Earnings call transcript: KULR Technology Q4 2024 revenue beats forecast

KULR Technology Group reported a significant revenue beat for Q4 2024, with earnings showing a 44% year-over-year increase. The company’s revenue reached $3.37 million, surpassing the forecast of $2.9 million by approximately 16.21%. Following the earnings announcement, KULR’s stock surged 19.86% in aftermarket trading, closing at $1.75. According to InvestingPro data, the stock has demonstrated high price volatility, with a remarkable 457% return over the past six months, despite being down 56% year-to-date.

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Key Takeaways

• KULR’s Q4 revenue exceeded expectations by 16.21%.
• The stock price increased by 19.86% in aftermarket trading.
• Gross margins improved significantly, reaching 64% in Q4.
• The company expanded its customer base, with paying customers rising from 53 to 71 in 2024.
• Strategic investments in AI, robotics, and space exploration are driving growth.

Company Performance

KULR Technology Group demonstrated strong performance in Q4 2024, with revenue increasing by 44% compared to the previous year. The company has made significant strides in expanding its customer base and improving its gross margins, positioning itself as a leader in the battery technology sector. With a market capitalization of $310 million and a moderate debt level, as indicated by InvestingPro data, the company maintains a debt-to-equity ratio of 0.52. This growth is aligned with broader industry trends favoring sustainable and energy-efficient solutions.

Financial Highlights

• Revenue: $3.37 million in Q4 2024, a 44% year-over-year increase.
• Full Year 2024 Revenue: $10.7 million, a 9% increase from 2023.
• Gross Margin: 64% in Q4 2024, up from 29% in 2023.
• Cash and Bitcoin Holdings: Over $80 million as of March 26, 2025.

Earnings vs. Forecast

KULR’s Q4 2024 revenue of $3.37 million surpassed the forecast of $2.9 million, marking a 16.21% positive surprise. This substantial beat highlights the company’s effective growth strategies and robust demand for its products.

Market Reaction

The stock’s 19.86% increase in aftermarket trading reflects strong investor confidence in KULR’s financial results and growth prospects. The stock’s performance is notable given its 52-week range, suggesting renewed interest from the market.

Outlook & Guidance

KULR expects to at least double its revenue in 2025, driven by strategic expansions into AI, robotics, and space exploration. The company is also continuing its Bitcoin treasury strategy, which it views as a long-term value store.

Executive Commentary

CEO Michael Moe emphasized the importance of energy consumption and thermal management in AI infrastructure, stating, "Energy consumption and thermal management are the key bottlenecks for artificial intelligence, AI infrastructure and applications." CFO Sean Kanter highlighted the strategic value of Bitcoin holdings, noting, "We consider BTC a good store value over time and therefore, a positive for Cooler shareholders."

Risks and Challenges

• Continued negative EPS forecasts could impact investor sentiment.
• The company’s reliance on emerging tech sectors may introduce volatility.
• Scaling operations to meet increased demand poses potential logistical challenges.

Q&A

During the earnings call, analysts inquired about KULR’s ongoing work with the U.S. Postal Service and developments in battery solutions for private space stations. The company confirmed its commitment to advancing these initiatives and exploring new market opportunities, including nuclear energy.

Full transcript - KULR Technology Group Inc (KULR) Q4 2024:

Stuart Smith, Moderator, Cooler Technology Group: Good afternoon and thank you for joining us for the Cooler Technology Group fourth quarter and full year twenty twenty four earnings call. Joining me on the call today will be Michael Moe, the Chief Executive Officer of the company, as well as Sean Kanter, the Chief Financial Officer of the company.

I am Stuart Smith and I will be your moderator for the call today. After we receive opening statements from both Michael and Sean, we will dive into a question and answer portion of the call, which will be the answering of questions submitted by you via email and social media. But before we begin the call, please listen to the following Safe Harbor statement. This call contains certain forward looking statements based on the company’s current expectations, forecasts and assumptions that involve risks and uncertainties. Forward looking statements made on this call are based on information available to the company 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 Cooler Technology Group’s business, which include the risk factors disclosed in their Form 10 ks filed with the Securities and Exchange Commission on 04/12/2024, as may be amended or supplemented by other reports KUHLER files with the Securities 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 forecasts provided by management on this call are based on information that is available at this time and management expects that internal projections and expectations may change over time. In addition, the forecasts are entirely based 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. Cooler Technology Group 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 Michael Moe, CEO of Cooler Technology Group. Michael, the call is yours.

Michael Moe, CEO, Cooler Technology Group: Thank you, Store. This is Michael Moe. Thanks, everyone, for joining us today. Quarter closed out 2024 with a record quarter in Q4. Revenue increased to $3,370,000 up 44% from Q4 twenty twenty three, while our operating loss decreased by 29% year over year.

Gross margin was 64% in Q4 twenty twenty four compared to 29% in the same quarter 2023. Product sale customers increased 35 to 53% in 2024 compared to 39% in 2023. Service revenue customers increased 100% to 34% in 2024 from 17% in 2023. By the end of 2024, quarter had approximately $30,000,000 in cash and $20,000,000 in Bitcoin Holdings. As of 03/26/2025, we have over $80,000,000 in cash in Bitcoin Holdings and no debt.

Quarter is in its strongest financial position ever with a rock solid balance sheet and 2025 will be a transformational year for us. Energy consumption and thermal management are the key bottlenecks for artificial intelligence, AI infrastructure and applications. At Kooler, we will leverage our energy management expertise to serve multiple fast growing markets in space exploration, robotics, physical AI at the edge and AI infrastructure platforms. We expect to at least double our revenue in 2025 as we grow our energy management business and expand into new applications. To accommodate our growth, we’re expanding our Webster, Texas headquarter.

We have signed a lease for over 13,000 square feet of additional office space next door to our current facility, making the total size to over 31,000 square feet of manufacturing and office space. Our headquarter facility has received AS9100 certification, which is a significant milestone reflecting Kuder’s dedication to producing the highest quality products within the aerospace and defense industries. AS9100 is the globally recognized quality management standard for organizations that design, develop and provide aerospace, defense and aviation products and services. We’re now well positioned as the one stop shop total solution provider to design, test, manufacture and certify battery products of the highest quality in The United States. As you all know, we’ve been investing in our CoolerOne battery platform.

We’re now reaping the benefits of that investment. For our CoolerOne space product, we now have multiple customer engagements to design their 20,793 compliant batteries. We’re going through 20,793 certification process now with NASA for one of our customers. We have Quarter one space reference platform for 100, two hundred and four hundred watt hour batteries. We have our own battery management system, BMS, for both terrestrial and space applications that are radiation tolerant.

We’re entering production stage for both our Q1 space and Guardian customers in 2025. In addition to Q1 space and Guardian products, we’re seeing growing demand for battery pack design and manufacturing services from U. S. Companies developing drones and robotics. Defense tech and warehouse automation are two areas of particular interest.

The new generation of defense tech companies are focused on innovating rapidly and delivering cost effective systems to the battlefield. Bomb costs and performance are more important than ever and Clouder is focused on delivering cost effective solutions for these companies by leveraging our supply chain and advanced technology portfolio across multiple projects. Robots for warehouse operations is another rapidly growing area and these solutions are all battery operated. Safety is paramount in these applications and Kuder is able to offer companies in this space range of solutions to improve safety profile and performance for the battery packs. NVIDIA CEO, Jensen Huang, has highlighted the emergence of physical AI, AI systems capable of understanding interacting with the physical world is a significant rapidly growing market opportunity.

He has referred to this sector as a multi trillion dollar opportunity, particularly emphasizing the potential in robotics and autonomous machines. At Cooler, our exposure to this market began through our battery customer interactions, but we quickly realized that this is a massive market opportunity that we must participate in with more than just batteries. We will announce our strategic partnership to enter the robotics and physical AI market in the next few weeks. We announced on Tuesday that we now have $6.68 Bitcoins, which is more than two thirds way towards our near term goal of 1,000 Bitcoins. I get asked a lot about how we stomach the volatility in Bitcoin.

Michael Saylor said it best, Volatility is vitality. In this age of AI where things are transforming at a crazy rate overnight, someone may call it the deep sleep moment, we better get used to volatility. I believe that to survive and to thrive in this new era of AI, CUDA needs to build a culture that embraces volatility so that it can reduce the risk of our own deep seek moments. Bitcoin’s treasury strategy serve two objectives for us. One, we believe that Bitcoin is a long term store value that beats inflation and gains in value.

Number two, it’s a training ground for building dynamic corporate culture and execution cadence that positions Cooler to succeed in the new AI era. We’re doubling down our commitment to BTC with BTC mining. We’re actively exploring partnerships opportunities. As we roll out our AI products and energy management technology applied to AI data centers, we expect to apply them to BTC mining as well to reduce energy costs. Cathie Wood has predicted Bitcoin to reach $1,500,000 by 02/1930.

Michael Saylor is projecting Bitcoin to reach $20,000,000,000,000 in market capitalization within the next four to eight years from the $2,000,000,000,000 market cap right now. I hope they’re both right. Speaking of Cathie Wood, I would like to wrap up my portion of the presentation with her big ideas for 2025, AI, robotics, energy storage and blockchain Bitcoin. These ideas are not isolated. Their convergence accelerates innovation, leading to potential growth or exponential growth to profound social impact that are fundamentally and structurally changing our financial systems.

At Kroller, although we’re a small company with limited resources, but we view this convergence as a generational opportunity for us to participate in, because we are all at the very early stage of AI and we have not even yet start the physical AI in the robotics age yet. There will be many deep seek moments to come and we want to be ready to take advantage of those moments. We’ll focus on applications where we can add our expertise and the existing business is disrupted by AI and we can pivot to these businesses that could be accretive to quarter quickly. To hear some context around our thinking and strategy, I’d like to share with you a couple of data points. In a recent interview at the Tokyo University in Japan, Sam Elman, CEO of OpenAI, predicted that OpenAI’s software programming AI agent will be the top one program in the world by the end of twenty twenty five.

SoftBank CEO, Martha san expects AI intelligence to advance 1,000 times every technology cycle, which lasts about two to three years. At that rate, we can expect AI intelligence to be 1,000,000 times more intelligent than what they are today by the end of this decade. As these predictions become realities over the coming months and years, every company in the world will become an AI and software company. Cooler needs to get there as fast as possible. Now, before I hand the call over to Sean, I would like to encourage you to check out our new website at www.cooler.ai.

It’s a fresh new look to showcase all of our products and services. Thank you very much. Next, Sean will discuss financial details.

Sean Kanter, CFO, Cooler Technology Group: Thank you, Mike. Let’s cover some key highlights now for both the fourth quarter and the full year 2024. Topics worth noting include revenue, a record revenue quarter and record revenue year for KUHLR. Gross margin, gross margin was up one hundred % fourth quarter twenty twenty four over fourth quarter twenty twenty three. Operating expenses were down.

We continued the trend of expanding our paying customer base and reduced our customer concentration. Cooler’s balance sheet is strong. We have a meaningful net cash position with no material debt obligations. Our cash and Bitcoin holdings are worth over $80,000,000 as of the close on March 25. We established our Bitcoin treasury position in 2024 and now own $6.67 Bitcoin.

Let’s start with our income statement. In the fourth quarter, KUHLR set a new revenue record. Revenue was approximately $3,400,000 and this is about 44% higher than the same period last year and 6% higher than the third quarter of twenty twenty four, which was then itself another revenue record quarter. In 2024, KUHLER delivered $10,700,000 of revenue, another revenue record for KUHLER. This was up 9% from 2023, which was itself also a revenue record year.

In 2024, product revenue was approximately $3,600,000 down 47% year over year and service revenue was approximately $4,400,000 in 2024, up 51% from the same period last year. In 2024, KUHLR signed its first two revenue generating license agreements and recorded $2,700,000 in revenue. We are excited about this business model and hope to be able to announce similar type deals in the coming quarters. Gross margin for the fourth quarter was 64% versus 29% in the same period last year. For the full year 2024, gross margin was 51% versus 37% in 2023, a 37% increase year over year.

2024 versus 2023 full year R and D expenses were down 34% and SG and A was down 16%. Twenty twenty four earnings per share improved 55% over 2023. Now let’s spend a moment on customers. In 2024, Cooler had 71 paying customers, up from 53 in 2023. Paying product customers were up 36% from 39% in 2023 to 53% in 2024.

Service customers were up 100% to 34% in 2024. In addition to expanding our customer base, we are reducing our paying customer concentration. Now a few points on our balance sheet. Compared to the end of 2023, our balance sheet has improved materially. At the end of 2024, our cash balance sheet was $30,000,000 our cash on hand was $30,000,000 our current accounts receivable was $2,600,000 and we held 20,000,000 in Bitcoin.

Total assets were $63,000,000 at twelvethirty onetwenty twenty four versus $11,000,000 at the end of twenty twenty three, up 479%, and we had no material financial debts. Total liabilities were down 58% to 5,500,000 Before moving on, as a reminder, we currently hold about $6.67 Bitcoin. Cooler has decided to early adopt the new FASB rule for marking to market our Bitcoin holdings. So you’ll see on our 2024 income statement a line item called change in fair value of digital assets. At the end of twenty twenty four, this line item was a $719,000 charge.

This is a non cash item. It just reflects the change in value from the purchase date to the mark date, in this case, twelvethirty onetwenty twenty four. It does not reflect that we sold any Bitcoin. Going forward, our Bitcoin holdings will be marked on a monthly basis. Back to you, Stuart.

Stuart Smith, Moderator, Cooler Technology Group: Thank you, Sean. Well, let’s jump right into the questions now. And this first question is for you, Michael. Here it goes. I saw the news on Thursday, March 12, about the deal with space agency or a space agency to provide M35A batteries.

How prevalent do you think space travel becomes over the next ten years? Will there be applications on earth as well?

Michael Moe, CEO, Cooler Technology Group: Yes, thanks, Stuart. Yes, space travel will definitely become more affordable than prevalent over the next ten years. But we believe that the bigger market opportunity is privatized space exploration with new satellites equipment into space that they’re all going to require batteries to power them. And also as the volume go up, the cost will go down. As that happens, we expect some of these more higher end technology to be available for applications on earth.

Stuart Smith, Moderator, Cooler Technology Group: All right. Excellent. Next question is for you, Sean. Here it is. Are there plans to diversify crypto or buy more?

Sean Kanter, CFO, Cooler Technology Group: Thanks, Stuart. Sure. As we’ve indicated before several times, from a crypto point of view, we are focused on our BTC or Bitcoin treasury program.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Thank you for that. Okay. Here’s the next question and it’s for you again, Michael. There is a rumor circulating on Twitter, AKA X, that KULR is providing materials to Rocket Lab Archimedes engine, specifically a carbon composite material to be used in a rocket called Neutron.

One, can KULR please confirm or deny that they are providing any materials to Rocket Lab? Two, if they are providing any materials to Rocket Lab, can KULR confirm or deny if the materials provided would be sufficient for the two companies to announce a partnership? And three, if the partnership will be announced, can Kuler please give details of any further opportunities that may arise from working together with Rocket Lab and how much money Kuler expects to realize from the partnership and how often they would be providing materials. I’m pretty sure he slipped about seven questions in there, Michael. I’ll leave it to you.

Michael Moe, CEO, Cooler Technology Group: No, thanks, Stuart. Yes, I’m glad that this investor really did a lot of homework on both Kuller and Rocket Lab sounds like, but I really can’t comment on any rumors that we have not officially announced that we have any relationship with. So I’m just going to leave it to that.

Stuart Smith, Moderator, Cooler Technology Group: Understood. So the next question, Sean is for you. Why is such a large portion of cash being invested into Bitcoin? And could this money be better allocated to focus on the growth of the Cooler brand at this clearly pivotal time for the company? Also, I would like to know what the company plans to do with their Bitcoin reserve if the company comes on financial hardship.

More than that, would they rather dilute investors or sell a portion of the Bitcoin holdings?

Sean Kanter, CFO, Cooler Technology Group: Thanks, Stuart. Good topic. Our treasury strategy is to retain liquidity and significant cash reserves in addition to building our BTC treasury position, as I’ve said before. Given the economic context in today’s world and the fundamentals of Bitcoin, and what I mean by that is sort of the growing demand across several dimensions, individuals, institutions, state organizations, government bodies and the fixed supply of Bitcoin that there will only be $21,000,000 ever created, we consider BTC a good store value over time and therefore, a positive for Cooler shareholders. We consider our liquidity and our cash on hand to fund operations as we go through our internal decision making processes.

All of our decisions get analyzed through a lens of what we think is in the overall best interest of the Cooler shareholder base. And decisions around cash management and our BTC treasury program are no different than that. So our strategy is to be a long term holder of BTC, Bitcoin, and we do not see a scenario today that would cause us to change that strategy.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Sean, let’s stay on this topic and let’s stay with you. Here’s the question. Why invest in Bitcoin and not invest in your company? I would imagine you need to improve product and facilities to create revenue.

Sean Kanter, CFO, Cooler Technology Group: Sure. Excellent question. We don’t really see the two we don’t see that we have to make a decision between the two though that we’d have to make a choice between the two today. We’re investing in our company and we consider our BTC treasury program a very valuable asset to KULR and its shareholders. We’re also investing in our people, our facilities and our product development.

Stuart Smith, Moderator, Cooler Technology Group: Excellent. All right. Next question. This is for you, Michael. During the last earnings call, you were asked if Cooler could deliverproduce if any large battery contract was awarded.

You said yes, and that cooler had a partner that was also ready to go if that big volume contract came along. What do you consider to be a big contract? What is the name of the companypartner you mentioned you would be ready to help take on the production of a big contract?

Michael Moe, CEO, Cooler Technology Group: Yes. I mean, we do have a number of customers with contracts over $1,000,000 and we do have customers ready on production. As I talked earlier, we have expanded our facility in Webster, Texas to over 31,000 square feet. And so now we’re actually ready to take on some of these bigger contracts. And I think that in our new facility, we can manage we can manufacture thousands of batteries per year without blinking an eye.

So yes, we’re ready for these big contracts.

Stuart Smith, Moderator, Cooler Technology Group: All right. Well, during the last two earnings calls, you’ve mentioned that revenues were down in part because Cooler’s biggest customer had not re signed a contractagreement. However, you said they were expected to do so in 2024. Did that transpire?

Michael Moe, CEO, Cooler Technology Group: Yes. In 2024, that particular customer did not order any products, but we were still able to make up the difference with new customers and finish the year on a record quarter. So as you’ve seen in the general battery market in The United States, it’s been a very challenging time for a lot of people and a lot of our customers. So we won’t make any prediction right now on when and how much this customer will order for 2025. But without any forecast from this one particular customer, we still expect our revenue to at least double in 2025.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Here’s another question on a different topic though. This is for you, Michael. Has Cooler considered pursuing a service contract providing a service technician on every U. S.

Military airbase with helicopters to utilize Cooler Zero Vibe?

Michael Moe, CEO, Cooler Technology Group: That’s a great idea, but it’s really up to the U. S. Military to grant such contracts. So far we haven’t received any indication of such contract or arrangement is welcomed by the U. S.

Military at this moment.

Stuart Smith, Moderator, Cooler Technology Group: Okay. So Michael, next question. Are there any data centers that have a cooler product at this time?

Michael Moe, CEO, Cooler Technology Group: Yes. So our Japanese licensed customer is testing the quarter zero buy product. I believe some of the engagements is for data center customers.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Michael, this is about the sales team. How big is KULR sales team and do you contract third party sales agents as well?

Michael Moe, CEO, Cooler Technology Group: Yes. We are growing our sales team, our sales and marketing team together. Yes, we do have third party sales agents for our Safe Case and other products. We’ve just added the new VP of Business Development, Jeong Song. He was at EaglePicher and Novix, and he’s helping developing new battery customers.

Josh Simon also just joined us as VP of AI and Robotics. Josh started his career at Qualcomm, where he developed the CDMA footprint for Southeast Asian markets and he’s a lot of experience in IoT as well as AI software. So, and our whole team is about 10 people.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Another question for you then, Michael. What has the partnership or collaboration with United States Postal Service produced?

Michael Moe, CEO, Cooler Technology Group: Yes. We are working on final approval for a couple of very large size safe case configurations. I believe it’s over three kilowatt hours to have UPS permits. Once that’s granted, then we have the power tools and EV customers ready to ship their recycled batteries on the UPS network.

Stuart Smith, Moderator, Cooler Technology Group: All right, very good. Let’s change gears and talk to you again, Sean, with another question. How much revenue in Q4 came from licensing deals?

Sean Kanter, CFO, Cooler Technology Group: Sure. So in the fourth quarter of twenty twenty four, KUHLR generated $1,700,000 in revenue from licensing. And while we’re on the topic for the full year 2024, we generated $2,700,000 from licensing.

Stuart Smith, Moderator, Cooler Technology Group: All right. Thank you, Sean. Michael, here’s another question. What new products or customers are pursuing is Cooler pursuing to utilize its TRS to potentially gain new business?

Michael Moe, CEO, Cooler Technology Group: Yes. Well, TRS will be utilized across all our products for the Cooler One battery for space, for DoD, for the robotics. So it’s across all of our new battery initiatives.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Another question for you here, Michael. Can you provide an update on Cooler’s current and future endeavors with private space stations, particularly with Acxiom Station and StarLab. Given your partnerships with Acxiom Space and Voyager Space, what growth opportunities do private space stations present for the company?

Michael Moe, CEO, Cooler Technology Group: Yes. We can’t comment on individual customer activities, but we feel very strongly the quarter one space platform is gaining traction with private space companies, especially with the 20793 certification. And then also our off the shelf products, off the shelf the customizable Cooler One space platforms, the 100 watt hour, 200 and the 400 watt hour configurations, these are very competitive products for satellites and other private space missions.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Sean, let’s talk to you. Here’s another question. The 01/25/2024, lease amendment extended the San Diego facility lease at 4863 Shawline Street to 11/30/2025 known as the first renewal. What are Cooler’s plans for its California operations after this state?

Does management anticipate extending this lease again?

Sean Kanter, CFO, Cooler Technology Group: Thanks, Stuart. Sure. As you know, we have moved our official headquarters to our Texas Webster, Texas facility. Our California activity continues to be an important part of our company. Whether we stay in this particular facility in California long term or identify a different facility for our California based activities, is simply an optimized operating decision that we will make based on the long term best interests of KULR, its customers and its shareholders.

And once that decision is made and it’s appropriate to share it, we’ll certainly share that with everyone.

Stuart Smith, Moderator, Cooler Technology Group: All right. Very good. Michael, a March 2025 announcement stated that Cooler One space battery incorporating the Moly Cell M35A cells is set for completion this month followed by NASA Safety Board review. Can you share the key progress made in March towards this completion?

Michael Moe, CEO, Cooler Technology Group: Yes. We are going through the NASA JSC 20793 certification testing right now. I believe the customer will be ready for NASA mission in 2025.

Stuart Smith, Moderator, Cooler Technology Group: Okay, Michael. The next question is for you. With Archer Aviation and Vertical Aerospace disclosing their use of the Moly Cell battery cells. What opportunities exist for KULR to integrate its patented thermal runway shield as a thermal management solution in their aircraft given KULR’s partnership with molycell to enhance battery safety?

Michael Moe, CEO, Cooler Technology Group: Great question. Moly Cell is very well respected in the industry. So you see industry leaders like Archer and Vertical use them. We have a very close relationship with Moly. We have done FTRC and ICM testing on the M35A cells and also their new power cells such as the P50 and they have actually a new version, more powerful cell coming as well.

So we’ve gained a lot of knowledge about that and we’re building our quarter one air reference platform with the Moly cell for electric aviation and drone markets. So TRS will be play an integral role for that and we were looking forward to really leverage that relationship and grow business for both us and Bali.

Stuart Smith, Moderator, Cooler Technology Group: Okay. The next question is also for you, Michael. A September 2024 announcement stated that Cooler completed its initial engagement with the U. S. Army under the expanded $2,400,000 battery contract focusing on silicone anode lithium ion battery prototypes with plans for Cooler One Guardian battery production in 2025.

Can you provide an update on the progress of this project since Q3 twenty twenty four, including any developments in testing, production timelines or expanded applications for the Army?

Michael Moe, CEO, Cooler Technology Group: Sure. We actually received another development and testing order from the Army. We believe we’re doing cell screening testing for them to show the value of cell screening for qualified cells to find defective cells before they are built into the battery pack. And so therefore, we can build the most reliable battery pack for the Army. We will go to production with them, pilot production with them in fall of twenty twenty five.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Here’s the next question, Michael. After the Japanese deal regarding cathode applications, what are your involvement in nuclear energy? Is there any upcoming project about that?

Michael Moe, CEO, Cooler Technology Group: Yes. The nuclear energy is a long term investment for our customers. It’s going take it’s going to take some time. I actually met with Charlie Oppenheimer, the grandson of Mr. Oppenheimer, which the movie was based on.

We had dinner together and we talked about his new company, Oppenheimer Energy. I learned a lot about how long it takes and how much money it takes to build a new nuclear power plant and it’s kind of mind boggling. So we’re just getting started, start engaging with these customers, but but it’s going to be a long, long time for some of them to get to fruition.

Stuart Smith, Moderator, Cooler Technology Group: Understood. Michael, here’s the next question. You announced the first sale of your M35A battery cells. Is there only one customer so far? Did that customer just make a one time purchase or are there ongoing sales expected?

Michael Moe, CEO, Cooler Technology Group: Yes. I think this question is about the M35A golden lot or what we call the golden lot cell that has gone through the NASA working structure in ’37. And then we have other customers for those cells as well as we’re using those cells to build KUONA one space batteries for customers that need to meet the JSC 20,793 certification.

Stuart Smith, Moderator, Cooler Technology Group: Okay. Michael, what is the current status of your Guardian one contract with the army?

Michael Moe, CEO, Cooler Technology Group: Yes. I think this is probably similar to the previous question. We’re going through more testing, self screening with the customer right now and targeting prototype production in fall of twenty twenty five.

Stuart Smith, Moderator, Cooler Technology Group: All right. And another topic here for you, Michael. Has your fan customer started selling fans? How far off might sales be that are larger than the minimum? Are there any other Vibe customers since then?

Michael Moe, CEO, Cooler Technology Group: Yes. They have not gone into volume production yet. We’re working on faster throughput on the balancing system to lower the cost. We’re also developing acoustic energy elimination technology to combine that with vibration elimination. It actually turns out that acoustic energy is as important to eliminate as vibration energy in server environments.

So we’re working with the customer pretty hard on that. And then hopefully later this year, we will be announcing those kind of products into the market.

Stuart Smith, Moderator, Cooler Technology Group: All right. Excellent. And thank you for that, Michael. Sean, as you deplete your cash, is this next question, will you sell Bitcoin to support the company’s operations?

Sean Kanter, CFO, Cooler Technology Group: Thanks, Stuart. We believe our Bitcoin holdings will account for meaningful shareholder value over the long term. We don’t anticipate using our BTC holdings to meet normal course working capital funding and think we’ll have available cash on hand to meet those needs.

Stuart Smith, Moderator, Cooler Technology Group: Sean, the final question is for you. Here we go. Given the growing interest in cryptocurrency adoption and electrification driven by policies such as the Bitcoin strategic reserve announced by President Trump. How does Cooler Technology Group plan to leverage its thermal management and battery solutions to support Bitcoin mining and energy storage infrastructure in The United States? And what impact does the company expect this to have on the revenue and margins over the next twelve to eighteen months?

Sean Kanter, CFO, Cooler Technology Group: Sure. Good question. We think the announcement of the strategic Bitcoin reserve is a strong positive for Bitcoin and therefore for Kooler and its shareholders. We’re one of the largest corporate owners of Bitcoin, and we are always looking to leverage our knowledge, resources and asset base to explore potential sources of shareholder value. As you know, we’ve already signed a license for our Cooler Zero Vibe cooling solutions.

And as we continue to explore these opportunities, we’ll look to execute on those that drive material revenue growth and positive margin contribution.

Stuart Smith, Moderator, Cooler Technology Group: All right. Thank you for that, Sean. As mentioned, that was our final question, which concludes the question and answer portion of this call. I’d like to thank both of our guests, Sean Cantor, CFO of the company, as well as, of course, Michael Moe, the CEO of Cooler Technology Group. But most of all, I know Michael and Sean want to extend their deepest gratitude to all of you shareholders who have tuned in and those that have submitted their questions.

With that, that concludes our call and I’ll turn the call back over to our operator, Thomas. Thank you. This does conclude today’s conference call and webcast. You may disconnect at this time and have a wonderful day. Thank you for your participation.

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