KULR Technology Group Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: Cooler delivered record Q2 results with $4 million in revenue (up 63% YoY) and its first profitable quarter at $0.22 EPS, supported by a $140 million cash and Bitcoin balance sheet.
  • Positive Sentiment: The company is shifting from design services to a product-focused model—CoreLogone product revenue rose 74% YoY—and expects to launch CUDA-one Air and industrial backup platforms, aiming to double revenue in 2025.
  • Positive Sentiment: Key technology milestones include the K1S400 passing NASA’s 20793 certification, a proprietary ballistic-proof Guardian battery, and delivery of an extreme-pressure subsea pack, validating Cooler’s leadership in demanding environments.
  • Negative Sentiment: Service revenue declined 57% YoY and overall gross margin fell to 18%, driven by higher labor costs for complex projects and lower Bitcoin mining margins, highlighting near-term margin pressure.
  • Neutral Sentiment: Cooler’s Bitcoin treasury strategy, with over 10.35 BTC held and no debt, underpins its financial foundation, though the market impact of this crypto exposure remains uncertain.
AI Generated. May Contain Errors.
Earnings Conference Call
KULR Technology Group Q2 2025
00:00 / 00:00

There are 3 speakers on the call.

Operator

Welcome, everyone, to the Cooler Technology Group second quarter twenty twenty five earnings conference call.

Operator

Today is Thursday, August 14. And in just a moment, I will be joined by the CEO of the company, Michael Moe, as well as the CFO for the company, Sean Cantor. Before the call begins, please listen to the following forward looking statement disclosure covering this call. This call may contain 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 the information available to Cooler Technology Group as of the date hereof.

Operator

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 the risk factors disclosed in their Form 10 k filed with the Securities and Exchange Commission on 03/31/2025 as may be amended or supplemented by other reports Cooler files with the Securities and Exchange Commission from time to time. 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. All forecasts that 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 based on management's best estimates of their future financial performance given their current contracts, current backlog of opportunities, and conversations with new and existing customers about their product and services. Cooler Technology Group assume no obligation to update the information included on this call whether as a result of new information, future events, or otherwise.

Operator

With that, I'd like to turn the call over now to Michael Moe, CEO of Cooler Technology Group.

Speaker 1

Thank you, Stuart. Thank you, everyone, for joining today. This is Michael Mo. In Q2 twenty twenty five, we achieved record revenue of approximately $4,000,000 which is up 63% from the same quarter in 2024. We also achieved our first quarterly profit of $0.22 per share, primarily attributed to our Bitcoin treasury strategy.

Speaker 1

Our balance sheet is approximately $140,000,000 in cash and Bitcoin as of today. We're very well capitalized to grow all of our current business operations. With Q2 twenty twenty five product revenue up 74% year over year, we're in the midst of a transformation from a design and testing service company to a product focused company that will see our growth trajectory accelerate in 2025. Launched in 2023, the CoreLogone platform was built to deliver best in class battery products. The vision now coming to life.

Speaker 1

With customer milestones achieved in CoreLogone Space and CoreLogone Guardian, We're leveraging this momentum to introduce two new platforms later this year, CUDA-one Air for unmanned autonomous vehicles and battery backup units for industrial, telecom, and data center applications. We believe the Cooler One platform will be a key growth engine for us, position Cooler to double revenue in 2025 versus 2024 and staying this growth trajectory into 2026. As I was preparing my opening remarks for this call, I saw about 30 questions coming in from our shareholders. Sean and I will answer all these questions on the call. I would like to address three key areas of the questions to start our call.

Speaker 1

First,

Speaker 2

there were a

Speaker 1

lot of questions around the rationale for the reverse split and its effect. The primary strategic reason for the reverse split was to attract more institutional investors, strengthening our shareholder base with larger, long longer term holders. A higher share price better aligns with institutional buying criteria, as many funds have minimum share thresholds in their charters. Some shareholders ask whether the reverse split was done to regain NYC listing compliance. We can state unequivocally that this was not the case.

Speaker 1

Quota was already in full compliance prior to the split. While short term market reactions can be unpredictable, we remain confident that this move will broaden institutional ownership, enhance shareholder stability and increase longer term shareholder value, not just a few months. Secondly, there were many questions around shareholder communications and a negative sentiment. We've heard your feedback, and we agree there's room to improve. Could we have communicated reverse split more effectively?

Speaker 1

Absolutely. Could we have done a better job sharing updates on our operating business alongside the BTC plus treasury strategy? Yes. We'll make this greater focus going forward. In April 2025, a short report targeting Kooler was published.

Speaker 1

Short sellers profit when the company's stock declined and often publish or promote negative opinions to create downward pressure. The April report was filled with negative commentary and opinions. And since then, we've seen an increase in critical opinions and rumors spreading on social media about Cooler. It is not our policy to let such report distract our management team or engage in what would become an endless back and forth of opinions. Our legal options are also limited by freedom of speech protection and our own need to maintain commercial confidentiality.

Speaker 1

However, here are two important facts. As of today, we're not aware of any class action litigation against the company or its officers. The reverse split was not initiated due to NYIC compliance concerns. We were fully compliant at the time. It was done to strengthen our shareholder base and drive long term shareholder value.

Speaker 1

The third group of questions is around strategy of our core operating business and how does it relate to our Bitcoin treasury strategy. Koole is a Bitcoin plus treasury company leveraging a Bitcoin backed balance sheet to build and scale a portfolio of frontier technologies from high performance energy systems to AI robotics. Our Bitcoin treasury strategy has enabled us to build a $140,000,000 balance sheet, providing the capital and the stability to accelerate our growing businesses, a remarkable transformation from where we were just one year ago. Speaking of the past, I'd like to take us back a few years. Cooler's route trace back over forty years to Doctor.

Speaker 1

Tim Ngo's pioneering work in carbon fiber thermal management for space and DOD missions. When Tim and I co founded Cooler more than a decade ago, our goal was to commercialize space proven materials for mass market applications from smartphones to advanced battery systems. Over the past five years, we evolved from a component supplier to a design and testing service provider, bringing us closer to the end customer and enabling complete product solutions. Our technology has been deployed in the on the Mars Rover, International Space Station, nuclear fusion reactors, wearables, battery systems, and even helicopters. Our ability to move quickly and adapt across a versatile technology portfolio has strengthened our customer relationships and allows to identify the next breakthrough applications.

Speaker 1

In 2023, we launched Koola One, uniting design, testing and battery product developments in all into one platform. In 2025, we have advanced our technology and operational infrastructure to rapidly launch products like cool open air and next generation batteries, both through internal innovation and our manufacturing capabilities. We continue to explore new markets and applications where we can truly scale. This exploration has led us to the exoskeleton business where we're very excited about its growth prospects. We believe we're now at the inflection point.

Speaker 1

Our cooler one battery products bring us closer to the end customer and give us a scalability in the hybrid growth potential that we've been looking for. With our strong balance sheet, proven technology, operational infrastructure and a network of world class partners, we're well positioned for the next stage of accelerated growth. Kooler One sits at the heart of our growth plan, delivering advanced mission ready energy storage system for the most demanding applications. In Q2, our Kooler One space, A1S 400 successfully passed NASA's acceptance process for the 20,793 certification in support of the ARTEMIS program. We believe this marked the first true commercial off the shelf battery to achieve a two zero seven nine three rating.

Speaker 1

Final certification is pending NASA's approval process for the Artemis Proof mission in 2026. This platform architecture paired with a working structure 37 a screen cells is now ready for human rated space mission. Alongside the k one s 400, our k one s 100, 200, and 300 series are also prepared for immediate customer deployment. The K1 S500 XLT offers a compact, ultra lightweight design that delivers cutting edge performance at commercial liable cost, aligned with the economics of the private space sector. This model combines high grade working suction 37A screen cells, optimized packing factors in the low mass structural materials, along with Cooler's second generation space rated BMS.

Speaker 1

Together, these elements create a complete end to end energy storage solution for our customers. Cooler has also successfully demonstrated a ballistic proof battery capable of withstanding API route impact, a major milestone for both cooler and our customer. One of the greatest challenges in deploying lithium ion battery for defense application is meeting the demanding combination of thermal runaway abuse, vibration, and ballistics testing, with ballistic testing being the most difficult to pass. Traditional battery chemistries pass the ballistic tests by producing only smoke of the API run penetration. Lithium ion battery cells, however, typically produce flames and combustion, preventing them from widespread adoptions in many military applications.

Speaker 1

Our Cooler One Guardian solved this problem with a proprietary ballistic proof design that shields the cells from damage even after the API routing patch. This results in a passing test, paving the way for further certifications, scale production, and operational deployment. Gura has also delivered its first extreme pressure tolerant subsea battery pack to a key strategic partner, reinforcing our leadership in energy solutions for extreme environments. With several kilowatt hours of capacity, this pack is engineered to withstand 6,000 to 8,000 psi for deep water missions and is PPR rated as surface pressure and designed for safe shipboard handling. The subsea batteries system market is valued at approximately $1,200,000,000 in 2024 with the projection to reach $3,500,000,000 by 02/1935.

Speaker 1

Successfully delivering these advanced products demonstrate Cooler's capability to engineer custom energy storage solutions for the most demanding conditions, whether it's in space, underwater, or in the air. We're now channeling this best in class engineering expertise into our commercial quarter one products to accelerate growth. As we have announced previously, KUDA is working to drive adoption of solutions that embody the concept of physical AI, beginning with our award winning best in class AI powered exoskeleton, Exia. Almost half of all muscle and joint injuries at work involve the back, and Akcea is built to help prevent those injuries while reducing fatigue with powerful and high quality robotic motors. The seventh generation Ekia developed with our partner, German Bionics, is now being introduced to customers across North America.

Speaker 1

Since its launch in June, feedback has been very positive. We believe this technology can greatly help people doing hard physical work. Even though most jobs are becoming automated, millions of workers still do tasks by hand. Akcea helps them work more efficiently, avoid injuries, and feel less tired by the end of the day. We're marketing Akcea to industries like retail distribution centers, supply chain and logistics, food service distribution, and many others where injury rates, employee turnover, and heavy labor are big challenges.

Speaker 1

As The US brings more manufacturing back home, it strengthens supply chain. Supporting American workers with advanced technology like this has never been more important. We expect Exia business to grow quickly and starting to contribute to our revenue in 2025. In the coming months, we look forward to share success stories from our first customers as their teams start enjoying the benefit of this technology. Since December 2024, Kooler has reinvented itself as a Bitcoin treasury company.

Speaker 1

We utilize equity financing, strategically acquired Bitcoin through open market purchases and mining, and measures performance using BTC yield metric to create value. This approach seeks to build a long term model grounded in BTC exposure and growth, including potential expansions into lending services and Bitcoin based derivatives using existing holdings. As governments continue printing more money, leading to a gradual weakening of traditional fiat currencies, cash is likely to diminish in value over time. Bitcoin, however, offers a hedge against this erosion with its fixed supply and independence from government control. We currently hold approximately $10.35 Bitcoins.

Speaker 1

We'll continue to accumulate Bitcoin through our dual acquisition strategy in responsible and pragmatic manner. With no debt in a non erosive asset like BTC on our growing balance sheet, we continue to build more confidence in our customers and partners to scale up their business with us. Next, Sean Kiancheng will go over financial and operational highlights. Sean?

Speaker 2

Thanks, Mike. Overall, we had a very strong second quarter that helped set the stage for us to accelerate our growth going forward. Here are some of the key highlights. Revenue grew an impressive 63% from the same quarter last year to approximately $4,000,000 Cooler's quarterly revenue growth records continue to grow. This is the highest quarterly revenue Cooler has ever generated.

Speaker 2

Trailing twelve months revenue ended Q2 twenty twenty five also grew to a record high. Notably, Cooler's growth included its streak of trailing twelve month revenue increases for a fourth straight quarter. We are pleased to highlight that the second quarter was the first time Cooler had positive net earnings, posting a positive earnings per share of $0.22 For the second quarter twenty twenty five versus the second quarter twenty twenty four, product revenue grew 74%, service revenue was down 57%. Overall revenue per customer was down approximately 6%, product revenue per customer grew 4.6 and service revenue per customer was down 50%. As we sometimes see in our battery design and testing services, the timing of projects can vary from expectations due to their complex nature.

Speaker 2

Our battery design and testing services are an important component to our overall customer offering. Gross margin for the second quarter of 18% was down primarily due to unanticipated labor hours needed to complete technical projects and the price of bitcoin affecting our bitcoin mining margin. Since the end of the second quarter, the price of bitcoin has gone up, which would have grown the second quarter gross margin. For the same period year over year, operating expenses were up due to, among other things, planned investments in growth related activities we anticipate will accelerate our growth going forward. A few points on our balance sheet.

Speaker 2

At the end of the second quarter, our cash balance was just over $20,000,000 Our current accounts receivable was about $4,200,000 and we held just over $9.28 bitcoins worth approximately $100,000,000 Our total assets were $141,000,000 Additionally, we had no material debts. As an update, as of August 11, Cooler held $10.35 bitcoins worth about $120,000,000 So again, a very strong second quarter financial performance. Back to you, Stuart.

Operator

Alright. Thank you for that, Sean. Michael, the first question is for you, and it's got a few questions mixed into this one question or one submission. So here we go. With great success at Camp Pendleton at the United States Marine Corps base, multiple civilian helicopter roto balance operations, and the ongoing US army trial, is there any DOD traction with respect to Vibe and DOD helicopters?

Operator

Do we have any upfront data on savings from the current trial? Specifically, how many aircraft have been balanced, average runs to solve the equation, and how many flights to balance have been saved using Vibe? The product is is is the product solid in the h 60 world? And lastly, any traction with the Bell four zero seven? Michael, that one's for you.

Speaker 1

Yes, that's a great question. Certainly feels like this investor is very interested and also knowledgeable about the helicopter world. Although we cannot discuss all the details about our work with our DoD customers, KoolaVibe can balance the H60, the Bell four zero seven and the Blackhawk, such a new basically any helicopter that we have a long history of balancing these. On average, takes between two to three runs to get the vibration closer to zero Ips. That's well below the threshold, and then it's virtually no vibration to be felt by these helicopters.

Speaker 1

So a lot of great work has been done. And we work with a customer on lot of details about the like this customer, like this investor said, the cost savings analysis and so forth. So thank you for the question.

Operator

All right. Very good. Sean, the next question is for you. Quarter over quarter, SG and A costs have been climbing, while sales growth has not kept pace. What's driving this imbalance?

Speaker 2

Thanks, Stuart. As mentioned in our prepared remarks, we achieved a record revenue sales quarter and logged another record trailing twelve months revenue record, our fourth in a row. Our SG and A costs reflect among other things, a planned increase in investments to drive growth going forward. And we're looking forward to when we can to sharing more about our revenue growth wins with all our investors.

Operator

All right. Thank you for that, Michael. And thank you, shareholders, for all of your submissions. We've got a lot of questions today. I should have said that at the outset.

Operator

Michael, the next one is for you. Why should shareholders continue to hold cooler shares? You continue to dilute shareholders to purchase Bitcoin and fund unprofitable operations in the thermal and battery space. The ATM is the only thing that keeps the company going. What's going to change?

Operator

Any meaningful increase in share price will be met with more share dilution by management selling shares.

Speaker 1

Well, the ATM has been a very strategic tool for KORO to build our BTC treasury strategy and our balance sheet. Now with approximately $140,000,000 in cash and Bitcoin, we're at the great position to continue to invest in our battery and AI robotics business for the tremendous growth that we anticipate. When you look at The U. S. Battery and battery related companies, there are very few profitable examples.

Speaker 1

Now as we transition from a design and service battery company to a product focused company based on our CoreLogin platform. But we can be one of the exceptions in The U. S. Market, both through organic growth and also by taking advantage of some of the industry consolidation that's happening.

Operator

Thank you for that, Michael. For these investor calls, why must investors submit their questions ahead of time? We don't have visibility on the quarter's results before submitting our questions. Why can't you answer questions in real time like most publicly traded NYSE companies or at the very least hold the earnings call the day after so investors see the results and get to submit questions?

Speaker 1

That's a great question. We'll look into some of the best practices of similar companies and see what we can do. What we learned from this call is that there is value in getting some of the questions ahead of time and provide more comprehensive answers in the prepared remarks.

Operator

Very good. Yeah. Shareholders, you understand you submit your questions all throughout the quarter as well, and we like to get these in here in front of management and be able to give you the opportunity to hear it straight from the CEO and the CFO. So, Michael, next question is for you. Typically, reverse splits are done to maintain compliance with listing requirements, and there are reports suggesting that was the case here.

Operator

However, Cooler has presented it as a voluntary move to attract more institutional shareholders. Can you provide any validation or context to support that position?

Speaker 1

Yes. As I have stated in my prepared remarks, the decision was unequivocally done on voluntary basis. We were in well within compliance with NYSE listing rules. And also, as I've talked about in my prepared remarks, the main strategic motivation behind the reverse split was to attract more institutional investors. We believe these are larger and longer term shareholders.

Speaker 1

And that will provide a broader base of shareholder base and build longer term shareholder value for us.

Operator

All right. Thank you for that, Michael. Next question or statement in this case. I've come across a message online suggesting that Cooler is facing a class action lawsuit involving insider trading and investigation related to revenue inflation. If this is true, could you share what you can?

Operator

And if it's false, would would you be able to clarify that as well? Thank you for your time.

Speaker 1

Yep. We do not comment on rumors. However, I can say that we are not aware of any class action litigation against the company or its officers at this time.

Operator

Alright. Very good. Next question is also for you, Michael. I'd really like to know why you're so quiet on social media. Some days, it's nonstop posts and comments, then weeks of nothing.

Operator

It would be so much better if we had consistent communication from the company. The only news we get are press releases and videos that repeat the same content. We want to hear from you.

Speaker 1

Well, I certainly appreciate that. And in my prepared remarks, I addressed about communication and about the negative sentiments. Yes, we can do better. I can do better. And I'm trying to balance between my time between execution and communication.

Speaker 1

So I will certainly do a better job communicating more consistently throughout the quarter with our investors.

Operator

Very good. All right. So, Michael, next question for you again. It's been like this for a while. In 2023, Cooler's CTO, Doctor.

Operator

William Walker, stated Our new Webster R and D Center will usher in the next phase of Cooler's expansion and growth. So far, quarter over quarter, we have not seen any meaningful growth. Where is this growth supposed to come from? You keep promising growth, but it never materializes. Also, using year over year numbers.

Operator

It's idiotic. We don't hear anything from the Webster office. In fact, the only time the company gains momentum is when Bitcoin is being discussed.

Speaker 1

Well, good question. Sounds like this investor really follow us throughout the years. First of all, I love Will, who is an internal optimist just like me. He and Peter Hughes, our VP of Engineering, have provided great leadership for our team in Webster. And we're also in the midst of moving all of our operations or consolidating our operations from a San Diego office to Webster by the October.

Speaker 1

So a lot of work going on there. As an update to the Webster facility, I think I provide our growth and our updates almost every quarter. They're usually the highlights. Like last quarter, I talked about expansion to the 31,000 square foot place and all the wonderful infrastructure expansion that we have been doing in Webster and we continue to do. I would say that we haven't gone through some, you know, growing pain of the growth and also transitioned to a product oriented company from design and testing services.

Speaker 1

I'm very confident that our current lineup of the Quarter Space, Quarter One Guardian and the new product lines coming up, Quarter One Air and the industrial energy storage products is going to provide the growth that we have been looking for.

Operator

Okay. Here's the next question, and it's a reference to November 2023. Michael Moe stated, We expect Cooler One to have the revenue opportunity of over $200,000,000 by 2026. It's two and a half years since that statement. What's the status of Cooler One's revenue opportunity, and why is it that you have not made any meaningful headway with that product yet?

Operator

It would be one thing if you were communicating these things to us, but we're getting nothing. Hope you take the time to address my question.

Speaker 1

Yes. Back in 2023, we established a strategic partnership with a battery cell provider to procure their cells to be made in North America to target a wide range of applications. However, subsequently, the cell provider changed their manufacturing strategy. And also the market opportunity has changed significantly due to battery price volatility over the last couple of years. However, I think that we're entering a new a different market situation now that the Corda One platform has been around for more than two years now since then.

Speaker 1

And we have developed and tested and delivered the suite of Quarter One S, Quarter One Guardian products. And I'm much more confident now about the future growth than back in 2023.

Operator

Okay. Here's the next question. Why are most or all press releases about Bitcoin and not about the operating company?

Speaker 1

Yeah. I would say that a lot of our business activities now are just about hunkering down and executing our products and customers, managing our transition to a product company and lots of internal operations on the growth and the facility consolidation. So I do hear you loud and clear. We will step up our communication and share more exciting news about our the the product launches, the quarter one, and the AI robotics growth updates.

Operator

All right. Thank you for that, Michael. So last quarter's report detailed a $3,300,000 investment for preferred shares in privately held German Bionic. Their Apogee robotic exoskeleton has been on the market for years at a price point exceeding €10,000 per unit. As the exclusive U.

Operator

S. Distributor, what were the Q2 sales figures for North America?

Speaker 1

Yep. We we don't break out sales figures on this at this time yet. However, we are very excited about the new suit called Axia, which is a seventh generation suit. It's a great product. I think it's 10% lighter than a previous suit and and more powerful.

Speaker 1

The initial customer feedback has been overwhelmingly positive. People feel that well, we were told that this is the most powerful and connected intelligent exoskeleton suit they've ever tried you know, they've ever put on. And I would also add that we start our relationship with Geminobiotics as an investor and The U. S. Exclusive distributor and technology partner as a way to test the product in the North American markets.

Speaker 1

And we expect that relationship to expand from here.

Operator

Another German Bionic question next. Given that German Bionic is up against established domestic and international competitors offering similar products at a lower price, what is Cooler's clear and defensible advantage in bringing these suits to The US market?

Speaker 1

Yeah, what we have heard from some of the largest customers through our early engagements on the Exia suit again, again, is it is the most powerful exoskeleton they've ever tested in the market, and the most advanced in the telemetric data and analysis. And there are some real killer applications that Akcea is addressing with the customers, which I would not go into due to confidentiality and competitive advantage reasons, but we are super excited about the growth opportunity.

Operator

Alright. The company has publicly stated a $20,000,000 annual revenue target for 2025. Recent Bitcoin purchases and mining announcements show a considerable allocation of capital and focus toward cryptocurrency related revenue. Beyond these initiatives, how is the broader business performing?

Speaker 1

Yes. Well, we expect to meet our 2025 revenue target, as we have stated before. Furthermore, we're excited about the prospects of the quarter one product platform as well as the Akcea growth. And we expect that the growth rate to maintain, if not accelerate into 2026.

Operator

All right. I'm going to go on a limb and think that this next question is for you. Sean, last quarter, Sean Cantor highlighted the company's balance sheet strength, but that was primarily due to aggressive use of the ATM. In June, you entered into a new $300,000,000 ATM agreement with Cantor Fitzgerald and Craig Hallum. Beyond balance sheet strength, what other financial metrics can the CFO point to that demonstrate the company is on a growth trajectory going forward?

Speaker 2

Thanks Stuart. As you can see from our numbers, Cooler's revenue grew to another record revenue quarter. We set a trailing twelve months revenue record again this quarter, which is our fourth in a row. And I would say, keep your eyes on revenue growth. That's what we're focused on and we'd encourage everybody to follow us with that focus.

Operator

All right, thank you for that, Sean. Michael, in May 2024, the company announced expansion of its testing services division, K1DS, projecting it to become an 8,000,000 to $10,000,000 annual revenue standalone business beginning in 2025 without requiring additional investment in testing capabilities. Is that still on track?

Speaker 1

We have completed our investment in the K1DS testing service. All the infrastructure investment has been made. We are now focused on strategic key customers for our testing and of our testing services, and then also transition some of the testing resources to manufacturing activities for our cooler one battery products as we start ramping up the production for these products. So where you see this is where you see the next growth opportunity for us.

Operator

Okay. Next question. Both Benchmark and Zacks paid research have discontinued coverage of Cooler aside from Litchfield Hills research. Are there any analysts currently covering KULR? You have an ATM with Craig Hallum and Cantor Fitzgerald.

Operator

Are there analysts covering KULR stock? And if not, why?

Speaker 2

Thanks, Stuart. You know, the research teams and investment banks make their own decisions as to who to cover and when to initiate that coverage. It's it's really not up to us.

Operator

Okay. Michael, this is another one regarding that reverse split. So what was the rationale for executing a reverse stock split when Cooler was Nasdaq compliant? I believe they mean NYSE compliant. And did you anticipate the significant drop in price following the reverse stock split from which Cooler hasn't recovered?

Operator

If so, do you regret the decision in hindsight?

Speaker 1

First of all, I don't regret the decision. The main strategic motivation behind the reverse split, as we've said before, was to attract more institutional investors. We believe a growing institutional investor base ultimately benefits all shareholders, including retail shareholders, and provide long term shareholder value, not just in a couple of months.

Operator

Alright. Next question. The Q1 earnings call opened with Michael Moe's declaration that Cooler is a bit coin first company or something to that effect. While I understand that Cooler is spending 90% of its surplus cash reserves on purchasing Bitcoin, I was confused as to why Bitcoin and not Coolr's core business operations was the top story on the call. Is Coolr transitioning from energy storage solutions to crypto mining, or was this just a messaging snafu?

Speaker 1

Well, Cooler is a Bitcoin plus treasury company that not only treats Bitcoin as a pillar of strategy, identity and financial foundation. On top of that foundation, we build a portfolio of frontier technology businesses ranging from high performance energy systems to AI robotics. And so these are very synergistic relationships opportunities between our Bitcoin strategy and our operating business. So I think this is the future growth of the company, and we'll continue on to that trajectory.

Operator

Okay. In Q1, your loss from operations was $9,440,000 which if that trend continues would mean $40,000,000 in operational losses for 2025. How does Q2 look operationally? What are you doing to slow down your cash burn? And please don't say you need to spend money to make money because you have had years of shareholders' money to prove your case.

Speaker 2

Thanks, Stuart. Know, having gotten our balance sheet on strong footing, we are now focused on our operational growth. We think our KoolaWarm product line, our new growth effort in exoskeletons and our vibration reduction technology are showing strong prospects and we'll continue to invest in growing our top line across these areas. When we can, we look forward to sharing future operational wins with everybody.

Operator

Alright. Thank you, Sean. Michael, in early April, Grizzly Research put out a report entitled Cooler Exposing the Hype, Over Promises, Insider Mistrust, and Operational Chaos in an Everything Tech Mirage. Cooler Management made no attempt refute any of these claims in their Q1 earnings call in May or since then. Why not?

Operator

If the claims in the report are not true, why not publicly state that? Since that report came out in April, the stock is down substantially. Do you not care that your shareholders have lost a lot of money? Are Grizzlies claims valid?

Speaker 1

Thank you, Stuart. I have addressed this in my prepared remarks. Short sellers publish or arrange for publication of negative opinions and comments and create a negative market sentiment, therefore, they generate profit. The April report was full of negative commentary and opinions. And since then, we see a growing negative opinions and rumors published and spread on the social media about Cooler.

Speaker 1

So but it's not our practice to allow these opinion reports to distract the management or engage with result in endless battle of opinions. So furthermore, you know, our ability to take legal action and other actions against short sellers are often limited by the principle of freedom of speech, and we also need to maintain our commercial confidentiality.

Operator

Okay. You recently added two board members. How do they each add value, particularly considering one of them has already been serving as CFO since March 2023?

Speaker 1

Yes, the board feels that both new members are strong addition to the boardroom. Aaron brings a long history of sophisticated private equity mindset and also hands on operational experience to the Board. Sean has contributed significantly to the quarter over the last two years. By adding Sean to the Board, we get a benefit of a judgment experience at the board level in addition to being a key member of the management team.

Operator

Alright. Thank you about for that one. So next one is about Bitcoin again or at least cryptocurrencies. Apart from Bitcoin, would Cooler consider holding other cryptocurrencies in its treasury such as Ethereum or Solana?

Speaker 2

Thanks, Stuart. Our treasury our treasury strategy solely utilizes Bitcoin.

Operator

Alright. Next question. I'm a little confused about the Bitcoin strategy. Have we decided to give up on new products and uses for Doctor. Knowles graphite material he had been working with for decades in place of hoping Bitcoin will somehow propel growth?

Speaker 1

Bitcoin is our treasury strategy, and it doesn't replace what we do with our technology to serve our customers. For the carbon fiber material, we'll continue to make them and also sell carbon fiber thermal management materials and products to our customers.

Operator

Could you please share your current energized hash rate, blended power costs, and estimated cash costs per BTC at today's network difficulty? Also, what is your target rate to reach one exahash?

Speaker 1

Yes. Our current hash rate is approximately 900 petahash. We maintain a blended power cost below $04 per kilowatt hour by sourcing only projects that align with our risk profile. However, this metric is not directly comparable as we lease as our leasing model caps our costs for the full lease term. So our cash cost per Bitcoin is approximately $102,000 per Bitcoin.

Speaker 1

And we target to get to one extra hash by this fall.

Operator

Alright. Thank you. So next question. Battery and space stocks have been on a tear lately while Cooler share price has gone down. What are you guys doing wrong?

Operator

You talk about NASA, Artemis missions, etcetera. But what the heck are you guys doing to improve sales? What's going on with the Texas Space Commission order? Have you got the money yet?

Speaker 1

The Texas Space Commission grant program is progressing very well with our partners, NASA and Southlake Technologies. And we're in the process of selecting a satellite manufacturing partner for the project. And the Texas Space Commission folks have been great to work with to fund their vision of making Texas the epicenter for the new space economy in The United States. As for the other battery companies, it's great to see our friends at Ampreus doing well, particularly a couple of things from the last quarter. I think over 90% of the last quarter's revenue was from electric aviation.

Speaker 1

And they achieved the first quarter of gross profit, positive gross profit. So we're very excited about this new Kuala One Air product launch, and we look forward to expand our margin as well.

Operator

All right. Thank you for that, Michael. Sean, the next question is for you. Are we going to have another summer investor presentation at the August? I personally feel this is the best due diligence on your company you have ever released.

Operator

Another detailed one this year would be great and allow us to see the company on all sides, not just Bitcoin.

Speaker 2

Thanks, Stuart. It's a good idea, and we will provide a new investor presentation in the fall. Thanks. Alright.

Operator

Thank you for that, Sean. Michael, would you ever allow investors who do photography to come see your facility? I've been dying to work with you all.

Speaker 1

Well, thank you for the question. Given the confidential, nature and proprietary nature of the work we do, we have to be very careful about photography and videos. So I'll be happy to, you know, hear about what you'd like to do. And, you know, please, you know, email us at irquarter dot ai, and we will see what we can do.

Operator

Absolutely. Send in those emails. Alright, Michael. The final question is for you. As Cooler Technology Group approaches its upcoming earnings call, I'm eager to get some insights on the strategic impact of your carbon fiber heat exchangers and internal short circuit trigger cells on advancing safety and performance in critical industries.

Operator

Could you please elaborate during the call on the key applications of these technologies, particularly in high stakes sectors such as aerospace, electric mobility, and next generation energy storage, highlighting how they address complex thermal management and battery safety challenges. Furthermore, could you provide insights into your existing or prospective customers, strategic partnerships, or targeted industries adopting these solutions and articulate how Cooler's cutting edge innovations position the company as a market leader in these rapidly evolving domains? Thank you for considering this question and for the earnings discussion. Your leadership in driving transformative thermal safety thermal and safety solutions at Cooler is truly inspiring. I look forward to your response.

Operator

Michael?

Speaker 1

Well, thank you, Stuart. This investor really knows and cares a lot about the history of Cooler. So thank you for that. I think I've answered quite a bit of that part of the question in my prepared remarks. I would just reiterate that Cooler has come a long way from a space proven material components company to a design and service company now on its way to be a product focused company that builds and applies a portfolio of frontier technologies ranging from high performance energy systems to AI robotics.

Speaker 1

And our engineering heritage and expertise combined our speed and ability to adapt is what sets us apart from the competition and thus to serve our customers. Now with a rock solid growing balance sheet, we'll accelerate growth trajectory with new product launches and customer engagements.

Operator

Thank you, Michael. And thank you, Sean. As mentioned, that was our final question. So that now concludes our call today. I will now hand the call back over to our operator.

Operator

Thomas?

Speaker 1

Thank you. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you once again for your participation.

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