KULR Technology (US:KULR)2020-06-25 20:10Financial Performance - Total revenue for the three months ended March 31, 2020, was $77,500, a decrease of $117,452, or 60%, compared to $194,952 for the same period in 2019[90] - For the three months ended March 31, 2020, revenues were $77,500, a decrease from $133,435 in the same period of 2019, representing a decline of 42%[96] - Gross profit for the three months ended March 31, 2020 was $51,574, down $81,861 or 61% from $133,435 in 2019, with a gross margin percentage of 67%[96] - Cash used in operating activities was $698,110 for the three months ended March 31, 2020, compared to $286,420 in 2019, primarily due to a net loss of $550,253[103] - Cash provided by financing activities was $1,223,401 for the three months ended March 31, 2020, significantly higher than $155,000 in the same period of 2019, driven by net proceeds from a note payable[105] Product and Service Revenue - Product sales decreased to $28,000 in Q1 2020 from $169,440 in Q1 2019, while contract services revenue increased to $49,500 from $25,512[90] - The decrease in product shipments was primarily due to COVID-19 related shutdowns affecting both the company and its clients[90] Research and Development - Research and development expenses decreased by $17,779 or 14% to $129,492 for the three months ended March 31, 2020, primarily due to reductions in patent costs and stock-based compensation[97] - The company expects R&D expenses to increase as it expands future operations[98] Operational Challenges - The company has not yet achieved profitability and expects to continue incurring cash outflows from operations, indicating substantial doubt about its ability to continue as a going concern[77] - As of March 31, 2020, the company had cash balances of $634,148 and working capital deficits of $1,163,280[102] - The company has outstanding debt principal of $1,450,000 maturing on May 31, 2021, indicating potential liquidity concerns[106] Strategic Initiatives - KULR Technology Group has developed a total battery safety solution, including patented thermal runaway shield (TRS) technology, to prevent thermal runaway propagation in lithium-ion batteries[70] - The TRS bag is currently being used on the International Space Station for storing laptop batteries to reduce the risk of thermal runaway[71] - The company plans to expand its capabilities in battery screening and testing, particularly in aerospace and defense sectors, to address increasing regulations on battery safety[73] - KULR's management projects growth in the aerospace and defense sectors, particularly in directed energy and hypersonic weapon programs[74] Financing Activities - The company has entered into a Standby Equity Distribution Agreement allowing it to sell up to $8,000,000 of common stock[82] - The company entered into a Standby Equity Distribution Agreement allowing it to sell up to $8,000,000 of common stock to fund ongoing operations[108] Cost Management - Selling, general and administrative expenses decreased by $99,664 or 18% to $469,527 for the three months ended March 31, 2020, mainly due to lower travel, rent, and salary expenses[100]