Welcome everyone to the Full Year 2023 Earnings Call for KULR Technology Group, Inc. Incorporated. The company is traded on the New York Stock Exchange, the NYSE under the ticker symbol KULR. I will be joined on the call today by the CEO of the company, that's Michael Mo, and the Chief Financial Officer of the company, Shawn Canter. The call will proceed as follows: we will get opening statements from both members of the management team; after those opening statements have concluded, we will welcome onto the call various analysts who will also be asking their questions directly to the company. At the conclusion of the Q&A portion of this call, we will then wrap up the call. With that, before the call can begin, please listen to the following statements. This call does not constitute an offer to sell or solicitation of offers to buy any securities of any entity. This call may contain certain forward-looking statements based on KULR’s expectations, forecasts, and assumptions that involve risks and uncertainties. Forward-looking statements made on this call are based on the information available to management as of the date hereof. The company'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 risk factors disclosed in their Form 10-K with the Securities Exchange Commission on March 28, 2023. 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 are provided by management on this call 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 their future financial performance given their current contracts, current backlog of opportunities, and conversations with new and existing customers about their products and services. The company 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 the CEO of the company, Michael Mo. Michael, the call is yours.

Thank you, Stuart. Thank you everybody for joining us today. 2023 was the most challenging, yet pivotal year for KULR. For most of 2023, we're working on paying down approximately $8 million of prepaid advanced convertible note that we owe to [YA] (ph). This outstanding debt really limited KULR’s ability to access capital in a market that had already been the most difficult for small cap companies in recent history. The difficulties in accessing capital really limited our ability to grow our business as we had to reduce our workforce by 15% and worked with our customers and partners closely to manage our operations. During 2023, we completed two equity financing for a total of approximately $3.5 million. We experienced significant shareholder value erosion during that process. We're not interested in doing that again. I'm happy to report that we have retired the entire prepay advance convertible note on March 27th of this year. Despite these challenges, 2023 was a transformational year for KULR as we achieved record revenue growth and built a solid foundation to grow in 2024 and beyond. 2023 total revenue increased 146% year-over-year to reach a record $9.8 million. Total number of customers increased from 36 to 53. Product sales revenue increased 161% and number of product sales customers grew from 33 to 39. Engineering services revenue increased 117%. Total number of engineering service customers grew from 14 to 17. In addition to the tremendous growth in our business, we have built an industry-leading technology platform for battery safety and thermal management and a world-class engineering team to execute our plan. I would like to share with you more about our KULR ONE platform and how it's serving some of the leading companies in the world. Generally speaking, every combination of battery application, storage and operational…

Thanks, Mike. You can see the financial results from our full year 2023, and our 10-K, which is now online. I'll touch on some highlights. 2023 was another record revenue year for KULR. KULR extended its growth trend, growing revenue at about 100% compound annual growth rate for the last two years. Additionally, KULR extended its trailing 12-month revenue growth record once again. KULR generated revenue of approximately $9.8 million versus $4 million in 2022, an increase of 146%. Product revenue increased 161% and service revenue was up 117% year-over-year. Gross margin for 2023 was 37% versus 59% in 2022. This reflects the increase in product sales and larger portion of revenue mix that management anticipates will scale revenue going forward. Revenue generating customers in 2023 numbered 53 versus 36 in 2022, a 47% increase. Revenue per customer in 2023 was approximately $185,000 versus approximately $111,000 in 2022, a 67% increase. KULR consumed less cash from operating and investing activities in 2023 than in 2022. Net cash used in operating activities decreased 31% year-over-year. Net cash used in operating and investing activities decreased 41% year-over-year. With that, back to you Stuart.

All right. Thank you, Shawn. And now we will begin the Q&A portion of this earnings call. First we have a call or questions from Jake Sekelsky. He is the Managing Director and Senior Research Analyst at Alliance Global Partners. And I'm going to be asking his questions for him this time. He was not able to make it today. So the first question is, what inventory management strategies are you looking at as SafeCASE sales ramp on the back of the eVTOL contract announcement?

Thanks, Stuart, it's Sean, I'll take that one. Our contract manufacturing partners hold buffer raw materials inventory and have capacity to support our demand on short notice. We'll hold minimal finished goods inventory to support small orders and have our supply chain ready to quickly fill large orders as they come in. I think this will put us in a good position for supporting customers, while maintaining our focus on improving our cash flow. Thanks.

Okay, very good. This next question is a two-part question. Do the recent award permits from the Department of Transportation for the safe transportation of EOL and DDR batteries have a specific timeframe that they are active for. Also, can you touch on some areas the new permit opens the door to?

Yes. I’ll take that. This is Michael Mo. On the SafeCASE special permit, they're good for three years. And the new permit really gives our OEM customers and also logistic partners more flexibility on how many smartphones, tablets, laptops, and power tools they can fit into each SafeCASE and SafeSLEEVE is really for business purposes. So we're working with top logistics shipping companies and e-commerce logistics companies to use these solutions for the OEM customers. It turns out that these logistic partners themselves have a lot of batteries for internal use, storage, and shipment. So as we explore more, we're finding new applications. Kind of like what we talked about in the prepared remarks, how we work with automotive OEMs, eVTOL customers, the more we get into their operation, the more application we find and now we're taking these application requirements and refine our solutions so they can serve these entire industry, entire new markets with the SafeCASE and SafeX technology. So we're super excited about these new applications opportunities and that we expect them to be a good revenue drivers going forward for us.

Thank you, Michael. All right, now we're going to be joined by Theodore O’Neill. He is the principal of equity research at Litchfield Hills Research. Theodore, you now have the call. Please proceed with your questions.

Thanks very much and congratulations on a solid quarter. I have two questions for you. My first question is, in the last three months, KULR’s announced projects or contracts with a leading global space innovator, Nanoracks, a leading automaker, the Army, Lockheed, and H55, and you received special permits from the DOT. Can you prioritize for us, if possible, the timeline for these to turn into recurring revenue and how big those markets might be?

Yes. So, thank you, Theo. We actually talked quite a bit about these customers in my prepared remarks and how they tie into our customer or our product roadmap. And really excited about these engagements. As you can see, they're in different markets. They're not correlated markets. And so that's really our diversification strategy on a customer base and reduce our risk. The service contract -- so to answer your question though, we always start with service contract revenue. As you can see, our service contract revenue start to grow 117% year-over-year. That's really indication of what can lead to future product revenue growth for us. The H55 engagement, for example, we start the contract services revenue about three years ago. Now you can see the ramp up in volume for over a million dollars worth of order. The Army DEFCOM contract, we started 18 months ago, and now we're delivering the prototype battery. In the Nanoracks, the prototype battery is delivered within nine months. So as you can see, we're shortening the design cycle for our customers. We're getting them faster time to market so they can win. And we expect that trend to continue. And each customer, frankly, has different life cycles and product ramp cycles. But the faster time to market that we [indiscernible] for them is why they choose KULR. Theodore O’Neill: Okay, that's helpful. My other question is that, you've opened an online marketplace. Which customers is this aimed at and who'd be buying online versus going directly to you and trying to negotiate some kind of contract?

Yes. Well, thanks for keeping it real up to date, because I think our online store just opened up a couple days ago. Theodore O’Neill: It did, yes.

Yes. Thank you. It is for both B2B and B2C customers. We're getting a lot of enquires from fire departments, hazmat teams, dangerous goods teams, companies as well as consumers directly inquiring about the SafeCASE. So we established the online store. We believe it's a good way to directly interface with our customers and can serve them in a scalable way. And in addition, we're also working with online and offline distributors who are focused on hazmat safety, dangerous goods industry. So stay tuned for more business partnership announcements in the future on additional distribution channels for us. Theodore O’Neill: Okay, thanks very much.

Thank you, Theo.

All right, Thank you, Theo. And now we'll be joined by Michael Legg, Sr. He is the Managing Director at Benchmark in Emerging Growth Research. Michael, the call is now yours. Please provide us with your questions.

Thanks. Michael, Shawn, great job [indiscernible] get off the balance sheet. I know that has to be a large part of your focus at the end of the 2023 and the end of the 2024. And want to try to understand how much of that focus, now that you have that off the balance sheet and put back strategic growth getting more out the door. And, obviously the revenues in the fourth quarter were down sequentially from the previous quarter. Was any of that impacted by the cash on the balance sheet or ability to get product out the door? Kind of want to get into the revenue run rate where we're at now and how you see that going forward. So let's just start there, please.

Yes, Michael, thank you. Yes, I'll take that. So, I mean, the outstanding debt that we had throughout 2023, also first part of 2024, which we just got completely paid off and retired, was very, very consuming for the management to solve that. In my prepared remarks, I talked about how that really choked off access to capital, that really forced us to work very closely with our customers and partners on our operations and cash flow. I would say that that had an impact in our performance leading to the second part of 2023. And we had to cut workforce. We had to put certain programs on hold to focus on the right programs to serve -- I mean every customer is a good customer, but some customers are more urgent so we have to prioritize if you will. So yes, I know I had a real impact on not just the management time frame -- the resources, the mindshare, but also operations. But we're certainly glad that that's out of the way. And Shawn and I and the entire team can really focus on the business. Meanwhile, super proud of the team in executing on the technology side, on the infrastructure side, operations side, and getting huge growth in customer engagements, huge growth in revenue per customer, and I think we're just setting up the stage for a very strong future growth.

Great. And when you look at all these new contracts you're bringing on, What type of visibility do you have into those for when deliveries will be? And how much lead time on that do you usually have?

I would say that the engineering service contracts are hopefully getting shorter and shorter. Like I said, the Nanoracks delivery was nine months. So some of these engineering service contracts still, I'd say conservatively, nine to 18 months, design, qualification, testing, prototype, so forth. And then you get to starting to ramp. And so, you're looking at 2024, getting the 2023 customers to ramp, and then you get 2024 customers, or end of 2023 customers start going to pilot productions in 2024, 2025. And yes, I think that's probably a 12 to 18 months [indiscernible] story, Mike.

Okay, great. Congrats and nice to see all the progress and look forward to 2024.

Great. Thank you so much.

All right, well with that, that was our last set of questions from Michael and we want to thank Michael, Theodore, and Jake for providing their questions to us here today. That now concludes our call. Ao I will turn the call back over to our operator Tom to end the call.

Thank you, Stuart. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you for your participation.