cash balances of $6,166,755 on March 31, 2021, compared with $8,880,140 on December 31, 2020. Subsequently, on May 20, 2021 we raised an additional $6.5 million in a preferred convertible financing agreement. This funding leaves us well positioned to expand operations, support new business, and fund ongoing product development despite the difficult Covid inspired trading conditions experienced through the latest quarter.