Q1 2024 KULR Technology Group Inc Earnings Call

Operator: All right. Thank you for joining us today for the KULR Technology Group first quarter 2024 earnings call. I will be joined on the call today by the CEO of KULR Technology Group, Michael Mo, and the Chief Financial Officer for the company, Shawn Canter. But before we begin the call, please listen closely to the following statement. This call does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity.

Alright, Thank you for joining us today for the cooler technology group first quarter 2024 earnings call I will be joined on the call today by the C. E O of cooler technology group, Michael Moe and the Chief Financial Officer for the company, Sean Cantor, but before we begin the call. Please listen closely.

Speaker Change: To the following statements. This call does not constitute an offer to sell or a solicitation of offers to buy any securities or any entity.

Operator: This call contains certain forward-looking statements based on the company's current expectations, forecasts, and assumptions that involve risks and uncertainty. 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 their business, which include risk factors disclosed in KULR Technology Group's Form 10-K, filed with the Securities Exchange Commission on April 12, 2024, as amended or supplanted by other reports the company files with the SEC from time to time.

Speaker Change: 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.

Speaker Change: Really 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 cooler technology groups Form 10-K filed with the Securities Exchange Commission on April 12, 2024 as may be.

Speaker Change: Amended or supplanted by other reports the company files with the Securities Exchange Commission from time to time.

Operator: Forward-looking statements include statements regarding their expectations, beliefs, intentions, or strategy 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 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 KULR Technology Group's future financial performance given their current contracts, current backlog of opportunities, and conversations with new and existing customers about their products and services.

Speaker Change: 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.

Speaker Change: 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 managements best estimate of cooler technology group's future financial performance given their current.

Speaker Change: 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 I will.

Operator: KULR Technology Group assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise. I will now turn the call over to the Chief Executive Officer of KULR Technology Group, Michael Mo. Michael, the call is yours.

Speaker Change: Now turn the call over to the Chief Executive Officer of cooler Technology Group, Michael Moe, Michael the call is yours.

Michael Mo: Thank you, Stuart. This is Michael Mo. Thanks to everybody for joining us today. I'd like to go over some of the financial and operational highlights with you today. I will discuss how we achieved over 760% year-over-year growth in our quarter one design solution business, which is our engineering services business, in Q1 of 2024 compared to Q1 of 2023, and how this tremendous growth in service business drives growth in our overall product sales business, especially in the quarter one space and the quarter one Guardian product line. While we're experiencing this big growth, we have reduced our cash use in operating and investment activities by 23% and total operating expenses by 25% year-over-year for the first quarter of 2024 compared to 2023.

Michael Mo: Thank you Stuart this is Michael Moe, Thanks to everybody for joining us today.

Michael Mo: I'd like to go over some of the financial and operational highlights with you today.

Michael Mo: Discuss how we achieved over 760% year over year growth quarter one's design solution business, which is our engineering services business in Q1 of 2024 compared to Q1 of 2023.

Speaker Change: This tremendous growth and service business gradual growth in our overall product sales business, especially in a quarter, one space and a quota with guardian product launch.

Speaker Change: While were experiencing this big growth.

Speaker Change: We have reduced our cash used in operating and investment activities by 23% and total operating expenses by 25% year over year for the first quarter in 2024 compared to 2023.

Speaker Change: And also give an update on our new quarter, Texas facility and how we are strategically positioning it to be the center of excellence for battery design and testing and also foster innovations together with our customers.

Michael Mo: I will also give an update on our new facility in Texas and how we're strategically positioning it to be the center of excellence for battery design and testing and also foster innovations together with the market. The market is changing very quickly. Our customers are very demanding. They want the best, and they wanted it yesterday.

Speaker Change: Market is changing very quickly.

Speaker Change: Customers are very demanding they want the best and they wanted to yesterday.

Michael Mo: With the ever-changing regulations around the safety of lithium-ion battery usage, customers demand fast turnaround time in addition to the requirements on quality, performance, and customization to fit perfectly to their application. At KULR, we win customer engagements by offering a one-stop-shop solution to all their battery needs. We start with a holistic design methodology to come up with a modular design that is easy to customize for our customers' needs.

Speaker Change: With the ever changing regulations around safety of lithium ion battery usage customers demand fast turnaround time. In addition to their requirements on quality performance and customization to fit perfectly to their applications.

Speaker Change: At quarter, we're winning customer engagements by offering a one stop shop solution to all their battery needs. We start with a holistic design methodology to come up with a modular design that is easy to customize for our customers' needs our dedicated and experienced engineering team is very focused on safety.

Michael Mo: Our dedicated and experienced engineering team is very focused on safety, and we can turn around a project very quickly with our in-house testing, machine shop, tooling, and manufacturing capabilities. This has enabled us to achieve over 760% year-over-year growth in our KULR One design solutions. Furthermore, through our KULR1 design solutions process, we're collecting valuable data through the self-screening, to testing, to design, and ultimately accelerating the customer certification process with a Treasure Trove of data. This data is becoming the glue and the key to our business.

Speaker Change: We can turn around very quickly with our in house testing machine shop, tooling and manufacturing capabilities.

Speaker Change: This has enabled us to achieve over 760% year over year growth.

Speaker Change: <unk> design solutions business.

Speaker Change: Furthermore, through our cooler one design solutions process, we're collecting valuable data through the self screening to testing to design and ultimately accelerating the customer's certification process.

Speaker Change: Treasure trove of data.

Speaker Change: This data is becoming the glue in the steel to our business.

Michael Mo: Let's use FTRC testing as an example of how it's driving new and recurring revenue. We recently announced that we have successfully completed large format FTRC testing for 200 amp hour high energy battery cells for automotive OEM customers. It's the first in the industry and the only one because KULR has an exclusive license with NASA for this technology. We are able to provide our customers with battery cell data that are not available anywhere else.

Speaker Change: FERC testing as an example on how it's driving new and recurring revenue.

Speaker Change: We recently announced so we have successfully completed large format at Trc test for 200, empower high energy battery sales for automotive OEM customer.

Speaker Change: It's the first in the industry.

Only one because quarter has an exclusive license with NASA on the technology.

Speaker Change: We're able to provide our customers with battery cell data, they're not available anywhere else and this data is critical foundational to build truly save battery packs for certification, which makes our service very sticky with our customers.

Michael Mo: And this data is critically foundational to build truly safe battery packs for certification, which makes our service very sticky with our customers, automotive customers like customers in electric aviation, energy storage, and industrial. Industrial markets are constantly evaluating new generations of battery cells with calorimetry. Therefore, our unique and exclusive position in the battery cell testing market is bringing us new and recurring business in the global cell testing market, estimated to reach over $7 billion by 2030.

Speaker Change: Automotive customers like customers electric aviation energy storage and industrial industrial markets.

Speaker Change: Constantly evaluating new generation of battery cells with Colorado treated.

Speaker Change: Therefore, our unique and exclusive position in the battery cell testing market is bringing us new and recurring businesses in the global self testing market estimate to reach over $7 billion.

By 2030.

Michael Mo: To drive our ecosystem further, we're working with battery cell companies to test and qualify their new battery cells with data, like our partnership with Ampereus, which we announced recently, for their silicon anode cylindrical cells. We see tremendous demand for our FTRC testing business because it's providing our customers with critical data that they cannot get anywhere else. We're building a couple of new testing lines in our new Texas facility, which will be fully operational in Q3 of this year.

Speaker Change: To drive our ecosystem further we're working with battery cell companies to test and quantified that new battery cells with data local partnership with the NPS, which you announced recently for their silicon handle surgical cells, we see tremendous really meant for herc testing business because it is providing our customers with critical data that they cannot.

Speaker Change: Get anywhere else.

Speaker Change: We're building a couple of new testing lines in our new Texas facility, which will be fully operational in Q3 of this year and we're expecting our testing service alone to be over $1 million a quarter revenue for us by the end of this year.

Michael Mo: And we're expecting our testing service alone to be over $1 million a quarter revenue for us by the end of this year. We're also developing AI-based data collection and report generation tools to streamline the testing and data analysis operations.

We're also developing AI based data collection and report generation tools to streamline the testing and the data analysis operations that will further drive our battery design and product sales business.

Michael Mo: But that will further drive our battery design and product sales. In Q1, we saw the number of product sale customers grow from 13 in 2023 to 25 in 2024. We had one large customer in Q1023 that did not place an order with us in Q1024.

Speaker Change: In Q1, we sold a number of product sell customers grew from 13 in 2023% to 25% in 2024.

Speaker Change: We had one large customer in Q1 of 'twenty three that did not place order with us in Q1 of 'twenty four.

Michael Mo: Due to the sticky nature of our products that are certified into that customer's products, management expects that customer to continue purchasing from KULR this year and beyond. Excluding that one large customer, our product sales revenue grew over 400% in Q1 of 24 year-over-year. We expect our CoolerOne space battery to be a key driver for growth going forward. The space economy is going to be over $1.8 trillion by 2035, and according to McKinsey, this is driven by the commoditization of the commercialized space industry.

Speaker Change: Due to the sticky nature of our products that are certified into customers' products.

Speaker Change: Management expects that customer to continue purchasing third quarter this year and beyond.

Speaker Change: Excluding the one large customer our product sales revenue grew over 400% in Q1 of 'twenty four year over year.

Speaker Change: We expect our cooler space battery to be a key driver for growth going forward.

Speaker Change: Basic economy is going to be.

Over a trillion dollars by 2035. According to Mackenzie. This is driven by the Commoditization of commercialized space industry.

Michael Mo: The space battery market is estimated to grow to $6.35 billion by 2030, and we expect our Corona One space platform to play an important role in this market. Some of the key players that drive this tremendous growth in the space economy include rapidly growing private companies such as SpaceX and Blue Origin, continued growth of traditional government-run contractors like Boeing and Northrop Grumman, and also new up-and-coming companies like Voyager Space, Axiom, and Last, many of these are already KULR customers.

Speaker Change: <unk> battery market is estimated to grow to $6 $35 billion by 2030.

Speaker Change: We expect a call of one space platform to play an important role in this market.

Speaker Change: Some of the key players that drive this tremendous quarter that speaks economy include rapidly growing private companies such as Spacex and Blue origin continued growth of traditional government prime contractors like Boeing and Northrop Grumman and also new upcoming companies like Voyager space Axiom last and many of these already calling on customers.

Michael Mo: What all these companies look for in their energy storage system is high performance, space qualified, and competitively priced battery solutions with the highest level of safety that meets NASA safety standards, especially the NASA JSC-20793 specification that's mandated to be part of a cruise-based mission. That's exactly what KULR OneSpace architecture offers.

Speaker Change: What all of these companies look for <unk>.

Speaker Change: Richie storage system is high performance space quantified a competitively priced battery solutions with the highest level of safety that meets NASA safety standards.

Speaker Change: He doesn't have such ASC 207, 93 specification that is mandated to be part of a cruise space mission.

Speaker Change: That's exactly what kudos space, a cooler space architecture offers a prequalified as an architecture that can be customized displace us space flight ready certified for NASA GSC to 0793 specifications in record time.

Michael Mo: A pre-qualified design architecture that can be customized, space-flight ready, and certified for NASA JSC 20793 specifications in record time. We're offering a solution that can dramatically improve time to market and offer cost savings to our customers. Another successful example of providing fast time to market engineering services and paved the way for high potential future product sales is our quota one Guardian plan. We started this platform with a contract with Army DEVCOM for the next generation aviation battery in Q2 of 2023.

Speaker Change: We're offering a solution that can dramatically improve time to market and offer cost savings to our customers.

Speaker Change: Is that a successful example of providing fast time to market engineering service and paved the way for height potential future product sales is a corner one guardian platform.

Michael Mo: The contract has since been expanded to over 1.8 million, and we're scheduled to deliver our prototype batteries to them in August of this year. Data has shown that a new battery will be a game changer for the Army in terms of safety and energy capacity. Now we're expanding our CoolerOne Guardian product portfolio to standard size 2590 battery, swappable UPS battery, and additional custom batteries for DoD customers based on the same scalable architecture. What sets QuantaOne Platform apart from the competition is data safety.

Speaker Change: We started this platform with our contract with the army that comp for the next generation next generation Aviation battery in Q2 of 2023.

Speaker Change: The contract has since been expanded to over $1 million or scheduled to deliver our prototype batteries to them in August of this year.

Speaker Change: Data has shown that a new battery will be a game changer for army in terms of safety energy capacity.

Speaker Change: Now we are expanding our cooler one guardian product portfolio to standardize to 590 battery Swappable.

Speaker Change: Battery and additional custom batteries for Dod customers based on the same scalable architecture.

Speaker Change: That's quite a one platform apart from the competition is data safety speed.

Michael Mo: Our customers demand that batteries have superior thermal performance and safety with the highest energy power. The KULR 1.0 detector is flexible; it can be quickly customized to meet regulatory requirements across a wide spectrum of applications. Our end-to-end one-stop shop solution is what the customers are looking for. Our thick case product is another example of data driven solutions winning in the marketplace. We have performed exhaustive thermal runaway tests on batteries of all sizes and chemistry in our Safe-X product line.

Speaker Change: <unk> demand to batteries to head the superior thermal performance safety with the highest energy power.

Speaker Change: Quarter, one architecture is flexible it can be quickly customized to meet regulatory requirements across a wide spectrum of applications. Our end to end one stop shop solution is what the customers are looking for.

Speaker Change: Our <unk> product is another example of data driven solution will need the marketplace.

Speaker Change: We have performed exhaustive thermal runaway tests batteries of all sizes and chemistry in our <unk> problem.

Michael Mo: The comprehensive test results are presented to the U.S. Department of Transportation and also logistic partners like UPS to receive special permits to ship batteries for recycling and other applications. We've also presented these tests and data to fire departments across the country, including San Diego and New York.

Speaker Change: The comprehensive test results are presented to US Department of transportation and also logistic partners like EPS two to receive special permits to ship batteries for recycling and other applications.

Speaker Change: We've also presented these tests to fire departments across the country, including San Diego and New York, They're very excited about our safe case, and how it can help them by battery fires.

Michael Mo: They're very excited about a safe case and how it can help them fight battery fires. We continue to grow our safe case customer base across multiple industries and markets. Customer are excited about the safe case because real-life test data has shown that it has the highest energy capacity to handle in the industry. Its patent technology is the most effective way to mitigate battery thermal runaway that's been used on international space stations since 2019. And it's reusable, which makes it a much more sustainable and cost-effective solution compared to our competition.

Speaker Change: We continue to grow our safe case customer base across multiple industries and markets.

Speaker Change: Customer excited about the safe case, because real life test data has shown that it has the highest energy capacity to handle in the industry.

Speaker Change: <unk> technology is the most effective.

Speaker Change: To mitigate battery thermal runaway.

Speaker Change: It's been used on international Space station says 2019, and it's a reusable which makes it much more sustainable and cost effective solution compared to our competition.

Michael Mo: The KULR Online Marketplace represents a pivotal expansion in KULR's sales strategy by offering a direct water facility that complements our traditional distribution channel. This direct-to-business and consumer channel is going to help us scale up our product sales more quickly. Currently, the Marketplace offers our SafeCase and SafeSleep products.

Speaker Change: The quota one.

Speaker Change: <unk> online marketplace represents a pivotal especially in quarter sales strategy.

Speaker Change: Offering direct order facility that complements our traditional distribution channels.

Speaker Change: Direct to business and consumer channel is going to help us scale up our product sales more quickly.

Speaker Change: Currently the marketplace offers are safe case, and say sleep products. We've already received orders from Barack Department. It Department of energy breakfast throughout the website.

Michael Mo: We've already received orders from fire departments and department energy branches throughout the website. We plan to expand our online offerings to include internal short circuit devices for yourselves. Rappeller BMS, Quarter One Battery Packs, and also Rapid Engineering Design Services in the near future. KULR has spent the last few years creating a portfolio of services and solutions that allow the company to support every aspect of the battery life cycle. We have now consolidated the infrastructure to execute our quote-unquote design solution services under one roof, all in-house, at our new Center of Excellence for Battery Design and Testing in Webster, Texas.

Speaker Change: We plan to expand our online offerings to include internal short circuit.

Speaker Change: Devices Krueger cells.

Speaker Change: The rest tolerant BMS quarter went battery packs. It also rapid engineering design services in the near future.

Speaker Change: Who has spent the last few years, creating a portfolio of service solutions that allow the company to support every aspect of battery life cycle.

Speaker Change: We have now consolidated the infrastructure to execute our equivalent as a solution service services under one roof all in house and our New Center of Excellence, a battery design of testing in Webster, Texas.

Michael Mo: This facility is approximately 2.1 miles from NASA Johnson Space Center, and it's next to companies like Exium Space, Leidos, Blue Origin, among many others. It's an ideal location to provide rapid turnaround, real time, VIP style battery design, testing, and production services to the surrounding ecosystem of aerospace companies. We signed the lease in April of this year, and we are in the midst of finishing up the facility improvements, moving in, and also executing our daily operation at the same time.

Speaker Change: This this facility is approximately $2 one miles from that is that Johnson space Center and it's next to companies like axiom space Lighthouse Blue origin. Among many others. It's an ideal location to provide rapid turnaround real time.

Speaker Change: Style battery design testing and production services to the surrounding ecosystem of <unk>.

Speaker Change: Aerospace companies.

Michael Mo: So a big shout out to my, Our success story with the NASA RFI program is a perfect example to highlight how KULR's Texas facility is providing rapid turnaround solutions to our customers. Within six hours of engagement, the KULR team was able to provide NASA's R5 team with a solution which successfully passed their testing requirements and get the CubeSat battery space ready. With a quarter one design solution infrastructure in place, we can provide in-house and custom battery design, testing services, analysis and modeling services, abuse testing, cell level categorization and cycling, fabrication, and also production services, all in one shop, all under one roof. In addition to customer support, KULR Texas is our R&D center to advance our next generation modular KULR One architecture.

Speaker Change: We signed a lease in April of this sorry.

Speaker Change: February of this year, we are in the midst of finishing up the city improvements moving in and also execute RTD operation at the same time, so a big shout out to my Texas team.

Speaker Change: Our success story with the NASA <unk> five program is a perfect example to highlight how quarter, Texas facility is providing rapid turnaround solution to our customers with a six hours of engagement the quarter team was able to provide that sets our team with a solution, which successfully passed or testing requirements.

The <unk> battery space ready.

Speaker Change: With a quota one design solution infrastructure in place, we can provide in house and custom battery design.

Speaker Change: <unk> services analysis, and modeling services abuse testing sell ever categorization and cycling fabrication and also production services all in one shop, all under one roof.

Speaker Change: In addition to customer support.

Speaker Change: Texas is our R&D center to advance our next generation module or call. It one architecture.

Michael Mo: You know, it's also our customer innovation center, where customers will come in and develop exciting new products next to our engineers under one roof. So I'm super excited about this new facility and how you will drive the future of KULR and, frankly, our industry together with our customers. Next, Shawn Canter will provide financial highlights.

Speaker Change: It's also our customer innovation center, where customers who come in and develop exciting new products next door engineers under what groups.

Speaker Change: So I'm Super excited about this new facility and how you would drive the future of cooler and frankly, our industry together with our customers.

Shawn Canter: KULR's financial position is the strongest it's been in over a year. Today, KULR has over $3 million in the bank, and the prepaid advance note has been fully repaid. You can see the financial results from our first quarter of 2024 in our Form 10-Q, which is now online. I'll touch on a few highlights.

Sean: <unk> will provide financial highlights Sean.

Sean: Thanks, Mike Hulu.

Sean: <unk> financial position is the strongest it's been in over a year today cooler has over $3 million in the bank and the prepaid advance note has been fully repaid.

Speaker Change: You can see the financial results from our first quarter 2024, and our Form 10-Q, which is now online.

Speaker Change: I'll touch on a few highlights.

Shawn Canter: Total revenue in the first quarter of 2024 was $1.8 million; product revenue was approximately $615,000, down from about $1.6 million. As Mike mentioned, this decrease was substantially due to delayed orders from a customer who placed a large order in the first quarter of 2023 and didn't order in the first quarter of 2024, further emphasizing Mike's earlier point because of the sticky nature of our products as certified into our customer's product.

Speaker Change: Total revenue in the first quarter of 2024 was $1 8 billion.

Speaker Change: Product revenue was approximately 615000 down from about $1 6 million as.

Speaker Change: As Mike mentioned.

Speaker Change: This decrease was substantially due to delayed orders from a customer who placed a large order in the first quarter of 2023 and didn't order in the first quarter of 2024.

Speaker Change: Further emphasizing Mike's earlier point.

Speaker Change: Due to the sticky nature of our products are certified into our customers' products.

Shawn Canter: Management expects this customer to continue purchasing from KULR this year and going forward. Due to the nature of our customer base and the end markets we serve, quarter-over-quarter comparisons may not always capture the larger trend in the business, as KULR grows and continues to expand its customer base. Any one customer's purchase order timing is likely to have less of an effect on interim, annual, and longer trends. Additionally, some unanticipated delays at government agencies in issuing particular licenses for our safe case products impacted revenue in the first quarter. These licenses have been issued to KULR, and the KULR sales team is now in the market with these products.

Speaker Change: Management expects this customer to continue purchasing from cooler.

Speaker Change: This year and going forward.

Speaker Change: Due to the nature of our customer base and the end markets we serve.

Speaker Change: Quarter over quarter comparisons may not always captured a larger trend in the business.

Speaker Change: As cooler grows and continues to expand its customer base.

Speaker Change: Any one customer's purchase order timing is likely to have less of an effect on interim annual and longer trends.

Speaker Change: Additionally, some unanticipated delays at government agencies, and issuing particular licenses for our safe case products impacted revenue in the first quarter.

Speaker Change: These licenses have been issued to cooler and cooler sales team is now in market with these products cooler services revenue was up 769%.

Shawn Canter: KULR's services revenue was up 769% in the first quarter over the same quarter last year. As we have previously discussed, service revenue may be seen as a predictor of future product revenue. Gross margin for the first quarter was 29% versus 37% in the same period last year. The decrease primarily stemmed from expenses related to a major project without corresponding revenue in the same period. While the first quarter gross margin related to this particular project was a drag on the overall gross margin for the quarter,

Speaker Change: In the first quarter over the same quarter last year.

Speaker Change: As we've previously discussed service revenue may be seen as a predictor of future product revenue.

Speaker Change: Gross margin for the first quarter was 29% versus 37% in the same period last year.

Speaker Change: The decrease primarily stem from expenses related to our major project without corresponding revenue in the same period.

Speaker Change: While the first quarter gross margin related to this particular project was a drag on the overall gross margin for the quarter.

Speaker Change: The overall gross margin for this project is estimated to be approximately 50%.

Speaker Change: Overall <unk>.

Speaker Change: Management anticipates gross margins returning to historical trends in the upper <unk> to low <unk>.

Shawn Canter: The overall gross margin for this project is estimated to be approximately 50%. Management anticipates gross margins returning to historical trends in the upper 30s to low 40s. Switching to customers, the total number of revenue-generating customers in the first quarter of 2024 numbered 34 versus only 15 in the first quarter of 2023, a 127% increase. In Q1 2024 versus Q1 2023, revenue generating customers from products grew 92% and from services, 180%. Touching on Expenses.

Speaker Change: Switching to customers. The total number of revenue generating customers in the first quarter of 2024 number 34 versus only 15 in the first quarter of 2023.

Speaker Change: A 127% increase.

Speaker Change: Q1, 2024 versus Q1, 2023 revenue generating customers from products grew 92% and from services 180%.

Speaker Change: Touching on expenses.

Shawn Canter: Operating expenses went down in the first quarter compared to the same quarter last year by about 25%. In the first quarter of 2024, KULR not only reduced its operating expenses, but the company continued to reduce its cash consumption; net cash used in operating activities decreased 18% in the first quarter of 2024 over the same period last year and net cash used in operating plus investing activities decreased 23% in the first quarter of 2024 over the same quarter in 2023. And finally, earnings per share improved by 33% in the first quarter of 2024 compared to Q1 last year.

Operating expenses went down in the first quarter compared to the same quarter last year by about 25%.

Speaker Change: In the first quarter of 2024.

Speaker Change: Cool or not only reduced its operating expenses the company continued to reduce its cash consumption.

Speaker Change: Net cash used in operating activities decreased 18% in the first quarter of 2024 over the same period last year.

Speaker Change: Net cash used in operating less investing activities decreased 23% first quarter 2024 over the same quarter in 2023.

Speaker Change: And finally earnings per share improved by 33% in the first quarter 2024 compared to Q1 last year.

Stuart: Back to you Stuart.

Operator: Okay, thank you for that, Shawn. Now we are going to transition into our question and answer phase of the call. I want to thank everyone who sent in their questions. We did have a deadline, so unfortunately, if you submitted your questions after 12 p.m. Eastern yesterday, we were not able to include them, but we did try to grab as many as we could. Without further ado, let's jump into the first question. Here we go. Can we expect major partners to come in and put this company on the map?

Stuart: Okay. Thank you for that Sean now, we are going to transition into our question and answer phase of the call I want to thank everyone, who sent in their questions. We did have a deadline. So unfortunately, if you submitted your questions. After 12 P M. Eastern yesterday more than likely we were not able to include them, but we.

Stuart: Did try to grab as many as we could without further ado, let's jump into the first question here. We go can we expect major partners to come in and put this company on the map.

Michael Mo: Sure, I'll take that. I actually think that we are already on the map with a lot of customers. Many of them are very large, name brand, tier one customers and partners. Some of them we can publicly talk about, but some of them we're on the NDA; we can't really talk about them. But what you mean by putting KULR on the map is from a name brand recognition perspective. Let's say, for example, when our safe case is going to be used by, let's say, for example, Apple in their retail store for the AppleCare product where people can put their iPhones and iPads in there for recycling, or like the Amazon Prime shipment for batteries, so our safe cases in their trucks, where every fire department in the country is going to use our safe case to solve their battery problems.

Speaker Change: Yes, sure I'll take that.

Speaker Change: I actually think that we are already on the map with lot of customers.

Speaker Change: Many of them are very large name brand tier one customers and partners.

Speaker Change: Some of them, we can publicly talk about it but some of them are under NDA, we can't really talk about it.

Speaker Change: But what you mean by putting cooler on the map.

Speaker Change: The name brand recognition perspective, let's say for example, when our save case.

Speaker Change: He is going to be used by say for example, Apple and they're in the retail store for the Apple care products.

Speaker Change: People can put the iPhone and iPad said, therefore recycling or like the Amazon Prime shipment for batteries. So our save cases in their trucks, where every fire department in the country is going to use our safe case up to salt.

Speaker Change: To solve that battery problems.

Speaker Change: These things will take time, but they could happen over time.

Michael Mo: These things will take time, but they could happen over time. But most of our products are built into customers and products, so they're not so visible from a brand name recognition perspective to the average consumer.

Speaker Change: Yes, but most of our products.

Speaker Change: Is there a build into the customers and products. So theyre not so visible from a brand name.

Britney recognition perspective to the to the average consumer.

Michael Mo: All right, great. Could you provide any insights or updates regarding the status of the partnerships with SpaceX, Blue Origin, Archer Aviation, Beta Technologies, and Wisk Aero, as mentioned by Mr. Mo earlier this year? Understanding the constraints of confidentiality, I should say, and strategic timing, any additional information would be greatly appreciated by shareholders like myself who are keen to see KULR's continued growth and collaboration within the aerospace industry.

Speaker Change: Alright, great could you provide any insights or updates regarding the status of the partnerships with Spacex Blue origin Archer aviation Beta technologies, and Whisk Arrow as mentioned by Mr. <unk> earlier this year understanding the constraints of confidentially confidentiality.

Speaker Change: I should say and strategic timing any any any additional information would be greatly appreciated by shareholders like myself, who are keen to see coolers continued growth in collaboration within the aerospace industry.

Michael Mo: Well, Stuart, in my prepared remarks, I talked about how the KULR Texas facility is very close to all these space industry giants and also the new upcoming private space companies, and so we're serving many of them already with our engineering services. For the e-veto customers that the question addressed, they're a little bit more spread out geographically, but we're working with many of them because all of them care about the same things: battery data, high energy, high-power battery cells, and the safest battery possible to pass FAA certification. So our products and services are ideally suited to those industries.

Speaker Change: Well historically in my prepared remarks, I talked about how the quarter, Texas facility is very close to all these.

Speaker Change: Space industry Giants and also the new upcoming private space companies and so we're serving many of them already with our engineering service.

Speaker Change: For the retail customers that the question addressed.

Speaker Change: They are a little more spread out geographically.

Speaker Change: We're working with many of them, but because also care about the same things batteries data high energy high power battery cells, and the safest battery possible to pass FAA certification. So.

Speaker Change: Products and services are ideally suited for those industries.

Michael Mo: So which leading electrical vehicle, and that's the quotation marks used, manufacturer did KULR make a deal with a couple of weeks ago? If you can't answer that, why is it kept secret?

So, which leading electrical vehicle and leading electrical vehicle is in quotes manufactured did ku alarm make a deal with a couple of weeks ago. If you can't answer why is it kept secret.

Michael Mo: Well, we have announced a number of PRs about working with automotive OEMs over the last few months. For example, our safe case is used by a leading automotive OEM, FTRC test for the world's largest automotive OEM, as well as EV truck and SUV OEM. We can't disclose the name because we're under an NDA with these large customers. So you may ask, maybe this question is, if you can't say the name and the donor man, why put out a PR? The answer is quite simple.

Speaker Change: Well, we have announced a number of.

Speaker Change: Our PR about working with automotive Oems over the last few months for example, our safe case used by a leading automotive OEM FERC tests for the world's largest automotive OEM as well as EV truck and SUV OEM.

Speaker Change: We can't disclose the name because we are under NDA with these large customers.

Speaker Change: You May ask maybe this question is that if you can't say the name of the colder man why put out a PR.

Michael Mo: We use PR as a very cost-effective way to do product marketing. You know, it costs us a couple hundred bucks to put on a global newswire, and it gets thousands of views from both the newswire distribution and also our social media channels, which have thousands of followers across multiple channels. And sometimes we get picked up by trade media as a story. And so we find these PRs to be a great way to get new customers.

Speaker Change: The answer is simple.

Speaker Change: We use PR is a very cost effective way to do product marketing.

Speaker Change: Just a couple of hundred Bucks to put all of the globe newswire.

Speaker Change: It gets thousands of views.

Speaker Change: Both the.

Speaker Change: Newswire distribution also our social media channels, which have thousands of following through.

Speaker Change: Through our multiple channels.

Speaker Change: Times, we get picked up by <unk> media as a story and so we found these prs to be a great way to get new customers to be surprised how many times, we put a PR. The story is ready and we got inbound attractive for our customers and partners.

Michael Mo: You'd be surprised how many times we put out a PR, the story is written, and we get inbound traffic for customers and partners. And then, you know, in addition to getting these new customers, we also keep our shareholders informed about our products. So we found this to be super cost-effective, you know, and, by the way, these large customers, well, the larger the customer, the least likely they will allow us to disclose your name.

Speaker Change: And then in addition to.

Speaker Change: These new customers, who also keeping our shareholders informed on our profits. So we found this to be super cost effective.

Speaker Change: And by the way these large customers.

Speaker Change: The larger the customer the least likely to allow us to disclose her name and then when we put it out there and then we also have attract other large customers in the market to contact us.

Michael Mo: And then when we put it out there, we also attract other large customers in the market to contact us. And so that's a great way in a very cost-effective, cost-effective way for us to do product marketing.

Speaker Change: And so that's a that's a great way and a very cost effective.

Speaker Change: Cost effective way for us to do product marketing.

Michael Mo: You recently announced that you're moving to a larger facility that's three times bigger than your previous Texas location. Is the previous location being decommissioned? Do you still plan on keeping the California facility, or is that being consolidated into a single location down in Texas? Will there be a need for another facility?

You recently announced that you are moving to a larger facility that three times bigger than your previous Texas location is the previous location being decommissioned do you still plan on keeping the California facility or is that being consolidated into a single location down in Texas will there be a need for <unk>.

Speaker Change: Another facility.

Michael Mo: Yes, we have decommissioned the previous locations in Texas, and we have consolidated all under one roof in the new Webster facility. We still have our San Diego location that's doing a lot of our thermal work. Some of our corporate organization is running out of there, and also, a battery cell screening line is still in San Diego. So those are the two facilities, and we don't have a need for another facility right now.

Yes, we are we have decommissioned the previous locations in Texas, and we have consolidated all under one roof.

Speaker Change: Indeed, the new Webster facility.

Speaker Change: We still have our San Diego location, that's doing.

Speaker Change: The amount of our total work.

Speaker Change: Some of our corporate organization is running out of there.

Speaker Change: It also battery cell screening line is still.

Speaker Change: In San Diego.

Speaker Change: So those are the two facilities and though we don't have a need for another facility right.

Michael Mo: Can you break down KULR1, the number of contracts and stages that they are in? We know that most revenue comes in later stages, but it's unclear how many clients are in the pipeline and at what stage they might be in.

Speaker Change: Can you breakdown cooler one the number of contracts and stages that they are in we know that most revenue comes in later stages, but it's unclear how many clients are in the pipeline and at what stage they might be in.

Michael Mo: Yeah, we haven't broken down the different customers and stages in the kind of detail that the question is asking for, but we actually do look at engineering service customer growth and revenue growth as an indication of future product sales growth. So we're focused on customers that have big product sales upside potentials, recurring revenue potentials, and also diversify our product portfolio, or our product in our customer portfolio, to reduce our risk of customer concentration.

Speaker Change: Yes.

Speaker Change: We haven't broken down the different customers in stages in the kind of detail that.

Speaker Change: The question.

Speaker Change: Is asking for.

Speaker Change: We actually we do look at engineering service customer growth and revenue growth is a indication of future product sales growth.

Speaker Change: So we're focused on customers that have big product sales upside potentials recurring revenue potentials and also diversify our product portfolio.

Speaker Change: Or our product and our customer portfolio to reduce our risk on customer concentration. So when you look at our Q1 performance. We grew our service revenue both in customer size and also in the revenue numbers.

Michael Mo: So when you look at our Q1 performance, we grew our service revenue both in customer size and also in revenue numbers, and our new customers for product sales in both size and revenue numbers. So I think our strategy is working, and we need to continue to execute on those.

Speaker Change: And our new customers.

Speaker Change: The full product sales in both the size and the revenue numbers. So I think our strategy is working and we need to continue to execute on those.

Operator: You recently authorized a reverse split, but you haven't announced anything yet. With the recent stock price improvement, do you feel like a reverse split is still needed?

Speaker Change: You've recently, an authorized a reverse split but you haven't announced anything yet with the recent stock price improvement do you feel like a reverse split is still needed.

Shawn Canter: Thanks, Stuart. It's Shawn. Maybe I'll take that one.

Sean: Thanks, Stuart it's Sean maybe I'll take that one good question.

Sean: We recently announced that the New York stock exchange informed us that we have regained compliance with regards to the level of our share price as a result, we're under no obligation to do a reverse split.

Sean: And I guess I'll leave it with we have and will continue to work towards our shareholders best interest.

Shawn Canter: Good question. We recently announced that the New York Stock Exchange informed us that we have regained compliance with regards to the level of our share price. As a result, we're under no obligation to do a reverse split. And I guess I'll leave it with: we have and will continue to work towards our shareholders' best interest. [inaudible]

Speaker Change: Okay, what part of the business are they most excited about they being you internally at cooler regarding growth and potential.

Speaker Change: Yes.

Michael Mo: Okay, what part of the business are they most excited about, they are telling you internally at KULR, regarding growth and potential?

Speaker Change: I am very step out actually at the overall strategy is working and are different parts of the technology portfolio is driving each other for growth. Obviously, the FERC tests is growing leaps and bounds industrial customer engagements and battery design contracts with larger customers and thats driving product sale business for us.

Michael Mo: I'm very excited about the overall strategies working in the different parts of the technology portfolio driving each other for growth. Obviously, the FPRC test is growing leaps and bounds, and that's driving customer engagement in battery design, contracts with larger customers, and that's driving product sales business for us in both the number of customers and revenue growth. Underlying it all is the data that we generate throughout the process. That is the glue and the few to the flywheel of our business.

Speaker Change: In both the number of customers and revenue growth underlying it all is the data that we generate through all the process that that is the glue in the few to the flywheel of our business everybody talked about proprietary data now and how it can be useful AI applications.

Michael Mo: Everybody talks about proprietary data now and how it can be used for AI applications. So we are building up our treasure trove of proprietary data, and we will explore that further with potential AI opportunities in the near future.

Speaker Change: Our building up our treasure trove of proprietary data and we will explore that further with potential AI op GDS in the near future.

Michael Mo: With KULR being the only company bringing FTRC to the table, would it be safe to say that all independent companies such as Intuitive Machines, Lunar Outpost, and Venturi Astrolabs that are working on NASA projects are, in turn, on the books as unnamed KULR clients for at least battery testing purposes?

Speaker Change: With cooler being the only company, bringing FTR seat at the table would it be safe to say that all independent companies such as intuitive machines lunar outpost and venturi Astro labs that are working on NASA projects are in turn on the books as unnamed cooler.

Speaker Change: Clients for at minimum battery testing purposes.

Michael Mo: Well, yes, we have the exclusive license on the large format FTRC test, which most of the EV energy storage and industrial applications companies that are using this large format. And also, we have made significant improvements on the FTRC device in general. And more importantly, the algorithm of the data collection and the analysis based on the original NETRA software.

Speaker Change: Well, yes, we have the exclusive license on the large format of Chelsea test.

Which that most of the EV energy storage and industrial applications companies that are using smart format.

Speaker Change: And also we have made significant improvements on the FERC device in general and more importantly is the algorithm of the data collection and the analysis based on the original unnatural.

Michael Mo: Will Walker, our CTO, is the inventor of the FTRC technology. So I think it's safe to say that KULR will be in the leading position to service all these space-related customers with our FTRC setup. In addition, for these customers to meet the NASA battery pack safety standard, you need your battery cell to be screened by working instruction 37, and we have the only automated cell screening line in the world to do that at scale.

Speaker Change: We will work our CTO.

Speaker Change: Is the inventor of the FDIC technology. So I think it's safe to say that quarter will be the leading position to service all of these space related customers, but for our FERC setup.

Speaker Change: In addition for these customers to meet the NASA battery pack safety standard.

Speaker Change: A battery cell to be screened by the work construction 37, which we have the only automated.

Speaker Change: So screen line the world to perform that at scale. It also reliably providing b cell screening data.

Michael Mo: It also reliably provides the cell screening data. It also then you need to build a battery pack to meet the JSC 20793 specification, which can be served by our KULR-1 space architecture, like I talked about in the presentation. So this is where we can start engagement with a customer with the FTRC cell testing, and then we can end up with a customer by building them a total solution using our quarter one space battery platform with screen cells. This will save customers money and time, and it's a win-win partnership for both of us.

Speaker Change: It also they need to build a battery pack to meet the GSC to 0793 specification.

Speaker Change: Which can be served by our quarter, one space architecture like I talked about in the presentation. So this.

Speaker Change: This is where we can.

Speaker Change: Starting cash flow with a customer with the HRC cell testing and that we could end up with a customer by building them a total solution using a corner one space battery platform.

Speaker Change: Screen cells this will save customers money.

Speaker Change: Time, it is a win win partnership for both of Us.

Michael Mo: All right, does the company believe its competitive advantage is strengthening? If so, what key factors contribute to this?

Speaker Change: All right does the company believe its competitive advantage is strengthening if so what key factors contribute to this.

Michael Mo: I believe it's definitely strengthening. The key contributing factors are data, safety, and speed. I think I'll repeat again, we are providing our customers with battery cell performance and safety data that they can't get anywhere else consistently in a broad-based type of data, proprietary data. We're a safety-focused organization, so our team is really focused on doing that, and all the design decisions are made around thermal performance and safety. That is a critical decision factor for our customers.

Speaker Change: I play this definitely strengthening.

Speaker Change: The key contributing factors are data safety.

Speaker Change: Yes Pete.

Pete: I think I'll repeat again again, we are providing our customers with batteries cell performance and safety data that they can't get anywhere else.

Pete: Distantly and a broad base.

Pete: The type of data proprietary data.

Pete: Our safety focus organization. So our team is really focused on doing that in order to design decisions are.

Pete: Made around double the performance and safety.

Pete: That is a critical decision factor for our customers.

Michael Mo: And now we have the one-stop-shop total solution package all under one roof in our Texas facility, and they can get their battery design tested and certified in record time. I definitely believe our competitive advantage is strengthening.

Pete: And now we had the one stop shop total solution package, all under one roof in our Texas facility.

Pete: You can't get that battery designed tested and certified in record time.

Pete: I definitely can lead our competitors.

Pete: Our competitive advantage is strengthening.

Operator: Great, all right, next question. How is the company ensuring timely order deliveries amidst increased volumes to prevent backlog issues affecting revenue recognition?

Speaker Change: Right Alright next question, how is the company, ensuring timely order deliveries amidst increased volumes to prevent backlogs each backlog issues affecting revenue recognition.

Shawn Canter: Stuart, it's Shawn. I think maybe that was a good one for me to take.

Sean: Stuart It's Sean I think maybe that was a good one for me to take.

Shawn Canter: With respect to revenue recognition, we follow the established accounting rules. Having increasing customer demand is certainly a nice problem to have. Meeting customer timing requests is always critical and something we're very focused on. We're always trying to gain additional efficiencies, to do more with the resources we have. For example, responding to customer demand, growing customer demand, as a result of being booked out for almost the next couple of quarters, we're bringing on two additional FTRC testing machines online. We're also evaluating different programs, for example, where we would offer premium subscriptions or subscription-type programs for customers who have particularly time-sensitive requirements.

Sean: With respect to revenue recognition, we follow the established accounting rules.

Sean: Having increasing customer demand is certainly a nice problem to have.

Sean: Meeting customer timing requests.

Sean: As always critical and something we're very focused on.

Sean: Always trying to gain additional efficiencies.

Sean: To do more with the resources we have.

Sean: For example, responding to customer demand growing customer demand.

Sean: As a result of being booked out for the next for almost the next couple of quarters, we're bringing on two additional <unk> testing machines online.

Sean: We're also evaluating different programs for example.

Sean: We would offer premium subscriptions are subscription type programs for customers, who have particularly time sensitive requirements.

Thanks.

Michael Mo: So what's the company's future patent application strategy? Any specific areas or technologies targeted for patent protection?

Speaker Change: So what's the company's future patent application strategy any specific areas or technology is targeted for patent protection.

Michael Mo: Yeah, so our PAN strategy has been very consistent from day one is that we look at PAN's core technology and its applications around that core technology. So for example, our TRS technology, the focus is on how to build it, the internal configurations of it and variations of that, and how to use it in a system. So I think that that creates a defensive mode, you know, around our technology and around our PAN.

Speaker Change: Yes, so our strategy has been very consistent from day one.

Speaker Change: Is that we look to pan core technology and its applications around our core technologies. So so for example, our Prs technology. The pen is on how to build it the internal company durations and variations, so bad and how to use in our system. So.

Speaker Change: Think that decreased the defensive mode around our technology and around for pads. So as we build out the different pieces of our Korlym platform will continue to.

Michael Mo: So as we build out the different pieces of our core platform, we'll continue to PAN new innovations in materials, in configurations of these materials, and also how these new, you know, pieces are used in the application of these technologies. That's our PAN strategy.

Speaker Change: New innovations in materials Reconfigurations of these materials and also how these.

Speaker Change: Our new.

Speaker Change: Pieces are used in the application of these technologies, that's our patent strategy.

Michael Mo: Okay, well, how does this quarter differ from the previous one in terms of strategic changes and performance goals?

Speaker Change: Okay, well, how does this quarter differ from <unk> from the previous one in terms of strategic changes and performance goals.

Michael Mo: Yeah, you know, our strategy has been fairly consistent throughout. So what might be a little bit different this quarter, compared to the previous quarters, is that we see acceleration of growth in our Kuno One Design Solutions business, in both the number of customers and also revenue growth. So we were seeing the flywheel of, you know, testing services, contracts, translating to design contracts, and then driving product sales, new product sales, revenue, and so forth. Now we're going to continue to monitor the new customer numbers, focus on customers that have large contracts, recurring revenue, and large product sales opportunities going forward.

Speaker Change: Yes.

Speaker Change: And again, our strategy has been pretty consistent throughout.

Speaker Change: So what might be a little bit different this quarter compared to the previous quarters is that we see the acceleration of growth in our core.

Speaker Change: And design solutions business in both the number of customers and also revenue growth.

Speaker Change: So we were seeing the flywheel.

Speaker Change: Testing services contracts translating to design contracts, and then driving product sales new product sales revenue and so forth. So that we're going to continue to monitor the new customer numbers focus on customers that have large contracts recurring revenue in March product sales opportunities.

Speaker Change: Going forward.

Michael Mo: Regarding the online store, any plans to expand its availability internationally?

Speaker Change: Regarding the online store any plans to expand its availability internationally.

Michael Mo: Yeah, we just launched our online store. I think within the next month, frankly, we're just, you know, getting our feet wet and seeing how we can serve the fire departments, hazmat groups, and other government agencies directly and also directly to consumers as well. So, there's plenty of business for us when, you know, we become successful at doing that, you know, then we'll be looking at international opportunities online.

Speaker Change: Yes, we just launched our online store I think within within amongst.

Speaker Change: Frankly, we're just getting our feet wet and.

Speaker Change: And let's see how we can serve the fire departments Hazmat foods and other government agencies.

Speaker Change: Directly and also directly to consumers while so so there is plenty of business for us when.

Speaker Change: We become successful doing that.

Speaker Change: We'll be looking at international opportunities align.

Michael Mo: Now, if there are companies interested in doing, you know, distribution for us internationally, and they see local opportunities, yes, definitely, please contact me or our sales team at kulrtechnology.com, and we can definitely have a conversation about how to work together and serve these international markets.

Speaker Change: If there are companies interest is doing distribution for us internationally NBC local opportunities, yes, definitely please contact me or our sales at quarter technology Dot com. So we can definitely have a conversation about how to work together and serve these international markets.

Operator: Very good. Any plans for future share offerings or sales, especially regarding the debt cancellation with Yorkville? How does this impact the company's financial strategy?

Speaker Change: Very good final question here any plans for future share offerings or sales, especially regarding the debt cancellation with Yorkville. How does this impact the company's financial strategy.

Shawn Canter: Stuart, it's Shawn again. I'll, I'll take that one. KULR has a standing company policy of not talking about potential or future strategic activities. I can say that management thinks the repayment of the Yorkville prepaid advance note strengthened our balance sheet substantially. Regarding our strategy, I'm not sure anything has really changed. You know, the principles we're focused on are, you know, keep working to meet the growing customer demands in a growing market, and that should address revenue trajectory, and keep a watchful eye out to thoughtfully reduce costs and gain efficiencies where we can.

Sean: Stuart It's Sean again, I'll take that one.

Speaker Change: Cooler has a standing company policy of not talking about the.

Sean: Potential or future strategic activities.

Sean: I can say that management thinks the repayment of the Europe, Phil prepaid advance note.

Sean: <unk> strengthened our balance sheet substantially.

Sean: Regarding our strategy.

Sean: Im not sure anything has really changed.

Sean: The principles, where we're focused on or.

Sean: Keep working to meet the growing customer demands in a growing market.

Sean: And that should address revenue trajectory.

Sean: Keep a watchful eye out to thoughtfully reduce costs and gain efficiencies where we can.

Shawn Canter: Don't be wasteful. Don't be penny wise and pound foolish and always be ready to take advantage of opportunities when they present themselves. They will they will present themselves. It's just hard to predict exactly exactly when. So we need to be ready. Strengthening our balance sheet, for example, moves us in that direction and I'd like to think makes KULR more attractive to opportunities to present themselves more often to us. Thanks.

Sean: Don't be wasteful don't be penny wise and pound foolish.

Speaker Change: Uh huh.

Speaker Change: And always be ready to take advantage of opportunities when they present themselves. They will they will present themselves and it's just hard to predict exactly.

Speaker Change: <unk>, so we need to be ready.

Speaker Change: Strengthening our balance sheet for example moves us in that direction.

Speaker Change: And I'd like to thank makes cooler more attractive for opportunities present themselves more often to us. Thanks.

Operator: Alright, as mentioned, that was our final question and that does conclude the call today. I will now turn the call back over to our operator Thomas to finish the call. Thank you.

Thomas: Alright as mentioned that was our final question and that does conclude the call today I will now turn the call back over to our operator Thomas to finish up the call. Thank you.

Thomas: Thank you everyone. This concludes today's event.

Speaker Change: You may disconnect at this time and have a wonderful day. Thank you for your participation.