KULR Technology (US:KULR)2021-08-16 20:53Financial Performance - For the three months ended June 30, 2021, total revenue was $628,244, representing an increase of $427,116, or 212% compared to $201,128 in the same period of 2020[92]. - For the six months ended June 30, 2021, total revenue was $1,046,149, an increase of $767,521, or 275% compared to $278,628 in the same period of 2020, driven by four new contracts[92]. - Product sales increased by 760% and 662% for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020, primarily due to large contracts received[92]. - Cost of revenues for the three months ended June 30, 2021, was $439,206, an increase of $394,472, or 882% compared to $44,734 in 2020[96]. - Gross margin percentage for the three months ended June 30, 2021, was 30%, down from 78% in the same period of 2020, primarily due to changes in product mix[96]. - The company incurred a net loss of $4,741,866 during the six months ended June 30, 2021, with an accumulated deficit totaling $15,988,274[106]. Expenses - Research and development expenses for the three months ended June 30, 2021, were $352,741, an increase of $294,750, or 508% compared to $57,991 in 2020[100]. - Selling, general and administrative expenses for the three months ended June 30, 2021, were $2,723,303, an increase of $2,301,759, or 546% compared to $421,544 in 2020[102]. Cash and Financing - As of June 30, 2021, the company had a cash balance of $12,159,583 and working capital of $12,194,403[106]. - Cash provided by financing activities for the six months ended June 30, 2021, was $7,397,500, compared to $1,956,476 for the same period in 2020, representing a significant increase[109]. - The company raised aggregate gross proceeds of $6,500,000 from the sale of preferred stock and $3,712,500 from warrant exercises during the six months ended June 30, 2021[111]. - The company intends to apply for full forgiveness of its outstanding Payroll Protection Program (PPP) loan, which remains active as of June 30, 2021[111]. - The company has approximately $5,707,000 available under its Standby Equity Distribution Agreement (SEDA) with YAII, which expires on February 7, 2022, but is currently restricted from issuing shares under this agreement[111]. Business Strategy - The company plans to evolve its business model to provide total system solutions and actively seek partnerships for joint ventures and technology licensing[84]. Internal Controls and Compliance - A material weakness in internal control over financial reporting was identified, specifically regarding the independent review and approval of electronic payments[117]. - The company is implementing a remediation plan to address the identified material weakness in internal controls[117]. - As of the end of the reporting period, the company's disclosure controls and procedures were not effective at the reasonable assurance level[116]. - There have been no changes in internal control over financial reporting that materially affected the company during the second quarter of 2021[118]. COVID-19 Impact - The company continues to monitor the impact of COVID-19 on its business, with uncertainty regarding future operational results due to potential virus resurgence[110]. Off-Balance Sheet Arrangements - There are no off-balance sheet arrangements that could materially affect the company's financial conditions or results of operations[112].