Stuart Smith: Thank you, [Indiscernible]. Now we’re going to get questions from Jacob Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners. Jake wasn’t able to be with us, so he did email the questions in and I have the first one here, looking at the announcement made earlier today, is the testing of battery cells under the contract with the global automaker specific to silicone anode battery chemistry, or do you expect to apply K1-DS across a spectrum of chemistry for this customer?
Michael Mo: Yes. So I take that. Yes, our solution is chemistry agnostic. So we can apply the KULR ONE design solutions platform across multiple chemistries and also multiple shapes of the battery cells. We’ve been working with cylindrical cells a lot because NASA really focused on that, but now we’re also working with pouch cells and also large format, surgical cells, and also prismatic cells. For prismatic cells, we’re testing for cells over a 100 amp hours. So for automotive and also large energy storage customers, that’s demanded. And we are the exclusive licensee from NASA on the large format at TRC. And so this has allowed us to provide, we believe, is the most comprehensive testing capabilities in the industry, and that has attracted a lot of customer attention.
Stuart Smith: All right. Next question, are you able to share any color on the structure of the contract? Did the automaker engage KULR to provide K1-DS services for a specific period of time during test work?
Michael Mo: Yes. Well, actually, kind of like what, Keith talked about earlier about our sales organization and also our sales strategy, we kind of employ kind of a land and expand hyper model. So when we land a customer engagement, usually the customer is looking for one solution or maybe a couple of solutions out of our entire KULR ONE design solution suite. But as we get into the organization and start building relationship with the customer, you know, we perform these tasks, we start expanding our relationship or engagement as they look across other product service offerings that we have. So as you can see in our Q2 financials, our number of customers grew from 12 in Q2 of 2022 to 19 and also our revenue per customer grew 200% in addition to the 60% growth in the customer number. So, we feel like this land and expand model is working and we will continue to execute on the strategy.
Stuart Smith: Okay. Margins were strong in both Q1 and Q2 of this year. Are these levels something we should expect to remain constant during the second-half of the year heading into 2024?
Shawn Canter: I’ll take that one, Mike. It’s Shawn. Thanks for the question. And yes, as we grow in scale, we believe our gross margin should improve, as the question indicates. In fact, if we look back this second quarter, our gross margin was about 37% and the same quarter last year was 28% evidencing a significant enhancement. So as we grow, we estimate the gross margin enhancement from here, especially on the product side of the business will grow. And our long term goal is to get to a gross margin in the low to hopefully mid-40s.
Stuart Smith: Shawn, it looks like I have an additional question for you. What’s the status of your capital position relative to driving operational breakeven?
Shawn Canter: Sure. Well, as, I guess, as you know, as you may be aware, today, KULR announced the capital raising transaction, because all of the available details about the offering are publicly accessible by reviewing the preliminary prospectus supplement filed this afternoon. We’ll refer you to that document for any further details.
Stuart Smith: All right. Very good, Mike. It looks like the final question will be towards you. How has KULR VIBE been gaining customer awareness and traction in the market?
Michael Mo: Yes. We’ve been going to industry conferences to market KULR VIBE and as Howard, kind of, asked a question earlier or similar question earlier about KULR VIBE integrating with the drone customer. Yes, we’ve been, you know, in my in my prepared remarks, I talked about we’ve been really focused on executing on KULR VIBE 2.0, and we’re working with strategic partners, integrating those, new features into the product. So doing those engagements, we’re really focused on how the new features, the — you know, the product offer specific and quantifiable performance benefits for these customers and new applications. So later this year, we would be demoing these products with the customer, we’ll be very targeted, very specific that we’re super excited about that.
Stuart Smith: Well, very good. As mentioned at the outset of that question, that was our final question. I know the company, along with myself, would like to thank our analyst Howard Halpern, Theodore O’Neil, who was replaced today by his associate [Indiscernible], who have been on the call, who was a senior analyst at Litchfield Hills Research and Jacob Sekelsky, Managing Director and Senior Research Analyst at Alliance Global Partners. Of course, we — I want to thank all the members of the management team, CFO, Shawn Canter; President and COO, Keith Cochran; and Chief Executive, Michael Mo. That concludes our call for today, the Q2 2023 earnings conference call. I’ll turn it over now to our operator, Thomas. Thank you, Thomas.
Operator: Thank you, very much, sir. And once again, that does conclude today’s conference call and webcast. You may disconnect at this time and have a wonderful day. Thank you for your participation.
