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KULR Technology positions itself strategically to secure battery supply to tap a $350M revenue opportunity

Published: 15:50 16 May 2022 EDT

KULR Technology Group Inc -- positions itself strategically to secure battery supply to tap a $350M revenue opportunity
As of March 31, 2022, the company had $10.1 million in cash, compared to $6.2 million in the same period a year earlier

KULR Technology Group Inc, a leading developer of next-generation lithium-ion battery safety and thermal management technologies, told investors that it had positioned itself strategically to secure a revenue opportunity of up to $350 million while reporting its first-quarter results.

The San Diego, California-based company said that with demand for battery cell supplies “skyrocketing to all-time highs” and showing no signs of slowing down, KULR has taken “a key step in positioning itself to capture as much market share by securing access up to $55 million in additional capital.”

In total, KULR said it expects to procure lithium-ion battery cells providing up to 500-megawatt hours (MWh) of energy capacity, enough to power approximately 40,000 homes using currently available domestic energy storage options.

READ: KULR Technology wins special DoT permit authorizing the transport of damaged, defective, or recalled lithium-ion batteries

“Within applications for the energy storage and e-mobility markets, the battery cell supplies would equate to a revenue opportunity of $250-$350 million,” said the company.

To further control supply chain and manufacturing costs and risks, the company also plans to use these funds to bring much of its production capabilities to North America. KULR noted that it has placed itself in a situation with “more autonomy” over its supply chain, thereby mitigating logistical risks. As the forecasted demand for electric vehicles (EV) and battery cell supplies reflects a hockey stick growth, the company plans to be at the forefront of the boom.

By securing the battery cell supplies, KULR said it intends to build comprehensive solutions for energy storage, or full battery packs that include all of its proprietary technology and certifications in a bundled offering to serve the growing market.

Meanwhile, for the first quarter ended March 31, 2022, KULR reported revenue of $218,000, compared to $418,000 in the same period in 2021.

The company said the decrease was due to less product revenue caused by pandemic-related lockdowns in China, which impacted the company’s ability to ship finished goods. Lockdown protocols were alleviated in early 2Q 2022, allowing the products to ship and the company said it has “booked revenue of $325,000 related to the affected sales.”

The company’s gross margin was 39% in the quarter, compared to 34% in the comparable period year earlier.

KULR’s R&D expenses during the quarter ballooned to $721,000 from $123,000 in 1Q 2021. The company explained that the increase was due to “new engineering hires, investments in manufacturing automation, new product developments,” and research in high-areal capacity battery electrodes and solid-state electrolyte.

The net loss for the quarter was $4.1 million, or $0.04 per share. The firm’s loss from operations was $4.2 million for the quarter, compared to $1.5 million from the same period in 2021. KULR said the loss was driven by higher selling and admin costs, combined with a year-over-year gross profit decrease of 46%, as a result of impacted product revenue caused by lockdowns in China.

As of March 31, 2022, KULR had $10.1 million in cash, compared to $6.2 million in the same period a year earlier 

“In the 1Q we took demonstrable steps to support our current operations and future-proof our business in the face of ongoing supply chain challenges and mandated COVID-19 lockdowns in China,” KULR CEO Michael Mo said in an earnings statement.

“During the period we saw significant inventory buildup in China that delayed over $300,000 in revenues, which we expect to report in the coming quarter. In response to these challenges and potential roadblocks going forward, we’ve taken decisive action in solidifying our access to capital and procuring high-value and high-demand battery supplies.”

Mo said that “over the coming year,” the company expects to procure battery cell supplies “equaling up to 500 MWh of energy capacity to ensure we can continue to meet the outsized customer demand we are seeing.”

“We are continuing to invest and focus on our core growth segments in energy storage, e-mobility, and safe transportation of lithium-ion batteries with the full battery management lifecycle,” added Mo. “As we further commercialize these areas, we will leverage our innovative R&D capabilities and products and also reference our partnerships in aerospace, defense, government and regulatory sectors.”

Contact the author Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive

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