UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:June 30, 20182019
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number:
000-55564
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or Other Jurisdiction of Incorporation or | 81-1004273 (I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:408-663-5247
(Former name, former address and former fiscal year, if changed since last report)N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
None | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes¨x Nox¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b- 2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | Smaller reporting company | x | ||
Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨ Nox
As of August 10, 2018,12, 2019, there were 77,718,78880,975,655 shares of common stock,Common Stock, $0.0001 par value, issued and outstanding.
KT HIGH-TECH MARKETING,
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 20182019
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||||
2018 | 2017 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash | $ | 108,031 | $ | 895,761 | ||||
Accounts receivable | 118,940 | 151,802 | ||||||
Inventory | 13,767 | 13,767 | ||||||
Prepaid expenses | 41,665 | 106,466 | ||||||
Other current assets | 8,727 | 8,727 | ||||||
Total Current Assets | 291,130 | 1,176,523 | ||||||
Property and equipment, net | 43,319 | 43,493 | ||||||
Deferred offering costs | 30,000 | - | ||||||
Total Assets | $ | 364,449 | $ | 1,220,016 | ||||
Liabilities and Stockholders' (Deficiency) Equity | ||||||||
Current Liabilities: | ||||||||
Accrued expenses and other current liabilities | $ | 434,950 | $ | 197,713 | ||||
Accrued expenses and other current liabilities - related parties | 190,559 | 282,597 | ||||||
Deferred revenue | 161,909 | - | ||||||
Total Current Liabilities | 787,418 | 480,310 | ||||||
Commitments and contingencies | ||||||||
Stockholders' (Deficiency) Equity: | ||||||||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; Series A Preferred Stock, 1,000,000 shares designated; None issued and outstanding at June 30, 2018 and December 31, 2017 | - | - | ||||||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 77,440,000 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 7,744 | 7,744 | ||||||
Additional paid-in capital | 5,398,074 | 5,090,282 | ||||||
Accumulated deficit | (5,828,787 | ) | (4,358,320 | ) | ||||
Total Stockholders' (Deficiency) Equity | (422,969 | ) | 739,706 | |||||
Total Liabilities and Stockholders' (Deficiency) Equity | $ | 364,449 | $ | 1,220,016 |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash | $ | 144,314 | $ | 229,896 | ||||
Accounts receivable | 62,475 | 112,224 | ||||||
Inventory | 8,304 | 9,594 | ||||||
Prepaid expenses | 41,410 | 27,033 | ||||||
Other current assets | 17,016 | 27,569 | ||||||
Deferred expenses | 92,516 | - | ||||||
Total Current Assets | 366,035 | 406,316 | ||||||
Property and equipment, net | 38,758 | 44,791 | ||||||
Deferred offering costs | 15,000 | - | ||||||
Total Assets | $ | 419,793 | $ | 451,107 | ||||
Liabilities and Stockholders' Deficiency | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 184,598 | $ | 117,995 | ||||
Accrued expenses and other current liabilities | 546,569 | 374,330 | ||||||
Accrued expenses and other current liabilities - related party | 58,919 | 83,919 | ||||||
Total Current Liabilities | 790,086 | 576,244 | ||||||
Commitments and contingencies (See Note 9) | ||||||||
Stockholders' Deficiency: | ||||||||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; | ||||||||
Series A Preferred Stock, 1,000,000 shares designated; | ||||||||
none issued and outstanding | ||||||||
at June 30, 2019 and December 31, 2018 | - | - | ||||||
Series B Preferred Stock, 31,000 shares designated; | ||||||||
30,858 issued and outstanding | ||||||||
at June 30, 2019 and December 31, 2018 | 3 | 3 | ||||||
Common stock, $0.0001 par value, 500,000,000 shares authorized; | ||||||||
80,092,315 and 78,706,256 shares issued and outstanding | ||||||||
at June 30, 2019 and December 31, 2018, respectively | 8,009 | 7,871 | ||||||
Additional paid-in capital | 7,225,363 | 6,283,548 | ||||||
Accumulated deficit | (7,603,668 | ) | (6,416,559 | ) | ||||
Total Stockholders' Deficiency | (370,293 | ) | (125,137 | ) | ||||
Total Liabilities and Stockholders' Deficiency | $ | 419,793 | $ | 451,107 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
1 |
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(unaudited)
For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Revenue | $ | 171,091 | $ | 10,900 | $ | 399,131 | $ | 10,900 | $ | 56,310 | $ | 171,091 | $ | 251,262 | $ | 399,131 | ||||||||||||||||
Cost of revenue | 33,470 | 56,195 | 183,417 | 56,195 | 28,550 | 33,470 | 90,067 | 183,417 | ||||||||||||||||||||||||
Gross Profit (Loss) | 137,621 | (45,295 | ) | 215,714 | (45,295 | ) | ||||||||||||||||||||||||||
Gross Profit | 27,760 | 137,621 | 161,195 | 215,714 | ||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Research and development | 119,006 | 36,448 | 238,690 | 49,628 | 114,547 | 119,006 | 227,739 | 238,690 | ||||||||||||||||||||||||
Research and development - related parties | - | 269,942 | - | 401,057 | ||||||||||||||||||||||||||||
Selling, general and administrative | 663,018 | 332,418 | 1,447,258 | 414,362 | 534,262 | 663,018 | 1,119,753 | 1,447,258 | ||||||||||||||||||||||||
Total Operating Expenses | 782,024 | 638,808 | 1,685,948 | 865,047 | 648,809 | 782,024 | 1,347,492 | 1,685,948 | ||||||||||||||||||||||||
Loss From Operations | (644,403 | ) | (684,103 | ) | (1,470,234 | ) | (910,342 | ) | (621,049 | ) | (644,403 | ) | (1,186,297 | ) | (1,470,234 | ) | ||||||||||||||||
Other expense, net | (219 | ) | (6,671 | ) | (233 | ) | (8,256 | ) | ||||||||||||||||||||||||
Other Expense: | ||||||||||||||||||||||||||||||||
Interest expense, net | (367 | ) | (219 | ) | (812 | ) | (233 | ) | ||||||||||||||||||||||||
Total Other Expense | (367 | ) | (219 | ) | (812 | ) | (233 | ) | ||||||||||||||||||||||||
Net Loss | $ | (644,622 | ) | $ | (690,774 | ) | $ | (1,470,467 | ) | $ | (918,598 | ) | $ | (621,416 | ) | $ | (644,622 | ) | $ | (1,187,109 | ) | $ | (1,470,467 | ) | ||||||||
Net Loss Per Share - Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||||||||||||||||||
Net Loss Per Share | ||||||||||||||||||||||||||||||||
- Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||||||||||||||||||
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 77,385,972 | 52,570,582 | 77,303,030 | 50,791,128 | ||||||||||||||||||||||||||||
Weighted Average Number of Common Shares Outstanding | ||||||||||||||||||||||||||||||||
- Basic and Diluted | 79,918,048 | 77,385,972 | 79,365,031 | 77,303,030 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
2 |
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2018
(Unaudited)(unaudited)
Additional | ||||||||||||||||||||
Common Stock | Paid-In | Accumulated | ||||||||||||||||||
Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
Balance - December 31, 2017 | 77,440,000 | $ | 7,744 | $ | 5,090,282 | $ | (4,358,320 | ) | $ | 739,706 | ||||||||||
Stock-based compensation | - | - | 307,792 | - | 307,792 | |||||||||||||||
Net loss | - | - | - | (1,470,467 | ) | (1,470,467 | ) | |||||||||||||
Balance - June 30, 2018 | 77,440,000 | $ | 7,744 | $ | 5,398,074 | $ | (5,828,787 | ) | $ | (422,969 | ) |
FOR THE SIX MONTHS ENDED JUNE 30, 2019 | ||||||||||||||||||||||||||||
Series B Convertible | Additional | Total | ||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-In | Accumulated | Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||||||||
Balance - January 1, 2019 | 30,858 | $ | 3 | 78,706,256 | $ | 7,871 | $ | 6,283,548 | $ | (6,416,559 | ) | $ | (125,137 | ) | ||||||||||||||
Stock-based compensation | - | - | 25,000 | 3 | 36,057 | - | 36,060 | |||||||||||||||||||||
Common stock issued for cash | - | - | 234,849 | 23 | 154,977 | - | 155,000 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (565,693 | ) | (565,693 | ) | |||||||||||||||||||
Balance - March 31, 2019 | 30,858 | $ | 3 | 78,966,105 | $ | 7,897 | $ | 6,474,582 | $ | (6,982,252 | ) | $ | (499,770 | ) | ||||||||||||||
Stock-based compensation | - | - | - | - | 7,593 | - | 7,593 | |||||||||||||||||||||
Common stock issued for cash | - | - | 1,126,210 | 112 | 743,188 | - | 743,300 | |||||||||||||||||||||
- | ||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | (621,416 | ) | (621,416 | ) | |||||||||||||||||||
Balance - June 30, 2019 | 30,858 | $ | 3 | 80,092,315 | $ | 8,009 | $ | 7,225,363 | $ | (7,603,668 | ) | $ | (370,293 | ) |
FOR THE SIX MONTHS ENDED JUNE 30, 2018 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Additional | Stockholders' | |||||||||||||||||||
Common Stock | Paid-In | Accumulated | Equity | |||||||||||||||||
Shares | Amount | Capital | Deficit | (Deficiency) | ||||||||||||||||
Balance - January 1, 2018 | 77,440,000 | $ | 7,744 | $ | 5,090,282 | $ | (4,358,320 | ) | $ | 739,706 | ||||||||||
Stock-based compensation | - | - | 182,957 | - | 182,957 | |||||||||||||||
Net loss | - | - | - | (825,845 | ) | (825,845 | ) | |||||||||||||
Balance - March 31, 2018 | 77,440,000 | $ | 7,744 | $ | 5,273,239 | $ | (5,184,165 | ) | $ | 96,818 | ||||||||||
Stock-based compensation | - | - | 124,835 | - | 124,835 | |||||||||||||||
Net loss | - | - | - | (644,622 | ) | (644,622 | ) | |||||||||||||
Balance - June 30, 2018 | 77,440,000 | $ | 7,744 | $ | 5,398,074 | $ | (5,828,787 | ) | $ | (422,969 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3 |
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (unaudited)
For the Six Months Ended | ||||||||
June 30, | ||||||||
2018 | 2017 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net loss | $ | (1,470,467 | ) | $ | (918,598 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 8,524 | 882 | ||||||
Stock-based compensation | 307,792 | 224,158 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 32,862 | (4,000 | ) | |||||
Other current receivable | - | 30,000 | ||||||
Other current receivable - related parties | - | 2,000 | ||||||
Interest receivable - related party | - | 2,152 | ||||||
Prepaid expenses | 64,801 | (183,370 | ) | |||||
Other current assets | - | 861,377 | ||||||
Accrued expenses and other current liabilities | 207,237 | 152,476 | ||||||
Accrued expenses and other current liabilities - related parties | (92,038 | ) | 114,679 | |||||
Deferred revenue | 161,909 | - | ||||||
Total Adjustments | 691,087 | 1,200,354 | ||||||
Net Cash (Used In) Provided By Operating Activities | (779,380 | ) | 281,756 | |||||
Cash Flows From Investing Activities: | ||||||||
Proceeds from loan from related party | - | 85,000 | ||||||
Cash acquired in reverse recapitalization | - | 1,859,261 | ||||||
Purchases of property and equipment | (8,350 | ) | (22,045 | ) | ||||
Net Cash (Used in) Provided By Investing Activities | (8,350 | ) | 1,922,216 | |||||
Net (Decrease) Increase In Cash | (787,730 | ) | 2,203,972 | |||||
Cash - Beginning of Period | 895,761 | 9,087 | ||||||
Cash - End of Period | $ | 108,031 | $ | 2,213,059 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid during the year for: | ||||||||
Interest | $ | 294 | $ | - | ||||
Income taxes | $ | 2,400 | $ | 1,600 | ||||
Non-cash investing and financing activities: | ||||||||
Accrual of deferred offering costs | $ | 30,000 | $ | - |
For the Six Months Ended | ||||||||
June 30, | ||||||||
2019 | 2018 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net loss | $ | (1,187,109 | ) | $ | (1,470,467 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 6,033 | 8,524 | ||||||
Write-down of inventory | 90 | - | ||||||
Stock-based compensation | 93,111 | 307,792 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 49,749 | 32,862 | ||||||
Inventory | 1,200 | - | ||||||
Prepaid expenses | (14,377 | ) | 64,801 | |||||
Other current assets | 10,553 | - | ||||||
Deferred expenses | (92,516 | ) | - | |||||
Accounts payable | 66,603 | 169,291 | ||||||
Accrued expenses and other current liabilities | 122,781 | 37,946 | ||||||
Accrued expenses and other current liabilities - related party | (25,000 | ) | (92,038 | ) | ||||
Deferred revenue | - | 161,909 | ||||||
Total Adjustments | 218,227 | 691,087 | ||||||
Net Cash Used In Operating Activities | (968,882 | ) | (779,380 | ) | ||||
Cash Flows From Investing Activities: | ||||||||
Purchases of property and equipment | - | (8,350 | ) | |||||
Net Cash Used In Investing Activities | - | (8,350 | ) | |||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from sale of common stock | 898,300 | - | ||||||
Payment of deferred offering costs | (15,000 | ) | - | |||||
Net Cash Provided By Financing Activities | 883,300 | - | ||||||
Net Decrease In Cash | (85,582 | ) | (787,730 | ) | ||||
Cash - Beginning of Period | 229,896 | 895,761 | ||||||
Cash - End of Period | $ | 144,314 | $ | 108,031 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 446 | $ | 294 | ||||
Income taxes | $ | - | $ | 2,400 | ||||
Non-cash investing and financing activities: | ||||||||
Accrual of deferred offering costs | $ | - | $ | 30,000 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4 |
KT HIGH-TECH MARKETING,KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 Business Organization, Nature of Operations and Basis of Presentation
Note 1 | Business Organization, Nature of Operations and Basis of Presentation |
Organization and Operations
KT High-Tech Marketing,KULR Technology Group, Inc. ("KT High-Tech"), through its wholly-owned subsidiary, KULR Technology Corporation (“KULR”) (collectively referred to as “KULR” or the “Company”), is primarily focused on developingdevelops and commercializing itscommercializes high-performance thermal management technologies which it acquired through assignment fromfor electronics, batteries, and license with KULR’s co-founder Dr. Timothy Knowles, inother components across a range of applications. Currently, the high value, high-performance consumer electronicCompany is focused on targeting the following applications: electric vehicles and autonomous driving systems (collectively referred to herein as “E-Mobility”); artificial intelligence and Cloud computing; energy storage applications.storage; and 5G communication technologies. KULR owns proprietary carbon fiber based (Carbon Fiber Velvet or “CFV”) thermalprovides heat management solutions that it believes are more effective at conducting, dissipatingto enhance the performance and storing heat generated by an electronic system’s internal components (i.e. semiconductor, integrated circuits “chips”)safety of battery packs used in comparison to traditional materials, such as copperelectric vehicles, communication devices aerospace and aluminum. KULR’s technologies can be applied inside a wide array of electronic applications where heat is often a problem, such as mobile devices, cloud computing, virtual reality platforms, satellites, internet of things, drones, and connected cars.defense.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of June 30, 20182019 and for the three and six months then ended. The results of operations for the three and six months ended June 30, 20182019 are not necessarily indicative of the operating results for the full year ending December 31, 20182019 or any other period. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 20172018 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 17, 2018.March 29, 2019.
Note 2 | Going Concern and Management’s Plans |
Note 2 Going Concern and Management’s Plans
Subsequent to June 30, 2018, the Company sold common stock for aggregate net proceeds of $159,000. See Note 9 – Subsequent Events – Private Placement for details. The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that its research and development and general and administrative expenses will continue to increase and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statement issuance date.
Based upon the Company’s forecast for continued operating losses, it expects that the cash itThe Company is currently has available will fundfunding its operations into the fourth quarteron a month-to-month basis by means of 2018 while it continues to apply efforts to raise additional capital. Thereafter, the Company will require external funding to sustain operations and to follow through on the execution of its business plan.private placements. Although the Company’s management believes that it has access to capital resources, there are currently no commitments in place for new financing at this time and there is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. If the Company is unable to obtain adequate funds on reasonable terms, it may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures.
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustment that might become necessary should the Company be unable to continue as a going concern.
5 |
Note 3 | Summary of Significant Accounting Policies |
Note 3 SummarySince the date of Significant Accounting Policies
The Company’s significant accounting policies are disclosed in Note 2 – Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Since the date of the Annual Report,2018, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.in this note.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. A significant portion of the Company’s cash is held at one major financial institution. The Company maintains cash with major financial institutions.has not experienced any losses in such accounts. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. There were aggregateno uninsured cash balances as of $0 and $611,450 at June 30, 20182019 and December 31, 2017, respectively.2018.
Customer concentrations are as follows:
Revenues | Accounts Receivable | |||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | As of | As of | |||||||||||||||||||||
June 30, | June 30, | June 30, 2018 | December 31, 2017 | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Customer A | 21 | % | * | 37 | % | * | 31 | % | 15 | % | ||||||||||||||
Customer B | * | * | 27 | % | * | 51 | % | * | ||||||||||||||||
Customer C | 70 | % | * | 30 | % | * | * | 43 | % | |||||||||||||||
Customer D | * | 100 | % | * | 100 | % | * | 16 | % | |||||||||||||||
Total | 91.00 | % | 100.00 | % | 94.00 | % | 100.00 | % | 82 | % | 74 | % |
Revenues | Accounts Receivable | ||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | As of | As of | ||||||||||||||||||
June 30, | June 30, | June 30, 2019 | December 31, 2018 | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Customer A | * | 21 | % | * | 37 | % | * | * | |||||||||||||
Customer B | * | * | * | 27 | % | * | * | ||||||||||||||
Customer C | * | 70 | % | * | 30 | % | * | 63 | % | ||||||||||||
Customer D | 17 | % | * | * | * | 16 | % | 37 | % | ||||||||||||
Customer E | 64 | % | * | 14 | % | * | 68 | % | * | ||||||||||||
Customer F | 18 | % | * | * | * | 16 | % | * | |||||||||||||
Customer G | * | * | 47 | % | * | * | * | ||||||||||||||
Total | 99 | % | 91 | % | 61 | % | 94 | % | 100 | % | 100 | % |
* Less than 10%
There is no assurance the Company will continue to receive significant revenues from any of these customers. A reductions or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. Because of the Company’s significant customer concentrations, its gross profit and operating income could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers.
Revenue Recognition
On January 1, 2018, theThe Company adopted ASCrecognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, than required under existing accounting principles generally accepted in the United States of America (“U.S. GAAP”) including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.
The Company adopted ASC 606 for all applicable contracts using the modified retrospective method, which would have required a cumulative-effect adjustment, if any, as of the date of adoption. The adoption of ASC 606 did not have a material impact on the Company's condensed consolidated financial statements as of the date of adoption. As a result, a cumulative-effect adjustment was not required.following five steps are applied to achieve that core principle:
· | Step 1: Identify the contract with the customer; |
· | Step 2: Identify the performance obligations in the contract; |
· | Step 3: Determine the transaction price; |
· | Step 4: Allocate the transaction price to the performance obligations in the contract; and |
· | Step 5: Recognize revenue when the company satisfies a performance obligation. |
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Note 3 | Summary of Significant Accounting Policies – Continued |
The Company recognizes revenue primarily from the following different types of contracts:
· | Product sales |
· | Contract services – Revenue is recognized at the point in time that the Company satisfies its performance obligation under the contract, which is generally at the time it delivers a report to the customer. |
The following table summarizes our revenue recognized in our condensed consolidated statements of operations:
For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Product sales | $ | 134,791 | $ | 10,900 | $ | 253,143 | $ | 10,900 | $ | 52,310 | $ | 134,791 | $ | 221,750 | $ | 253,143 | ||||||||||||||||
Contract services | 36,300 | - | 145,988 | - | 4,000 | 36,300 | 29,512 | 145,988 | ||||||||||||||||||||||||
Total revenue | $ | 171,091 | $ | 10,900 | $ | 399,131 | $ | 10,900 | $ | 56,310 | $ | 171,091 | $ | 251,262 | $ | 399,131 |
As of June 30, 2019 and December 31, 2018, the Company had $0 and $161,909did not have any contract assets andor contract liabilities respectively, from contracts with customers. The contract liabilities represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. As of December 31, 2017, the Company did not have any contract assets or contract liabilities from contracts with customers. During the three and six months ended June 30, 20182019 and 2017,2018, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods.
Reclassifications
Certain prior year balance sheet amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
Net Loss Per Common Share
Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. The following shares were excluded from basic weighted average common stock outstanding:
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Non-vested restricted stock | 54,028 | 789,196 | 136,970 | 876,496 | ||||||||||||
Total | 54,028 | 789,196 | 136,970 | 876,496 |
Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. Dilutive common-equivalent shares consist of shares of non-vested restricted stock, if not anti-dilutive.
The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||
2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Non-vested restricted stock | - | 687,500 | - | 54,028 | - | 136,970 | ||||||||||||||||||
Series B Convertible Preferred Stock | 1,542,900 | - | 1,542,900 | - | ||||||||||||||||||||
Options | 300,000 | - | 300,000 | - | ||||||||||||||||||||
Total | - | 687,500 | 1,842,900 | 54,028 | 1,842,900 | 136,970 |
Recently Issued and Adopted Accounting PronouncementsOperating Leases
In May 2017, the FASB issued ASU No. 2017-09, “Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting,” (“ASU 2017-09”). ASU 2017-09 provides clarity on the accounting for modifications of stock-based awards. ASU 2017-09 requires adoption on a prospective basis in the annual and interim periods for fiscal years beginning after December 15, 2017 for share-based payment awards modified on or after the adoption date. The Company adopted ASU 2017-09 effective January 1, 2018 and itsleases properties under operating leases. For leases in effect upon adoption did not have a material impact on the Company’s condensed consolidated financial statements.
In June 2018, the FASB issuedof Accounting Standards Update (“ASU”) No. 2018-07, “Compensation — Stock Compensation2016-02, “Leases (Topic 718),842)” (“ASU 2018-07”)at January 1, 2019 and for any leases commencing thereafter, the Company recognizes a liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”. ASU 2018-07The lease liability is intended to reducemeasured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate. The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset. Operating lease expense consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and complexity and to improve financial reporting for nonemployee share-based payments. Currently,any impairment of the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. ASU 2018-07 expands the scope of Topic 718, Compensation — Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity — Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. right-of-use asset.
The Company early adopted ASU 2018-07 effective April 1, 2018. The adoptionevaluated their operating leases and elected to apply the short-term lease measurement and recognition exemption in which the right of this ASU diduse assets and lease liabilities are not have a material impact on the Company’s condensed consolidated financial statements.recognized for short-term leases.
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Note 4 Prepaid Expenses
Note 4 | Deferred Expenses |
Deferred expenses consist of labor and materials that are attributable to customer contracts that the Company has not completed itsperformance obligation under the contractand, as a result, has not recognized revenue. As of June 30, 20182019, deferred expenses were $92,516, which consisted of labor and materials, totaling $43,843 and $48,673, respectively. As of December 31, 2017, prepaid expenses consisted of the following:2018, there were no deferred expenses.
June 30, 2018 | December 31, 2017 | |||||||
(unaudited) | ||||||||
Business development services | $ | - | $ | 40,000 | ||||
Research and development services | 25,669 | 25,000 | ||||||
Professional fees | - | 10,000 | ||||||
Other | 15,996 | 31,466 | ||||||
Total prepaid expenses | $ | 41,665 | $ | 106,466 |
Note 5 Accrued Expenses and Other Current Liabilities
Note 5 | Accrued Expenses and Other Current Liabilities |
As of June 30, 20182019 and December 31, 2017,2018, accrued expenses and other current liabilities consisted of the following:
June 30, 2018 | December 31, 2017 | June 30, | December 31, | |||||||||||||
(unaudited) | 2019 | 2018 | ||||||||||||||
Accrued legal and professional fees | $ | 222,345 | $ | 71,241 | ||||||||||||
Accrued payroll and vacation | 66,793 | 69,425 | ||||||||||||||
(unaudited) | ||||||||||||||||
Payroll and vacation | $ | 388,894 | $ | 252,043 | ||||||||||||
Legal and professional fees | 29,745 | 47,502 | ||||||||||||||
Travel expenses | 55,226 | 48,248 | ||||||||||||||
Payroll and income tax payable | 8,224 | 14,223 | 10,792 | 12,678 | ||||||||||||
Accrued research and development expenses | 7,635 | 14,611 | ||||||||||||||
Research and development expenses | - | 2,850 | ||||||||||||||
Credit card payable | 8,381 | 110 | 4,475 | 4,586 | ||||||||||||
Accrued issuable equity | 49,459 | 3,960 | ||||||||||||||
Rent | 176 | 176 | ||||||||||||||
Other | 121,572 | 28,103 | 7,802 | 2,287 | ||||||||||||
Total accrued expenses and other current liabilities | $ | 434,950 | $ | 197,713 | $ | 546,569 | $ | 374,330 |
The Company has agreed to issue an aggregate of 43,895 shares of common stock and warrants to purchase 75,000 shares of common stock for consulting fees. As of June 30, 2019, the stock and warrants had not been issued and, as a result, $49,459 of accrued issuable equity at fair value was included within accrued expenses and other current liabilities.
Note 6 Related Party Transactions
Note 6 | Related Party Transactions |
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities – related parties consist of: (i)of a liability of $154,269$58,919 and $254,344$83,919 as of June 30, 20182019 and December 31, 2017,2018, respectively, to Energy Science Laboratories, Inc. (“ESLI”), a company controlled by the Company’s Chief Technology Officer (“CTO”), in connection with consulting services provided to the Company associated with the development of the Company’s CFV thermal management solutions; and (ii) a liability of $36,290 and $28,253 as of June 30, 2018 and December 31, 2017, respectively, to the Company’s Chief Executive Officer (“CEO”) in connection with Company-related travel and entertain expenses incurred by the CEO.solutions.
Note 7 | Stockholders' Deficiency |
Consulting AgreementsCommon Stock
During the three and six months ended June 30, 2017,2019, the Company recordedsold an aggregate expense of $26,000 (of which, $13,000 and $13,000 was included within research and development expenses and selling, general and administrative expenses, respectively) and $65,000 (of which, $32,500 and $32,500 was included within research and development expenses and selling, general and administrative expenses, respectively), respectively, related1,361,059 shares of common stock at $0.66 per share to consulting agreements with its CEO and CTO, which were terminated in connection with the closingaccredited investors for aggregate gross cash proceeds of the Share Exchange Agreement on June 19, 2017.
During the three and six months ended June 30, 2017, the Company recorded research and development expense of $256,942 and $368,557, respectively, related to consulting services provided to the Company by ESLI associated with the development of the Company’s CFV thermal management solutions. There were no such costs recorded in the three and six months ended June 30, 2018. ESLI is controlled by the Company’s CTO.
Note 7 Stockholders' Equity$898,300.
Stock-Based Compensation
During the three and six months ended June 30, 2018,2019, the Company recognized stock-based compensation expense of $124,835$45,171 and $307,792,$93,111 (which includes the issuance of 25,000 shares of immediately-vested common stock for legal fees of $36,060), respectively, and during the three and six months ended June 30, 2017,2018, the Company recognized stock-based compensation expense of $212,147 $124,835 and $224,158,$307,792, respectively, related to restricted common stock, awards issued during 2014stock options and warrants, which isare included within general and administrative expenses on the condensed consolidated statements of operations.As of June 30, 2018,2019, there was no$137,003of unrecognized stock-based compensation expense.expense that will be recognized over the weighted average remaining vesting period of 2.5 years.
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Note 7 | Stockholders' Deficiency – Continued |
Securities Purchase Agreement
On April 2, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the stockholders (the “Sellers”) holding 100% of the ownership interest in TECHTOM Co., Ltd. (“TECHTOM”), a Japanese limited liability company, pursuant to which the Company agreed to purchase from the Sellers, subject to the satisfaction of certain closing conditions, all ownership interests in TECHTOM and any and all claims, notes and other liabilities owed by TECHTOM to the Sellers (the “Acquisition”). Although no assurances can be made that the Acquisition will be completed, upon such Acquisition, TECHTOM would become a wholly-owned subsidiary of the Company.
Pursuant to the Purchase Agreement, the Company agreed to pay the Sellers, against delivery of all Ownership and Claims, the following aggregate acquisition price: (i) $1,700,000 cash consideration (the “Cash Consideration”); and (ii) one hundred (100) shares of the Company’s Series C Convertible Preferred Stock (“Series C Preferred”), which class of Series C Preferred is to be designated prior to the closing of the Acquisition. It is contemplated that the Series C Preferred will have, among others, the following rights, preferences and limitation: (i) a stated value of $10,000 per share; (ii) no right to receive dividends; (iii) the right to convert each share into twenty thousand shares of the Company’s common stock, which right is subject to a 4.99% beneficial ownership limitation; and (iv) the right to vote with the Company’s shareholders on an as-converted basis. The rights and preferences of the Series C Preferred are set forth in further detail in the form of Certificate of Designation attached as an exhibit to the Purchase Agreement and which description is qualified in its entirety to such exhibit, which is incorporated herein by reference.
See Note 10 - Subsequent Events for details associated with the termination of the Purchase Agreement.
Note 8 | Leases |
The Company has two operating leases for real estate which have remaining terms that are less than one year. The Company elected not to recognize short-term leases on the balance sheet and all costs were recognized as selling, general and administrative expenses on the condensed consolidated statements of operations. For the three and six months ended June 30, 2019, operating lease expense was $40,103 and $80,488, respectively. For the three and six months ended June 30, 2018, operating lease expense was $31,505 and $46,666, respectively. As of June 30, 2019, the Company does not have any financing leases.
Note 8 Commitments and Contingencies
Note 9 | Commitments and Contingencies |
Patent License Agreement
On March 21, 2018, the Company entered into an agreement with the National Renewable Energy Laboratory (“NREL”) granting the Company an exclusive license to commercialize its patented Internal Short Circuit technology. The agreement shall be effective for as long as the licensed patents are enforceable, subject to certain early termination provisions specified in the agreement. In consideration, the Company agreed to pay to NREL the following: (i) a cash payment of $12,000 payable over one year, (ii) royalties ranging from 1.5% to 3.75% on the net sales price of the licensed products, as defined in the agreement, with minimum annual royalty payments ranging from $0 to $7,500. In addition, the Company shall use commercially reasonable efforts to bring the licensed products to market through a commercialization program that requires that certain milestones be met, as specified in the agreement. AsFor the three and six months ended June 30, 2019, the Company recorded royalties of the date$690 that were included within cost of filing, there had beenrevenues. There were no sales of the licensed products during 2018, such that no royalties had been earned. were earned during the three and six months ended June 30, 2018.
Securities Purchase Agreement
On April 2, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the stockholders (the “Sellers”) holding 100% of the ownership interest in TECHTOM Co., Ltd. (“TECHTOM”), a Japanese limited liability company, pursuant to which the Company agreed to purchase from the Sellers, subject to the satisfaction of certain closing conditions, all ownership interests in TECHTOM and any and all claims, notes and other liabilities owed by TECHTOM to the Sellers (the “Acquisition”).
On July 5, 2019, the Company entered into a Rescission and Termination Agreement (the “Termination Agreement”) with the Sellers (each Seller, individually, and the Company, a “Party” or collectively, the “Parties”) holding 100% of the ownership interest in TECHTOM to terminate the Purchase Agreement.
Pursuant to the Termination Agreement, each of the Parties mutually agreed (i) to rescind and terminate the Purchase Agreement, relieving each Party of their respective duties and obligations arising under the Purchase Agreement; and (ii) to a general release of all other respective Parties from all claims arising out of the Purchase Agreement or the Termination Agreement. Each Party is responsible for all costs and expenses incurred by such Party in connection with the Purchase Agreement or the Termination Agreement.
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Note 10 | Subsequent Events |
NoteCommon Stock
On July 8, 2019, the Company issued 25,000 shares of common stock at $0.66 per share in connection with services provided.
On July 9, Subsequent Events2019, the Company issued an aggregate of 39,790 shares of common stock at $0.66 per share in connection with services provided.
Private PlacementRegistration Statement
On July 11, 2019, the Company filed a shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (“SEC”). The shelf registration was declared effective by the SEC, on August 1, 2019. The registration statement will allow the Company to issue, from time to time at prices and on terms to be determined at or prior to the time of the offering, shares of its common stock, shares of our preferred stock or warrants, either individually or in units, with a total value of up to $50,000,000.
Series B Convertible Preferred Stock
Subsequent to June 30, 2018, the Company sold2019, holders of Series B Convertible Preferred Stock converted an aggregate of 278,78816,371 shares of Series B Convertible Preferred Stock into an aggregate of 818,550 shares of common stock to investors for aggregate gross and net cash proceeds of $184,000 and $159,000, respectively. Of the $25,000 of cash offering costs withheld from the proceeds, $20,000 was included within deferred offering costs on the condensed consolidated balance sheet as of June 30, 2018.stock.
Note 10 Revision of Financial Statements for the Quarter Ended March 31, 2018
During the course of preparing the quarterly report on Form 10-Q for the quarter ended June 30, 2018, the Company identified certain errors related to cost of revenue not being recorded in connection with a product sale to a customer, which resulted in the understatement of its net loss for the three months ended March 31, 2018. The reason for the error was related to certain information not being provided to the Company’s accounting staff as a result of the Company’s transition of certain accounting duties from its then-Interim Chief Financial Officer, who left the Company in the first quarter of 2018.
The following tables reconcile the prior period as reported balances to the as revised balances:
March 31, 2018 | ||||||||||||
As Reported | Adjustment | As Revised | ||||||||||
Condensed Consolidated Balance Sheet: | ||||||||||||
Total Current Assets | $ | 698,092 | $ | (27,957 | ) | $ | 670,135 | |||||
Total Assets | $ | 735,964 | $ | (27,957 | ) | $ | 708,007 | |||||
Total Current Liabilities | $ | 560,545 | $ | 50,644 | $ | 611,189 | ||||||
Total Liabilities | $ | 560,545 | $ | 50,644 | $ | 611,189 | ||||||
Total Stockholders' Equity | $ | 175,419 | $ | (78,601 | ) | $ | 96,818 | |||||
For The Three Months Ended | ||||||||||||
March 31, 2018 | ||||||||||||
As Reported | Adjustment | As Revised | ||||||||||
Condensed Consolidated Statement of Operations: | ||||||||||||
Revenue | $ | 228,040 | $ | - | $ | 228,040 | ||||||
Cost of Revenue | $ | 49,346 | $ | 100,601 | $ | 149,947 | ||||||
Operating Expenses | $ | 925,924 | $ | (22,000 | ) | $ | 903,924 | |||||
Loss From Operations | $ | (747,230 | ) | $ | (78,601 | ) | $ | (825,831 | ) | |||
Net Loss | $ | (747,244 | ) | $ | (78,601 | ) | $ | (825,845 | ) | |||
Net Loss Per Share - Basic and Diluted | $ | (0.01 | ) | $ | - | $ | (0.01 | ) | ||||
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 77,219,168 | - | 77,219,168 | |||||||||
For The Three Months Ended | ||||||||||||
March 31, 2018 | ||||||||||||
As Reported | Adjustment | As Revised | ||||||||||
Condensed Consolidated Statement of Cash Flows: | ||||||||||||
Cash Flows From Operating Activities: | ||||||||||||
Net Loss | $ | (747,244 | ) | $ | (78,601 | ) | $ | (825,845 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities | $ | 276,874 | $ | 78,601 | $ | 355,475 | ||||||
Net Cash Used In Operating Activities | $ | (470,370 | ) | $ | - | $ | (470,370 | ) |
In accordance with SEC Staff Accounting Bulletin No 108, the Company has evaluated this error, based on an analysis of quantitative and qualitative factors, as to whether it was material to the condensed consolidated statement of operations for the three months ended March 31, 2018 and if amendments of previously filed financial statements with the SEC are required. The Company has determined that quantitatively and qualitatively, the error has no material impact to the condensed consolidated statement of operations for the three months ended March 31, 2018 or other prior periods.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the results of operations and financial condition of KT High-Tech Marketing,KULR Technology Group, Inc. ("KT High-Tech"KULR" and, including its subsidiary, KULR Technology Corporation (“KULR”), the “Company”) as of June 30, 20182019 and for the three and six months ended June 30, 20182019 and 20172018 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 20172018 and for the year then ended, which are included in the Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 17, 2018.March 29, 2019. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Report, in our other reports filed with the SEC, and other factors that we may not know.
Overview
The Company owns
KULR Technology Group, Inc., through our wholly-owned subsidiary KULR Technology Corporation, develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across an array of applications. Currently, we are focused on targeting the following applications: electric vehicles and autonomous driving systems (collectively referred to herein as “E-Mobility”); artificial intelligence and Cloud computing; energy storage; and 5G communication technologies. Our proprietary core technology is a carbon fiber based (Carbon Fiber Velvet or “CFV”)material, with roots in aerospace and defense, that provides what we believe to be superior thermal managementconductivity and heat dissipation in an ultra-lightweight and pliable material. By leveraging our proprietary cooling solutions that ithave been developed through longstanding partnerships with NASA, the Jet Propulsion Lab and others, our products and services make E-Mobility battery powered products safer and more stable.
Our management believes are more effective at conducting, dissipatingthat the E-Mobility industry has created and storing heat generatedwill create significant new opportunities for the application of our technology and know-how. We believe these new opportunities will be further driven by certain changing preferences that we’ve observed in younger generations that must increasingly cope with higher population density, global warming, and the rapidly evolving communications and computing needs of their personal devices and the surrounding infrastructure. As a result, we predict that the younger generations will increasingly prefer to attend meetings by video conference; rent a car, bike, or scooter, or call an electronic system’s internal components (i.e. semiconductor, integrated circuits “chips”) than traditional materials,app-based car service instead of owning a vehicle; and leverage the Cloud to perform tasks traditionally done in person, such as coppershopping for lunch, clothes, electronics and aluminum. KULR’s technologiesother consumer goods that also leverages an expanding E-Mobility delivery network.
In addition to evolving demands led by consumer-preferences, we have observed trending manufacturer-led opportunities in industries that have become increasingly more reliant on the Cloud, on portability and on high-demand processing power. For example, car manufacturers are increasingly providing options that take over the responsibility for driving, diagnosing its own service requirements and analyzing on-board systems data and efficiency. The communications and entertainment industries are leveraging increasingly more powerful and portable devices to deliver live and high-definition content and experiences. These innovations will require high bandwidth communication devices that can be applied insidehandle the power drain and computational requirements to keep up with the sophisticated security and software tools that will power these advanced product offerings. As a result of these manufacturer and consumer trends, we believe that the new generations of high-powered, small form-factor semiconductors are out-pacing the ability to control unwanted heat generation in lithium ion batteries.
The above-described advances in micro technology, portable power, and compact energy efficient devices linked to an ever-widening Internet of Things (“IoT”) via the Cloud are driving opportunities that forms the focus of the Company’s business development plan. We believe that our core technology and historical development focus on improving lithium-ion battery performance and safety, positions us in a competitively advantageous position to enhance key components to the evolving mobile applications for a wide arrayrange of electronic applications where heat is often a problem, suchconsumer products and IoT. We have found that as mobile devices, cloud computing, virtual reality platforms, satellites, internet of things, drones, and connected cars.
Three key vectors have driven advancements in semiconductors and electronics systems – performance, power, and size. These vectors, however, often counteract one another. As chip performance increases, power consumption increases, and more heat is generated as a byproduct. When chip size reduces, there is an increased potential for a hot spot on the chip, which can degrade system performance. Electronicperformance, or even cause spontaneous combustion. However, electronic system components must operate within a specific temperature range on both the high and low end to operate properly. KULR resolves many of the tradeoffs associated with other thermalAfter strenuous testing, we believe we have developed heat management materials. KULR’s productssolutions that significantly improve upon traditional heat storage and dissipation solutions and improve upon their rigidity problems and durability. ItsWe also believe that the traditional solutions are not equipped to handle the evolving marketplace. However, through a combination of custom design services and provision of proprietary hardware solutions, our products are lightweight and reduce manufacturing complexity associated withand provide a lighter weight solution than traditional thermal management materials.materials and, we believe, can meet the heat management demands of components and batteries being designed into the newest mobile technologies and applications.
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Our management’s growth strategy has put particular focus on targeting E-Mobility applications for its core technology. We believe we are well-positioned to provide a broad range of E-mobility solutions, and intend to expand our business through internal growth and acquisition. In additionthe case of acquisitions, we seek to thermal management of electronic systems, KULR has developed,acquire businesses in partnership with National Aeronautics and Space Administration (“NASA”) Johnson Space Center (“NASA JSC”), a highly effective, lightweight and passive thermal protection technology, Thermal Runaway Shield (“TRS”) for lithium-ion batteries. KULR’s lithium-ion battery (“Li-B”) TRS product prevents a potentially dangerous combustible condition known as thermal runaway propagation from occurring in neighboring Li-B cells by acting as a shield or barrier in between individual Li-B cells in a battery pack. Although rare, incidents of thermal runaway propagation occurring spontaneously in Li-B cargo shipments and inside electronics, including hoverboards, smartphones, and electric vehicles,related markets that are a cause of public concern.
During the second quarter of 2018, we generated business fromsynergistic to our existing aerospaceoperations, technologies, and automotive customer-base by providing contractmanagement experience. This focus will highlight markets in which we can: (1) integrate our existing technology into the acquiree’s product offerings or simultaneously offer our products and services through the acquiree’s customer base and thermal solution products.channels; (2) gain a leading market position and provide vertically integrated services where we can secure economies of scale, premium market positioning, and operational synergies; and/or (3) establish a leading position in selected markets and channels of the acquiree through a joint broad-based, hi-tech, E-Mobility branding campaign. We continuehave developed an acquisition discipline based on a set of financial, market and management criteria to make progress with establishingevaluate opportunities. If we were to successfully close an acquisition, we would seek to integrate it while minimizing disruption to our existing operations and those of the production of Internal Short Circuit (“ISC”) devices which were licensedacquired business, while exploiting the technical and managerial synergies from NASA and National Renewable Energy Laboratory (“NREL”) in the first quarter of 2018. Although no assurances can be made, we expect to generate revenue from the sale of ISC devices in the second half of 2018. In addition, we expect some of our current design engagements with potential customers in aerospace, defense and battery storage products to reach early production in the second half of 2018 and into 2019. However, no assurances can be made that such design engagements will result in production agreements or purchase orders.integration.
We have not yet achieved profitability and expect to continue to incur cash outflows from operations. It is expected that our research and development and general and administrative expenses will continue to increase and, as a result, we will eventually need to generate significant product revenues to achieve profitability. These conditions indicate that there is substantial doubt about our ability to continue as a going concern within one year after the financial statement issuance date. Historically, we have been able to raise funds to support our business operations, although there can be no assurance that we will be successful in raising additional funds in the future.
Recent Developments
In May 2018,Termination of the Securities Purchase Agreement
On July 5, 2019, the Company was assignedentered into a Rescission and Termination Agreement (the “Termination Agreement”) with the stockholders (the “Sellers”) (each Seller, individually, and the Company, a “Party” or collectively, the “Parties”) holding 100% of the ownership interest in TECHTOM Co., Ltd. (“TECHTOM”) to terminate the Securities Purchase Agreement between the Company and the Sellers, dated April 2, 2019 (the “Purchase Agreement”). The Company originally entered into the Purchase Agreement to, among other things, purchase all the ownership interests of TECHTOM from the Sellers, as previously disclosed in the Company’s Form 8-K filed on April 3, 2019.
Pursuant to the Termination Agreement, each of the Parties mutually agreed (i) to rescind and terminate the Purchase Agreement, relieving each Party of their respective duties and obligations arising under the Purchase Agreement; and (ii) to a general release of all other respective Parties from all claims arising out of the Purchase Agreement or the Termination Agreement. Each Party is responsible for all costs and expenses incurred by such Party in connection with the Purchase Agreement or the Termination Agreement.
Change of Ticker Symbol
Effective on July 11, 2019, the Company changed its trading symbol from “KUTG”, for quotation on the OTC Markets.
In July 2018, we sold an aggregate of 278,788 shares of common stock to investors for aggregate gross and net proceeds of $184,000 and $159,000, respectively.“KULR.”
Results of Operations
Three and Six Months Ended June 30, 20182019 Compared With Three and Six Months Ended June 30, 20172018
The closing of the Share Exchange Agreement with KULR on June 19, 2017 was accounted for as a reverse recapitalization under the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 805-40. The condensed consolidated statements of operations herein reflect the historical results of KULR prior to the completion of the reverse recapitalization since it was determined to be the accounting acquirer, and do not include the historical results of operations for KT High-Tech prior to the completion of the reverse recapitalization.
Revenues
Our revenues consisted of the following types:following:
For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Product sales | $ | 134,791 | $ | 10,900 | $ | 253,143 | $ | 10,900 | $ | 52,310 | $ | 134,791 | $ | 221,750 | $ | 253,143 | ||||||||||||||||
Contract services | 36,300 | - | 145,988 | - | 4,000 | 36,300 | 29,512 | 145,988 | ||||||||||||||||||||||||
Total revenue | $ | 171,091 | $ | 10,900 | $ | 399,131 | $ | 10,900 | $ | 56,310 | $ | 171,091 | $ | 251,262 | $ | 399,131 |
For the three months ended June 30, 20182019 and 2017,2018, we generated $171,091$56,310 and $10,900$171,091 of revenues, an increasea decrease of $160,191,$114,781, or 1,470%67%. The decrease was primarily due to a decrease in the volume of product sales, as well as the decrease in service contract completions during the second quarter of 2019.
Our revenues during the three months ended June 30, 20182019 primarily consisted of sales of our component product, CFV thermal management solution, which carries a higher margin,ISC battery cell products, as well as certain research and development contract and onsite engineering services. Our revenues during the three months ended June 30, 20172018 consisted of sales of our Phase Change Material (“PCM”) heat sink. The increase was primarily due to an increase in the volume ofcomponent product, sales,CFV thermal management solution as well as certain research and development contract services.
Our revenue for the addition of our contract services revenue.three months ended June 30, 2019 and 2018 was generated from 4 and 6 different customers, respectively.
For the six months ended June 30, 20182019 and 2017,2018, we generated $399,131$251,262 and $10,900$399,131 of revenues, an increasea decrease of $388,231,$147,869, or 3,562%37%. The decrease was primarily due to a decrease in service contract completions during the 2019 period.
Our revenues during the six months ended June 30, 2019 consisted of our component product, CFV thermal management solution, ISC battery cell products as well as certain research and development contract and onsite engineering services Our revenues during the six months ended June 30, 2018 consisted of sales of our component product, CFV thermal management solution, which carries a higher margin, sales of an Original Equipment Manufacturer (“OEM”) product which carries a lower margin, as well as certain research and development contract services.
Our revenues duringrevenue for the six months ended June 30, 2017 consisted of sales of our Phase Change Material (“PCM”) heat sink. The increase2019 and 2018 was primarily due to an increase in the volume of product sales, as well as the addition of our contract services revenue.generated from 13 and 10 different customers, respectively.
Cost of Revenues
Cost of revenues consists of the cost of our products as well as labor expenses directly related to product sales or research contract services.
Generally, we earn greater margins on revenue from products compared to revenue from services, so product mix plays an important part in our reported average margins for any period. Also, we are introducing new products in the early stages of our development cycle and the margins earned can vary significantly between period, customers and products due to the learning process, customer negotiating strengths, and product mix.
Our customers and prospective customers are large organizations with multiple levels of management, controls/procedures, and contract evaluation/authorization. Furthermore, our solutions are new and do not necessarily fit into pre-existing patterns of purchase commitment. Accordingly, the business activity cycle between expression of initial customer interest to shipping, acceptance and billing can be lengthy, unpredictable and lumpy, which can influence the timing, consistency and reporting of sales growth.
For the three months ended June 30, 20182019 and 2017,2018, cost of revenues was $33,470$28,550 and $56,195,$33,470, respectively, a decrease of $22,725,$4,920, or 40%15%. The decrease was primarily due to increased costs in 2017 to produce the PCM heat sinks, as well as due to the fact that our 2018lower sales were of higher margin products. The gross margin percentage was 49% and 80% for the three months ended June 30, 2019 and 2018, respectively. The decrease in margins during the 2019 period was primarily due to a reduction in sales of higher margin products as compared to the 2018 period.
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For the six months ended June 30, 20182019 and 2017,2018, cost of revenues was $90,067 and $183,417, and $56,195, respectively, an increasea decrease of $127,222,$93,350, or 226%51%. The increasedecrease was primarily due to costsincreased volume of sales of our lowercontracts in the 2018 period, which requested additional labor and materials. The gross margin higher cost OEMpercentage was 64% and 54% for the six months ended June 30, 2019 and 2018, respectively. The increase during the 2019 period resulted primarily from a more favorable product mix being sold as well as increased labor costs.compared to the previous period.
Research and Development
Research and development (“R&D”) includes expenses incurred in connection with the R&D of our CFV thermal management solution. R&D expenses are expensed as they are incurred.
For the three months ended June 30, 2018,2019, R&D expenses increaseddecreased by $82,558,$4,459, or 227%4%, to $119,006$114,547 from $36,448$119,006 for the three months ended June 30, 2017.2018. The increasedecrease is primarily attributable to an increase in salaries and other benefits due to a headcount increase of 9 employees.expenses associated with R&D supplies.
For the six months ended June 30, 2018,2019, R&D expenses increaseddecreased by $189,062,$10,951, or 381%5%, to $238,690$227,739 from $49,628$238,690 for the six months ended June 30, 2017.2018. The increasedecrease is primarily attributable to an increase in salaries and other benefits due to a headcount increase of 9 employees.expenses associated with R&D supplies.
We expect that our R&D expenses will continue to increase.
Research and Development – Related Parties
R&D – related parties include expenses associated with the development ofincrease as we expand our CFV thermal management solutions provided by Energy Science Laboratories, Inc. (“ESLI”), a R&D company owned by our Chief Technology Officer (“CTO”), as well as services provided by our CTO. R&D – related parties expenses are expensed as they are incurred.
For the three months ended June 30, 2018, R&D – related parties decreased by $269,942, or 100%, to $0 from $269,942 for the three months ended June 30, 2017. The decrease is due to the elimination of R&D services provided by ESLI during the current period, which resulted from the Company hiring its own research and development staff in June 2017.
For the six months ended June 30, 2018, R&D – related parties decreased by $401,057, or 100%, to $0 from $401,057 for the six months ended June 30, 2017. The decrease is due to the elimination of R&D services provided by ESLI during the current period, which resulted from the Company hiring its own research and development staff in June 2017.future operations.
Selling, General and Administrative
Selling, general and administrative expenses consist primarily of salaries, payroll taxes and other benefits, legal and professional fees, stock-based compensation, marketing, travel, rent and office expenses.
For the three months ended June 30, 2018,2019, selling, general and administrative expenses increaseddecreased by $330,600,$128,756, or 99%19%, to $663,018$534,262 from $332,418$663,018 for the three months ended June 30, 2017.2018. The increasedecrease is primarily due to increased salaries and other benefits of approximately $164,000 from the hiring of new employees in the third quarter of 2017,decreased professional fees of approximately $184,000$50,000 resulting from the compliance and reporting coststermination of being a public company as well as due to entering into newmultiple consulting agreements, partially offset by decreased non-cash stock-based compensation expense of approximately $99,000.$80,000, payroll and benefit expense of approximately $31,000, partially offset by increased travel expense of approximately $26,000.
For the six months ended June 30, 2018,2019, selling, general and administrative expenses increaseddecreased by $1,032,896,$327,505, or 249%23%, to $1,447,258$1,119,753 from $414,362$1,447,258 for the six months ended June 30, 2017.2018. The increasedecrease is primarily due to increased salariesa reduction in payroll and other benefitsbenefit expenses of approximately $311,000 from the hiring of new employees in the third quarter of 2017, increased$66,000, professional fees of approximately $446,000 resulting from the compliance and reporting costs of being a public company as well as due to entering into new consulting agreements, increased travel expenses of approximately $74,000, increased rent expenses of approximately $46,000 due to entering into a new lease agreement as well as increased$75,000, non-cash stock-based compensation expense of approximately $84,000.$215,000, partially offset by increased rent expense of approximately $34,000.
Liquidity and Capital Resources
For the six months ended June 30, 2019 and 2018, and 2017, cash (used in) provided byused in operating activities was $(779,380)$968,882 and $281,756,$779,380, respectively. Our cash used in operations for the six months ended June 30, 2019 was primarily attributable to our net loss of $1,187,109, adjusted for non-cash expenses in the aggregate amount of $99,234, partially offset by $118,993 of net cash provided by changes in the levels of operating assets and liabilities.Our cash used in operations for the six months ended June 30, 2018 was primarily attributable to our net loss of $1,470,467, adjusted for non-cash expenses in the aggregate amount of $316,316, partially offset by $374,771 of net cash provided by changes in the levels of operating assets and liabilities. Our cash provided by operations for the six months ended June 30, 2017 was primarily attributable to our net loss of $918,598, adjusted for net non-cash expense in the aggregate amount of $225,040, partially offset by $975,314 of net cash provided by changes in the levels of operating assets and liabilities.
For the six months ended June 30, 2019 and 2018, and 2017, cash (used in) provided byused in investing activities was$(8,350)was $0 and $1,922,216,$8,350, respectively. Cash used in investing activities during the six months ended June 30, 2018 was due to purchases of equipment. Cash provided by investing activities during
For the six months ended June 30, 2017 resulted from $1,859,261 of2019, and 2018, cash acquired in connection with the Share Exchange as well as $85,000 of proceeds received from the collection of our note receivable to our CEO, partially offsetprovided by $22,045 of purchases of property and equipment.
There were no cash flows from financing activities forwas $883,300 and $0, respectively. Cash provided by financing activities the six months ended June 30, 2018 and 2017.
In July 2018, we sold an aggregate2019 consisted of 278,788 sharesapproximately $898,000 proceeds from sale of common stock, to investors for aggregate gross and net proceedspartially offset by the payment of $184,000 and $159,000, respectively. $15,000 of deferred offering costs.
We have not yet achieved profitability and expect to continue to incur cash outflows from operations. It is expected that our research and development and general and administrative expenses will continue to increase and, as a result, we will eventually need to generate significant product revenues and/or raise additional capital to fund our operations. These conditions indicate that there is substantial doubt about our ability to continue as a going concern within one year after the financial statement issuance date.
Based upon our forecast for continued operating losses, we expect that the cash we
We are currently have available will fundfunding our operations into the fourth quarter of 2018 while we continue to apply efforts to raise additional capital. Thereafter, we will require external funding to sustain operations and to follow through on the execution ofa month-to-month basis. Although our business plan. Although management believes that we have access to capital resources, there are currently no commitments in place for new financing at this time and there is no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. Our operating needs include the planned costs to operate our business, including amounts required to fund working capital and capital expenditures.
Our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Off Balance Sheet Arrangements
There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
For a description of our critical accounting policies, see Note 3 – Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Recently Adopted Accounting Pronouncements
For a description of recently adopted accounting pronouncements, including adoption dates and estimated effects, if any, on our condensed consolidated financial statements, see Note 3 – Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is a smaller reporting company, as defined by Rule 229.10(f)(1), and is not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our management, with the participation of our principal executive officer and principal financial officer, concluded that, as of the end of the period covered inby this report, our disclosure controls and procedures were not effective to provideat the reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our principal executive officer, as appropriate, to allow timely decisions regarding required disclosure.
The following material weakness in our internal control over financial reporting were identified as of June 30, 2018 in the normal course:
A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
We intend to address the weakness identified above by increasing the internal controls over the (a) vendor management process and (b) purchase to pay process.
Notwithstanding the assessment that our disclosure controls and procedures and our internal controls over financial reporting were not effective and that there is a material weakness as identified herein, we believe that our condensed consolidated financial statements contained in this Quarterly Report fairly present our financial position, results of operations and cash flows for the periods covered thereby in all material respects.level.
Changes in Internal Control over Financial Reporting
Except as disclosed above,There has been no change in our internal control over financial reporting did not changethat occurred during the three months ended June 30, 2018.second quarter of 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except as noted above.
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None.
There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K which was filed with the SEC on April 17, 2018.March 29, 2019.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In July 2018, we sold an aggregate of 278,788 shares of common stock to certain accredited investors for aggregate gross proceeds of $184,000, which proceeds will be used for general corporate expenses and other research and development expenses. The issuances of securities were made pursuant to the exemption from registration under Section 4(a)(2) and Rule 506 of Regulation D under the Securities Act for transactions not involving a public offering and transactions with “accredited investors” as defined under the Securities Act. None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety DisclosuresDisclosures.
Not applicable.
None.
3.1 | Certificate of Amendment dated December 31, 2018 (1) | ||
10.1 | Securities Purchase Agreement dated April 2, 2019 (2) | ||
31.1 | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||
31.2 | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | ||
101.INS | XBRL Instance* | ||
101.SCH | XBRL Taxonomy Extension Schema* | ||
101.CAL | XBRL Taxonomy Extension Calculation* | ||
101.DEF | XBRL Taxonomy Extension Definition* | ||
101.LAB | XBRL Taxonomy Extension Labels* | ||
101.PRE | XBRL Taxonomy Extension Presentation* |
*Filed herewith
**Furnished herewith
(1) Previously filed as an exhibit to Form 8-K on January 7, 2019 and incorporated herein by this reference
(2) Previously filed as an exhibit to Form 8-K on April 3, 2019 and incorporated herein by this reference
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned hereunto duly authorized.
August 14, | By | /s/Michael Mo |
Michael Mo | ||
Chief Executive Officer and Chairman (Principal Executive Officer) | ||
August 14, | By | /s/Simon Westbrook |
Simon Westbrook Chief Financial Officer (Principal Financial and Accounting Officer) | ||
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