Q4 2024 KULR Technology Group Inc Earnings Call
Speaker Change: Good afternoon and thank you for joining us for the KULR Technology Group 4th quarter and full year 2024 earnings call
Speaker Change: Joining me on the call today will be Michael Mo, the Chief Executive Officer of the company as well as Shawn Canter, 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 Shawn, 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.
Speaker Change: 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.
Speaker Change: Ford-looking statements made on this call are based on information available to the company as of the date hereof.
Speaker Change: The company's actual results made different materially from those stated or implied in such forward-looking statements.
Speaker Change: Due to risk and uncertainties associated with KULR Technology Group's business
Speaker Change: which include the risk factors disclosed in their Form 10K file with the Securities and Exchange Commission on April 12, 2024, as may be amended or supplemented by other reports, cooler files with the Securities Exchange Commission from time to time.
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!
Speaker Change: Could, estimate, expect, intend, may, should, and would, or similar words?
Speaker Change: 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.
Speaker Change: Group assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise.
Speaker Change: With that, I will now turn the call over to Michael Mo, CEO of KULR Technology Group. Michael, the college yours.
Speaker Change: Thank you, Stuart. This is Michael Mo. Thanks everyone for joining us today.
KULR closed out 2024 with a record quarter in Q4.
Speaker Change: Revenue increased to $3.37 million of 44% from Q4 2023 while our offering loss decreased by 29% over here.
Speaker Change: Gross Margin was 64% in Q4 2024 compared to 29% in the same quarter 2023.
Speaker Change: 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.
Speaker Change: By the end of 2024, KULR had approximately $30 million in cash and $20 million in Bitcoin on holdings.
Speaker Change: As of March 26, 2025, we have over $80 million in cash and Bitcoin holdings and note that.
Speaker Change: KULR is in its strongest financial position ever with a rock solid balance sheet and 2025 will be a transformational year for us.
Speaker Change: Energy consumption and thermal management are the key bottlenecks for artificial intelligence AI infrastructure and applications.
Cooler: At KULR, 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.
Cooler: 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 headquarters.
Cooler: We've signed the lease for over 13,000 square feet of additional office space next door to our current facility.
Cooler: Our headquarter facility has received a S 9100 certification, which is a significant milestone reflecting quarters dedication to producing the highest quality products within the aerospace and defense industries.
Cooler: They are studying 100 is a globally recognized quality management standard or organizations that design develop and provide aerospace defense and aviation products and services.
Cooler: We're now well positioned as the one stop shop total solution provider to design test manufacture is certified battery products of the highest quality in the United States.
Cooler: As you all know we've been investing in our cooler battery platform. We're now reaping the benefits of that investment.
Cooler: Well cooler ones based product, we now have multiple customer engagements to design to 0793 compliant patterns.
Cooler: We're going through 20793 certification process now with NASA for one of our customers.
Cooler: We have quota was based reference platform for 100, 204 hundred watt hour batteries.
Cooler: We have our own battery management system Pms for both terrestrial and space applications that are a radiation tolerant.
Cooler: We're entering production stage for both our quarter, one space and Guardian customers in 2025.
Cooler: In addition, new Colo space and Guardian products, we're seeing growing demand for battery pack design and manufacturing services from U S companies developing drones and robotics.
Cooler: Defense Tech warehouse automation are two areas.
Cooler: He can or interest.
Cooler: The new generation of defense that companies are focused on innovating rapidly is delivering cost effective systems to the battlefield.
Cooler: Bom costs and performance are more important than ever in a quarter is focused on delivering cost effective solutions for these companies by leveraging our supply chain and advanced technology portfolio across multiple projects.
Cooler: Robots for warehouse operations is another rapidly growing area and these solutions are all battery operated.
Cooler: Safety is paramount in these applications and cuda is able to offer a companies in this space range of solutions to improve safety profile and performance for their battery packs.
Cooler: Nvidia CEO Jensen Huang has highlighted the emergence of physically.
Cooler: AI systems capable of understanding interacting with the physical world is a significant a rapidly growing market opportunity. He has referred to this sector is a multi trillion dollar opportunity.
Cooler: Particularly emphasizing the potential in robotics and autonomous machines.
Cooler: At cooler our exposure to this market begin through our battery customer interactions.
Cooler: But we quickly realized that this is a massive market opportunity that we must participate in with more than just batteries.
Cooler: We'll announce our strategic partnership to enter the robotics and physical AI market in the next few weeks.
Cooler: We announced on Tuesday that we now have 668, bitcoin, which is more than two thirds weighed towards our near term goal of 1000 Big quotes.
Cooler: I get asked a lot about how we stomach.
Cooler: The volatility in bitcoin.
Cooler: <unk> set a burst of volatility is by calling.
Cooler: In this age of AI, where things are transforming at a crazy rate overnight someone may call. It that these seek moment, we better do we better get used to volatility.
Cooler: At least that to survive and thrive in this new era of AI cooler needs to build a culture that embraces volatility. So they can reduce the risk. So it can reduce the risk of our own deep seek moments.
Cooler: Because the Treasury strategy served two objectives for US one we believe that bitcoin is a long term store value that beef inflation and games.
Cooler: Number two it's a training ground for building dynamic corporate culture and execution cadence depositions qunar to succeed in the new AI era.
Cooler: We're doubling down our commitment to PTC with BTC mining, we're actively exploring partnerships opportunities as.
Cooler: As we rollout our AI products and energy management technology applied to AI data centers, we expect to apply them to PTC mining as well to reduce energy costs.
Cooler: Kathy would has predicted bitcoin to reach one $5 million by 2030.
Speaker Change: Michael Saylor is projecting bitcoin to reach 40 trillion dollars in market capitalization within the next four to eight years from the two trillion dollar market cap right now I hope, they're both right.
Speaker Change: Speaking of Kathy I would like to wrap up my portion of the presentation with her big ideas for 2025.
Speaker Change: Robotics energy storage and blockchain bitcoin.
These ideas are not isolated.
Speaker Change: Theyre convergence accelerates innovation, leading to potential gross or exponential growth.
Speaker Change: Profound social impact that are fundamentally or structurally changing our financial systems.
Speaker Change: At cooler, although we're a small company with limited resources, but we view this convergence as a generational opportunity for us to participate in.
Speaker Change: Because we are all at the very early stages of AI and we have not even yet to start the physical AI and robotics H yet.
Speaker Change: There'll be many deep deep deep deep moments to come and we want to be ready to take advantage of those moments.
Speaker Change: We will focus on the applications, where we can add our expertise.
Speaker Change: And the existing business is disrupted by AI.
Speaker Change: And we can pivot to these businesses that could be accretive to quarter quickly.
Speaker Change: To give some context around our thinking our strategy I'd like to share with you a couple of data points in.
Speaker Change: In a recent interview at the Tokyo University in Japan.
Sam Edelman: Sam Edelman sealed open AI.
Sam Edelman: Predicted that openly as software programming AI agent will be the top one program in the world by the end of 2025.
Speaker Change: Stopping CEO muscles don't expect AI intelligence to advance 1000 times every technology cycle, which lasts about two to three years.
Speaker Change: At that rate, we can expect AI intelligence to be 1 million tonnes more intelligence to what they are today by the end of this decade.
Speaker Change: As these predictions become realities over the coming months and years.
Speaker Change: Every company in the World will become an AI and software company.
Speaker Change: All earnings to get there as fast as possible.
Sean: Now before I hand, the call over to Sean I would like to encourage you to check out our new website at www dot cooler.
Speaker Change: It's a fresh new look to showcase all of our products and services.
Speaker Change: Thank you very much.
Sean: Sean will discuss financial details.
Speaker Change: Thank you Mike.
Speaker Change: Let's cover some key highlights now for both the fourth quarter and the full year.
Speaker Change: <unk> 2024.
Speaker Change: Topics worth noting include revenue of <unk>.
Speaker Change: Record revenue quarter.
Speaker Change: And record revenue year for cooler gross margin gross margin was up 100% fourth quarter 2024 over fourth quarter 2023.
Speaker Change: Operating expenses were down.
Speaker Change: We continued the trend of expanding our paying customer base and reduce our customer concentration.
Speaker Change: Whose balance sheet is strong we are.
Speaker Change: A meaningful net cash position with no material debt obligations.
Speaker Change: Our cash and Bitcoin holdings are worth over $80 million as of the close on March 25th.
Speaker Change: We established our bitcoin treasury position in 'twenty, 'twenty, four and now own 667 bitcoin.
Speaker Change: Let's start with our income statement in the fourth quarter cooler set a new revenue record revenue was approximately $3.4 million and this is about 44% higher than the same period last year and 6% higher than the third quarter 2024, which was then itself.
Speaker Change: Another revenue record quarter.
Speaker Change: And 'twenty 'twenty, four cooler delivered $10.7 million of revenue.
Speaker Change: Another revenue record for cooler this was up 9% from 2023, which was itself also a revenue record year.
Speaker Change: In 2020 for product revenue was approximately $3 $6 million down 47% year over year and service revenue was approximately $4.4 million in 2024.
Speaker Change: 51% from the same period last year.
Speaker Change: In 2024 cooler signed its first two revenue generating license agreements and recorded $2 7 million in revenue.
Speaker Change: We are excited about this business model and hope to be able to announce similar type deals in the coming quarters.
Speaker Change: Gross margin for the fourth quarter was 64% versus 29% in the same period last year.
Speaker Change: For the full year 2024, gross margin was 51% versus 37% in 2023% to 37% increase year over year.
Speaker Change: 2024 versus 2023 full year R&D expenses were down 34% and SG&A was down 16%.
Speaker Change: 2024 earnings per share improved 55% over 2023.
Speaker Change: Now, let's spend a moment on customers.
Speaker Change: And 'twenty 'twenty four.
Speaker Change: <unk> had 71 paying customers up from 53 in 2023.
Speaker Change: Paying product customers were up 36% from 39 in 2023 to 53 in 2024.
Speaker Change: Service customers were up 100% to 34 and 2024.
Speaker Change: In addition to expanding our customer base, we are reducing our paying customer concentration.
Speaker Change: Now a few points on our balance sheet.
Speaker Change: Compared to the end of 2023, our balance sheet has improved materially.
Speaker Change: At the end of 2024.
Speaker Change: Our cash balance sheet was 30 million our cash on hand was $30 million.
Speaker Change: Our current accounts receivable was $2 6 million.
Speaker Change: And we held $20 million in bitcoin.
Speaker Change: Total assets were $63 million at 12, 31, 2024 versus 11 million at the end of 2023 up 479% and we had no material financial debts.
Speaker Change: Total liabilities were down 58% to $5.5 million.
Speaker Change: Before moving on as a reminder, we currently hold about 667 bitcoin.
Speaker Change: Cooler has decided to early adopt the new FASB rule for marking to market our bitcoin holdings.
Speaker Change: So you'll see on our 'twenty 'twenty four income statement on a line item called quote change in fair value of digital assets unquote at.
Speaker Change: At the end of 2020 for this line item was a $719000 charge. This is a noncash item. It just reflects the change in value from the purchase date to the market. In this case 12 31 2024.
Speaker Change: It does not reflect that we sold any bitcoin.
Speaker Change: Going forward, our Bitcoin holdings will be marked on a monthly basis back to Stuart.
Speaker Change: Thank you, Sean well, let's jump right into the questions now in 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 M Street five a batteries how prevalent do you think space travel becomes over the next 10.
Speaker Change: [noise] years will there be applications on Earth as well, yes. Thanks, Stuart, Yes, fish trouble will definitely become more affordable than prevalent over the next 10 years, but we believe that the bigger market opportunity is privatize space exploration with new satellites equipment into space that they're all kind of requests.
Speaker Change: <unk> batteries to power them.
Speaker Change: And also as the volume go up the costs will go down.
Speaker Change: As that happens we expect some of these more higher end technology to be available or applications on earth.
Speaker Change: Alright excellent next question is for you Sean here. It is are there plans to diversify crypto or buy more.
Speaker Change: Thanks, Stuart sure as we've indicated before several times from a crypto point of view.
Speaker Change: We are focused on our BTC or bitcoin Treasury program.
Speaker Change: Okay. Thank you for that Okay. Here's the next question and its for you again, Michael there is a rumor circulating on Twitter.
Speaker Change: A K a acts that cooler is providing materials to rocket lab Archimedes engine, specifically, a carbon composite material to be used in a rocket called neutron one can cooler please confirm or deny that they are providing any materials to rocket lab to if they are.
Speaker Change: We are providing any materials to rocket lab in cooler confirm or deny if the materials provided would be sufficient for the two companies to announce a partnership.
Speaker Change: And three if the partnership will be announce can cooler. Please give details of any further opportunities that may arise from working together with rocket lab and how much money cooler expects to realize from the partnership and how often they would be providing materials I'm pretty sure. He slipped about seven questions in.
Michael: Michael I'll leave it to you.
Speaker Change: Thanks Stuart.
Speaker Change: Yes.
Speaker Change: I'm glad that this investor really did a lot of homework on both quarter end and Rocky lab sounds like but.
Speaker Change: I really can't comment on any rumors that we have not officially announced that we have any relationship with so I'm sure I'll leave it to that.
Speaker Change: Understood.
Speaker Change: So the next question Sean is for you why is such a large portion of cash being invested into bitcoin and could this muttered 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 <unk>.
Speaker Change: Company comes on financial hardship more than that would they rather dilute investors or sell a portion of the bitcoin holdings.
Speaker Change: Thanks Stuart.
Speaker Change: Good topic.
Speaker Change: Our our treasury strategy is to retain liquidity and significant cash reserves. In addition to building our BTC treasury position as I've said before give.
Speaker Change: Given the economic context in today's world and the fundamentals of bitcoin.
Speaker Change: And what I mean by that is sort of the growing demand across several dimensions individuals' institutions.
Speaker Change: State organizations government bodies, and the fixed supply of bitcoin that they'll only be 21 million ever created.
We consider BTC, a good store value overtime, and therefore, a positive for for cooler shareholders.
Speaker Change: We consider our liquidity and our cash on hand to fund operations.
Speaker Change: As we go through our internal decision making processes.
Speaker Change: All of our decisions get analyzed through a lens of what we think is in the overall best interests of the cooler shareholder base.
Speaker Change: And decisions around cash management, and our BTC Treasury program are no different than that.
Speaker Change: So our strategy is to be a long term holder of BTC bitcoin.
Speaker Change: And we do not see a scenario today that would cause us to change that strategy.
Speaker Change: Okay, Sean let's stay on this topic and let's stay with you here is 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.
Speaker Change: Sure.
Speaker Change: Excellent question.
Speaker Change: We don't really see that too we don't see that we have to make a decision between the two though.
Speaker Change: That we'd have to make a choice between the two today.
Speaker Change: We're investing in our company.
Speaker Change: And we consider our BTC Treasury program, a very valuable asset to cooler and its shareholders. We're also investing in our people our facilities and our product development.
Speaker Change: Excellent Alright next question. This is for you Michael during the last earnings call. You were asked of cooler could deliver slash produce 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.
Speaker Change: To be a quote unquote big contract what is the name of the company Slash partner you mentioned you would be ready to help take on the production of a big contract.
Speaker Change: Yes, I mean, we do have a number of customers with contracts over $1 million.
Speaker Change: And we do have customers, who are already on production as I talked earlier, we have expanded our facility in Webster, Texas.
Speaker Change: To over 31000 square feet in there. So now we're actually ready to take off some of these bigger contracts.
Speaker Change: And I think that in our new facility. We can we can manage we can manufacture thousands of batteries per year without Blake humanized. So so yeah, we're ready for these big contracts.
Speaker Change: Well during the last two earnings calls you've mentioned that revenues were down in part because coolers biggest customer had not re signed to contract Slash agreement. However, you said they were expected to do so in 2024 did that transpire.
Speaker Change: Yes in 2020 for that particular customer did not order any products, but.
But we were still able to make up the difference with new customers and finished the year on a record quarter. So.
Speaker Change: As you've seen in the general battery markets.
Speaker Change: In the United States.
It's been a very challenging time for a lot of.
Speaker Change: A lot of people a lot of our customers. So so we won't make any predictions right now on when and how much this customer will order for 2025.
Speaker Change: But without any forecast for this one particular customer we still expect our revenue to at least double in 2025.
Speaker Change: 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 service technician on every U S military airbase with helicopters to utilize cooler zero vibe.
Speaker Change: That's a great idea, but it's really up to the U S military.
Speaker Change: Two granted such contracts. So so far so far we haven't received any indication of such contract or arrangement is welcomed by the U S. Military at this moment.
Speaker Change: Okay.
Speaker Change: So Michael next question are there any data centers that have a cooler product at this time.
Speaker Change: So our Japanese license customer is testing the quarter zero byproduct.
Speaker Change: Some of the engagements is for data center customers.
Speaker Change: Okay. Michael this is about the sales team how big is cooler sales team and do you contract third party sales agents as well.
Speaker Change: Yes.
Speaker Change: We are growing our sales team our sales and marketing team together, yes.
Speaker Change: Yes, we do have third party sales agents or our safe case in other products.
Speaker Change: We've just added a new VP of business development Joel song, but he was at Eagle picture in Dolby.
Speaker Change: He's helping developing new battery customers, Josh Diamond also just joined us as VP of AI and robotics.
He started his career at Qualcomm, where he developed the CDMA footprint for Southeast Asia markets and he has a lot of experience.
Speaker Change: Iot is as well as the AI software.
Speaker Change: And our whole team is about 10 people.
Speaker Change: Okay. Another question for you then Michael what has the partnership or collaboration with United States Postal service produced.
Michael: Yes, we are working on final approval for a couple of very large size save case configurations uplifts over.
Michael: Kilowatt hours to have U S permits once that is granted then we have the power tools and EV customers waiting to ship their recycled batteries on the U S network.
Speaker Change: Alright, very good let's change gears and talk to you again, Sean with another question how much revenue in Q4 came from licensing deals.
Speaker Change: Sure. So in the fourth quarter of 2024 cooler generated $1 7 million in revenue from licensing and while we're on the topic for the full year 2024, we generated $2 $7 million from licensing.
Speaker Change: Alright, 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.
Speaker Change: Or Trs will be utilized across all of our products for the kudos on battery for space for D O D for the robotics.
Speaker Change: It's across all of our new battery initiatives.
Speaker Change: Okay. Another question for you here, Michael can you provide an update on coolers current and future endeavors with private space stations, particularly with axiom station and Star lab, given your partnerships with axiom space in Voyager space, what growth opportunities do private space space stay.
Speaker Change: <unk> presents to the company.
Speaker Change: Yes.
Speaker Change: We can't comment on individual customer activities.
Speaker Change: But we feel very strongly to quarter ones based platform is getting traction with private space companies, especially with the 207 midnight three certification.
Speaker Change: And then.
Speaker Change: Also our off the shelf products off the shelf.
Speaker Change: The customizable quota when space platforms. The 100 Watt hour 200, and 401 all configurations. These are very competitive products for satellites and other private space missions.
Sean: Okay, Sean let's talk to you here is another question. The January 25th 2024 lease Amendment extended the San Diego facility.
Speaker Change: Lease at 4863, Sharline Street to November 30th 20, twenty-five known as the first renewal what our coolers plans for its California operations. After the state does management anticipate extending this lease again.
Sean: Thanks, Stuart sure as you know.
Sean: We have moved our official headquarters to our Texas Webster, Texas facility.
Sean: Our California activity continues to be an important part of our company.
Sean: Whether we stay in this particular facility in California long term or identify a different facility for our California based activities.
Sean: It's simply a and upper and optimized operating decision that we will make based on the long term.
Sean: Best interests of cooler its customers and its shareholders.
Sean: And once that decision is made and it's appropriate to share. It we'll certainly share that with our with everyone.
Speaker Change: Alright, very good Michael our March 20th twenty-five announcements stated that cooler one space battery incorporating the malis sell M. Three five as cells is set for completion. This month, followed by NASA Safety Board review can you share the key progress made in March toward.
Sean: This completion.
Sean: Yes, we are going through the NASA GSE to zero 793.
Sean: Certification testing right now.
Sean: I believe the customer will be ready for NASA mission in 2025.
Speaker Change: Okay. Michael the next question is for you with.
Speaker Change: With Archer aviation and vertical aerospace disclosing their use of the moly cell battery cells, what opportunities exist for cooler to integrate its patented thermal runaway shield as a thermal management solution in their aircrafts, given coolers partnership with moly sell to enhance battery safety.
Speaker Change: Great question, Molly still is very well respected in the industry. So you see industry leaders like Archer and vertical use them.
Speaker Change: We have a very close relationship with moly.
Speaker Change: We have done FTR see an ICM testing on the F 35, <unk> cells and also their new power Soc such as the <unk>.
Speaker Change: 50, and they have actually a new new version more powerful so coming as well.
Speaker Change: We've gained a lot of knowledge about that and we're building our corner one air reference platform with the body. So for electric aviation in 12 markets. So Trs will be played an integral role for that and we were looking for too to really leverage that relationship and grow business.
Speaker Change: For pulse us in Boston.
Speaker Change: Okay. The next question is also for you Michael Our September 'twenty 'twenty four announcements stated that cooler completed its initial engagement with the U S Army under the expanded 2.4 million dollar battery contract focusing on silicon anode lithium ion battery prototypes with plans for cooler when Garnier.
Speaker Change: In 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.
Speaker Change: Sure, we actually receive another development and testing order from the Army. We believe we're doing self screening testing for them.
Speaker Change: To show the value of self screening for qualified.
Speaker Change: To fight effector cells before they are built into the battery pack and so therefore, we can build the most reliable reliable battery pack for the army. We will go to production with them pilot production with them.
Speaker Change: In the fall of 2025.
Speaker Change: 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.
Speaker Change: Yes.
Speaker Change: It does.
Speaker Change: Nuclear energy is a long term investment for our customers.
Speaker Change: It's going to take it's going to take some time I actually met with Charlie Oppenheimer, Chris on the Mr Oppenheimer, which the movie was based on.
Speaker Change: Dinner together and we talked about his new company Oppenheimer energy I learn a lot about.
Speaker Change: How long it takes and how much money it takes to build a new nuclear power plant.
Speaker Change: It's kind of mind boggling. So we're just getting started.
Speaker Change: Our engagement with these customers, but it's going to be a long long time.
Speaker Change: Some of them to get to fruition.
Michael: Understood Michael Here's the next question you announced the first sale of your M. Three five a battery cells is there only one customer so far did that customer just make a onetime purchase or are there ongoing sales expected.
Yes, I think this question is about the <unk> 35, a golden lot or what we called the Golden loss cell that has gone through the NASA work instructions and 37.
Michael: We have other customers.
Michael: For those cells as well as we're using those cells to build cooler space batteries for customers that need to meet the GSC to 073 certification.
Speaker Change: Okay. Michael what is the current status of your Guardian, one contract with the army.
Speaker Change: 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 2025.
Speaker Change: All right and another topic here for you Michael has your fan customers started selling fans how far off might sales b that are larger than the minimum are there any other vibe customers. Since then.
Speaker Change: They have not gone into volume production yet.
Speaker Change: We're working on faster throughput on the balancing system to lowered our costs. We are also developing acoustic energy elimination technology to combine that with vibration elimination.
Speaker Change: It actually it turns out that the acoustic energy is as important to eliminate this vibration energy.
Speaker Change: In server environments. So we're working over the customer pretty hard on that.
Speaker Change: And then.
Speaker Change: Hopefully later this year, we will be announcing those kind of products into the market.
Speaker Change: Alright 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.
Speaker Change: Thanks Stuart.
Speaker Change: 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 nor.
Speaker Change: Normal course, working capital funding and think we will have.
Speaker Change: Available cash on hand to meet those needs Sean. The final question is for you here. We go given the growing interest in crypto currency adoption and electrification driven by policies such as the Bitcoin strategic reserve announced by President Trump.
Speaker Change: Does cooler technology group plans to leverage its thermal management and battery solutions to support bitcoin mining and energy storage infrastructure in the United States and the United States and what impact does the company expect this to have on the revenue and margins over the next 12 to 18 months.
Speaker Change: Sure Good question.
Speaker Change: We think the announcement of the strategic Bitcoin reserve is a strong positive for bitcoin and therefore for cooler and its shareholders, where 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.
Speaker Change: As you know we've already signed a license for our cooler zero vibe cooling solutions.
Speaker Change: And as we continue to explore these opportunities we will look to execute on those that drive material revenue growth and positive margin contribution.
Speaker Change: All right. Thank you for that Sean has 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 show them want to extend their deepest gratitude.
Speaker Change: 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.
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.
Thomas: Okay.