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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 955 added, 705 removed, 913 unchanged (65% of the section changed)

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Management’s Report on Internal Control Over Financial Reporting

Our management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act).

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

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(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

(ii) provide reasonable assurance that transactions are

recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 Framework).

Under the supervision of our principal executive officer and principal financial officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 Framework).

Based on this evaluation, our principal executive officer and principal financial officer have concluded that our internal control over financial reporting as of December 31, 2025 was effective.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Based on our management’s evaluation, there has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of the Effectiveness of Controls

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Insider Trading Arrangements

During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, modi fied or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5 -1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

On December 17, 2025 , Joanna Massey , a member of the Company’s board of directors , terminated a trading arrangement that was intended to satisfy the affirmative defense of Rule 10b5-1(c), which had been entered into on July 1, 2025 , with a termination date of July 1, 2026.

The plan provided for the potential sale of up to 25,000 shares of common stock.

As previously disclosed, on October 3, 2025, Dr.

Massey sold 500 at $5.4594 per share under this plan prior to its termination.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

March 2026 Drawdown

On March 27, 2026, the Company borrowed $5.0 million in cash (the “March 2026 Drawdown”) under the Master Loan Agreement, dated July 1, 2025 (the “Master Loan Agreement”), previously disclosed in the Current Report on Form 8-K on July 8, 2025.

The March 2026 Drawdown is the second advance against the revolving credit facility established by the Master Loan Agreement.

The March 2026 Drawdown bears a 7% loan fee.

The Company’s obligations under the March 2026 Drawdown are by a first-priority security interest at collateral-coverage ratio of about 156.25% of the outstanding principal amount, or 125 bitcoin.

Except as set forth herein, the March 2026 Drawdown is subject to the terms and conditions of the Master Loan Agreement previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 8, 2025.

After giving effect to the March 2026 Drawdown, $15.0 million of the $20.0 million credit facility remains available.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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William Walker

Director, Chief Technology Officer

Chief Financial Officer

Michael Carpenter

Vice President of Engineering

Chief Technology Officer

Chief Financial Officer, Director

Aron Schwartz

Joanna Massey

Lead Director

General Counsel and Secretary

The term of office for each director is one year, or until the next annual meeting of the stockholders.

Michael Mo was appointed CEO and Director of the Company on March 16, 2011.

Michael Mo has served as our CEO and member of the Board of Directors of the Company since March 2011.

Mo is a technology entrepreneur and successful investor with over 20 years of experience in technology management, product development and marketing.

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Mo served as Senior Director of Business Development at Amlogic, Inc., a California high-tech company.

Mo received his Master of Science in Electrical Engineering from the University of California at Santa Barbara in 1995.

Shawn Canter was appointed as Chief Financial Officer (“CFO”) effective as of March 31, 2023.

Mo received his Master of Science in Electrical Engineering from the University of California at Santa Barbara.

Shawn Canter was appointed CFO of the Company effective March 2023 and has served as a member of the Board of Directors of the Company since June 2025.

Canter is a seasoned corporate executive and board member with over 25 years of experience leading teams in hands-on roles in both institutional and early/growth stage companies bringing solutions to complex situations.

He gained significant financial and transactional experience as an executive in mergers and acquisitions (“M&A”) at Goldman Sachs and at Bank of America’s investment banking division where he also served as Chief Operating Officer of M&A.

Canter will be responsible for financial management and driving a disciplined fiscal strategy while scaling the Company through its commercialization phase.

He gained significant financial and transactional experience as an executive in M&A at Goldman Sachs and at Bank of America’s investment banking division where he also served as Chief Operating Officer of M&A.

Canter is responsible for financial management and driving a disciplined fiscal strategy while scaling the Company through its commercialization phase.

Canter received a bachelor’s degree in economics and a master’s degree in organizational behavior from Stanford University, as well as a JD and an MBA from the University of Michigan.

William Walker was appointed Chief Technical Officer effective November 2022.

Walker who originally joined the Company in March 2022 as Director of Engineering, has significant experience in professional and research related activities focused on thermo-electrochemical testing and analysis of lithium-ion (Li-ion) battery assemblies and related thermal management products designed for space exploration applications.

Walker, who originally joined the Company in March 2022 as Director of Engineering, has significant experience in professional and research related activities focused on thermo-electrochemical testing and analysis of Li-ion battery assemblies and related thermal management products designed for space exploration applications.

Prior to joining the Company, from October 2021 to March 2022, Dr.

Walker was a Research Scientist at Underwriters Laboratories Inc.

since October of 2021.

From June 2012 to October 2021, Dr.

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in Materials Science and Engineering at the University of Houston (UH).

Michael Carpenter serves as KULR’s Vice President of Engineering.

Carpenter has been employed by ESLI since December 1983, serving as Director of the PCM Heatsink Group, Quality Manager, Facility Security Officer (FSO) in the Defense Industrial Security Program from 1988 to 1995.

He also has been served as Safety Officer since he joined ESLI in 1983.

Carpenter received his B.S.

in Applied Mechanics from the University of California, San Diego in 1983.

Jay Yamamoto was appointed General Counsel and Corporate Secretary effective June 2025.

Yamamoto brings 15 years of legal experience to the Company.

Prior to joining, Mr.

Yamamoto had served as KULR’s primary outside counsel since December 2016, providing strategic advice on securities regulation, corporate governance, M&A, and other complex matters and, through that engagement, has developed an intimate understanding of the Company’s business, risk profile, and long-term objectives.

Prior to joining KULR, Mr.

Yamamoto spent 15 years practicing law, including over 7 years as a partner, at Sichenzia Ross Ference Carmel LLP, a law firm in New York.

His firm practice focused on corporate and securities law, including initial public offerings and secondary transactions, mergers and acquisitions, corporate governance and securities law compliance.

Yamamoto represented numerous public and private companies in private equity financing transactions, debt and venture capital offerings, domestic mergers, stock and assets acquisitions and other reorganization transactions.

Yamamoto received B.A.

degrees from Colgate University in economics and philosophy, and his J.D.

degree from Pace University School of Law.

Non-Executive Directors

Joanna Massey is a public company Board Director and communications executive at global Fortune 500 companies.

She specializes in enterprise risk management, governance, and guiding organizations through transformative periods.

Massey helps companies with operational efficiency, aligning strategic initiatives, and navigating complex transitions.

In her board roles for public and private companies, Dr.

Massey serves as Chair of Nominations & Governance, Chair of Compensation, and she sits on the Audit and M&A Committees.

Massey has a PhD in psychology and 30 years of experience advising Chairmen and CEOs.

She spent her operating career in the media and digital technology industries strategizing on global brand reputation management as Head of Communications at Condé Nast Entertainment and Senior Vice President of Corporate Communications at Lions Gate Entertainment (NYSE:

She also held Senior Vice President positions in communications and media relations at CBS Corporation and

Viacom, Inc., now Paramount Global (Nasdaq:

PARA), as well as at a joint venture between Discovery, Inc.

WBD) and Hasbro, Inc.

As a corporate communications executive, Dr.

Massey managed integration during major M&A transactions at Lionsgate, CBS, and Discovery;

corporate turnaround as Condé Nast pivoted from print to video;

and crisis communications with consumers, employees, investors, regulators, and politicians.

She is based in the United States and has international experience working with partners in Europe, the UK, China and India.

Joanna Massey has served as a member of the Company’s Board of Directors since June 2021 and was appointed Lead Director in November 2022.

Massey is an experienced public company board director.

She has served on both public and private company boards with audit, compensation, and M&A experience.

She specializes in enterprise risk management, governance, and guiding organizations through transformation.

In addition, her expertise in stakeholder communications and regulatory reporting ensures effective change management and sustainable outcomes during mergers, acquisitions, and restructurings.

In her board roles, Dr.

Massey has served as chairman of the board, lead independent director, chair of nominations & governance, chair of compensation, and a member of the audit, strategic finance, and pricing committees.

Her previous board roles have included Thumzup Media Corporation (Nasdaq:TZUP), The Hollywood Foreign Press Association (private) and TessPay Inc.

Massey has a Master of Science in Legal Studies from Cornell Law School, a Master of Business Administration from the University of Southern California, a Graduate Certificate in Corporate Finance from Harvard University, as well as a Master of Arts in Clinical Psychology from Antioch University and a Ph.D.

in Psychology from Sofia University.

Donna Grier has been a member of the Company’s Board of Directors since April 2024, serving as Chair of the Audit Committee and a member of both the Nominating and Corporate Governance and Compensation Committees of the Board.

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She previously served as Board Director and Audit Committee Chair of Pyxus International, a global agricultural company (NYSE:PYX until 2020).

She also serves as Chair of the Board of Trustees for Washington & Jefferson College.

She also serves as Trustee (and former Chair) of the Board of Directors for Washington & Jefferson College.

Grier earned her MBA from the Booth School of Business at the University of Chicago and a BA in Economics and Psychology from Washington & Jefferson College.

Aron Schwartz has served as a member of the Company’s Board of Directors since June 2025.

He was a Managing Director at ACON Investments from 2014 to 2024.

Schwartz is the founder of Constructivist Capital, LLC, a firm that works with family offices and alternative asset management firms to pursue attractive investment opportunities.

He was previously a consultant to and a Managing Director at Avenue Capital from 2012 to 2014 and held various positions culminating in Managing Director of Fenway Partners, a middle market private equity firm based in New York, from 1999 to 2011.

From 1997 to 1999, Mr.

Schwartz was an associate in the Financial Entrepreneurs Group of Salomon Smith Barney, where he worked on a variety of financings and advisory assignments.

He also serves or has served on the board of directors of a number of other public and private companies, including Elara Caring, Invacare Corporation, True Value Company, LLC, 1-800 Contacts, Inc., Commonwealth Laminating & Coating, Inc., Easton Bell Sports, Inc., STVT-AAI Education Inc.

(Ancora Education), Igloo Products Corp., APR Energy, PLC, Borden Dairy Holdings, ATU Auto Technick-Unger, PSSI, Rapid Deploy, Inc., Prima-Wawona, AFH, Melinta Therapeutics LLC, Tempel Steel, Mark Andy Inc., FEV Acquisition LLC, Injured Workers Pharmacy, LLC, Aventine, Inc.

and VillageMD.

In addition, Mr.

Schwartz previously served on the board of directors of the Open Road Foundation and US-ASEAN Business Council.

Schwartz, a Certified Management Accountant, received his J.D.

and M.B.A with honors from U.C.L.A.

cum laude from the Wharton School at the University of Pennsylvania.

Board Composition

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Officers are elected annually by the board of directors and serve at the discretion of the board.

Our board currently consists of three directors, Michael Mo, Joanna Massey, and Donna Grier.

Joanna Massey and Ms.

Our board currently consists of five directors, Michael Mo, Joanna Massey, Donna Grier, Aron Schwartz and Shawn Canter.

Joanna Massey, Mr.

Aron Schwartz and Ms.

Donna Grier are “independent” as defined under the NYSE American rules (as discussed below).

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Director Independence

Our board of directors has determined that Donna Grier and Dr.

Joanna Massey are “independent,” as defined under the NYSE American rules.

Our board of directors has determined that Donna Grier, Dr.

Joanna Massey and Aron Schwartz are “independent,” as defined under the NYSE American rules.

For purposes of the NYSE American rules, an independent director means a person other than an executive officer or employee of our company or any other individual having a relationship which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, subject to certain additional limitations.

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Audit Committee

The members of our Audit Committee are Donna Grier and Dr.

Joanna Massey, with Ms.

Grier serving as the Chairperson.

Each of Donna Grier and Dr.

Joanna Massey, is independent under the rules and regulations of the SEC and the listing standards of the NYSE American applicable to audit committee members.

Our board of directors has determined that each of Donna Grier and Dr.

Joanna Massey qualify as an audit committee financial expert within the meaning of SEC regulations and meet the financial sophistication requirements of the NYSE American.

Our Audit Committee has the responsibility for, among other things, (i) selecting, retaining and overseeing our independent registered public accounting firm, (ii) obtaining and reviewing a report by independent auditors that describe the accounting firm’s

internal quality control, and any materials issues or relationships that may impact the auditors, (iii) reviewing and discussing with the independent auditors standards and responsibilities, strategy, scope and timing of audits, any significant risks, and results, (iv) ensuring the integrity of the Company’s financial statements, (v) reviewing and discussing with the Company’s independent auditors any other matters required to be discussed by PCAOB Auditing Standard No.

1301, (vi) reviewing, approving and overseeing any transaction between the Company and any related person and any other potential conflict of interest situations, (vii) overseeing the Company’s internal audit department, (viii) reviewing, approving and overseeing related party transactions, and (ix) establishing and overseeing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

The Audit Committee consists of Donna H.

Joanna Massey and Aron Schwartz.

Grier is the chair of the Audit Committee.

The Board has affirmatively determined that each member of the Audit Committee meets the additional independence criteria applicable to audit committee members under SEC rules and the NYSE American Stock Market.

The Board of Directors has adopted a written charter setting forth the authority and responsibilities of the Audit Committee.

The Board has affirmatively determined that each member of the Audit Committee is financially literate.

Grier meets the qualifications of an Audit Committee financial expert.

Our Audit Committee has the responsibility for, among other things, (i) appointing, approving the compensation of, overseeing the work of, and assessing the independence, qualifications, and performance of the independent auditor, (ii) reviewing the internal audit function, including its independence, plans, and budget, (iii) approving, in advance, audit and any permissible non-audit services performed by our independent auditor, (iv) reviewing our internal controls with the independent auditor, the internal auditor, and management, (v) reviewing the adequacy of our accounting and financial controls as reported by the independent auditor, the internal auditor, and management, (vi) reviewing, approving and overseeing any transaction between the Company and any related person and any other potential conflict of interest situations, and (vii) overseeing our major risk exposures regarding the Company’s accounting and financial reporting policies, and the activities of our internal audit function.

Compensation Committee

The members of our Compensation Committee are Donna Grier and Dr.

Joanna Massey, with Ms.

The members of our Compensation Committee are Aron Schwartz, Donna Grier and Dr.

Joanna Massey, with Mr.

Schwartz serving as Chairperson.

Grier and Dr.

Massey serving as Co-Chairpersons.

Massey serve as members.

Our Compensation Committee has the responsibility for, among other things, (i) reviewing and approving the chief executive officer’s compensation based on an evaluation in light of corporate goals and objectives, (ii) reviewing and recommending to the Board the compensation of all other executive officers, (iii) reviewing and recommending to the Board incentive compensation plans and equity plans, (iv) reviewing and discussing with management the Company’s Compensation Discussion and Analysis and related information to be included in the annual report on Form 10-K and proxy statements, and (v) reviewing and recommending to the Board for approval procedures relating to Say on Pay Votes.

Nominating and Corporate Governance Committee

The members of our Nominating and Corporate Governance Committee are Donna Grier and Dr.

Joanna Massey, with Dr.

The members of our Nominating and Corporate Governance Committee are Donna Grier, Dr.

Joanna Massey, and Aron Schwartz with Dr.

Massey serving as the Chairperson.

Our Nominating and Corporate Governance Committee has the responsibility relating to assisting the Board in, among other things, (i) identifying and screening individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors, (ii) recommending to the Board the approval of nominees for director, (ii) developing and recommending to our board of directors a set of corporate governance guidelines, and (iv) overseeing the evaluation of our board of director.

Code of Ethics

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Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of the issued and outstanding shares of our common stock to file reports of initial ownership of common stock and other equity securities and

subsequent changes in that ownership with the SEC.

Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

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Nomination Process

As of December 31, 2024, we did not affect any material changes to the procedures by which stockholders may recommend nominees to the Board of Directors.

As of December 31, 2025, we did not effect any material changes to the procedures by which stockholders may recommend nominees to the Board of Directors.

We do not have any defined policy or procedure requirements for stockholders to submit recommendations or nominations for directors.

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Summary Compensation Table

The following Summary Compensation Table sets forth all compensation earned in all capacities during the fiscal years ended December 31, 2024 and 2023 by (i) our principal executive officer, (ii) our two most highly compensated executive officers, other than our principal executive officer, who were serving as executive officers as of December 31, 2024 and whose total compensation for the 2024 fiscal year, as determined by Regulation S-K, Item 402, exceeded $100,000, (iii) a person who would have been included as one of our two most highly compensated executive officers, other than our principal executive officer, but for the fact that he was not serving as one of our executive officers as of December 31, 2024 (the individuals falling within categories (i), (ii) and (iii) are collectively referred to as the “Named Executive Officers”):

The following Summary Compensation Table sets forth all compensation earned in all capacities during the fiscal years ended December 31, 2025 and 2024 by (i) our principal executive officer and (ii) our two most highly compensated executive officers, other than our principal executive officer, who were serving as executive officers as of December 31, 2025 collectively the “Named Executive Officers”):

Name and Principal Position

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Chief Technology Officer

Keith Cochran

Former Chief Operating Officer*

(1) The amounts reflect the aggregate grant date fair value of restricted stock awards computed in accordance with FASB ASC Topic 718.

For additional information on the valuation assumptions regarding these restricted stock awards, (see Note 16 – Stockholders’ Equity (Deficit)) to our financial statements for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the year ended December 31, 2025 included herein.

(2) Includes 250,000 shares of the Company’s common stock which vest in four equal increments over four years and gym membership fees of $12,224.

(3) Includes 35,779 shares of the Company’s common stock which vests over one year.

(2) Includes cash compensation earned from date of hire March 31, 2023 through December 31, 2023.

Also includes 1,500,000 shares of the Company’s common stock which vest in five equal increments over five years.

(4) Includes 187,500 shares of the Company’s common stock which vest in four equal increments over four years.

(4) Includes severance payment of $99,551.

* Resigned effective August 20, 2024

(5) Includes 125,000 shares of the Company’s common stock which vest in four equal increments over four years.

Employment Contracts;

Termination of Employment and Change-in-Control Arrangements

We have not entered into employment agreements with our officers and directors and our Board of Directors has the sole discretion to pay salaries and incentive bonuses, including merit-based cash and equity bonuses.

During the year ended December 31, 2024, the Board, at the recommendation of the Compensation Committee, approved the following compensation for each of the following officers of the Company:

● Effective May 23, 2024, the Board approved a $112,344 reduction in Michael Mo’s salary and granted 286,230 of the Company’s restricted stock units, which shall vest in one year.

On December 26, 2024, the Board approved a cash bonus to Michael Mo in the amount of $100,000.

● On October 4, 2024, the Board approved a cash bonus to Shawn Canter in the amount of $45,000.

● On December 26, 2024, the Board approved a cash bonus to William Walker in the amount of $50,000.

We have not entered into employment agreements with our officers and directors and our Board of Directors has the sole discretion to determine the salaries and incentive bonuses, including merit-based cash and equity bonuses, payable to our Named Executive Officers.

During the year ended December 31, 2025, the Board, upon recommendation of the Compensation Committee, approved the following compensation for each of the following officers of the Company:

● On December 31, 2025, the Board approved a cash bonus to Michael Mo, Shawn Canter and Will Walker in the amount of $90,000, $70,000 and $53,860, respectively.

Equity Compensation Plans

On August 15 and November 5, 2018, the Board of Directors and a majority of the Company’s shareholders, respectively, approved the 2018 Equity Incentive Plan (the “2018 Plan”).

Under the 2018 Plan, 15,000,000 shares of common stock of the Company were authorized for issuance.

The 2018 Plan provided for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, and restricted stock units to employees, directors and consultants of the Company and its affiliates.

Upon the effectiveness of the 2025 Plan (defined below), no further awards were made under the 2018 Plan.

On September 24, 2025 and November 21, 2025, the Board of Directors and a majority of the Company’s shareholders, respectively, approved the 2025 Equity Incentive Plan (the “2025 Plan”).

Under the 2025 Plan, 7,500,000 shares of common stock of the Company are authorized for issuance.

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Compensation of Directors

On November 1, 2022, the Board of the Company appointed a Lead Independent Director (“Lead Director”) and a non-Lead Independent Director (“non-Lead Director”) of the Board, to hold office until the earlier of the expiration of the term of office of the director whom they have replaced, successors are duly elected and qualified, or the earlier of such director’s death, resignation, disqualification, or removal.

Furthermore, the Lead Director will receive annual cash compensation equal to $150,000 upon their appointment and the non-Lead Independent Director (“non-Lead Director”) will receive annual cash compensation equal to $70,000.

Additionally, the Lead Director and non-Lead Director were each granted 140,000 shares of restricted stock units, which vested quarterly in 35,000 share installments, of which 105,000 units were fully vested as of December 31, 2024.

The Lead Director also received 15,000 immediately vested shares of common stock.

The table below sets forth the non-employee director compensation for the year ended December 31, 2025.

Incentive Plan

Joanna Massey

Aron Schwartz

The amounts reflect the aggregate grant date fair value of restricted stock awards computed in accordance with FASB ASC Topic 718.

For additional information on the valuation assumptions regarding these restricted stock awards (see Note 16 – Stockholders’ Equity (Deficit)) to our financial statements for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the year ended December 31, 2025 included herein.

On June 5, 2025, the Board approved the cash compensation of the independent directors of the Company as follows;

the Lead Independent Director (“Lead Director”) will receive annual cash compensation equal to $120,000, the non-Lead Independent Director (“non-Lead Director”) will receive annual cash compensation equal to $97,500 and the second non-Lead Independent Director (“second non-Lead Director”) will receive annual compensation equal to $95,000.

On November 24, 2025, the Board approved stock compensation whereby the Lead Director and each Independent Director were granted 13,130 restricted stock units, which vest in two equal installments on December 6, 2025 and June 6, 2026.

Outstanding Equity Awards at Fiscal Year-End

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William Walker (Chief Technology Officer)

The market value of the awards that have not vested is based on the closing price of the Company’s Common Stock on NYSE American on December 31, 2025, which was $2.96.

Consists of (i) 46,875 restricted stock units which vest on November 1, 2026 and (ii) 250,000 restricted stock units which vest annually in four equal installments on January 17, 2026, January 17, 2027, January 17, 2028 and January 17, 2029.

Consists of (i) 112,500 restricted stock units which vest in equal installments on March 31, 2026, March 31, 2027 and March 31, 2028 and (ii) 187,000 restricted stock units which vest in equal installments on January 17, 2026, January 17, 2027, January 17, 2028 and January 17, 2029.

Consists of (i) 1,563 restricted stock awards which vest on April 13, 2026;

(ii) 3,125 restricted stock awards vest on November 1, 2026;

(iii) 21,874 restricted stock units which vest in equal installments on July 12, 2026 and July 12, 2027;

and (iv) 125,000 restricted stock units which vest in equal installments on January 17, 2026, January 17, 2027.,January 17, 2028 and January 17, 2029.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides the names and addresses of each person known to us who own more than 5% of the outstanding common stock as of the date of this annual report, and by our officers and directors as of March 27, 2025.

The following table provides certain information regarding the beneficial ownership of our common stock as of March 27, 2026 (except as indicated below) (the “Measurement Date”) by:

● each person known to us who own more than 5% of the outstanding common stock;

● each of our named executive officers;

● each of our directors and director nominees;

● all of our executive officers and directors as a group.

Except as otherwise indicated, all shares are owned directly.

Unless otherwise indicated, the address of each of the persons shown is c/o KULR Technology Group, Inc., 555 Forge River Road, Suite 100, Webster, TX.

Each record holder of Non-convertible Series A Voting Preferred Stock shall have that number of votes (identical in every other respect to the voting rights of the holders of Common Stock entitled to vote at any regular or special meeting of the shareholders or by written consent) equal to one hundred (100) votes per share of Non-convertible Series A Voting Preferred Stock held by such record holder.

Each record holder of Non-convertible Series A Voting Preferred Stock shall have that number of votes (identical in every other respect to the voting rights of the holders of Common Stock entitled to vote at any regular or special meeting of the shareholders or by written consent) equal to 100 votes per share of Non-convertible Series A Voting Preferred Stock held by such record holder.

Name of Beneficial Owner

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Michael Mo (2) - CEO and Chairman

Shawn Canter (3) - CFO

Shawn Canter (3) – CFO and Director

William Walker (4) - CTO

Michael Carpenter (5) - VP of Engineering

Donna Grier (5) - Director

Joanna Massey (7) - Director

Joanna Massey (6) - Lead Director

Aron Schwartz (7) - Director

All directors and executive officers as a group (7 persons) (8)

(1) The percent of class is based on 284,389,637 shares outstanding and entitled to vote, which excludes 158,698 treasury shares and 62,500 outstanding shares that are not vested and are not entitled to vote.

A person is considered to beneficially own any shares:

(a) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (b) of which such person has the right to acquire beneficial ownership at any time within 60 days through the vesting of restricted equity grants.

Beneficial owners of more than 5%

(1) The percentage ownership is based on 46,235,909 shares outstanding and entitled to vote.

A person is considered to beneficially own any shares (a) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (b) of which such person has the right to acquire beneficial ownership at any time within 60 days through the vesting of restricted equity grants.

Shares underlying such equity grants, however, are only considered outstanding for the purpose of computing the percentage ownership of that person and are not considered outstanding when computing the percentage ownership of any other person.

(2) Consists of 20,327,570 shares held directly by Mr.

Mo and 1,400,000 shares held jointly by Mr.

Mo and his spouse, Linda Mo, and excludes shares held by Mr.

Mo’s son Alexander Mo and shares held by Mr.

Mo’s son Brandon Mo, over which shares Mr.

Mo disclaims beneficial ownership, as Mr.

Mo has no control over the dispositive or voting power over the shares and his sons no longer live in the same household as Mr.

Does not include a restricted stock award of 3,500,000 shares of the Company’s common stock that does not vest or settle within 60 days.

Mo beneficially owns an aggregate of 1,000,000 shares of Non-Convertible Series A Voting Preferred Stock (the “Preferred Stock”).

(2) Includes 175,000 shares of common stock held jointly by Mr.

Mo and his spouse and 2,598,149 shares of common stock underlying restricted stock held by Mr.

Mo also beneficially owns an aggregate of 1,000,000 shares of Non-Convertible Series A Preferred Stock (the “Preferred Stock”).

Each share of the Preferred Stock entitles Mr.

Mo to votes equal to one hundred votes per share of Preferred Stock held.

(3) Does not include a restricted stock award of 2,400,000 shares of the Company’s common stock that does not vest or settle within 60 days.

(4) Does not include 1,325,000 restricted stock grants that do not vest within 60 days.

(5) Does not include a restricted stock grant of 200,000 shares of the Company’s common stock that does not vest or settle within 60 days.

(6) Consists of 140,000 vested shares granted by the Company on April 15, 2024.

(7) Consists of 20,000 vested shares of common stock granted by the Company, on June 7, 2021, the effective date of Dr.

Massey’s appointment as a director of the Company, 37,500 vested shares granted by the Company on November 1, 2022, 155,000 vested shares granted by the Company on April 15, 2024, and 10,000 shares of common stock acquired in open market purchases.

(3) Includes 93,222 shares of restricted stock and 37,500 shares of common stock underlying restricted stock that will vest or settle within 60 days.

(4) Includes 55,252 shares of restricted stock and 1,562 shares of common stock underlying restricted stock units that vest or settle within 60 days.

(5) Consists of 24,065 shares of restricted common stock.

(6) Consists of 24,378 shares of restricted common stock.

(7) Consists of 6,565 shares of restricted common stock.

(8) Consists of 13,945 shares of restricted common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

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The 2018 Plan is generally administered by the Board or a committee of two (2) or more independent, non-employee directors (the “Plan Committee”).

The Board or the Plan Committee, as applicable, has the

power to determine the participants (the “Participants”) to whom awards under the 2018 Plan (the “Plan Awards”) shall be made.

The 2018 Plan allows for the award of, stock, stock options, and shares of restricted stock.

Stock options granted under the Plan may be either incentive stock options (an “ISO”) qualifying under Section 422 of the Internal Revenue Codes of 1986, as amended (the “Code”) or non-qualified stock options (a “NQSO”).

An ISO may only be issued to employees of KULR.

ISOs may be granted to officers or directors, provided they are also employees of KULR.

On November 21, 2025, KULR adopted and ratified the KULR Technology Group 2025 Equity Incentive Plan (the “2025 Plan”).

Subject to certain adjustments, the 2018 Plan, the total number of shares of common stock which may be purchased or granted directly under the plan shall not exceed seven and a half million (7,500,000).

The 2025 Plan is generally administered by the Board or a committee of two (2) or more independent, non-employee directors (the “Plan Committee”).

The Board or the Plan Committee, as applicable, has the power to determine the participants (the “Participants”) to whom awards under the 2025 Plan (the “Plan Awards”) shall be made.

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ISOs may be granted to officers or directors, provided they are also employees of KULR.

The following table sets forth, as of December 31, 2024, our securities authorized for issuance under any equity compensation plans approved by our stockholders:

The following table sets forth, as of December 31, 2025, our securities authorized for issuance under any equity compensation plans:

Number of securities

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Equity compensation plans not approved by security holders

As of December 31, 2025,1,471,942 equity awards consisted of time-based restricted stock that were granted under the 2018 Plan and the 2025 Plan, which shares are already issued and outstanding and therefore are not reflected in this table.

Change in Control

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

Other than as set forth below and compensation arrangements, including employment, and indemnification arrangements, discussed, there have been no transactions since January 1, 2023, in which the amount involved in the transaction exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets as at the year-end for the last two completed fiscal years, and to which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

Other Transactions

Director Independence

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Our board of directors has determined that Dr.

Joanna Massey and Ms.

Donna Grier are “independent,” as defined under the NYSE American rules.

Joanna Massey, Ms.

Donna Grier and Mr.

Aron Schwartz are “independent,” as defined under the NYSE American rules.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed or expected to be billed to us for professional services rendered with respect to the fiscal years ended December 31, 2024 and 2023:

The following is a summary of the fees billed or expected to be billed to us for professional services rendered by CBIZ CPAs P.C., our independent registered public accounting firm, for the fiscal years ended December 31, 2025 and 2024:

For the Fiscal Year Ended

Audit fees consist of fees billed for services rendered by our independent auditors during the years ended December 31, 2024 and 2023 for the audit and review of our financial statements.

Tax fees consist of fees billed for services rendered by our tax preparers during the years ended December 31, 2024 and 2023 in connection with the preparation and filing of our income tax returns.

Audit Fees (1)

Audit fees consist of fees billed for services rendered by our independent auditors during the years ended December 31, 2025 and 2024 for the audit and review of our financial statements and comfort letters and consents in connection with securities offerings.

Pre-Approval Policies

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Requests or applications to provide services that require the specific pre-approval of the board of directors must be submitted to the Audit Committee by the independent auditors, and the independent auditors must advise the Audit Committee as to whether, in the independent auditor’s view, the request or application is consistent with the SEC’s rules on auditor independence.

The Audit Committee has considered the nature and amount of the fees billed by Marcum and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining the independence of Marcum.

The Audit Committee has considered the nature and amount of the fees billed by CBIZ CPAs P.C.

and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining the independence of CBIZ CPAs P.C.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Share Exchange Agreement, dated June 8, 2017 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2017 and incorporated herein by reference)

Certificate of Incorporation of the Company (previously filed as Exhibit 3 to the General form for Registration of Securities on Form 10-12G, filed with the SEC on January 7, 2016 and incorporated herein by reference)

Second Amended and Restated Certificate of Incorporation of KULR Technology Corporation (previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference).

Bylaws of the Company (previously filed as Exhibit 4 to the General form for Registration of Securities on Form 10-12G, filed with the SEC on January 7, 2016 and incorporated herein by reference).

Certificate of Incorporation of KULR Technology Corporation (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference)

Amended and Restated Certificate of Incorporation of KULR Technology Corporation (previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference)

By-laws of KULR Technology Corporation (previously filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference)

Certificate of Designation of Series A Voting Preferred Stock, filed on June 6, 2017 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2017 and incorporated herein by reference).

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Form of Certificate of Designation for Series D Convertible Preferred Stock (previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 20, 2021 and incorporated herein by reference).

Description of registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934*

Certificate of Amendment to the Certificate of Incorporation, effective June 23, 2025.

Description of registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (previously filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2025 and incorporated herein by reference).

License and Development Agreement, dated April 15, 2013 (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference).

Letter of Intent by and between the Company and E3 Enterprise, dated April 20, 2016 (previously filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on June 28, 2016 and incorporated herein by reference)

Letter of Intent by and between the Company and KULR Technology Corporation (previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 3, 2016 and incorporated herein by reference)

Patent Assignment Agreement, dated November 10, 2016 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 19, 2017 and incorporated herein by reference)

2018 KULR Technology Group Equity Incentive Plan (previously filed as Exhibit 4.8 to the Company’s Registration Statement on Form S-8, filed with the SEC on October 9, 2018 and incorporated herein by reference)

Form of Subscription Agreement (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 5, 2019 and incorporated herein by reference)

Form of Securities Purchase Agreement (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 31, 2020 and incorporated herein by reference)

Form of Warrant (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 31, 2020 and incorporated herein by reference)

Form of Securities Purchase Agreement dated May 19.

2021 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 20, 2021 and incorporated herein by reference)

Form of Warrant (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on May 20, 2021 and incorporated herein by reference)

Standby Equity Purchase Agreement, dated May 13, 2022, by and between KULR Technology Group, Inc.

and YA II PN, Ltd.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 16, 2022 and incorporated herein by reference)

Note Purchase Agreement, dated May 13, 2022, by and between KULR Technology Group, Inc.

and YA II PN, Ltd.

(previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on May 16, 2022 and incorporated herein by reference)

Promissory Note, dated May 13, 2022 (previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on May 16, 2022 and incorporated herein by reference)

Amendment dated June 3, 2022, to the Standby Equity Purchase Agreement by and between KULR Technology Group, Inc.

and YA II PN, Ltd.

(previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 03, 2022 and incorporated herein by reference)

Supplemental Agreement dated as of September 23, 2022 to the Standby Equity Purchase Agreement dated as of May 16, 2022 between KULR Technology Group, Inc.

and YA II PN, LTD.

(previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on September 23, 2022 and incorporated herein by reference)

2018 KULR Technology Group Equity Incentive Plan (previously filed as Exhibit 4.8 to the Company’s Registration Statement on Form S-8 (File No.

333-227751), filed with the SEC on October 9, 2018 and incorporated herein by reference).

Form of Restricted Stock Award Agreement under the 2018 KULR Technology Group Equity Incentive Plan.

Form of Incentive Stock Option Award Agreement under the 2018 KULR Technology Group Equity Incentive Plan.

Asset Purchase Agreement, effective as of October 6, 2022, by and among KULR Technology Group, Inc., Vibetech International, LLC, and Norman Serrano (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 6, 2022 and incorporated herein by reference).

Underwriting Agreement dated December 20, 2023 by and between KULR Technology Group, Inc.

Lafferty & Co., Inc.

(previously filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 13, 2023 and incorporated herein by reference)

Letter Agreement dated August 16, 2023, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 16, 2023 and incorporated herein by reference)

Amendment Letter Agreement dated August 22, 2023, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on August 22, 2023 and incorporated herein by reference)

Amendment Letter Agreement dated August 30, 2023, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 30, 2023 and incorporated herein by reference)

Amendment Letter Agreement dated December 19, 2023, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 19, 2023 and incorporated herein by reference)

Amendment Letter Agreement dated January 9, 2024, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 9, 2024 and incorporated herein by reference)

Amendment Letter Agreement dated February 13, 2024, by and among KULR Technology Group, Inc., YA II PN, LTD, and Yorkville Advisors Global, L.P.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2024 and incorporated herein by reference)

At The Market Offering Agreement, dated July 3, 2024, by and between the Company and Craig-Hallum Capital Group LLC (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 3, 2024 and incorporated herein by reference)

Severance Agreement and General Release, dated August 20, 2024 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 21, 2024 and incorporated herein by reference)

Amendment Agreement dated December 26, 2024 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 26, 2024 and incorporated herein by reference)

Insider Trading Policy

Sales Agreement, dated June 9, 2025, by and among the Company, Cantor Fitzgerald & Co.

and Craig-Hallum Capital Group LLC (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 9, 2025 and incorporated herein by reference).

Master Loan Agreement, dated July 1, 2025, between KULR Technology Group, Inc., Coinbase Credit, Inc.

and Coinbase, Inc.

(previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 8, 2025 and incorporated herein by reference).

2025 KULR Technology Group Equity Incentive Plan (previously filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (File No.

333-291824), filed with the SEC on November 26, 2025 and incorporated herein by reference).

Form of Restricted Stock Award Agreement under the 2025 KULR Technology Group Equity Incentive Plan.

Form of Incentive Stock Option Award Agreement under the 2025 KULR Technology Group Equity Incentive Plan.

Insider Trading Policy of KULR Technology Group, Inc.

List of Subsidiaries.

Consent of Marcum LLP

Consent of CBIZ CPAs P.C.

Certification pursuant to 18 U.S.C.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy, effective November 29, 2023 (previously filed as Exhibit 97 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 12, 2024 and incorporated herein by reference)

KULR Technology Group Inc.

Clawback Policy.

Inline XBRL Instance.

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Furnished herewith.

Management contract or compensatory plan or arrangement.

FORM 10-K SUMMARY

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/s/ Shawn Canter

Chief Financial Officer

March 31, 2025

/s/ William Walker

Chief Technology Officer

Chief Financial Officer and Director

March 31, 2026

William Walker

/s/ Joanna Massey

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March 31, 2026

/s/ Aron Schwartz

March 31, 2026

Aron Schwartz

KULR TECHNOLOGY GROUP INC.

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Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Year Ended December 31, 2024

Consolidated Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2025

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Year Ended December 31, 2024

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We have audited the accompanying consolidated balance sheets of KULR Technology Group, Inc.

and Subsidiary (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

and Subsidiary (the “Company”) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Notes 2 and 15 to the financial statements, the Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

We have also audited the adjustments to the 2025 financial statements to retrospectively adjust the disclosures for the adoption of ASU 2023-09 in 2025.

In our opinion, such retrospective adjustments are appropriate and have been properly applied.

We were not engaged to audit, review, or apply any procedures to the 2024 financial statements of the Company other than with respect to these retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2024 financial statements taken as a whole.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

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We determined that there are no critical audit matters.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

We have served as the Company’s auditor since 2018 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C.

effective November 1, 2024).

Los Angeles, California

March 31, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

KULR Technology Group, Inc.

Opinion on the Financial Statements

We have audited, before the effects of the retrospective adjustments to the disclosures for the adoption of ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”) as discussed in Notes 2 and 15 to the consolidated financial statements, the accompanying consolidated balance sheet of KULR Technology Group, Inc.

and Subsidiary (the “Company”) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”) (the 2024 financial statements before the effects of the adjustments discussed in Notes 2 and 15 to the financial statements are not presented herein).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We are not engaged to audit, review, or apply any procedures to the retrospective adjustments to the disclosures for the adoption of ASU 2023-09 as discussed in Notes 2 and 15 to the financial statements and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.

Those retrospective adjustments were audited by CBIZ CPAs P.C.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum LLP.

We have served as the Company’s auditor since 2018.

Los Angeles, CA

We have served as the Company’s auditor from 2018 through 2025.

Los Angeles, California

March 31, 2025

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Current Assets:

Accounts receivable billed, current portion

Accounts receivable unbilled, current portion

Accounts receivable, net of allowance for credit losses of $ 1,450,000 and $ 0 as of December 31, 2025 and 2024, respectively

Grant receivable

Inventory deposits

Auto-Vibe assets

Prepaid expenses and other current assets

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Intangible assets, net

Operating lease right-of-use assets

Operating lease right-of-use assets, net

Finance lease right-of-use asset, net

Deferred financing costs

Liabilities and Stockholders’ Equity (Deficit)

Other non current assets

Liabilities and Stockholders’ Equity

Current Liabilities:

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Finance lease liability, non-current portion

Notes payable, non-current portion

Prepaid advance liability, net of discount

Accrued interest

Other non-current liabilities

Total Liabilities

Commitments and contingencies (Note 17)

Stockholders’ Equity (Deficit)

Stockholders’ Equity

Preferred stock, $ 0.0001 par value, 20,000,000 shares authorized

Series A Preferred Stock, 1,000,000 shares designated;

730,000 and 0 shares issued and outstanding at December 31, 2024 and 2023, respectively

1,000,000 and 730,000 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively;

Series B Convertible Preferred Stock, 31,000 shares designated;

none issued and outstanding at December 31, 2024 and 2023

none issued and outstanding at December 31, 2025 and December 31, 2024

Series C Preferred Stock, 400 shares designated;

none issued and outstanding at December 31, 2024 and 2023

none issued and outstanding at December 31, 2025 and December 31, 2024

Series D Preferred Stock, 650 shares designated;

none issued and outstanding at December 31, 2024 and 2023

none issued and outstanding at December 31, 2025 and December 31, 2024

Common stock, $ 0.0001 par value, 500,000,000 shares authorized;

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Treasury stock, at cost;

131,162 shares held at December 31, 2024 and 2023

21,922 and 16,395 shares held at December 31, 2025 and December 31, 2024, respectively.

Accumulated deficit

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( 83,811,223 )

Total Stockholders’ Equity (Deficit)

( 2,182,696 )

Total Liabilities and Stockholders’ Equity (Deficit)

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

The accompanying notes are an integral part of these consolidated financial statements.

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Selling, general, and administrative

Credit losses on accounts receivable

Impairment of finance lease right-of-use asset

Impairment of property and equipment

Impairment of intangible assets

Impairment of equipment deposits

Total Operating Expenses

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( 15,234,959 )

Other (Expense) Income

Interest expense

Other Income (Expense)

Change in fair value of digital assets

( 13,800,041 )

Impairment of equity investment

( 3,325,045 )

Credit loss on loan receivable

( 2,127,565 )

Interest income

Change in fair value of accrued issuable equity

Interest expense

Amortization of debt discount

( 1,151,659 )

Gain on debt extinguishment, net

Change in fair value of accrued issuable equity

Change in fair value of digital assets

Gain on debt extinguishment

Total Other Expense, net

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AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2025

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Stockholders’

Equity (Deficit)

Balance - January 1, 2025

( 83,811,223 )

( 2,182,696 )

Preferred stock issued for no consideration

Purchase of treasury shares

Common stock issued upon the exercise of options

Common stock issued upon the exercise of warrants

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices (1)

Common stock issued for cash pursuant to Advance Notices (2)

Common stock issued for at the market offering (1)

Shares repurchased and canceled

Warrants issued in connection with notes payable

Common stock issued upon vesting of restricted stock units

Shares withheld for employee payroll tax obligations

Effect of reverse stock split

Stock-based compensation:

Restricted stock awards granted converted to restricted stock units

( 2,168,508 )

Restricted stock awards forfeited and returned to the Company

Restricted stock units vested

Common stock issued for services

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(1) Represents gross proceeds of $ 123,181,925 less issuance costs of $ 3,523,005 .

(2) Represents gross proceeds of $ 9,104,950 less issuance costs of $ 57,031 .

(3) Represents gross proceeds of $ 61,912,798 less issuance costs of $ 2,031,594 .

The accompanying notes are an integral part of these consolidated financial statements.

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FOR THE YEAR ENDED DECEMBER 31, 2024

Preferred Stock

Treasury Stock

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( 66,287,594 )

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices

( 2,182,696 )

Preferred stock issued for no consideration

Common stock issued upon the exercise of options

Common stock issued upon the cashless exercise of warrants

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices (1)

Shares repurchased for payroll taxes and canceled

Common stock issued pursuant to the equity financing for cash, net of issuance costs (2)

Common stock issued for cash pursuant to Advance Notices (2)

Common stock issued for at the market offering (3)

Shares repurchased and canceled

Warrants issued in connection with notes payable

Stock-based compensation:

Restricted stock awards granted

Unvested restricted stock awards canceled

Restricted stock awards granted converted to restricted stock units

Restricted stock awards forfeited and returned to the Company

Restricted stock units vested

Common stock issued for services

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( 83,811,223 )

( 66,287,594 )

( 2,182,696 )

(1) Represents gross proceeds of $ 166,337 less $ 1,211 amortization of deferred financing costs.

(1) Represents gross proceeds of $ 6,068,407 less issuance costs of $ 13,577 .

(2) Represents gross proceeds of $ 9,104,950 less issuance costs of $ 57,031 .

(3) Represents gross proceeds of $ 61,912,798 less issuance costs of $ 2,031,594 .

The accompanying notes are an integral part of these consolidated financial statements.

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Depreciation and amortization expense

Stock-based compensation

Credit losses on accounts receivable

Impairment of equity investment

Credit loss on loan receivable

Impairment of finance lease right-of-use asset

Impairment of equipment deposits

Impairment of property and equipment

Impairment of intangible assets

Write down finance lease ROU asset

Change in fair value of accrued issuable equity

Change in fair value of digital assets

Stock-based compensation

Provision for credit losses

Write down inventory to net realizable value

Digital assets received as downtime credits

Mining of digital assets

( 7,029,924 )

Loss on disposal of property and equipment

Changes in operating assets and liabilities:

Accounts receivable billed

Accounts receivable

( 3,100,668 )

Accounts receivable unbilled

( 3,190,007 )

Auto-Vibe assets

( 5,046,759 )

Inventory deposits

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Deferred revenue

Total Adjustments

( 8,283,909 )

( 6,874,822 )

Net Cash Used In Operating Activities

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Cash Flows From Investing Activities:

Loan receivable

( 2,127,565 )

Equity investments

( 3,325,045 )

Purchase of intangible assets

Equipment deposits

Purchases of property and equipment

Acquisition of intangible assets

( 2,986,503 )

Purchases of digital assets

( 79,700,002 )

( 21,000,010 )

Net Cash Used In Investing Activities

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Cash Flows from Financing Activities:

Proceeds from equity financing

Issuance costs on equity financing

Proceeds from ATM equity financing

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( 3,082,182 )

Proceeds from the SEPA

Proceeds from prepaid advance liability

Issuance costs on prepaid advance liability

Repayments of prepaid advance liability

( 1,780,982 )

Proceeds from loan payable

Repayments of loan payable

( 8,000,000 )

Proceeds from exercise of stock options

Proceeds from the SEPA (2)

Proceeds from notes payable (3)

Issuance costs on notes payable

Repayments of notes payable

( 3,341,597 )

Repurchase and cancellation of common stock

Payment of employee tax withholdings from shares withheld

Purchase of treasury shares

Payments for deferred financing costs

Repayments of notes payable

( 3,341,597 )

Repayment of finance lease liability

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( 16,531,670 )

Cash - Beginning of Year

Cash - End of Year

Cash - Beginning of Period

Cash - End of Period

(1) Excludes $ 440,823 and $ 250,612 of deferred financing costs paid in prior periods for 2025 and 2024, respectively.

(2) Excludes $ 57,031 of deferred financing costs paid in prior periods for 2024.

(3) Face value of $ 3,659,200 , less $ 929,200 original issue discount for 2024.

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Non-cash investing and financing activities:

Common stock issued in satisfaction of prepaid advance liability and interest pursuant to Investor Notices

Right-of-use asset for operating lease liability

Original issue discount on indebtedness

Purchase consideration payable

Deferred financing costs charged to additional paid-in capital

Common stock issued in satisfaction of accrued issuable equity

Accounts payable and accrued expenses for property and equipment purchases

Preferred shares issued for no consideration

Common shares issued for restricted stock units vested and other common stock issued for services

Warrants issued in connection with notes payable

Deferred financing costs charged to additional paid-in capital

Accounts payable and accrued expenses for property and equipment

Notes payable for property and equipment

Right-of-use asset for finance lease liability

Restricted stock awards converted to restricted stock units

Common shares issued for restricted stock units vested

Preferred shares issued for no consideration

Common stock issued pursuant to cashless warrant exercises

Common stock issued in satisfaction of prepaid advance liability and interest pursuant to Advance Notices

Original issue discount on prepaid advance liability

Deposits applied to purchases of property and equipment

Accrual of equity financing issuance costs

Restricted stock awards converted to restricted stock units

Original issue discount on indebtedness

Common stock issued pursuant to Advance Notices in satisfaction of prepaid advance liability and interest

Right-of-use asset for finance lease liability

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

Organization and Operations

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changed its name to KULR Technology Group, Inc.

KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across a range of applications.

Currently, the Company is focused on targeting both high performance aerospace and Department of Defense applications, such as space exploration, satellite communications, and underwater vehicles, and applying them to mass market commercial applications, such as lithium-ion battery energy storage, electric vehicles, fifth generation (“5G”) communication, cloud computer infrastructure, consumer and industrial devices.

Risks and Uncertainties

The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows:

ability to obtain future financing;

advances and trends in new technologies and industry standards;

regulatory approval and market acceptance of the Company’s products;

development of sales channels;

certain strategic relationships;

litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors;

and the Company’s ability to attract and retain employees necessary to support its growth.

The “Tariff War”, especially with China, Canada and Mexico, could have an adverse effect on the Company’s supply chain potentially causing financial difficulty for the Company’s direct or indirect customers and reduced demand of the Company’s products.

A continuation of these conflicts could have adverse changes in international trade policies and relations.

Tariffs could increase the cost of the Company’s products and the components that go into making them.

These increased costs could adversely impact the gross margin that the Company earns on its products.

Tariffs could also make the Company’s products more expensive for customers, which could make the Company’s products less competitive and reduce consumer demand.

Changing the Company’s operations in accordance with new or changed trade restrictions can be expensive, time-consuming and disruptive to the Company’s operations.

In addition, the Company has invested in Bitcoin, which is a digital asset.

Digital assets are loosely regulated and there is no central marketplace for asset exchange.

Supply is determined by a computer code, not by a central bank, and prices have been extremely volatile.

Certain digital asset exchanges have been closed due to fraud, failure or security breaches.

Any of the Company’s digital assets that reside on an exchange that shuts down may be lost.

Several factors may affect the price of digital assets, including, but not limited to:

supply and demand, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates or future regulatory measures (if any) that restrict the trading of digital assets, and the use of digital assets as a form of payment.

There is no assurance that digital assets will maintain their long-term value in terms of purchasing power in the future, or that acceptance of digital asset payments by mainstream retail merchants and commercial businesses will continue to grow.

As digital assets have grown in popularity and market size, various countries and jurisdictions have begun to develop regulations governing the digital asset industry.

To the extent future regulatory actions or policies limit the ability to exchange digital assets or utilize them for payments, the demand for digital assets could be reduced.

Furthermore, regulatory actions may limit the ability of end-users to convert digital assets into fiat currency (e.g., U.S.

dollars) or use digital assets to pay for goods and services.

Such regulatory actions or policies could result in a reduction of demand, and in turn, a decline in the underlying digital asset unit prices.

The effect of any future regulatory change on digital assets in general is impossible to predict, but such change could be substantial and adverse to the Company and the value of the Company’s investments in digital assets.

Digital assets are not insured or protected under the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Company (“SIPC”).

Accordingly, with respect to its Bitcoin investment, the Company does not enjoy the same protection as other assets covered by the FDIC or SIPC.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), delivers cutting-edge energy storage solutions for space, aerospace, defense, telecom, and other critical infrastructure.

KULR leverages its in-house battery design expertise, comprehensive cell and battery testing suite, and battery fabrication and production capabilities.

The Company offers commercial-off-the-shelf and custom next-generation energy storage systems in rapid timelines for a fraction of the cost compared to traditional programs.

Reverse Stock Split

On June 23, 2025, the Company effected a reverse stock split wherein each 8 shares of common stock outstanding immediately prior to the effective date was combined and converted into one share of common stock (the “Reverse Stock Split”).

All share and per share amounts in this Annual Report have been adjusted to reflect the effect of the Reverse Stock Split as if the Reverse Stock Split occurred as of the earliest period presented.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange Commission.

Use of Estimates

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GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements.

The Company’s significant estimates used in these financial statements include, but are not limited to, fair value calculations for intangible assets, equity securities, stock-based compensation and the valuation allowance related to the Company’s deferred tax assets.

The Company’s significant estimates used in these financial statements include, but are not limited to, valuation of intangible assets, digital assets, investments, property, plant and equipment, equity securities, stock-based compensation, deferred revenue, loan receivable and the valuation allowance related to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions.

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Concentrations of Credit Risk

Financial assets that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, accounts receivable and Bitcoin held at Coinbase.

Financial assets that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, accounts receivable and BTC held at Coinbase.

The Company’s concentrations of credit risk also include concentrations from key customers and vendors.

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There were uninsured balances of $ 12,800,188 and $ 29,331,858 as of December 31, 2025 and 2024, respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Customer and Revenue Concentrations

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

During the year ended December 31, 2024, the Company operated one segment, the Energy Management Platform (“EMP”), and had certain customers whose revenue individually represented 10% or more of total revenue, or whose accounts receivable balances individually represented 10% or more of total accounts receivable.

During the year ended December 31, 2025, the Company operated two segments — EMP and Mining of Digital Assets — and had certain customers across both segments meeting the same thresholds, as follows:

Energy Management Platform

Accounts Receivable

For the Year Ended

Mining of digital assets

Accounts Receivable

For the Year Ended

* Less than 10%

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Any reduction 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.

During the year ended December 31, 2024, the Company had two customers that made up 100 % of its license revenue.

As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political,

As a result of the Company’s significant customer concentrations, its gross profit and results from operations 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.

Custody of Digital Assets

The Company currently holds and intends to continue to hold all of its digital assets in a custodial account at a U.S.

based, institutional-grade custodian that has demonstrated records of regulatory compliance and information security.

The custodian may also serve as a liquidity provider.

If the Company’s custodially-held digital assets were considered to be the property of the custodian’s estate in the event that the custodian were to enter bankruptcy, receivership or similar insolvency proceedings, the Company could be treated as a general unsecured creditor of the custodian, inhibiting the Company’s ability to exercise ownership rights with respect to such digital assets and this may ultimately result in the loss of the value related to some or all of such digital assets.

Additionally, the digital assets the Company holds with our custodian and transacts with our trade execution partners do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the FDIC or the SIPC.

Vendor Concentrations

During the year ended December 31, 2024, the Company operated one segment, the EMP, and had no vendors whose purchases represented more than 10% of total purchases.

During the year ended December 31, 2025, the Company operated two segments — EMP and Mining of Digital Assets.

The EMP segment had no vendors whose purchases represented more than 10% of total purchases, while the Mining of Digital Assets segment had two vendors whose purchases individually represented 51 % and 45 % of total purchases.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers.

Custody of Bitcoin

The Company currently holds and intends to continue to hold all of its bitcoin in a custodial account at a U.S.

based, institutional-grade custodian (who may hold the Company’s bitcoin in the United States or other territories) that has demonstrated records of regulatory compliance and information security.

The custodian may also serve as a liquidity provider.

If the Company’s custodially-held bitcoin were considered to be the property of the custodian’s estates in the event that the custodian were to enter bankruptcy, receivership or similar insolvency proceedings, the Company could be treated as a general unsecured creditor of the custodian, inhibiting the Company’s ability to exercise ownership rights with respect to such bitcoin and this may ultimately result in the loss of the value related to some or all of such bitcoin.

Additionally, the bitcoin the Company holds with our custodian and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Vendor Concentrations

During the year ended December 31, 2023, the Company had vendors whose purchases individually represented 23 % and 15 % of the Company’s total purchases of inventory.

There were no vendors whose purchases represented more than 10% of the Company’s total purchases of inventory during the year ended December 31, 2024.

Accounts Receivable

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are carried at their contractual amounts, less an estimate for credit losses.

As of December 31, 2024 and 2023, no allowances for credit losses were determined to be necessary.

Management estimates the allowance for bad debts based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts.

Receivables are considered past due if full payment is not received by the contractual due date.

Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted.

During the year ended December 31, 2025, credit losses of $ 780,643 related to receivables from one customer were recorded as a direct write-off to the receivables as a result of the customer’s insolvency proceedings (see Note 7 – Investments, Impairment and Credit losses for further detail).

Also, as of December 31, 2025, the Company established an allowance for credit losses in the amount of $ 1,450,000 .

As of December 31, 2024, no allowances for credit losses were determined to be necessary.

The Company recognizes an allowance for credit losses on trade receivables in accordance with ASC 326-20, Financial Instruments – Credit Losses.

Trade receivables are stated at amortized cost, net of the allowance for credit losses.

The allowance represents the Company's best estimate of expected lifetime credit losses inherent in the receivable portfolio as of each reporting date.

The Company evaluates credit losses using an aging-based method.

Receivables are grouped into pools based on shared risk characteristics, including customer type (domestic commercial, international commercial, and governmental) and aging status.

The Company uses its historical loss experience and makes appropriate adjustments for current and forecasted macroeconomic conditions, industry-specific credit risk trends affecting the Company’s customer base, changes in customer payment behavior and concentrations of credit risk, known customer financial distress, or other specific risk factors identified through ongoing credit monitoring.

A receivable is written off against the allowance when the Company determines that all reasonable collection efforts have been exhausted.

Subsequent recoveries of amounts previously written off are credited to the allowance.

Digital Assets

The Company has invested in bitcoin, which is a digital asset.

Digital assets are subject to limited regulatory oversight and there is no central marketplace for asset exchange.

Supply is determined by a computer code, not by a central bank, and prices have been extremely volatile.

Certain digital asset exchanges have been closed due to fraud, failure or security breaches.

Any of the Company’s digital assets that reside on an exchange that shuts down may be lost.

Several factors may affect the price of digital assets, including, but not limited to:

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

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In addition, this guidance requires disclosures related to digital assets once it is adopted.

As of January 1, 2024, the Company has adopted ASU 2023-08.

The Company reflects digital assets held at fair value on the consolidated balance sheets and consolidated statements of cash flows, the activity from the remeasurement of digital assets at fair value on the consolidated statements of operations, and the required expanded disclosures in Note 3, Digital Assets.

There was no cumulative effect adjustment to the Company’s retained earnings balance as a result of the adoption of ASU 2023-08.

The Company adopted ASU 2023-08 as of January 1, 2024.

The Company reflects digital assets held at fair value on the consolidated balance sheets, the activity from the remeasurement of digital assets at fair value on the consolidated statements of operations and consolidated statements of cash flows, and the required expanded disclosures in Note 3, Digital Assets.

There was no cumulative effect adjustment to the Company’s accumulated deficit balance as a result of the adoption of ASU 2023-08.

Digital assets are generally valued using prices as reported on reputable and liquid exchanges and may involve using an average of bid and ask quotes using closing prices provided by such exchanges as of the date and time of determination.

Since the digital assets are traded on a 24-hour period, the Company uses the price at 4:00pm Eastern Standard Time (“EST”) to value its digital assets.

The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized.

These costs consist of finished goods, raw materials, manufacturing – related costs, transportation and freight, and other indirect overhead costs.

Inventory is comprised of carbon fiber velvet (“CFV”) thermal interface solutions and internal short circuit batteries, which are available for sale, as well as raw materials and work in process related primarily to the manufacture of safe cases.

Safe cases provide a safe and cost-effective solution to commercially store and transport lithium batteries and mitigate the impacts of cell-to-cell thermal runway

Since the digital assets are traded on a 24-hour period, the Company uses the price at 4:00pm Eastern Standard Time (“EST”) as the quoted price to value its digital assets.

Equity Investments

The Company accounts for equity investments that do not have a readily available fair value under the measurement alternative provided in Accounting Standards Codification (“ASC”) 321 Investments – Equity Securities, whereby the equity investment is initially recorded at cost, (including transaction costs), and is subsequently remeasured at fair value in accordance with the provisions of ASC 820, Fair Value Measurement (“ASC 820”) when it is impaired, or when the Company identifies observable price changes in orderly transactions for the identical or similar investment of the same issuer.

See Note 7 – Investments, Impairment and Credit Losses for additional details.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company performs a qualitative assessment at each reporting period considering impairment indicators to evaluate whether the fair value of the investment is less than its carrying amount.

If the qualitative assessment indicates that an investment is impaired, a loss is recorded equal to the difference between the fair value and carrying value of the investment.

Mining of Digital Assets

The Company leases digital asset mining equipment, which provides hash rates to a mining pool operator.

The Company derives a portion of its revenue from its digital asset mining activities by providing hash rates as part of transaction verification services within the digital currency networks of cryptocurrencies, such as bitcoin (“BTC”), referred to herein as “mining of digital assets”.

In consideration for these services, the Company receives digital rewards which are recorded as revenue, based on the daily amount of BTC earned.

Digital rewards are settled daily and are received at Coinbase on a one-day delay and receivable amounts are immaterial.

The Company’s digital assets are recorded on the balance sheet at their fair value according to the Company’s accounting policies for digital assets.

Unrealized gains or losses on the remeasurement of digital assets mined are recorded in the statement of operations.

Lease and non-lease costs associated with the digital asset mining operation are recorded as cost of revenue.

If the leased machines fail to meet the minimum downtime guarantee over the contracted term, the Company will receive a credit issued in accordance with the agreements.

These credits are recorded as a reduction to lease costs.

Asset Acquisition

Under ASC 805—Business Combinations, the acquisition of a business requires application of the acquisition method of accounting which recognizes and measures all identifiable assets acquired and liabilities assumed at their fair values as of the date the Company obtains control.

Goodwill arising in a business combination represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired.

ASC 805 allows a measurement period, not to exceed one year from the date of acquisition, to make any changes in the estimated fair values of the net assets that were not final at the acquisition date, which would result in an adjustment to goodwill.

Contingent consideration related to a business combination, if any, is classified as either an asset or a liability and remeasured to fair value each reporting period, until the contingency is resolved.

Changes in fair value of contingent consideration period-over-period are recognized in earnings.

Acquisition-related expenses for a business combination are recognized separately from the business combination and are expensed as incurred.

Acquisitions of assets that do not qualify as a business are accounted for under ASC 805-50 using a cost accumulation model.

Costs are allocated to assets acquired based on relative fair values and no goodwill is recognized in an asset acquisition.

Direct costs related to the acquisition of assets are capitalized as part of the cost of the acquired assets.

The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized.

These costs consist of finished goods, raw materials, manufacturing – related costs, transportation and freight, and other indirect overhead costs.

Inventory is comprised of carbon fiber velvet thermal interface solutions and internal short circuit batteries, which are available for sale, as well as raw materials and work in process related primarily to the manufacture of safe cases.

Safe cases provide a safe and cost-effective solution to commercially store and transport lithium batteries and mitigate the impacts of cell-to-cell thermal runway propagation.

Inventories are stated at the lower of cost or net realizable value.

Cost is determined by the first-in, first-out method.

The cost of inventory that is sold to third parties is included within cost of revenue and the cost of inventory that is given as samples is included within operating expenses.

The cost of inventory that is sold to third parties is included within cost of sales.

The Company periodically reviews for slow-moving, excess or obsolete inventories.

Products that are determined to be obsolete, if any, are written down to net realizable value.

During the year ended December 31, 2025, certain inventory related to exoskeleton suits, which are wearable robotic frames that enhance human physical capability, was written down to its net realizable value by taking a charge to cost of revenue of $ 697,679 .

On occasion, the Company pays for inventory prior to receiving the goods.

These payments are recorded as inventory deposits until the goods are received and these costs are included in the current asset section of the consolidated balance sheets.

These payments are recorded as inventory deposits until the goods are received and these costs are included in the current asset section of the condensed consolidated balance sheet.

As of December 31, 2025 and 2024, inventory deposits were $ 839,644 and $ 0 , respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventory at December 31, 2025 and 2024 consisted of the following:

For the Years Ended

Raw materials

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Total inventory

Finished goods inventory is held on-site at the San Diego, California and Webster, Texas locations.

Finished goods inventory is held on-site at the Webster, Texas location.

Certain raw materials are held off-site with certain contract manufacturers.

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Vendor deposits toward the purchase of property and equipment are reflected as equipment deposits on the accompanying balance sheets (see Note 8 - Equipment Deposits).

The Company reviews long-lived assets for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

An impairment loss would be recognized when undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value.

There was no impairment charge during the years December 31, 2024 and 2023, respectively.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

When an impairment indicator is identified, the Company performs a recoverability test by comparing the carrying amount of the asset group to the estimated undiscounted future cash flows expected to be generated by the asset group.

If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value of the asset group.

There was a $ 625,967 impairment charge reflected in Impairment of property and equipment within Operating expenses on the Consolidated Statement of Operations for the year ended December 31, 2025.

The Company recorded no impairment charge in 2024.

Intangible assets are stated at fair value as of the date acquired, less accumulated amortization for finite-lived intangible assets.

Amortization is calculated based on the estimated useful lives of the assets, using the straight-line method or another method that more fairly represents the utilization of the assets, as follows:

Amortization is calculated based on the estimated useful lives of the assets using the straight-line method that fairly represents the utilization of the assets, as follows:

Estimated Useful Life

Intellectual property

Supply agreement

Technology license

The Company periodically evaluates the remaining useful lives of our intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization.

The Company periodically evaluates the remaining useful lives of its intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization.

In the event that the estimate of an intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.

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Indefinite-lived intangible assets are subject to impairment testing annually or whenever events or circumstances indicate that its carrying value may not, based on future undiscounted cash flows or market factors, be recoverable.

An impairment loss, the recorded amount of which would be based on the fair value of the intangible asset at the measurement date, is recorded in the period in which an impairment determination is made.

There was no impairment charge during the years ended December 31, 2024 and 2023, respectively.

An impairment loss is based on the difference between the carrying amount and the fair value of the intangible asset at the measurement date and is recorded in the period in which an impairment determination is made.

There was a $ 202,058 impairment charge reflected in Impairment of intangible assets within Operating expenses on the Consolidated Statement of Operations for the year ended December 31, 2025.

The Company recorded no impairment charge in 2024.

KULR TECHNOLOGY GROUP, INC.

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Fair Value Measurements

The Company measures the fair value of financial assets and liabilities based on the guidance of Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company’s financial assets, such as cash, accounts receivable, accrued expenses and other current liabilities, notes payable and Prepaid Advance Liability approximate fair values due to the short-term nature of these instruments.

The carrying amounts of the Company’s financial assets and financial liabilities, such as cash, accounts receivable, grant receivable, accounts payable, accrued expenses and other current liabilities, purchase consideration payable, and notes payable approximate fair values due to the short-term nature of these instruments.

The carrying amount of the Company’s digital assets are recorded at fair value in accordance with ASC 820, Fair Value Measurement (“ASC 820”), based on quoted prices on the active exchange(s) that the Company has determined is the principal market for such assets (Level I inputs).

The cost basis of digital assets is determined using the specific identification of each unit received.

Realized and unrealized gains and losses are now recorded to other (expense) income, net in our consolidated statement of operations.

Realized and unrealized gains and losses are recorded to other income (expense), net in the Company’s condensed consolidated statement of operations.

The Company accounts for its equity investments under the measurement alternative provided in ASC 321, whereby the equity investment is initially recorded at cost, (including transaction costs), and is subsequently remeasured at fair value in accordance with the provisions on ASC 820 when it is impaired, or when the Company identifies observable price changes in orderly transactions for the identical or similar investment of the same issuer.

See Note 7 – Investments, Impairment and Credit Losses for additional details.

Treasury Stock

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Losses resulting from differences between the cost of treasury stock and the re-issuance proceeds are debited to additional paid-in capital.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The Company measures deferred tax assets and liabilities using the enacted tax rates for the years and jurisdictions in which the temporary differences are expected to be recovered.

A change to the tax rates used to measure the Company’s deferred taxes is recognized in income during the period in which the new rate(s) were enacted.

The Company recognizes deferred tax assets to the extent the Company’s assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including the future reversals of existing taxable temporary differences, projected future taxable income exclusive of reversing temporary differences and carryforwards, tax-planning strategies, taxable income in prior carryback years if permitted under tax law, and the results from prior years.

If the Company determines it is more likely than not, that all or a portion of a deferred tax asset will not be realized a valuation allowance is recorded with a charge to income tax expense.

Alternatively, if the Company determines that all or a portion of a deferred tax asset previously not meeting the more likely than not threshold will be realized, the Company reduces its valuation allowance and recognizes a benefit in income tax expense.

The Company recognizes and measure uncertain tax benefits in accordance with ASC 740, Income Taxes (“ASC 740”) based on a two-step process in which (1) the Company determines whether it is more likely than not that the tax position will be sustained based on the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

recognizes the largest amount of tax benefit that is more than fifty percent likely to be realized upon ultimate settlement with the related tax authority.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in income tax expense.

Accrued Issuable Equity

The Company records accrued issuable equity when it is contractually obligated to issue shares and there has been a delay in the issuance of such shares.

The Company records accrued issuable equity when it is contractually obligated to issue a variable number of shares or shares with features requiring liability classification.

Accrued issuable equity is recorded and carried at fair value with changes in its fair value recognized in the Company’s consolidated statements of operations.

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Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”).

The Company recognizes revenue in accordance with 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, 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.

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The following five steps are applied to achieve that core principle:

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Recognize revenue when the company satisfies a performance obligation.

For sales contracts with terms of more than one year, the Company recognizes any significant financing component as revenue over the contractual period using the effective interest method, and the associated interest income is reflected accordingly on the consolidated statements of operations and included in other income.

The Company recognizes revenue primarily from the following different types of contracts:

The Company’s sales contracts typically have 30 - 60 day payment terms.

For sales contracts with payment terms of more than one year, the Company determines whether there is a significant financing component, and if so, revenue is recognized at an amount that represents the present value of the payments, and interest income is recognized over the contractual period using the effective interest method, reflected in other income on the consolidated statements of operations.

Principal versus Agent Considerations

The Company evaluates its role under ASC 606 to determine whether it acts as a principal or agent where third-party sellers fulfill or ship orders to customers.

The Company recognizes revenue on a gross or net basis depending on whether it acts as a principal or an agent in the transaction.

The determination is based on an evaluation of whether the Company controls the specified good or service before it is transferred to the customer.

During the years ended December 31, 2025 and 2024, the Company recognized revenue primarily from the following different types of contracts:

● Product sales – Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time it ships the product to the customer.

For certain product sales contracts,

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the Company acts as an agent and revenue in connection with these contracts is presented net of the related costs.

The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer.

When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis.

When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agent service.

● Contract services – Revenue is recognized pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract.

Contract services revenue that is recognized over time may be recognized using the input method, based on labor hours expended, or using the output method based on milestones achieved, depending on the contract.

● Mining of digital assets – The Company has entered into lease agreements with a digital assets mining services company to operate digital asset mining machines on behalf of the Company and provide mining pool operating and hosting services.

Pursuant to these agreements, the Company provides computing power to the mining pool operator.

The Company is entitled to digital asset rewards once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications.

The Company’s fractional share is based on the total blocks expected to be generated on the BTC network for the daily 24-hour period.

Digital asset rewards are considered non-cash consideration.

● IP license – Revenue is recognized pursuant to the type of intellectual property (“IP”) being licensed for each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract.

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a) License fees – revenue from the right to use IP is recognized immediately at the point in time that the control of the license is transferred to the customer.

b) Minimum royalty fees – revenue is recognized at the point in time that control of the license is transferred to the customer.

b) Minimum royalty fees related to a license to use IP – revenue is recognized at the point in time that control of the license is transferred to the customer.

c) Sales based royalty fees above the minimum – are recognized when the sale occurs.

IP license agreements (“License Agreements”) have payment terms of 3 - 5 years.

As a result, the License Agreements contain a significant financing component.

Accordingly, a portion of the consideration in connection with the License Agreements is recognized as interest income.

● Grant revenue - The Company has determined that government grant revenue does not fall under the FASB ASC 606.

Under the grant contract with the Texas Space Commission (“Texas Grant”), the Texas Space Commission receives no direct benefit from the product development, and therefore does not meet the definition of a customer pursuant to ASC 606.

As there was no authoritative guidance under U.S.

GAAP on accounting for grants to for-profit business entities when the Company entered into the Texas Grant, the Company has applied the guidance in ASC 958 Not-for-Profit Entities by analogy.

Further, the Texas Grant is considered a conditional contribution because the Texas Grant can only be used to reimburse allowable expenses.

The grant is for the research and development of cold-temperature lithium-ion battery solutions for the next generation of Lunar and Martian missions which is part of the Company’s ongoing major or central activities.

As such, reimbursement proceeds from the Texas Grant are recorded as revenue, which is generally recognized when qualifying costs are incurred and conditions

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for reimbursement have been met.

Grant revenue during the year ended December 31, 2025, was $ 1,886,376 related to the reimbursement of equipment purchases totaling $ 255,728 , R&D expenses totaling $ 1,474,100 and prepayments of $ 156,548 .

The following table summarizes the Company’s revenue recognized in its consolidated statements of operations:

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Contract services

Grant revenue

Revenue Recognized Over Time:

Mining of digital assets

Contract services

Total Revenue

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Contract Balances

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However, we sometimes receive advances or deposits from our customers resulting in contract liabilities (See Deferred Revenue , below).

As of December 31, 2024, the Company had billed accounts receivable of $ 1,984,518 and unbilled accounts receivables of $ 660,672 .

As of December 31, 2023, the Company had billed accounts receivable of $ 901,672 and no unbilled accounts receivable.

As of December 31, 2025 and 2024, the Company had accounts receivable, net of $ 3,075,328 and $ 4,091,679 , respectively.

As of December 31, 2025, the Company had non-trade receivables of $ 3,723,473 .

Deferred revenues were $ 107,267 and $ 32,768 as of December 31, 2025 and 2024, respectively.

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On September 29, 2024, the Company entered into a three-year licensing agreement (the “KULR VIBE Agreement”) with a customer located in Japan to use its KULR VIBE software to measure and reduce fan vibration levels.

The Agreement gives the customer the exclusive license to use the software in Japan (for Japanese customers) for the sole purpose of operating the Balancer.

The KULR VIBE Agreement gives the customer the exclusive license to use the software in Japan (for Japanese customers) for the sole purpose of operating the Balancer.

The Balancer is a hardware device used to measure vibration levels.

Pursuant to this Agreement, the Company received a one-time, non-refundable license fee for the right to use the IP of $ 500,000 for which revenue was recognized immediately.

The customer will pay royalty fees to the Company of $ 0.20 per unit of any rotational system balanced by a Balancer, and 3 % of gross sales of all Balancers the customer manufactures and sells to a third party.

The customer will make quarterly royalty payments to the company which may vary from period to period, but the minimum payment of $ 50,000 per quarter ($ 600,000 over the three-year life of the Agreement) is guaranteed.

Since the payment of the minimum royalty occurs significantly after performance, this indicates a significant financing component.

Therefore, the Company immediately recognized revenue in an amount equal to the present value ($ 528,767 ) of the $ 600,000 minimum royalty to be received, using the prevailing interest rate in the relevant market (prime rate) of 8.0 %.

Royalty fees above the minimum amount will be recognized when and if amounts become probable and estimable.

While the Agreement contains a software maintenance provision, the Company expects the resources that will be dedicated to the software maintenance services to be negligible and determined an amount to be allocated to this software maintenance performance obligation to be de minimis.

The customer is required to pay royalty fees to the Company of $ 0.20 per unit of any rotational system balanced by a Balancer, and 3 % of gross sales of all Balancers the customer manufactures and sells to a third party.

The customer is required to make quarterly royalty payments to the Company which may vary from period to period, but there is a minimum payment of $ 50,000 per quarter for three years (or $ 600,000 over the three-year term of the Agreement).

Since the payment of the minimum royalty occurs significantly after performance, a significant financing component was identified.

Therefore, in 2024, the Company immediately recognized revenue in an amount equal to the present value ($ 528,767 ) of the $ 600,000 minimum royalty to be received, using the prevailing interest rate in the relevant market (prime rate) of 8.0 %.

Royalty fees above the minimum amount, if any, will be recognized when the related sales are recognized by the customer.

The Company has not recognized any excess royalty fees as revenue during the years ended December 31, 2025 and 2024.

While the KULR Vibe Agreement contains a software maintenance provision, the Company expects the resources that will be dedicated to the software maintenance services to be negligible and determined an amount to be allocated to this software maintenance performance obligation to be de minimis.

On December 29, 2024, the Company entered into a ten-year licensing agreement (the “CF Cathode Agreement”) with a different customer located in Japan, for the use of intellectual property in connection with its CF Cathode Design technology (including the specifications, diagrams, schematics and instructions (together the “KULR CF Intellectual Property”)) for the production of the CF Cathode.

The Agreement provides an exclusive license to use the KULR CF Intellectual Property to manufacture and sell CF Cathodes in Japan, and a non-exclusive license to manufacture and sell CF Cathodes in several other countries, including Taiwan, China, India and Korea.

The CF Cathode Agreement provides an exclusive license to use the KULR CF Intellectual Property to manufacture and sell CF Cathodes in Japan, and a non-exclusive license to manufacture and sell CF Cathodes in several other countries, including Taiwan, China, India and Korea.

The license fee is $ 1.8 million to be paid over 5 years as follows:

● 2/15/25 $ 300,000

● 6/15/25 $ 150,000

● 12/15/25 $ 150,000

Then $ 150,000 on each of 6/15 and 12/15 in 2026 through 2029 (the last $ 150,000 payment is due 12/15/2029).

$ 300,000 due on February 15, 2025;

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due on June 15, 2026;

$ 150,000 due on December 15, 2025;

and $ 150,000 on each of June 15 and December 15 in 2026 through 2029 (with the last $ 150,000 being due on December 15, 2029).

The CF Cathode Agreement contains a significant financing component.

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The Company did not recognize revenue from performance obligations satisfied in prior periods during the years ended December 31, 2025 or 2024.

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Deferred Labor Costs

As of December 31, 2024 and 2023, the Company had $ 356,030 and $ 41,625 , respectively, of deferred labor costs, which is included in prepaid expenses and other current assets in the Company’s consolidated balance sheets.

As of December 31, 2025 and 2024, the Company had $ 273,746 and $ 356,030 , respectively, of deferred labor costs, which is part of deferred expenses within prepaid expenses and other current assets in the Company’s consolidated balance sheets.

Deferred labor costs represent costs incurred to fulfill the Company’s deferred contract service revenue.

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Research and Development

Research and development include expenses incurred in connection with the research and development of our CFV thermal management solution, high-areal-capacity battery electrodes and 3D engineering for a rechargeable battery.

Research and development include expenses incurred in connection with the research and development of our CFV thermal management solution, Jetson I/F board development, server acoustic analysis study, and Vibe technologies.

Research and development expenses are recognized as incurred.

Advertising Costs

Advertising and Marketing Costs

Advertising costs are expensed in the period incurred.

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Upon the exercise of an award, the Company generally issues new shares of common stock out of its authorized shares, but may issue treasury stock when available.

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.

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.

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Net Loss Per Share of Common Stock

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.

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.

The following table presents the computation of basic and diluted net loss per common share:

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Treasury shares purchased

Unvested restricted shares

( 3,079,374 )

Unvested restricted stock awards

Accrued issuable equity

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The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

Prepaid advance liability (1)

Unvested restricted stock awards

Unvested restricted stock units

Shares issuable estimated using the floor price of $ 0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 12 – Prepaid Advance Liability).

Operating and Finance Leases

The Company determines if an arrangement is a lease or contains a lease at inception.

For leases in effect upon adoption of Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” at January 1, 2020 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”.

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”.

The lease liability is measured at the present value of the remaining lease payments, discounted at either (1) the rate implicit in the lease, if available, or (2) the Company’s incremental borrowing rate.

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Interest expense incurred on finance leases is included in interest expense on the statements of operations.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns.

Deferred tax assets and liabilities are determined on the basis of the difference

There was a $ 905,630 impairment charge reflected in Impairment of right-of-use asset within Operating expenses on the Consolidated Statement of Operations for the year ended December 31, 2025 (see Note 13–Leases for additional details).

The Company recorded no impairment charge in 2024.

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between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns.

Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

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See Note 19 – Subsequent Events.

Segment Reporting

Operating segments are components of an enterprise for which separate financial information is available and regularly reviewed by management in deciding how to allocate resources and evaluate performance.

Management has determined that the Company has two significant operating segments:

Energy Management Platform and Mining of Digital Assets, as discussed in Note 18.

In determining the appropriateness of segment definition, the Company considers the criteria of Accounting Standards Codification (“ASC”) 280, Segment Reporting.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023 – 09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material impact on its financial condition, results of operations, or cash flows.

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023–09.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses.

The ASU requires, among other items, additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the consolidated Statements of Operations.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively.

The Company is currently evaluating the effect of adopting the ASU on its disclosures.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity;

Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements.

Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium.

As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt.

The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance.

The guidance is effective for the Company in financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year.

The Company adopted this ASU on January 1, 2024, and the adoption did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures.

ASU 2024-03 is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions.

The amendments in this ASU will be applied retrospectively and are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of implementing this guidance.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments provide a practical‐expedient election that permits an entity to assume that current conditions as of the reporting date will not change over the remaining life of certain current accounts receivable and contract assets arising from transactions accounted for under ASC 606, “Revenue from Contracts with Customers.” The guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted for reporting periods for which financial statements have not yet been issued or made available for issuance.

The Company is currently evaluating the impact of implementing this guidance.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs.

It is intended to modernize the accounting for internal-use software costs to reflect the evolution of software development practices.

The amendments are effective for fiscal years beginning

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and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted this ASU as of December 31, 2024.

Since this new ASU addresses only disclosures, the adoption of this ASU did not have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which provides an update to existing crypto asset guidance and requires (1) crypto assets measured at fair value separately from other intangible assets in the balance sheet and (2) changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement and (3) specific presentation of cash receipts arising from crypto assets that are received as noncash consideration in the ordinary course of business and are converted nearly immediately into cash.

The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance).

The Company adopted ASU 2023-08 as of January 1, 2024.

after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of implementing this guidance.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832) – Accounting for Government Grants Received by Business Entities.

This ASU establishes authoritative guidance on the accounting for government grants received by business entities, which previously did not exist.

In the absence of specific guidance, many business entities analogized to the guidance in International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, or Subtopic 958-605, Not-for-Profit Entities—Revenue Recognition.

The ASU defines two types of government grants:

(1) a grant related to an asset (for which there are two approaches to record the grant proceeds) and (2) a grant related to income.

A grant related to an asset is conditioned on the purchase, construction, or acquisition of an asset (for example, a long-lived asset or inventory).

A grant related to income is other than a grant related to an asset (for example, a grant that reimburses a business entity for operating expenses).

The ASU defines the criteria that need to be met in order to recognize government grant proceeds and prescribes that a business entity present a grant related to income and a grant related to an asset for which the deferred income approach is elected as part of earnings either (1) separately under a general heading such as other income or (2) deducted from the related expense.

The ASU is effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of implementing this guidance.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures.

Adjustments to the annual disclosure of income taxes include:

(1) A tabular rate reconciliation comprised of eight specific categories, (2) Income taxes paid, disaggregated between significant national, state, and foreign jurisdictions, (3) Eliminates requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made, and (4) Adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) by national and foreign, and income tax expense (or benefit) from continuing operations disaggregated between national, state and foreign.

The ASU is effective for public business entities for fiscal years beginning on or after December 15, 2024 with early adoption permitted.

The amendments in ASU 2023-09 were adopted by the Company on a retrospective basis.

There was no material impact to the Company’s financial statements as a result of adopting ASU 2023-09.

NOTE 3 – DIGITAL ASSETS

The Company’s digital assets are comprised solely of Bitcoin.

In accordance with ASC Topic 820, Fair Value Measurement, the Company measures the fair value of its Bitcoin based on the quoted price at 4:00pm EST on the measurement date for a single Bitcoin on an active trading platform, Coinbase.

Management has determined that Coinbase, an active exchange market, represents a principal market for Bitcoin and at 4:00pm EST, the price is both readily available and representative of fair value (Level 1 inputs).

The following table sets forth the units held, cost basis, and fair value of Bitcoin held, as shown on the consolidated balance sheet as of December 31, 2024.

There was no Bitcoin held as of December 31, 2023.

Crypto assets held:

The following table presents a reconciliation of the fair values of the Company’s Bitcoin as of December 31, 2024:

Beginning balance at January 1, 2024

Unrealized loss, net

The Company’s digital assets are comprised solely of BTC.

In accordance with ASC Topic 820, Fair Value Measurement, the Company measures the fair value of its BTC based on the quoted price at 4:00pm EST on the measurement date for a single BTC on an active trading platform, Coinbase.

Management has determined that Coinbase, an active exchange market, represents a principal market for BTC and at 4:00pm EST, the price is both readily available and representative of fair value (Level 1 inputs).

As of December 31, 2025, the Company held 1,074.21 BTC at Coinbase with a cost basis of $ 108,514,113 , and a fair value of $ 93,995,256 .

As of December 31, 2024, the Company held 217.18 BTC at Coinbase with a cost basis of $ 21,000,010 , and a fair value of $ 20,281,184 .

The following table presents the roll forward of activity related to the Company’s digital assets for the years ended December 31, 2025 and 2024:

Digital Assets

For the Years Ended December 31,

Beginning balance

Additions - purchased

Additions - mined

Digital assets received as downtime credits

Change in fair value

( 13,800,041 )

Ending balance

During the year ended December 31, 2025, the Company purchased 783.81 BTC via trade orders on Coinbase (the “Custodian”) at an average cost of $ 101,683 per BTC, inclusive of fees and expenses, for an aggregate cost of $ 79,700,002 .

During the year ended December 31, 2024, the Company purchased 217.18 BTC via trade orders on Coinbase at an average cost of $ 93,384 per BTC, inclusive of fees and expenses, for an aggregate cost of $ 21,000,010 .

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On March 7, 2025, the Company entered into a 60 day lease agreement (the “First Machine Lease Agreement”) with a digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 850,000 .

On May 16, 2025, the Company entered into a 228 day lease agreement (the “Second Machine Lease Agreement”) with the same digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 3,200,000 .

On June 20, 2025, the Company entered into a one hundred and three-day lease agreement (the “Third Machine Lease Agreement”) with a new digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 2,756,795 .

On July 30, 2025, the Company entered into a one year lease agreement (the “Fourth Machine Lease Agreement”) with a digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 2,646,250 .

The Company elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for leases with a term of twelve months or less.

On October 1, 2025, the Company entered into a two year lease agreement (the “Fifth Machine Lease Agreement”) with a digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 4,200,000 , of which $ 987,932 represents costs attributable to the machines (see Note 13 – Leases for additional details).

During 2025, the Company received BTC with an aggregate fair value of $ 784,187 from the lessors as compensation for machine downtime, which was used to offset lease costs.

During the year ended December 31, 2025, the Company recognized revenue of $ 7,029,924 in connection with its digital assets mining operations.

See Note 2 – Summary of Significant Accounting Policies – for further information.

Bitcoin prices fell materially during the year ended December 31, 2025, resulting in a significant decline in the value of the Company’s digital asset holdings.

Loan Agreement

In July 2025 the Company secured a $ 20 million credit facility with Coinbase, its digital assets custodian.

Pursuant to the terms of the agreement, either party may terminate a loan on a termination date established by notice given to the other party prior to the close of any business day.

On July 8, 2025, the Company entered into an agreement (the “Loan Agreement”) pursuant to which the Company borrowed $ 8 million (the “Initial Drawdown”) and segregated 232 BTC as collateral against this loan.

The Initial Drawdown carried an 8 % loan fee.

The Company’s obligations were secured by a first-priority security interest at collateral-coverage ratio of about 156.25 % of the outstanding principal amount.

The Initial Drawdown is subject to the terms and conditions of the Master Loan Agreement.

Of the $ 8 million borrowed, $ 6.7 million was used to purchase 61.4 BTC.

The Company made principal and interest payments on the loan on August 12, 2025 and September 20, 2025.

As of December 31, 2025, the Company repaid the full $ 8 million principal balance of the loan and $ 49,139 of interest pursuant to the Loan Agreement.

The full $ 20 million credit facility remains available.

NOTE 4 – AUTO-VIBE ASSETS

In December 2025, the Company entered into a three -year Master Vehicle Sales Agreement with a licensed Dealership (the “Dealership”) in California to buy and sell automobiles for the purpose of determining whether the Company’s technology known as KULR VIBE can be deployed in the automobile market.

The Company purchased a range of autos and performed vibration diagnostic testing on the autos using the KULR VIBE technology.

As an R&D activity, the Company intends to continue to buy vehicles, including high-end exotic supercars, run the KULR VIBE diagnostic testing, analyze the data generated, and then sell these cars within one year .

The resulting analysis will help determine if the Company’s VIBE technology can be successfully marketed in the auto sector.

The de minimis profit from auto sales was recorded as a credit against research and development expense.

During December 2025, the Company allocated $ 5,000,000 toward this project and bought and subsequently sold 71 autos that went through the VIBE diagnostic testing.

As of December 31, 2025, the Company has a receivable of $ 1,837,097 due from the Dealership related to these sales, with payment terms of 20 % due on January 30, 2026 (which was received by the Company in January 2026), 20 % due on February 27, 2026 (which was received by the Company in February 2026), and 60 % due on March 30, 2026.

The Company also has a deposit of $ 940,013 which is in a segregated account at the Dealership to be used for future purchases of vehicles.

As of December 31, 2025, the Company also owns 122 autos (to be tested for vibration) at a cost of $ 2,269,649 , that it expects to sell within the year.

No additional funds are expected be allocated to this project.

The December 2025 sales of autos to the Dealership did not qualify as sales to customers, therefore no revenue has been recorded for the sales of these autos.

Auto-Vibe Assets

Vehicles owned

Deposits in segregated account

Balance, December 31, 2025

Additions are the result of the Company acquiring Bitcoin with cash, while dispositions are the result of sales of Bitcoin.

During the year ended December 31, 2024, the Company had no Bitcoin dispositions.

Bitcoin is included in non-current assets in the consolidated balance sheet due to the Company’s intent to not liquidate its Bitcoin to support operations in the next twelve to fifteen months.

The Company has ownership and control over its Bitcoin and uses third-party custodial services at Coinbase.

NOTE 4 – ASSET ACQUISITION

On May 4, 2023, the Company entered into an agreement (the “Asset Purchase Agreement”) with a seller (the “Seller”), pursuant to which the Company purchased all of the assets, primarily intellectual property, of the Seller (the “Acquired Assets”) for consideration of $ 75,000 (the “Total Consideration”), which was paid in cash on May 11, 2023.

In addition, the Seller has been employed by the Company.

The total cost of the intellectual property acquired of $ 75,000 is included in intangible assets on the accompanying consolidated balance sheet and is being amortized over its estimated useful life of 5 years.

The Asset Purchase Agreement includes customary representations, warranties and covenants of the Company and the Seller.

The Asset Purchase Agreement also contains post-closing indemnification provisions pursuant to which the parties have agreed to indemnify each other against losses resulting from certain events, including breaches of representations and warranties, covenants and certain other matters.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determined that the transaction should be accounted for as an asset acquisition because substantially all of the fair value of the Acquired Assets is concentrated in a single asset.

NOTE 5 – INVENTORY DEPOSITS

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Deferred expenses

Marketing and advertising

Compensation costs

Other receivables

Security deposits

Professional fees

Prepaid grant expense

Bitcoin mining leases

Security deposits

Dues and subscriptions

Other receivables

Marketing and advertising

Vendor receivables

Conferences and seminars

Investor relations

Compensation costs

Total prepaid expenses and other current assets

NOTE 7 – INVESTMENTS, IMPAIRMENT AND CREDIT LOSSES

During the year ended December 31, 2025, the Company made two investments in a private German entity (“Investee”), who was also a customer, including Series A7 Preferred Shares and a convertible loan receivable.

On November 13, 2025, the Investee filed an application with a German insolvency court to open insolvency proceedings.

As a result, as of December 31, 2025, the Company has fully impaired or recognized credit losses associated with the Company’s investments and accounts receivable associated with the Investee.

The details of these matters follow:

● On May 7, 2025, the Company purchased Series A7 Preferred Shares (the “Preferred Shares”) of Investee for an aggregate purchase price of approximately $ 3.3 million.

The Preferred Shares rank senior to all outstanding preferred as well as common shares of Investee, and are convertible on a 1 :1 basis into common shares of Investee at the Company’s option, subject to anti-dilution adjustments.

The Company also has the right to one voting advisory board seat and one non-voting observer seat on Investee’s advisory board.

Investee’s Preferred Shares have a liquidation preference equal to the purchase price of the shares plus any accrued and unpaid dividends thereon.

The Company’s purchase of Preferred Shares represents an investment in non-marketable equity securities of a company without a readily determinable fair value.

The Company accounts for this investment under the measurement alternative in ASC 321, whereby the equity investment is recorded at cost, and is subsequently remeasured to its fair value in accordance with the provisions of ASC 820 when observable price changes occur or when it is impaired (see Note 2 - Significant Accounting Policies, Equity Investment).

Due to the Investee’s current financial condition, the Company estimated that the fair value of its Preferred Shares investment in Investee was zero , and accordingly, recorded a full impairment expense of $ 3,325,045 as of September 30, 2025, reflected in Impairment of equity investment within Other Income (Expense) on the Consolidated Statement of Operations for the year ended December 31, 2025.

● On August 25, 2025, the Company executed a Convertible Loan Agreement (the “Note”) with the Investee to loan up to € 2,000,000 .

The Note carries a 12 % interest rate, and it matures on November 30, 2025.

The Note is convertible into the most senior class of preferred shares of Investee at the time of conversion.

The Company can demand conversion at maturity, or prior to maturity if certain defined events occur.

As of September 30, 2025, the Company loaned $ 1,832,690 ( € 1,550,000 ) to the Investee pursuant to the Note.

The Company accounts for the Note at amortized cost and records an estimate of expected credit losses using a forward-looking current expected credit loss (CECL) model in accordance with ASC 326.

The estimate of expected credit losses is based on relevant information about past events, current conditions, and reasonable forecasts about

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On October 24, 2025, the Company loaned an additional $ 294,875 ( € 250,000 ) pursuant to the Note.

Due to the Investee’s current financial condition, the Company determined the collectability of the Note was not assured and accordingly, recorded a full credit loss of $ 2,127,565 , reflected in Credit loss on loan receivable within Other Income (Expense) on the Consolidated Statement of Operations for the year ended December 31, 2025.

In addition to the above balances, the Company had accounts receivable due from the Investee related to product sales made during the second quarter of 2025.

Due to the Investee’s current financial condition, the Company determined that collectability of the accounts receivable was not assured and accordingly, recorded credit losses on accounts receivable of $ 780,643 as of September 30, 2025, reflected within Operating Expenses for the year ended December 31, 2025.

NOTE 8 – EQUIPMENT DEPOSITS

Equipment deposits at December 31, 2025 and December 31, 2024 are $ 806,000 and $ 1,355,174 , respectively.

Equipment deposits at December 31, 2024 represented deposits paid to a vendor as a downpayment for the manufacture of an automated manufacturing system (the “System”).

The System was never delivered to the Company.

After negotiation, and in an effort to come to a resolution on the matter, the Company agreed to forfeit the equipment deposit while the vendor retained the unfinished equipment.

During the year ended December 31, 2025, the Company recorded a write-down of $ 1,355,174 , as a result of its agreement to forfeit the equipment deposit.

NOTE 9 – PROPERTY AND EQUIPMENT

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Machinery & equipment

Leasehold improvement

Leasehold improvements

Lesser of the useful life of the asset or remaining life of the lease

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Property and equipment, net

Depreciation expense amounted to $ 1,656,988 and $ 2,077,722 , respectively, for the years ended December 31, 2024 and 2023, respectively, which is included in selling, general and administrative, cost of revenue, and research and development expenses in the consolidated statements of operations.

Depreciation expense amounted to $ 1,173,190 and $ 1,656,988 , respectively, for the years ended December 31, 2025 and 2024, which is included in selling, general and administrative, cost of revenue, and research and development expenses in the consolidated statements of operations.

NOTE 10 – CABAN ASSET ACQUISITION

On December 24, 2025 (the “Acquisition Date”), the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Caban Systems, Inc.

(“Caban”), a Miami-based renewable energy services and technology company, pursuant to which the Company acquired certain equipment and software used for the development, manufacture, and supply of Underwriters Laboratories (“UL”)-certified battery packs in exchange for a purchase price of $ 2,515,987 (the “Acquisition”).

The Company paid cash of $ 1,921,127 on the Acquisition Date, with the remainder of $ 594,860 (“Holdback Amount”) to be paid in cash during 2026 based on timing of completion of delivery and installation of the equipment at the Company’s facility.

If the Company suffers any damages related to the Acquisition for which the Company is indemnified and that are not cured by Caban, the Holdback Amount may be setoff against payments for such damages that would otherwise be paid by Caban.

The Company viewed the Acquisition as a strategic opportunity to integrate telecom-focused battery solutions into its portfolio and align its technology platform with the evolving requirements of digital infrastructure operators who require reliable, high-performance backup power through batteries.

No equity interests were exchanged, and there was no contingent consideration in connection with the Acquisition.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concurrent with the Purchase Agreement, the Company entered into a five-year Manufacture and Supply Agreement (the “M&S Agreement”) with Caban, pursuant to which KULR will manufacture and supply UL-certified battery packs (the “Battery Packs”) to Caban.

The M&S Agreement is non-exclusive and KULR may sell Battery Packs to third-party customers.

The M&S Agreement may be renewed for an additional five-year term upon mutual agreement of the parties.

Under the M&S Agreement, Caban granted KULR a license to Caban’s intellectual property and production enablement materials (together, the “Business IP”), which includes embedded software, standard operating procedures, test scripts, manuals, configurations, fixture drawings, and related know-how necessary for the manufacture and supply of the Battery Packs, as well as (i) a non-exclusive, worldwide, royalty-free license to manufacture and supply Battery Packs to Caban and its affiliates;

and (ii) a non-exclusive, worldwide, royalty-bearing license to manufacture and supply Battery Packs and equivalent products to third parties (i and ii together, the “Customer Supply Contract”).

In connection with the Purchase Agreement and the M&S Agreement, the Company entered into a Transition Services Agreement (the “TSA”) with Caban, whereby both parties agreed to work together for approximately ninety days after the equipment is installed at the Company’s facility, to ensure a smooth transition of the manufacturing of the Battery Packs from Caban to KULR.

In consideration for the transition services, the Company will pay Caban service fees not to exceed $ 500,000 in the aggregate unless otherwise agreed in writing.

Management determined that the acquired assets did not constitute a business pursuant to ASC 805, because substantially all of the fair value of the gross assets acquired was concentrated in a group of similar assets (the manufacturing and related equipment).

Three types of assets were acquired:

fixed assets, consisting of equipment and machinery to conduct the manufacturing;

software tools;

and an intangible asset consisting of the Customer Supply Contract.

The assets were recorded using a cost accumulation and allocation model prescribed under ASC 805-50, which included an allocation of the direct acquisition-related costs of approximately $ 381,200 (primarily related to third party legal fees) based on relative fair values as determined by third-party valuation specialists.

The following table summarizes the allocation of the cost of the Acquisition, including direct acquisition-related costs, based on the relative fair values of the assets acquired as of the Acquisition Date.

No Caban liabilities were assumed by the Company in connection with the Acquisition.

Purchase price:

Cash consideration

Holdback Amount (consideration payable)

Direct acquisition-related costs

Total purchase price

Assets acquired (at relative fair values):

Manufacturing and related equipment

Software tools

Intangible asset (Customer Supply Contract)

NOTE 11 – INTANGIBLE ASSETS

2 unchanged sentences

Technology license

Supply Agreement

accumulated amortization

Intangible assets, net

In February 2023, the Company entered into an agreement and paid $ 60,000 for exclusive use of a technology license.

The technology license asset is being amortized on a straight-line basis over its useful life of ten years .

On May 4, 2023, the Company acquired intellectual property with an aggregate cost of $ 75,000 (see Note 4 - Asset Acquisition).

The intellectual property is being amortized on a straight-line basis over its useful life of five years .

During the years ended December 31, 2024 and 2023, the Company recognized amortization expense related to intangible assets of $ 142,296 and $ 136,373 , respectively.

During the years ended December 31, 2024 and 2023, the Company had no impairments of its intangible assets.

The weighted average remaining amortization period of the Company’s intangible assets is 6.83 years.

Future amortization of intangible assets is as follows:

For the Years Ended December 31,

NOTE 9 – EQUIPMENT DEPOSITS

The Company entered into an agreement with a third party contractor for the design and construction of an automated manufacturing system.

To date, this equipment has not been delivered.

The Company is involved in continuing discussions with the vendor regarding delivery of this equipment.

As of December 31, 2024 and 2023, the Company had outstanding deposits of $ 1,355,174 and $ 1,332,436 , respectively, in connection with these agreements.

See Note 19 – Commitment and Contingencies – Contingent Loss.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In each of the years ended December 31, 2025 and 2024, the Company recognized amortization expense related to intangible assets of $ 142,296 .

During the years ended December 31, 2025, the Company evaluated its expected future discounted cash flows compared to the carrying value of its intangible assets.

As of December 31, 2025, the Company does not expect to generate revenue from the patent and one of its intellectual property licenses and decided to fully impair the assets.

Accordingly, the Company recognized impairment expense of $ 202,058 related to intangible assets as of December 31, 2025.

During the year ended December 31, 2024, the Company had no impairments of its intangible assets.

The weighted average remaining amortization period of the Company’s intangible assets is 3.56 years.

Future amortization of intangible assets is as follows:

For the Years Ended December 31,

Total future intangible amortization

NOTE 12 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of December 31, 2025 and 2024, accrued expenses and other current liabilities consisted of the following:

Professional fees

Purchase consideration payable

Payroll and vacation

Bitcoin mining costs

Franchise tax payable

Research and development

Inventory purchases

Professional fees

Sales and marketing

Sales tax payable

Research and development

Equipment purchases

Interest payable

Refund due to customer

Cost of sales

Board compensation

Total accrued expenses and other current liabilities

Accrued interest, non-current

Total accrued expenses and other liabilities

On December 16, 2024, the Company settled $ 241,192 of outstanding liabilities in connection with a research agreement for $ 200,000 and recorded a gain on extinguishment of debt in the amount of $ 41,192 .

NOTE 11 – ACCRUED ISSUABLE EQUITY

A summary of the accrued issuable equity activity during the years ended December 31, 2024 and 2023 is presented below:

For the Year Ended December 31,

Beginning balance at January 1, 2024

Mark-to-market

Shares issued in satisfaction of accrued issuable equity

Fair value at December 31, 2024

During the years ended December 31, 2024 and 2023, the Company entered into certain contractual arrangements for consulting services in exchange for a fixed number of shares of common stock of the Company.

On the respective dates the contracts were entered into, the estimated fair value of the shares to be issued was an aggregate of $ 565,164 and $ 158,133 , respectively, based on the quoted market prices of the shares.

During the year ended December 31, 2024, the Company settled certain of its accrued issuable equity obligations through the issuance of an aggregate of 553,723 of its shares with an aggregate fair value of $ 386,516 , remeasured as of the date of settlement based on the quoted market prices of the shares.

During the years ended December 31, 2024 and 2023, the Company recorded gains (losses) in the aggregate amount of $( 228,777 ) and $ 167,040 , respectively, related to the changes in fair value of accrued issuable equity (see Note 17 – Stockholders’ (Deficit) Equity, Stock-Based Compensation for additional details).

The fair value of the accrued but unissued shares as of December 31, 2024 was $ 420,427 , based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

The Company’s prepaid advance liability consists of the following:

Gross Amount of

Prepaid Advance

net of discount

Balance, December 31, 2022

Proceeds from prepaid advance

Original issue discount on prepaid advance

Repayments in cash

( 1,575,000 )

Repayments pursuant to Advance Notices

Repayments pursuant to Investor Notices

( 4,032,658 )

Amortization of debt discount

Balance, December 31, 2023

Repayments pursuant to Advance Notices

( 5,918,430 )

Amortization of debt discount

Balance, December 31, 2024

On September 23, 2022, the Company entered into a Supplemental Agreement (the “Supplemental Agreement”) to its Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd.

(“Yorkville”).

Under the Supplemental Agreement, the Company may from time-to-time request advances of up to $ 15,000,000 (each, a “Prepaid Advance”) from Yorkville with a limitation on the aggregate amount of such advances of $ 50,000,000 .

At any time that there is a balance outstanding under a Prepaid Advance, the Company is not permitted to deliver Advance Notices (as defined in Note 17, Stockholders’ (Deficit) Equity) under the SEPA, without prior consent from Yorkville.

Pursuant to the terms of the Supplemental Agreement, Yorkville has the right to receive shares to pay down Prepaid Advances, and may select the timing and delivery of such shares (via an “Investor Notice”), in an amount up to the balance of the Prepaid Advance at a price equal to the lower of (a) 135 % of the volume weighted average price (“VWAP”) of the Company’s common stock on the day immediately prior the closing of the Prepaid Advance, or (b) 95 % of the lowest VWAP during the three days immediately prior to the Investor Notice.

Each Prepaid Advance accrues interest at 10 % per annum, subject to an increase to 15 % per annum upon events of default as defined and matures 12 months after the date of the closing of such advance.

Any advance balance that remains outstanding at maturity must be repaid in cash.

On September 23, 2022, the Company recorded an initial Prepaid Advance liability in the amount of $ 15,789,474 , which consisted of $ 15,000,000 of gross cash proceeds (the “Initial Advance”), plus an original issue discount of $ 789,474 .

Of the $ 15,000,000 Initial Advance amount, $ 3,850,000 was used to repay amounts due under a Note Purchase Agreement with Yorkville.

The Company incurred $ 85,000 of legal and professional fees in connection with its entry into the Supplemental Agreement.

The original issue discount and legal and professional fees incurred were recorded as a debt discount, which is being amortized ratably over the term of the Initial Advance.

On March 10, 2023, the Company and Yorkville agreed and closed on a second Prepaid Advance (the “Second Advance”).

The Company recorded additional prepaid advance liability in the amount of $ 2,105,263 , which consisted of $ 2,000,000 cash proceeds received, plus an original issue discount of $ 105,263 .

Interest accrues on the outstanding balance of each Prepaid Advance at an annual rate of 10 %, subject to an increase to 15 % upon events of default, as defined.

On September 18, 2023, the Company repaid an aggregate amount of $ 1,839,731 , consisting of a principal amount of $ 1,500,000 , accrued interest in the amount of $ 264,731 and a payment premium in the amount of $ 75,000 .

During the year ended December 31, 2023, the Company issued 4,078,971 shares of common stock, at purchase prices per share ranging from $ 0.57 to $ 1.20 , pursuant to Investor Notices submitted by Yorkville for aggregate proceeds of $ 4,466,627 .

The proceeds were applied against the principal and interest due for the Prepaid Advance Liability in the aggregate amounts of $ 4,032,657 and $ 433,970 , respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2023, the Company recorded interest expense in the amount of $ 714,117 and recorded amortization of debt discount in the amount of $ 730,230 in connection with the Prepaid Advance liability.

On August 16, 2023, as amended on August 23, 2023, August 30, 2023, November 6, 2023 and December 19, 2023, the Company and Yorkville entered into letter agreements (the “Letter Agreement”), intended to supplement and modify the Supplemental Agreement to extend the repayment date of the Prepaid Advance Liability balance as follows:

(i) an initial payment of $ 1,000,000 plus accrued interest as well as a 5 % cash payment premium on or before December 31, 2023 or the date of the closing of any financing conducted by the Company (the “December Payment”);

(ii) $ 2,000,000 on or before February 29, 2024 plus accrued interest as well as a 5 % cash payment premium (the “February Payment”);

(iii) the remaining principal amount of the Prepaid Advance Liability of $ 2,597,194 plus accrued interest as well as a 5 % cash payment premium on or before April 30, 2024 (the “April Payment”).

On January 9, 2024, the Company entered into a letter agreement with Yorkville to defer the Company’s December 31, 2023 (the “December Payment”) payment of $ 2,000,000 plus accrued interest and a 5 % cash payment premium until February 29, 2024.

On February 13, 2024, the Company and Yorkville entered into another agreement to extend all payment due dates and defer all payment obligations to December 31, 2024.

During the year ended December 31, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $ 15,173,357 (see note 17 – Stockholders’ Equity (Deficit)).

Of the shares issued pursuant to the SEPA Advance Notices, 21,798,830 shares valued at $ 6,068,407 were issued in satisfaction of $ 5,918,430 of principal and $ 118,619 of accrued interest owed in connection with the Company’s prepaid advance liability.

The Company recorded $ 31,358 in extinguishment loss and charged $ 13,577 of deferred financing costs to additional paid-in capital in connection with the shares issued in satisfaction of the prepaid advance liability.

As of December 31, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA has been terminated.

See Note 17 – Stockholders’ Equity (Deficit) - Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA for additional information.

The remaining 33,860,646 shares issued pursuant to the SEPA Advance Notices were issued for cash proceeds of $ 9,104,950 , which was used to fund the operations of the Company.

Deferred financing costs in the amount of $ 57,030 were charged to additional paid-in capital in connection with the shares issued for cash.

NOTE 13 – LEASES

Operating Leases

On January 18, 2023, the Company entered into a lease agreement for office space in Webster, Texas.

7 unchanged sentences

Monthly rental payments under the new lease are $ 33,818 , which is comprised of $ 22,682 of base rent and $ 11,136 of common area maintenance fees.

No cash payments are due for the first three months of the lease.

No cash payments were due for the first three months of the lease.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determined that the value of the operating lease liability and related right-of-use asset at inception was $ 1,085,498 , using an incremental borrowing rate of 10 %.

The Company paid a security deposit of $ 37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of December 31, 2024.

The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which originally expired May 31, 2024 (the “San Diego Lease”).

On January 25, 2024, the Company entered into an amendment to the lease dated April 5, 2021, for the facility located at 4863 Shawline Street, San Diego, CA 92111 (the “First Renewal”).

Pursuant to the amendment, the lease was extended for a period of eighteen months commencing June 1, 2024, and terminating November 30, 2025.

The Company paid a security deposit of $ 37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of December 31, 2025 and December 31, 2024.

On April 15, 2025, the Company amended its original lease dated January 27, 2024 (the First Amendment”), for the property located in Webster, TX, to expand the rentable square footage by approximately 13,535 square feet (the “Expansion Premises) for a total rentable space of 31,095 square feet.

The First Amendment is effective May 1, 2025 and expires April 30, 2029.

Monthly payments for the Expansion Premises are $ 17,483 .

No cash payments are due for the first two months of the lease.

The Company determined that the value of the operating lease liability and related right-of-use asset at inception was $ 691,852 , using an incremental borrowing rate of 10 %.

The Company also leased office space at 4863 Shawline Street, San Diego, CA, pursuant to an operating lease which originally expired May 31, 2024 (the “San Diego Lease”).

On January 25, 2024, the Company entered into an amendment to the lease (the “First Renewal”), whereby the lease was extended for a period of eighteen months commencing June 1, 2024, and terminating November 30, 2025.

The Company did not renew this lease upon its expiration.

Monthly rental payments under the amendment are $ 30,511 .

1 unchanged sentence

The Company paid a security deposit of $ 50,213 in connection with the San Diego lease agreement which is recorded within the prepaid expenses and other current assets section of the balance sheet as of December 31, 2025.

During the years ended December 31, 2024 and 2023, operating lease expense was $ 576,332 and $ 265,457 , respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During July 2024, the Company entered into a three - year lease agreement, (the “Equipment Lease”) for the lease of a copy machine (the “Equipment”).

The lease term began on July 18, 2024.

The monthly fixed lease payment is $ 220 .

The Equipment Lease includes a purchase option pursuant to which the Company can purchase the Equipment at the end of the lease term for $ 1 .

The Company recorded a finance lease ROU asset and related lease liability in the amount of $ 7,768 upon the commencement of the Equipment Lease.

The Company recorded depreciation expense in the amount of $ 1,554 in connection with ROU assets held under the finance lease during the year ended December 31, 2024.

The Company recorded interest expense of $ 118 during the year ended December 31, 2024, in connection with its finance lease liability.

Lease liabilities mature during the year ended December 31, 2024, as follows:

During the year ended December 31, 2025 and 2024, operating lease expense was $ 717,505 and $ 576,332 , respectively.

Finance Lease

On October 1, 2025, the Company entered into a two -year lease agreement (the “Fifth Machine Lease Agreement”) with a digital asset mining services company to operate digital assets mining machines on KULR’s behalf, at a total lease cost of $ 4,220,000 .

The lease term began on October 31, 2025.

On October 1, 2025, the Company prepaid $ 1,100,000 , representing the approximate fair value of the machines.

The lease requires monthly fixed payments of $ 130,000 , which cover the operational costs of using the machines.

Upon lease commencement on October 31, 2025, the Company obtained the right to control the use of the identified asset and recorded a ROU asset in the amount of $ 987,932 , with no corresponding lease liability, as the full prepayment had been made prior to commencement related to the Fifth Machine Lease Agreement.

During 2025, the Company recorded an impairment charge of $ 905,630 on its ROU asset related to its digital asset mining operations.

The impairment was driven by a significant decline in the market price of BTC, which reduced the expected future cash flows attributable to the asset below its carrying value.

Accordingly, the ROU asset was written down to zero .

See Note 3 for information regarding this finance lease and other short-term digital asset leases.

The Company recorded depreciation expense in the amount of $ 82,691 and $ 1,554 in connection with ROU assets held under the finance leases during the years ended December 31, 2025 and 2024, respectively.

The Company recorded interest expense of $ 138 and $ 118 during the years ended December 31, 2025 and 2024, in connection with its finance lease liabilities.

Supplemental Information

Maturities of lease liabilities as of December 31, 2025, were as follows:

For the years ended December 31,

Operating Lease

Financing Lease

Total future minimum lease payments

3 unchanged sentences

Lease liabilities, non current portion

Supplemental cash flow information related to the lease was as follows:

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to the leases is as follows:

For the Years Ended

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Financing leases

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – RELATED PARTY TRANSACTIONS

Effective August 26, 2022, the Company entered into an eight-month consulting agreement with the father of the Company’s Chief Technology Officer (the “Related Consultant”), which shall automatically renew for an additional four months unless otherwise terminated.

During the years ended December 31, 2024 and 2023, expense recognized for services provided by the Related Consultant were $ 0 and $ 32,055 , respectively, and is included within selling, general and administrative expenses in the consolidated statements of operations.

On July 24, 2023, the Related Consultant accepted an employment offer by the Company, which became effective on August 7, 2023.

As of December 31, 2024 and December 31, 2023, the Company did no t have material accounts payable outstanding with related parties.

NOTE 14 – NOTES PAYABLE

A summary of the notes payable activity during the year ended December 31, 2024 is presented below:

A summary of the notes payable activity during the years ended December 31, 2025 and 2024 is presented below:

Outstanding, January 1, 2024

6 unchanged sentences

Amortization of debt discount

Outstanding, January 1, 2025

Repayments in cash

Amortization of debt discount

Total notes payable as of December 31, 2025

notes payable, current portion

Notes payable, noncurrent as of December 31, 2024

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $504,900 of cash (net of underwriting fees of $ 35,100 ), and paid finder’s fees in cash of $ 21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $ 804,600 over thirty-two weekly payments of $ 25,144 , beginning January 30, 2024.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, were being amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 217 %.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, was amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 217 %.

The Cash Advance Agreement was secured by the Company’s accounts receivable and related cash receipts.

3 unchanged sentences

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the same lender mentioned above whereby the Company received $ 502,200 of cash (net of underwriting fees of $ 37,800 ), and paid finder’s fees in cash of $ 21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $ 804,600 over thirty weekly payments of $ 26,820 , beginning February 29, 2024.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, is being amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate ranging from 240 % to 249 %.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, was amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate ranging from 240 % to 249 %.

The Second Cash Advance is secured by the Company’s accounts receivable and related cash receipts.

On July 11, 2024, the terms of this agreement were revised whereby the weekly repayment amounts were reduced from $ 26,820 to $ 15,620 and the repayment period was extended from September 27, 2024, to November 15, 2024.

On July 11, 2024, the terms of this agreement were revised whereby

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the weekly repayment amounts were reduced from $ 26,820 to $ 15,620 and the repayment period was extended from September 27, 2024, to November 15, 2024.

On November 15, 2024, this merchant cash advance was repaid in full.

2 unchanged sentences

The debt discount was amortized using the effective interest rate method and an annualized effective interest rate of 26 %.

The Promissory Note carries an annual interest rate of 0 %, which shall increase to 15 % in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due.

The Promissory Note carries an annual interest rate of 0 %, which increased to 15 % in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due.

On May 28, 2024, the Company repaid the Promissory Note in full, and recognized $ 60,000 of amortization expense related to the debt discount.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On April 4, 2024, the Company and the finder of the First and Second Cash Advance Agreements determined that the equity compensation would be by issuance of warrants to purchase up to 10,224 shares (the “First Warrant”) and up to 13,549 shares (the “Second Warrant”), respectively, of the Company’s common stock at an exercise price of $ 1.48 per share and $ 1.11 per share, respectively.

6 unchanged sentences

Exercise price

1.11 - $ 1.48

Risk free interest rate

2 unchanged sentences

On December 27, 2024, the holder elected the cashless exercise and exercised all the Warrants and received 22,985 shares of the Company’s common stock.

Pursuant to the cashless exercise, 6,295 shares were withheld from the holder to cover taxes and fees.

On April 9, 2024, the Company entered into a note purchase agreement pursuant to which the Company issued an unsecured promissory note with an initial principal amount of $ 200,000 and which matures on the first anniversary of its issuance.

3 unchanged sentences

On October 31, 2024, this promissory note was repaid in full.

On April 9, 2024, the Company entered into a Conditional Sale Agreement (the “Agreement”) to purchase a Haas Vertical Machining Center (the “Equipment”), pursuant to which the Company issued a promissory note with an initial principal amount of $ 42,788 .

The promissory note carries an imputed interest rate of 10 %.

The Company will make twenty-four consecutive monthly installments of $ 2,003 , beginning thirty days after the delivery of the Equipment.

The Equipment was received on June 17, 2024.

On July 11, 2024, the Company entered into a merchant cash advance agreement (the “Third Cash Advance Agreement”) whereby the Company received $ 758,850 of cash (net of underwriting fees of $ 40,000 and $ 201,150 used to pay the remaining balance of the first merchant cash advance), with the obligation to repay a total of $ 1,350,000 over forty - three weekly payments of $ 31,395 , beginning July 18, 2024.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount and is being amortized over forty - three weeks using the effective interest rate method and an annualized effective interest rate of 86 %.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount and was amortized over forty - three weeks using the effective interest rate method and an annualized effective interest rate of 86 %.

The Third Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts.

The agreement contains an early payoff discount whereby the Company will owe $ 1,230,000 if paid by August 11, 2024, or $ 1,310,000 if paid by September 11, 2024.

The agreement contains an early payoff discount whereby the Company owed $ 1,230,000 if paid by August 11, 2024, or $ 1,310,000 if paid by September 11, 2024.

The Company did not take advantage of the early payoff discount and continued making weekly payments over the original forty-three-week term.

1 unchanged sentence

This Third Cash Advance was repaid in full on January 8, 2025.

See Note 20 – Subsequent Event, for full repayment disclosure.

KULR TECHNOLOGY GROUP, INC.

2 unchanged sentences

NOTE 15 – INCOME TAXES

The income tax provision (benefit) for the years ended December 31, 2024 and 2023 consists of the following:

The following table summarizes income before income taxes:

For the Years Ended,

1 unchanged sentence

( 17,523,629 )

State and Local

( 61,899,782 )

( 17,523,629 )

Change in valuation allowance

Income tax provision

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

The Company’s income tax expense (benefit) is as follows:

For the Years Ended,

Tax benefit at federal statutory rate

State income taxes, net of federal benefit

Permanent differences

Stock-based compensation

Other and prior year true-ups

Rate and apportionment changes

Current income tax expense (benefit)

( 12,746,999 )

( 2,542,839 )

( 1,642,546 )

Deferred income tax expense (benefit)

( 14,389,545 )

( 2,743,401 )

Change in valuation allowance

Effective income tax rate

The Company has determined that a valuation allowance for the entire net deferred tax asset is required.

A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized.

After consideration of all the evidence, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero.

( 2,743,401 )

Total income tax expense (benefit)

The Company’s effective tax rate for the periods ended December 31, 2025 and 2024 were 0.0 %.

For the period ended December 31, 2025 and December 31, 2024, the primary driver of the variance from the statutory rate was valuation allowance activity.

The following is a reconciliation from the Company’s statuary rate to the effective tax rate reported in the financial statements:

For the Years Ended,

Income tax expense (benefit) at federal statutory rate

( 13,041,538 )

( 3,676,946 )

State and local income taxes, net of federal benefit of state

Foreign jurisdictions

Federal law changes

Tax credits (federal)

Federal R&D tax credit

Other federal tax credits (Orphan Drug)

Valuation allowance (federal)

Non-deductible or non-taxable items

Section 162(m) limitation

Share based compensation

Unrecognized tax benefits

Other adjustments

Effective tax rate

For the periods ended December 31, 2025 and 2024, the Company’s state tax expense was $0.00.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

The tax effect of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases that give rise to deferred tax assets and liabilities are as follows:

For the Years Ended,

Deferred Tax Assets:

Net operating loss carryforwards

Research and development credit carryforwards

Capitalized research and development costs

Stock-based compensation

Property and equipment

Accrued expenses

Property & equipment

Intangible assets

Lease liability

Accruals and other

Credit carry-forward

Net operating losses carryforward

Section 174 costs

Stock based compensation

Lease liability (ASC 842)

Unrealized gains/losses

Capital loss carryforward

Gross deferred tax assets

2 unchanged sentences

( 19,307,367 )

Deferred tax assets, net of allowance

Net deferred tax assets

Deferred tax liabilities

Right of use asset

Debt discount

Net deferred tax liabilities

Changes in valuation allowance

At December 31, 2024 and 2023, the Company had federal net operating loss carry forwards of approximately $ 61.0 million and $ 49.0 million, respectively.

At December 31, 2024, approximately $ 3.3 million of federal net operating losses will expire from 2033 to 2037 , and approximately $ 57.7 million will have no expiration.

At December 31, 2024 and 2023, the Company had state net operating loss carry forwards of approximately $ 34.9 million and $ 33.3 million, respectively, of which $ 33.5 million of which will expire between 2034 and 2044 and $ 1.3 million have no expiration.

The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations.

The amount of the limitation would be determined based on the value of the Company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation.

An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited.

No tax audits were commenced or were in process during the years ended December 31, 2024 and 2023.

No tax related interest or penalties were incurred during the years ended December 31, 2024 and 2023.

The Company’s federal and state income tax returns beginning with the year ended December 31, 2021 remain subject to examination.

Lease liability (ASC 842)

Total deferred tax liabilities

Total deferred tax assets (liabilities)

For the period ended December 31, 2025, the Company has federal and state post-apportioned net operating loss carryforwards of $ 105.3 million and $ 51.2 million, respectively.

Of the federal amount, $ 3.3 million have a limited carryforward period and will begin to expire in 2033;

the remaining $ 102.0 million will have an indefinite carryforward period.

Of the state post-apportioned amount, $ 40.3 million have a limited carryforward period and will begin to expire in 2033;

the remaining $ 10.9 million will have an indefinite carryforward period.

For the period ended December 31, 2025, the Company has federal and state tax credit carryforwards of $ 0.1 million and $ 0.1 million, respectively.

The full federal amount of $ 0.1 million has a limited carryforward period and will begin to expire in 2033.

The full state amount of $ 0.1 million has an indefinite carryforward period.

For the period ended December 31, 2025, the Company has federal capital loss carryforward of $ 3.3 million that will begin to expire in 2030.

In accordance with Section 382 and Section 383, utilization of the NOL and tax credit carryforwards may subject to limitations based on prior or future ownership changes.

Additionally, after weighing all available and positive and negative evidence for the period ended December 31, 2025, the Company determined a full valuation allowance was necessary, consistent with prior year.

No income tax was paid during the years ended December 31, 2025 and 2024.

Tax Law Change

On July 4, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “Tax Reform Act of 2025”).

The legislation includes numerous changes to U.S.

corporate income tax law, including but not limited to:

permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, increased Section 179 expensing limits, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m).

Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.

The Company evaluated the impact of the Tax Reform Act of 2025 on its consolidated financial statements and determined the total impact on the tax expense to be immaterial.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – STOCKHOLDERS’ EQUITY (DEFICIT)

10 unchanged sentences

As of December 31, 2025, there were 119,126 shares available for issuance under the 2018 Plan.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

No new grants will be issued under the 2018 Plan pursuant to the 2025 Equity Incentive Plan.

On November 21, 2025, the Board of Directors and a majority of the Company’s shareholders, respectively, approved the 2025 Equity Incentive Plan (the “2025 Plan”).

Under the 2025 Plan, 7,500,000 shares of common stock of the Company are authorized for issuance.

The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants of the Company and its affiliates.

The 2025 Plan requires the exercise price of stock options to be not less than the fair value of the Company’s common stock on the date of grant.

As of December 31, 2025, there were 6,953,110 shares available for issuance under the 2025 Plan.

Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA

11 unchanged sentences

Deferred financing costs in the amount of $ 57,031 were charged to additional paid-in capital in connection with the shares issued for cash.

As of March 27, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA terminated on June 1, 2024.

See Note 12 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA.

As of March 27, 2024, the prepaid advance liability and the related accrued interest was repaid in full and the SEPA terminated on June 1, 2024.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At the Market Offering

4 unchanged sentences

On December 26, 2024, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable under the ATM Agreement by an additional $ 50 million and the Company entered into an amendment (the “Amendment”) to the ATM Agreement, to provide that the Agent’s compensation payable under the Sales Agreement shall be 2.5 % of gross proceeds of any sales of shares of common stock sold under the ATM Agreement.

During the year ended December 31, 2024, the Company issued a total of 74,781,217 shares of common stock pursuant to the ATM Agreement for aggregate gross proceeds of $ 61,912,798 .

(See Note 20, Subsequent Events)

On January 24, 2025, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable under its At the Market Offering agreement (the “First ATM Agreement”) by an additional $ 50 million, to a $ 146 million maximum offering amount.

On May 30, 2025, the Company completed its initial ATM offering under the First ATM Agreement with a total of 14,783,401 shares issued for gross proceeds of $ 146 million, of which 9,347,652 shares were issued and gross proceeds of $ 61.9 million were received in 2024.

On June 9, 2025, the Company entered into a second At the Market Offering agreement (the “Second ATM Agreement”) with certain sales agents (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $ 300 million in an “At the Market” offering through or to the Agent.

On September 30, 2025, the Company amended and reduced the aggregate offering amount pursuant to the Second ATM Agreement to $ 150 million.

Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent.

The Agent will receive a commission from the Company of up to 3.0 % of the gross proceeds of any shares of common stock sold pursuant to the Second ATM Agreement.

During the year ended December 31, 2025, the Company issued a total of 12,679,311 shares of common stock pursuant to the ATM Agreements for aggregate gross proceeds of $ 123 million (see Note 19 - Subsequent Events).

During the year ended December 31, 2024, the Company issued a total of 9,347,652 shares of common stock pursuant to the ATM Agreement for aggregate gross proceeds of $ 61.9 million.

As of December 22, 2025, the Company decided to pause its ATM transactions through June 30, 2026.

Treasury Stock

The Company’s equity-based compensation plan allows for the grant of stock options, RSUs and RSAs to its employees pursuant to the terms of its equity incentive plan.

Under the provision of the plan, unless otherwise elected, participants fulfill their related income tax withholding obligation by having shares withheld at the time of vesting.

Generally, the shares withheld are then transferred to the Company’s treasury stock at cost.

During the year ended December 31, 2025, the Company repurchased 5,527 shares recorded at their cost of $ 97,522 in connection with paying employee payroll tax obligation for vested restricted common stock units during the period.

The Company had 21,922 and 16,395 shares held in treasury as of December 31, 2025 and 2024, respectively, recorded at their cost of $ 393,744 and $ 296,222 , respectively.

Series A Preferred Stock

9 unchanged sentences

The issuance of up to 1,000,000 shares of Non-Convertible Series A Voting Preferred Stock was previously approved and authorized by a vote of the majority stockholders of the Company.

On January 16, 2025, the Board of Directors approved the issuance of an additional 270,000 shares of Non-convertible Series A Voting Preferred Stock (“Series A Preferred”) to the CEO, such that the total shares of Series A Preferred held by the CEO as of December 31, 2025 is 1,000,000 shares.

The issuance of up to 1,000,000 shares of Non-convertible Series A Voting Preferred Stock to the CEO was previously approved and authorized by a vote of the majority stockholders of the Company, subject to the Board reserving the full and unequivocal right to revoke, rescind, transfer or otherwise cancel the issued Non-convertible Series A Voting Preferred Stock in the event the CEO is removed from any position with the Company or resigns from all positions with the Company.

Holders of Non-Convertible Series A Voting Preferred Stock shall not be entitled to dividends, shall not convert into another series or class of stock of the Company and have no rights to distributions in the event of any liquidation.

16 unchanged sentences

During the year ended December 31, 2024, the Company issued an aggregate of 99,422 shares of common stock valued at $ 447,677 for legal and consulting services, of which 8,554 shares valued at issuance at $ 13,002 were accrued at January 1, 2024 for services rendered in prior years.

During the year ended December 31, 2023, the Company issued an aggregate of 13,389,285 shares of common stock in public equity offerings for gross proceeds of $ 3,910,000 less issuance costs of $ 846,030 .

During the year ended December 31, 2023, the Company issued 50,000 shares of restricted common stock for marketing services subject to a 180 -day lock-up period.

During the year ended December 31, 2024, the Company issued an aggregate of 795,373 shares of common stock valued at $ 447,677 for legal and consulting services, of which 68,431 shares valued at issuance at $ 13,002 were accrued at January 1, 2024 for services rendered in prior years.

During the year ended December 31, 2024, the Company issued 3,750 shares of immediately vested common stock with a grant date value of $ 17,400 as equity compensation to its independent members of the Board of Directors.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2024, the Company issued 30,000 shares of immediately vested common stock with a grant date value of $ 17,400 as equity compensation to its independent members of the Board of Directors.

During the year ended December 31, 2024, the Company issued 184,058 shares of common stock upon the cashless exercise of 250,421 warrants with a weighted average exercise price of $ 7.36 .

During the year ended December 31, 2024, the Company issued 3,230 shares of common stock upon the exercise of stock options.

During the year ended December 31, 2024, the Company issued 1,102,127 shares of common stock upon the vesting of restricted stock units previously granted.

See At The Market Offering, above, and Note 12 - Prepaid Advance Liability for details related to additional share issuances.

During the year ended December 31, 2024, the Company issued 137,766 shares of common stock upon the vesting of restricted stock units previously granted, of which no shares were withheld to cover payroll tax obligations.

During the year ended December 31, 2025, the Company issued an aggregate of 46,500 shares of common stock valued at $ 130,220 for legal and consulting services.

During the year ended December 31, 2025, the Company issued 1,688 shares of common stock upon the exercise of stock options.

During the year ended December 31, 2025, the Company issued 304,489 shares of common stock upon the vesting of restricted stock units previously granted, of which 69,084 shares were withheld to cover payroll tax obligations.

See At The Market Offering , above, for details related to additional share issuances.

During the year ended December 31, 2024, the Company repurchased and cancelled 109,375 shares issued in connection with vested equity awards held by the Company’s former COO in exchange for a cash payment of $ 500,000 .

In addition, 376 shares withheld for payroll taxes were cancelled by the Company.

Treasury Stock

As of December 31, 2024 and 2023, the Company has 131,162 shares held in treasury recorded at their cost of $ 296,222 .

A summary of warrants activity during the year ended December 31, 2025 is presented below:

Outstanding, January 1, 2025

( 2,003,368 )

Outstanding, December 31, 2025

Exercisable, December 31, 2024

A summary of outstanding and exercisable warrants as of December 31, 2024 is presented below:

Warrants Outstanding

Warrants Exercisable

Remaining Life

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no warrants outstanding as of December 31, 2025.

Stock-Based Compensation

The following table presents information related to stock-based compensation expense for the years ended December 31, 2025 and 2024:

For The Year Ended

Shares issued for legal services

Shares issued to Directors

Accrued issuable equity (common stock)

For The Years Ended

Shares issued for legal and consulting services

Shares issued to board members

Common stock issued for asset purchase

Amortization of stock options

Amortization of restricted stock awards and units

Amortization of restricted stock awards, units and other common stock compensation

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation expense of $ 6,522,581 and $ 2,692,687 , respectively, of which $ 4,970,435 and $ 2,319,207 , respectively, are included within selling, general and administrative expenses, and $ 1,552,146 and $ 373,480 , respectively are included within research and development expenses in the consolidated statements of operations.

12 unchanged sentences

$ 16.40 - $ 18.48

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2025 and 2024, the weighted average grant date fair value per share of options was $ 8.47 and $ 1.60 , respectively.

1 unchanged sentence

In applying the Black-Scholes option pricing model, the Company used the following assumptions:

For The Year Ended

For The Years Ended

December 31, 2025

Risk free interest rate

4.27 % - 4.81 %

3.92 % - 5.40

Expected term (years)

Expected volatility

110 % - 114 %

Expected dividends

6 unchanged sentences

As of December 31, 2025, there was $ 64,299 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.46 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards

The following table presents information related to restricted stock awards as of December 31, 2024:

The following table presents information related to restricted stock awards for the year ended December 31, 2025:

Weighted Average

1 unchanged sentence

Non-vested RSAs, January 1, 2025

RSAs exchanged for RSUs

( 2,168,508 )

( 1,287,500 )

Non-vested RSAs, December 31, 2025

On March 31, 2023, the Company granted 1,500,000 restricted shares of common stock with a grant date value of $ 1,380,000 to the Company’s Chief Financial Officer.

The restricted shares vest in five (5) equal annual installments.

During the year ended December 31, 2023, the Company granted RSAs of 668,508 restricted shares of common stock with an aggregate grant date value of $ 685,400 to employees which vest in four (4) equal annual installments.

As of August 20, 2024, the President and Chief Operating Officer (the “Former COO”) resigned from all positions held with the Company, and the Company agreed to provide the Former COO with certain separation benefits, which include accelerated vesting of the final tranche of his restricted stock award (“RSA”), consisting of 500,000 unvested shares, previously granted.

The Company recorded a credit in the amount of $ 325,000 to stock-based compensation as a result of this modification, consisting of reversal of $ 435,000 of amortization related to the unvested award, net of $ 110,000 equal to the fair value of shares vested on an accelerated basis.

As of August 20, 2024, the President and Chief Operating Officer (the “Former COO”) resigned from all positions held with the Company, and the Company agreed to provide the Former COO with certain separation benefits, including accelerated vesting of the final tranche of his restricted stock award (“RSA”) consisting of 62,500 unvested shares previously granted.

The Company recorded a credit in the amount of $ 325,000 to stock-based compensation as a result of this modification, consisting of a reversal of $ 435,000 of amortization related to the unvested award, net of $ 110,000 equal to the fair value of shares vested on an accelerated basis.

On November 27, 2024, these shares were cancelled in lieu of payment.

See Note - 17 Commitment and Contingencies - Separation and General Release Agreement.

2 unchanged sentences

As of December 31, 2025, there was $ 50,094 of unrecognized stock-based compensation expense related to restricted stock that will be recognized over the weighted average remaining vesting period of 0.75 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

The following table presents information related to RSUs as of December 31, 2024:

The following table presents information related to RSUs for the year ended December 31, 2025:

Weighted Average

1 unchanged sentence

Non-vested RSUs, January 1, 2025

RSAs exchanged for RSUs

( 1,092,127 )

( 1,125,000 )

Non-vested RSUs, December 31, 2025

Vested RSUs undelivered December 31, 2025

During the year ended December 31, 2024, the Company granted RSUs of 3,441,230 restricted shares of common stock with an aggregate grant date value of $ 4,382,643 to employees and consultants which vest in four (4) equal annual installments.

During the year ended December 31, 2024, the Company granted RSUs of 100,000 restricted shares of common stock with an aggregate grant date value of $ 118,000 to employees which vest in two (2) biannual installments.

During the year ended December 31, 2024, the Company cancelled 46,875 of unvested restricted stock units, upon the resignation of the Former COO.

See Note 17 – Commitments and Contingencies – Separation and General Release Agreement .

To date, RSUs have only been granted to employees in accordance with the Company’s 2018 Equity Incentive Plan.

Pursuant to the terms of the restricted stock unit agreements, the vested but undelivered units are to be settled on January 1, 2026.

As of December 31, 2024, there was $ 6,543,446 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 3.35 years.

NOTE 18 – SEGMENT REPORTING

The Company has one operating and reporting segment (energy management platform), namely, the development and commercialization of energy management technologies, batteries and other components across a range of applications.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The chief operating decision maker (“CODM”), who is the Company’s chief executive officer, reviews profit and loss information on a consolidated basis in order to assess performance, make decisions about the allocation of operating and capital resources, and evaluate pricing strategies.

The CODM is not regularly provided disaggregated expense information, other than the expense information included in the consolidated statements of operations.

The measure of segment assets is reported on the balance sheet as total assets.

The Company does not have intra-entity sales or transfers.

Effective December 2024, digital assets became a primary asset of the Company’s treasury program.

The CODM does not consider gains and losses associated with digital assets when reviewing the results of, or allocating resources to, the energy management platform segment.

Gains and losses associated with the Company’s digital assets (which is not considered an operating segment) are presented separately from segment net income.

Geographic Information

As of December 31, 2024, all the Company’s license revenue is generated from Japan.

As of December 31, 2024, the Company’s long-lived assets are located in the U.S.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2025, the Company granted RSUs of 1,109,283 restricted shares of common stock with an aggregate grant date value of $ 13,109,331 to employees which vest in four (4) equal annual installments.

During the year ended December 31, 2025, the Company granted RSUs of 39,390 restricted shares of common stock with an aggregate grant date value of $ 100,051 to board members which vest in two (2) biannual installments.

During the year ended December 31, 2025, the Company granted RSUs of 25,000 restricted shares of common stock with an aggregate grant date value of $ 496,000 to an employee which vest in one (1) six month installment.

To date, RSUs have only been granted to employees, consultants or board members in accordance with the Company’s 2018 and 2025 Equity Incentive Plans.

Pursuant to the terms of the restricted stock unit agreements, the vested but undelivered units were settled on January 21, 2026.

As of December 31, 2025, there was $ 14,583,236 unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 2.89 years.

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Digital Asset Mining Leases

As of December 31, 2025, the Company was party to contractual commitments with digital asset mining services providers related to the operation of digital asset mining machines.

On July 30, 2025, the Company entered into a one-year mining services agreement with a digital asset mining services company, with total committed payments of $ 2,646,250 , of which $ 1,323,125 remained as commitments as of December 31, 2025.

These commitments are not recorded on the accompanying consolidated balance sheet as of December 31, 2025 because the lease term was one year or less and the Company elected the practical expedient to not record an ROU asset and related lease liability, but rather elected to record the lease expense and related payments over time as incurred during the year.

In addition, on October 1, 2025, the Company entered into a two-year mining services agreement with a digital asset mining services company, that included certain non-lease operating expense commitments that were therefore not reflected on the balance sheet within lease liability.

Remaining commitments as of December 31, 2025 for future operating expenses associated with this lease totaled $ 3,120,000 .

See Note 13, Leases, for additional information.

Patent License Agreement

2 unchanged sentences

In consideration, the Company agreed to pay the following:

(i) a cash payment of $ 60,000 payable upon the execution of the agreement (which was capitalized as an intangible asset and will be amortized over its useful life), and (ii) royalties of 5.5 % on the net sales price of royalty-based products and services for each accounting period, as defined in the agreement, with minimum annual royalty payments of $ 20,000 beginning in the 2024 calendar year.

(i) a cash payment of $ 60,000 payable upon the execution of the agreement (which was capitalized as an intangible asset and is being amortized over its useful life), and (ii) royalties of 5.5 % on the net sales price of royalty-based products and services for each accounting period, as defined in the agreement, with minimum annual royalty payments of $ 20,000 beginning in the 2024 calendar year.

As of December 31, 2025, the Company owed a total of $ 20,000 pursuant to this agreement.

4 unchanged sentences

Settlements are accrued when, and if, they become probable and estimable.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Separation and General Release Agreement

On August 20, 2024, the Company entered into a Separation and General Release Agreement (“Separation Agreement”) with the Former COO of the Company, and resignation from all other appointments and positions held with the Company and any of its affiliated entities.

On August 20, 2024, the Company entered into a Separation and General Release Agreement (“Separation Agreement”) with the Former COO of the Company, covering his resignation from all appointments and positions held with the Company and any of its affiliated entities.

The Former COO released the Company from any and all claims he may have against the Company, and the Company agreed to provide certain separation benefits, including (i) a one-time payment of $ 99,551 , subject to legally required payroll withholdings/deductions, (ii) early settlement of 46,875 of vested RSUs previously granted and (iii) accelerated vesting of the final tranche of a restricted stock award (“RSA”), consisting of 62,500 unvested shares, previously granted.

On November 27, 2024, the Company and Former COO amended the Separation Agreement and agreed to settle the equity component with a cash payment of $ 500,000 in lieu of the 109,375 shares of common stock and these shares are deemed canceled.

Contingent Loss

Equipment deposits at December 31, 2024, represent amounts paid to a vendor as a downpayment for the manufacture of an automated manufacturing system (the “System”).

To date, the System has not been delivered and the Company and the vendor are in continuing discussions.

There can be no assurance that the Company will recover the full amount of the equipment deposit.

At this time, a loss is not considered probable.

Even if a loss were to occur, at this time the Company is not able to estimate the dollar amount of a potential loss.

NOTE 18 – SEGMENT REPORTING

During the first quarter of 2025, the Company expanded on its treasury strategy and began mining digital assets.

The Company determined these activities met the criteria of an operating segment.

The Company operates as two operating and reporting segments (i) energy management platform, and (ii) mining of digital assets, namely, the development and commercialization of energy management technologies, batteries and other components across a range of applications, and the mining of digital assets.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The CODM is not regularly provided disaggregated expense information, other than the expense information included in the consolidated statements of operations.

The CODM reviews financial information for mining digital assets separately from the financial information related to the energy management platform for making decisions, allocating resources and assessing financial performance, as well as making strategic operational decisions and managing the organization.

The Company does not have intra-entity sales or transfers.

The CODM does not consider gains and losses associated with digital assets when reviewing the results of operations, or allocating resources to the Company’s operating segments.

Gains and losses associated with the Company’s digital assets (which is a corporate treasury function and is not considered an operating segment) are presented separately from segment net income.

Beginning in 2025, the Company has broken out a Corporate & Other category, which is not considered an operating segment, and includes the changes in fair value of the Company’s digital asset holdings.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the breakout of the operations of the energy management and mining of digital assets segments for the years ended December 31, 2025 and 2024:

For the Year Ended

December 31, 2025

December 31, 2024

Digital Assets

Cost of revenue

Gross Profit (Loss)

Operating Expenses

Research and development

Selling, general, and administrative (1)

Total Operating Expenses

Segment Operating Loss

( 41,129,914 )

( 1,870,591 )

( 43,000,505 )

( 15,234,959 )

Other (Expense) Income

Other segment (expense) income (2)

( 1,569,844 )

Impairment of equity investment

( 3,325,045 )

Credit loss on loan receivable

( 2,127,565 )

Change in fair value of digital assets

( 13,800,041 )

Total Other Expense, net

( 5,099,236 )

( 13,800,041 )

( 18,899,277 )

( 1,569,844 )

( 2,288,670 )

( 46,229,150 )

( 1,870,591 )

( 13,800,041 )

( 61,899,782 )

( 16,804,803 )

( 17,523,629 )

(1) Selling, general, and administrative includes credit losses on accounts receivable, impairment of finance right-of-use asset, impairment of property and equipment, impairment of intangible assets and impairment of equipment deposits.

(2) Other segment expenses and losses include interest income, interest expense, amortization of debt discount, gain on extinguishment of debt, and change in fair value of accrued issuable equity.

December 31, 2025

December 31, 2024

Digital Assets

Segment Assets

Digital assets

All other assets

Geographic Information

As of December 31, 2025 and 2024, 100 % of the Company’s long-lived assets are located in the U.S.

During the year ended December 31, 2025, $ 2,579,897 of revenue was generated from non-U.S.

During the year ended December 31, 2024, $ 4,210,321 of revenue was generated from non-U.S.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 – SUBSEQUENT EVENTS

Repayment of Merchant Cash Advances

During January 2025, the remaining $ 577,675 balance on the third merchant cash advance was paid in full.

At the Market Offering

On January 24, 2025, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock, issuable under the ATM by an additional $ 50 million.

During the period from January 1, 2025 through March 27, 2025, the Company issued 19,387,610 shares of common stock for gross proceeds of $ 51,122,190 pursuant to the ATM.

Digital Assets

During the period from January 1, 2025 through March 27, 2025, the Company purchased 449.45 Bitcoin, at an average cost of $ 99,008 per Bitcoin.

As of March 27, 2025, the Company owns 666.63 Bitcoin with a current market value of approximately $ 58.1 million.

Adjustments to Executive Cash Compensation and RSU Grants

On January 16, 2025, the Board of Directors approved certain adjustments to the cash compensation, and the grant of restricted stock units to the executive officers of the Company.

The following Restricted Stock Units (“RSUs”) grants were approved;

(i) the Chief Executive Officer, Chief Financial Officer and Chief Technology Officer were granted an aggregate of 4,700,000 RSUs that vest over four years;

and (ii) the VP of Engineering was granted 200,000 RSU’s that vest on June 30, 2025.

Issuance of Non-Convertible Series A Voting Preferred Stock

On January 16, 2025, the Board of Directors approved the issuance of an additional 270,000 shares of Non-convertible Series A Voting Preferred Stock (“Series A Preferred”) to the Chief Executive Officer, bringing his total holdings up to 1,000,000 shares of Series A Preferred Stock.

Bitcoin Mining

On March 7, 2025, the Company entered into a sixty-day Machine Lease Agreement with a bitcoin mining services company to operate 2,500 S-19 bitcoin mining machines on KULR’s behalf, at a total lease cost of $ 850,000 .

As of March 27, 2025, the Company has earned a total of 2.48 Bitcoin from mining services.

Treasury Stock

The Company’s equity-based compensation plan allows for the grant of non-vested stock options, RSUs and RSAs to its employees pursuant to the terms of its equity incentive plan.

Under the provision of the plan, unless otherwise elected, participants fulfill their related income tax withholding obligation by having shares withheld at the time of vesting.

The shares withheld are then transferred to the Company’s treasury stock.

On January 16, 2025, the Company withheld 27,536 shares in connection with the vesting of restricted common stock units.

As of March 27, 2025, the Company holds 158,698 treasury shares.

During the period from January 1, 2026 through March 27, 2026, the Company earned 8.37 bitcoin from mining services and received 0.13 bitcoin as downtime credits.

As of March 27, 2026, the Company held 1,082.71 BTC with an aggregate fair market value of approximately $ 72 million.

Bitcoin Market Price Decline

The market price of bitcoin has declined over 20 % from approximately $ 87,500 at December 31, 2025 to under $ 66,338 as of March 27, 2026.

Accordingly, the Company expects to report additional unrealized losses for the three months ended March 31, 2026.

On March 27, 2026, the Company borrowed $ 5 million (the “Second Drawdown”) against its $ 20 million credit facility with Coinbase.

The Second Drawdown bears a 7 % loan fee, and the Company segregated 125 bitcoin as collateral against this loan.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures