Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e)) (the “Exchange Act”). Based on the foregoing evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in its reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
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) and 15d-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. GAAP. Our internal control over financial reporting includes those policies and procedures that: (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
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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 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
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
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
Attestation Report of Registered Public Accounting Firm
This Annual Report does not contain an attestation report of our independent registered public accounting firm related to internal control over financial reporting because the rules for smaller reporting companies provide an exemption from the attestation requirement.
ITEM 9B. OTHER INFORMATION
Insider Trading Arrangements
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.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Executive Officers and Directors
Our executive officers and directors and their ages are as follows:
Name
Age
Office
Michael Mo
55
Chief Executive Officer and Chairman
Dr. William Walker
36
Chief Technology Officer
Shawn Canter
55
Chief Financial Officer, Director
Aron Schwartz
55
Director
Dr. Joanna Massey
57
Lead Director
Donna Grier
68
Director
Jay Yamamoto
47
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 has served as our CEO and member of the Board of Directors of the Company since March 2011. Mr. Mo is a technology entrepreneur and successful investor with over 20 years of experience in technology management, product development and marketing. In 2013, he co-founded KULR and has been serving as its CEO since then. From 2007 to 2015, Mr. Mo served as Senior Director of Business Development at Amlogic, Inc., a California high-tech company. Mr. 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. Mr. 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 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. Mr. Canter is responsible for financial management and driving a disciplined fiscal strategy while scaling the Company through its commercialization phase. Mr. 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.
Dr. William Walker was appointed Chief Technical Officer effective November 2022. Dr. 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. From June 2012 to October 2021, Dr. Walker was employed by the National Aeronautics and Space Administration (NASA) Johnson Space Center (JSC) where he focused on designing battery assemblies for human spaceflight applications capable of safely mitigating the effects of thermal runaway and preventing cell-to-cell propagation. Dr. Walker was recognized with a NASA Trailblazer award and with the RNASA Stellar Award for early career contributions to Li-ion battery thermal analysis and calorimetry methods. Dr. Walker continues to be engaged in the academic and professional communities focused on battery safety. Dr. Walker received his B.S. in Mechanical Engineering at West Texas A&M University (WTAMU) and Ph.D. in Materials Science and Engineering at the University of Houston (UH).
Jay Yamamoto was appointed General Counsel and Corporate Secretary effective June 2025. Mr. 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. Mr. 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. Mr. Yamamoto received B.A. degrees from Colgate University in economics and philosophy, and his J.D. degree from Pace University School of Law.
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Non-Executive Directors
Dr. 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. Dr. 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. (private). Dr. 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. Ms. Grier is a seasoned SEC-Qualified Financial Expert with extensive Audit Committee experience. She has held two Executive Finance leadership positions: Vice President-Treasurer and Vice President-General Auditor & Chief Ethics and Compliance Officer with E. I. DuPont de Nemours (NYSE: DD). At the time, DuPont was a diversified agricultural and manufacturing Fortune 100 Company focused on seed, crop chemicals, specialty chemicals and industrial materials. In addition to CFO roles in global and diverse business units, Ms. Grier has significant strategic M&A transaction experience, driving shareholder value. She also has international financial leadership experience in Europe and South America with demonstrated success in leading organizations and driving strategic and operational change while continuously improving cost and cash productivity. Ms. Grier currently serves as Board Director and Audit & Risk Management Committee Chair for Global Advanced Metals, a privately held tantalum producer. 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 Trustee (and former Chair) of the Board of Directors for Washington & Jefferson College. Ms. 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. Mr. 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. Mr. Schwartz, a Certified Management Accountant, received his J.D. and M.B.A with honors from U.C.L.A. and his B.A. and B.S.E. cum laude from the Wharton School at the University of Pennsylvania.
Board Composition
The Company’s directors are elected at the annual meeting of shareholders to hold office until the annual meeting of shareholders for the ensuing year or until their successors have been duly elected and qualified. Officers are elected annually by the board of directors and serve at the discretion of the board.
Our board currently consists of five directors, Michael Mo, Joanna Massey, Donna Grier, Aron Schwartz and Shawn Canter. Dr. Joanna Massey, Mr. Aron Schwartz and Ms. Donna Grier are “independent” as defined under the NYSE American rules (as discussed below).
Family Relationships
There are no family relationships between any director and executive officer.
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Director Independence
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.
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.
Audit Committee
The Audit Committee consists of Donna H. Grier, Dr. Joanna Massey and Aron Schwartz. Ms. 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. Donna H. 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 Aron Schwartz, Donna Grier and Dr. Joanna Massey, with Mr. Schwartz serving as Chairperson. Ms. Grier and Dr. 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, 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 directors.
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Code of Ethics
Our board of directors has adopted a Code of Business Conduct and Ethics (the “Code”). The Code applies to all of our directors, officers and employees. We have made the Code available on our website https://www.kulrtechnology.com/governance-documents/. We intend to disclose future amendments to, or waivers of, our Code, as and to the extent required by SEC regulations, at the same location on our website identified above or in public filings.
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:
● any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
● any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
● being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
● being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
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. To our knowledge, during the fiscal year ended December 31, 2025, our officers, directors and greater than 10% beneficial owners have complied with all applicable filing requirements of Section 16(a).
Nomination Process
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. The Board of Directors believes that, given the current stage of our development, a specific nominating policy would be premature and of little assistance until our operations develop to a more advanced level. We do not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and there is no specific process or procedure for evaluating such nominees. The Board of Directors assesses all candidates, whether submitted by management or stockholders, and makes recommendations for election or appointment.
A stockholder who wishes to communicate with the Board of Directors may do so by directing a written request addressed to our Chief Executive Officer at the address appearing on the face page of this annual report.
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ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
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”):
Stock
All Other
Name and Principal Position
Year
Salary
Bonus
Awards (1)
Compensation
Total
Michael Mo
2025
$
440,755
$
90,000
$
4,960,000
(2)
$
12,224
$
5,502,979
Chief Executive Officer
2024
$
272,196
$
100,000
$
103,043
(3)
$
—
$
475,239
Shawn Canter
2025
$
345,834
$
70,000
$
3,720,000
(4)
$
—
$
4,135,834
Chief Financial Officer
2024
$
250,001
$
45,000
$
—
$
—
$
295,001
William Walker
2025
$
263,470
$
53,860
$
2,480,000
(5)
$
—
$
2,797,330
Chief Technology Officer
2024
$
228,270
$
50,000
$
—
$
—
$
278,270
(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.
(4) Includes 187,500 shares of the Company’s common stock which vest in four equal increments over four years.
(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 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 $53,860, respectively.
Equity Compensation Plans
On August 15 and November 5, 2018, the Board of Directors and a majority of the Company’s shareholders, respectively, approved the 2018 Equity Incentive Plan (the “2018 Plan”). Under the 2018 Plan, 15,000,000 shares of common stock of the Company were authorized for issuance. The 2018 Plan provided for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, and restricted stock units to employees, directors and consultants of the Company and its affiliates. Upon the effectiveness of the 2025 Plan (defined below), no further awards were made under the 2018 Plan.
On September 24, 2025 and November 21, 2025, the Board of Directors and a majority of the Company’s shareholders, respectively, approved the 2025 Equity Incentive Plan (the “2025 Plan”). Under the 2025 Plan, 7,500,000 shares of common stock of the Company are authorized for issuance. The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants of the Company and its affiliates. The 2025 Plan requires the exercise price of stock options to be not less than the fair value of the Company’s common stock on the date of grant.
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Compensation of Directors
The table below sets forth the non-employee director compensation for the year ended December 31, 2025.
Fees
Nonqualified
Earned or
Non-Equity
Deferred
Paid in
Stock
Incentive Plan
Compensation
All Other
Cash
Awards
Compensation
Earnings
Compensation
Total
Name
($)
($) (1)
($)
($)
($)
($)
Dr. Joanna Massey
$
135,000
$
33,350
$
—
$
—
$
—
$
168,350
Donna Grier
$
76,875
$
33,350
$
—
$
—
$
—
$
110,225
Aron Schwartz
$
47,500
$
33,350
$
—
$
—
$
—
$
80,850
(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.
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 $95,000. On November 24, 2025, the Board approved stock compensation whereby the Lead Director and each Independent Director were granted 13,130 restricted stock units, which vest in two equal installments on December 6, 2025 and June 6, 2026.
Outstanding Equity Awards at Fiscal Year-End
The following table discloses information regarding outstanding equity awards granted or accrued as of December 31, 2025, for our named executive officers.
Outstanding Equity Awards
Stock Awards
Number of Shares or Units of
Market Value of Units of
Stock that have not vested
Stock that have not vested
Name
(#)
($) (1)
Michael Mo (Chief Executive Officer)
296,875
(2)
$
878,750
Shawn Canter (Chief Financial Officer)
300,000
(3)
888,000
Dr. William Walker (Chief Technology Officer)
151,562
(4)
448,624
(1)
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.
(2)
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.
(3)
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.
(4)
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.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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; and
● 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 100 votes per share of Non-convertible Series A Voting Preferred Stock held by such record holder.
Amount of
Beneficial
Percentage
Vote With
Name of Beneficial Owner
Ownership
Ownership (1)
Series A
Michael Mo (2) - CEO and Chairman
2,773,149
6.00
%
70.28
%
Shawn Canter (3) – CFO and Director
130,722
*
*
Dr. William Walker (4) - CTO
56,814
*
*
Donna Grier (5) - Director
24,065
*
*
Dr. Joanna Massey (6) - Lead Director
24,378
*
*
Aron Schwartz (7) - Director
6,565
*
*
All directors and executive officers as a group (7 persons) (8)
3,029,638
6.55
%
70.45
%
Beneficial owners of more than 5%
None
*
Less than 1%
(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) 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. 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) 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
On November 5, 2018, KULR adopted and ratified the KULR Technology Group 2018 Equity Incentive Plan (the “2018 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 fifteen million (15,000,000). 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
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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. The 2025 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.
The following table sets forth, as of December 31, 2025, our securities authorized for issuance under any equity compensation plans:
Number of
Number of securities
securities
remaining available for
to be issued upon
Weighted-average
future issuance under equity
exercise of
exercise
compensation plans
outstanding
price of
(excluding securities
options,
outstanding options,
reflected in
warrants and rights
warrants and rights
column (a))
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders
1,635,068
(1)
$
11.33
7,134,736
Equity compensation plans not approved by security holders
—
—
—
Total
1,635,068
$
11.33
7,134,736
(1)
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
We are not aware of any arrangement that might result in a change in control of the Company.
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ITEM 13. 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.
Director Independence
The Board evaluates the independence of each nominee for election as a director of our Company in accordance with the NYSE American rules. Pursuant to these rules, a majority of our Board must be “independent directors” within the meaning of the NYSE American Rules, and all directors who sit on our Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee must also be independent directors.
Our board of directors has determined that Dr. Joanna Massey, Ms. Donna Grier and Mr. 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.
ITEM 14. 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 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
December 31,
2025
2024
Audit Fees (1)
$
495,032
$
294,135
Tax Fees
—
—
Total
$
495,032
$
294,135
(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
Our Audit Committee has adopted a policy governing the pre-approval by the Board of Directors of all services, audit and non-audit, to be provided to our Company by our independent auditors. Under the policy, the Audit Committee has pre-approved the provision by our independent auditors of specific audit, audit related, tax and other non-audit services as being consistent with auditor independence. 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 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.
47
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
No.
Description
3.1
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).
3.2
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).
3.3
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).
3.4
Certificate of Amendment to the Certificate of Incorporation, effective August 30, 2018 (previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 30, 2018 and incorporated herein by reference).
3.5
Certificate of Designation of Series B Convertible Preferred Stock, filed on November 30, 2018 (previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 6, 2018 and incorporated herein by reference).
3.6
Certificate of Amendment to the Certificate of Incorporation, effective December 31, 2018 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 7, 2019 and incorporated herein by reference).
3.7
Certificate of Designation of Series C Convertible Preferred Stock, filed on August 19, 2019 (previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 23, 2019 and incorporated herein by reference).
3.8
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).
3.9*
Certificate of Amendment to the Certificate of Incorporation, effective June 23, 2025.
4.1
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).
10.1
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).
10.2†
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).
10.3†*
Form of Restricted Stock Award Agreement under the 2018 KULR Technology Group Equity Incentive Plan.
10.4†*
Form of Incentive Stock Option Award Agreement under the 2018 KULR Technology Group Equity Incentive Plan.
10.5
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).
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Table of Contents
10.6
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).
10.7
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).
10.8†
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).
10.9†*
Form of Restricted Stock Award Agreement under the 2025 KULR Technology Group Equity Incentive Plan.
10.10†*
Form of Incentive Stock Option Award Agreement under the 2025 KULR Technology Group Equity Incentive Plan.
19.1 *
Insider Trading Policy of KULR Technology Group, Inc.
21.1*
List of Subsidiaries.
23.1*
Consent of Marcum LLP
23.2*
Consent of CBIZ CPAs P.C.
31.1*
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1*
KULR Technology Group Inc. Clawback Policy.
101.INS*
Inline XBRL Instance.
101.SCH*
Inline XBRL Taxonomy Extension Schema.
101.CAL*
Inline XBRL Taxonomy Extension Calculation.
101.DEF*
Inline XBRL Taxonomy Extension Definition.
101.LAB*
Inline XBRL Taxonomy Extension Labels.
101.PRE*
Inline XBRL Taxonomy Extension Presentation.
104*
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).
*
Filed herewith.
**
Furnished herewith.
†
Management contract or compensatory plan or arrangement.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
March 31, 2026
KULR Technology Group, Inc.
By:
/s/ Michael Mo
Michael Mo
Chief Executive Officer and Chairman
(Principal Executive Officer)
By:
/s/ Shawn Canter
Shawn Canter
Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
By:
/s/ Michael Mo
Chief Executive Officer and Chairman
March 31, 2026
Michael Mo
By:
/s/ Shawn Canter
Chief Financial Officer and Director
March 31, 2026
Shawn Canter
By:
/s/ Joanna Massey
Lead Director
March 31, 2026
Joanna Massey
By:
/s/ Donna Grier
Director
March 31, 2026
Donna Grier
By:
/s/ Aron Schwartz
Director
March 31, 2026
Aron Schwartz
50
Table of Contents
KULR TECHNOLOGY GROUP INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 199 )
F-2
Report of Independent Registered Public Accounting Firm (PCAOB ID: 688 )
F-3
Consolidated Balance Sheets as of December 31, 2025 and 2024
F-4
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024
F-5
Consolidated Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2025
F-6
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Year Ended December 31, 2024
F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024
F-8
Notes to Consolidated Financial Statements
F-10
F-1
Table of Contents
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 the accompanying consolidated balance sheets of KULR Technology Group, Inc. 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 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits 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.
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 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
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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
F-2
Table of Contents
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. 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. 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.
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 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.
Marcum LLP
We have served as the Company’s auditor from 2018 through 2025.
Los Angeles, California
March 31, 2025
F-3
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31,
2025
2024
Assets
Current Assets:
Cash
$
13,300,188
$
29,831,858
Accounts receivable, net of allowance for credit losses of $ 1,450,000 and $ 0 as of December 31, 2025 and 2024, respectively
2,076,556
2,645,190
Grant receivable
1,886,376
—
Inventory
581,156
545,467
Inventory deposits
839,644
—
Auto-Vibe assets
5,046,759
—
Prepaid expenses and other current assets
1,825,849
1,141,540
Total Current Assets
25,556,528
34,164,055
Digital assets
93,995,256
20,281,184
Accounts receivable, non-current portion
998,772
1,446,489
Property and equipment, net
5,482,743
3,676,544
Equipment deposits
806,000
1,355,174
Security deposits
39,430
48,158
Intangible assets, net
370,925
577,099
Operating lease right-of-use assets, net
1,338,657
1,216,772
Finance lease right-of-use asset, net
—
6,215
Deferred financing costs
276,690
155,497
Other non current assets
102,703
—
Total Assets
$
128,967,704
$
62,927,187
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable
$
3,173,813
$
2,061,266
Accrued expenses and other current liabilities
2,628,914
1,160,446
Accrued issuable equity
—
420,427
Operating lease liabilities, current portion
366,937
493,468
Finance lease liability, current portion
—
2,463
Notes payable, net of discount, current portion
—
494,796
Deferred revenue
107,267
32,768
Total Current Liabilities
6,276,931
4,665,634
Operating lease liabilities, non-current portion
1,078,575
818,750
Finance lease liability, non-current portion
—
3,852
Other non-current liabilities
—
10,966
Total Liabilities
7,355,506
5,499,202
Commitments and contingencies (Note 17)
Stockholders’ Equity
Preferred stock, $ 0.0001 par value, 20,000,000 shares authorized
Series A Preferred Stock, 1,000,000 shares designated; 1,000,000 and 730,000 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively;
100
73
Series B Convertible Preferred Stock, 31,000 shares designated; 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, 2025 and December 31, 2024
—
—
Series D Preferred Stock, 650 shares designated; none issued and outstanding at December 31, 2025 and December 31, 2024
—
—
Common stock, $ 0.0001 par value, 500,000,000 shares authorized; 46,063,172 and 46,041,250 shares issued and outstanding at December 31, 2025, respectively; 33,100,207 and 33,083,812 shares issued and outstanding at December 31, 2024, respectively
4,606
3,310
Additional paid-in capital
267,712,241
141,532,047
Treasury stock, at cost; 21,922 and 16,395 shares held at December 31, 2025 and December 31, 2024, respectively.
( 393,744 )
( 296,222 )
Accumulated deficit
( 145,711,005 )
( 83,811,223 )
Total Stockholders’ Equity
121,612,198
57,427,985
Total Liabilities and Stockholders’ Equity
$
128,967,704
$
62,927,187
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended
December 31,
2025
2024
Revenue
$
16,170,404
$
10,737,481
Cost of revenue
15,399,432
5,254,283
Gross Profit
770,972
5,483,198
Operating Expenses
Research and development
10,755,036
4,738,305
Selling, general, and administrative
27,696,969
15,979,852
Credit losses on accounts receivable
2,230,643
—
Impairment of finance lease right-of-use asset
905,630
—
Impairment of property and equipment
625,967
—
Impairment of intangible assets
202,058
—
Impairment of equipment deposits
1,355,174
—
Total Operating Expenses
43,771,477
20,718,157
Loss From Operations
( 43,000,505 )
( 15,234,959 )
Other Income (Expense)
Change in fair value of digital assets
( 13,800,041 )
( 718,826 )
Impairment of equity investment
( 3,325,045 )
—
Credit loss on loan receivable
( 2,127,565 )
—
Interest income
563,271
10,575
Change in fair value of accrued issuable equity
( 17,075 )
( 228,777 )
Interest expense
( 159,944 )
( 209,817 )
Amortization of debt discount
( 82,878 )
( 1,151,659 )
Gain on debt extinguishment
50,000
9,834
Total Other Expense, net
( 18,899,277 )
( 2,288,670 )
Net Loss
$
( 61,899,782 )
$
( 17,523,629 )
Net Loss Per Share
- Basic and Diluted
$
( 1.56 )
$
( 0.75 )
Weighted Average Number of Common Shares Outstanding
- Basic and Diluted
39,727,205
23,324,642
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2025
Series A
Additional
Total
Preferred Stock
Common Stock
Paid-In
Treasury Stock
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
Capital
Shares
Amount
Deficit
Equity
Balance - January 1, 2025
730,000
$
73
33,100,207
$
3,310
$
141,532,047
16,395
$
( 296,222 )
$
( 83,811,223 )
$
57,427,985
Preferred stock issued for no consideration
270,000
27
—
—
( 27 )
—
—
—
—
Purchase of treasury shares
—
—
—
—
—
5,527
( 97,522 )
—
( 97,522 )
Common stock issued upon the exercise of options
—
—
1,688
—
10,815
—
—
—
10,815
Common stock issued for at the market offering (1)
—
—
12,679,311
1,267
119,657,653
—
—
—
119,658,920
Common stock issued upon vesting of restricted stock units
—
—
304,489
30
( 30 )
—
—
—
—
Shares withheld for employee payroll tax obligations
—
—
( 69,084 )
( 6 )
( 448,295 )
—
—
—
( 448,301 )
Effect of reverse stock split
—
—
61
—
—
—
—
—
—
Stock-based compensation:
Common stock issued for services
—
—
46,500
5
567,717
—
—
—
567,722
Amortization of restricted common stock
—
—
—
—
6,341,331
—
—
—
6,341,331
Amortization of stock options
—
—
—
—
51,030
—
—
—
51,030
Net loss
—
—
—
—
—
—
—
( 61,899,782 )
( 61,899,782 )
Balance - December 31, 2025
1,000,000
$
100
46,063,172
$
4,606
$
267,712,241
21,922
$
( 393,744 )
$
( 145,711,005 )
$
121,612,198
(1) Represents gross proceeds of $ 123,181,925 less issuance costs of $ 3,523,005 .
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 2024
Series A
Additional
Total
Preferred Stock
Common Stock
Paid-In
Treasury Stock
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
Capital
Shares
Amount
Deficit
Equity (Deficit)
Balance - January 1, 2024
—
$
—
16,753,959
$
1,675
$
64,399,445
16,395
$
( 296,222 )
$
( 66,287,594 )
$
( 2,182,696 )
Preferred stock issued for no consideration
730,000
73
—
—
( 73 )
—
—
—
—
Common stock issued upon the exercise of options
—
—
3,230
—
23,455
—
—
—
23,455
Common stock issued upon the cashless exercise of warrants
—
—
184,058
18
( 18 )
—
—
—
—
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices (1)
—
—
2,724,854
272
6,054,558
—
—
—
6,054,830
Common stock issued for cash pursuant to Advance Notices (2)
—
—
4,232,581
423
9,047,496
—
—
—
9,047,919
Common stock issued for at the market offering (3)
—
—
9,347,652
937
59,880,267
—
—
—
59,881,204
Shares repurchased and canceled
—
—
( 109,751 )
( 11 )
( 499,989 )
—
—
—
( 500,000 )
Warrants issued in connection with notes payable
—
—
—
—
112,863
—
—
—
112,863
Stock-based compensation:
Restricted stock awards granted converted to restricted stock units
—
—
( 271,064 )
( 27 )
27
—
—
—
—
Restricted stock awards forfeited and returned to the Company
—
—
( 6,250 )
( 1 )
1
—
—
—
—
Restricted stock units vested
—
—
137,766
14
( 14 )
—
—
—
—
Common stock issued for services
—
—
103,172
10
465,068
—
—
—
465,078
Amortization of restricted common stock
—
—
—
—
1,960,083
—
—
—
1,960,083
Amortization of stock options
—
—
—
—
88,878
—
—
—
88,878
Net loss
—
—
—
—
—
—
—
( 17,523,629 )
( 17,523,629 )
Balance - December 31, 2024
730,000
$
73
33,100,207
$
3,310
$
141,532,047
16,395
$
( 296,222 )
$
( 83,811,223 )
$
57,427,985
(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.
F-7
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
2025
2024
Cash Flows From Operating Activities:
Net loss
$
( 61,899,782 )
$
( 17,523,629 )
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount
82,878
1,151,659
Non-cash operating lease expense
569,967
447,332
Gain on debt extinguishment
( 50,000 )
( 9,834 )
Depreciation and amortization expense
1,398,179
1,800,838
Stock-based compensation
6,522,581
2,692,687
Credit losses on accounts receivable
2,230,643
—
Impairment of equity investment
3,325,045
—
Credit loss on loan receivable
2,127,565
—
Impairment of finance lease right-of-use asset
905,630
—
Impairment of equipment deposits
1,355,174
—
Impairment of property and equipment
625,967
—
Impairment of intangible assets
202,058
—
Write down finance lease ROU asset
1,351
—
Change in fair value of accrued issuable equity
17,075
228,777
Change in fair value of digital assets
13,800,041
718,826
Digital assets received as downtime credits
( 784,187 )
—
Mining of digital assets
( 7,029,924 )
—
Loss on disposal of property and equipment
—
26,490
Subtotal
25,300,043
7,056,775
Changes in operating assets and liabilities:
Accounts receivable
( 3,100,668 )
( 3,190,007 )
Auto-Vibe assets
( 5,046,759 )
—
Inventory
( 35,689 )
603,580
Inventory deposits
( 839,644 )
27,500
Prepaid expenses and other current assets
( 787,012 )
( 510,179 )
Security deposits
8,728
( 37,930 )
Accounts payable
1,112,547
( 708,276 )
Accrued expenses and other current liabilities
888,647
( 2,216,387 )
Operating lease liabilities
( 558,558 )
( 324,870 )
Deferred revenue
74,499
( 518,253 )
Subtotal
( 8,283,909 )
( 6,874,822 )
Net Cash Used In Operating Activities
( 44,883,648 )
( 17,341,676 )
Cash Flows From Investing Activities:
Loan receivable
( 2,127,565 )
—
Equity investments
( 3,325,045 )
—
Purchase of intangible assets
( 138,180 )
—
Equipment deposits
( 806,000 )
( 22,738 )
Purchases of property and equipment
( 2,986,503 )
( 573,444 )
Purchases of digital assets
( 79,700,002 )
( 21,000,010 )
Net Cash Used In Investing Activities
( 89,083,295 )
( 21,596,192 )
Cash Flows from Financing Activities:
Proceeds from ATM equity financing
123,181,925
61,912,798
Issuance costs on ATM equity financing (1)
( 3,082,182 )
( 1,780,982 )
Proceeds from loan payable
8,000,000
—
Repayments of loan payable
( 8,000,000 )
—
Proceeds from exercise of stock options
10,815
23,455
Proceeds from the SEPA (2)
—
9,104,950
Proceeds from notes payable (3)
—
2,730,000
Issuance costs on notes payable
—
( 166,100 )
Repurchase and cancellation of common stock
—
( 500,000 )
Payment of employee tax withholdings from shares withheld
( 448,301 )
—
Purchase of treasury shares
( 97,522 )
—
Payments for deferred financing costs
( 562,016 )
( 406,109 )
Repayments of notes payable
( 577,674 )
( 3,341,597 )
Repayment of finance lease liability
( 989,772 )
( 1,453 )
Net Cash Provided By Financing Activities
117,435,273
67,574,962
Net Increase (Decrease) In Cash
( 16,531,670 )
28,637,094
Cash - Beginning of Period
29,831,858
1,194,764
Cash - End of Period
$
13,300,188
$
29,831,858
(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.
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
For the Years Ended
December 31,
2025
2024
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest
$
159,943
$
62,380
Taxes
$
—
$
—
Non-cash investing and financing activities:
Right-of-use asset for operating lease liability
$
691,852
$
1,534,902
Purchase consideration payable
$
594,860
—
Deferred financing costs charged to additional paid-in capital
$
440,823
$
307,643
Common stock issued in satisfaction of accrued issuable equity
$
80,328
$
386,516
Accounts payable and accrued expenses for property and equipment purchases
$
23,995
$
45,646
Preferred shares issued for no consideration
$
27
$
73
Common shares issued for restricted stock units vested and other common stock issued for services
$
30
$
14
Warrants issued in connection with notes payable
$
—
$
112,863
Notes payable for property and equipment
$
—
$
42,788
Common stock issued pursuant to cashless warrant exercises
$
—
$
( 18 )
Restricted stock awards converted to restricted stock units
$
—
$
27
Original issue discount on indebtedness
$
—
$
929,200
Common stock issued pursuant to Advance Notices in satisfaction of prepaid advance liability and interest
$
—
$
6,054,830
Right-of-use asset for finance lease liability
$
—
$
7,768
The accompanying notes are an integral part of these consolidated financial statements.
F-9
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
Organization and Operations
KULR Technology Group, Inc. was incorporated on December 11, 2015 under the laws of the State of Delaware as KT High-Tech Marketing, Inc. Effective August 30, 2018, KT High-Tech Marketing, Inc. 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”), 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
Principles of Consolidation and Basis of Presentation
The consolidated financial statements of the Company include the accounts of KULR Technology Group, Inc. and its wholly-owned subsidiary, KULR Technology Corporation. All significant intercompany transactions have been eliminated in the consolidation. 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
Preparation of financial statements in conformity with U.S. 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, 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. It is possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.
Concentrations of Credit Risk
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.
Cash Concentrations
A significant portion of the Company’s cash is held at one major financial institution. The Company has not experienced any losses in such accounts. Cash held in US bank institutions is currently insured by the FDIC up to $250,000 at each institution. There were uninsured balances of $ 12,800,188 and $ 29,331,858 as of December 31, 2025 and 2024, respectively.
F-10
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Customer and Revenue Concentrations
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
Revenue
Accounts Receivable
For the Year Ended
As of
As of
December 31,
December 31,
December 31,
2025
2024
2025
2024
Customer A
17
%
*
20
%
*
Customer B
11
%
*
*
*
Customer C
*
15
%
46
%
41
%
Customer D
*
10
%
17
%
25
%
Customer E
*
*
*
16
%
Total
28
%
25
%
83
%
82
%
Mining of digital assets
Revenue
Accounts Receivable
For the Year Ended
As of
December 31,
December 31,
2025
2024
2025
2024
Customer F
100
%
*
*
*
Total
100
%
0
%
0
%
0
%
* Less than 10%
There is no assurance the Company will continue to receive significant revenue from any of these customers. 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. 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.
F-11
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. 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: 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.
In December 2023, the Financial Accounting Standards Board (“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 digital asset guidance and requires an entity to measure certain digital assets at fair value. In addition, this guidance requires disclosures related to digital assets once it is adopted. 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”) 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.
F-12
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
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.
Inventory
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 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 condensed consolidated balance sheet. As of December 31, 2025 and 2024, inventory deposits were $ 839,644 and $ 0 , respectively.
F-13
Table of Contents
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
December 31,
2025
2024
Raw materials
$
237,661
$
363,224
Finished goods
343,495
182,243
Total inventory
$
581,156
$
545,467
Finished goods inventory is held on-site at the Webster, Texas location. Certain raw materials are held off-site with certain contract manufacturers.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which range from 3 to 10 years (see Note 9 – Property and Equipment for additional details). Leasehold improvements are amortized over the shorter of (a) the useful life of the asset; or (b) the remaining lease term. Maintenance and repairs are charged to operations as incurred. The Company capitalizes costs attributable to the betterment of property and equipment when such betterment extends the useful life of the assets. 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 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.
Intangibles
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 that fairly represents the utilization of the assets, as follows:
Estimated Useful Life
Patent
17.3 years
Intellectual property
5.0 years
Supply agreement
5.0 years
Technology license
10.0 years
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.
The Company’s finite-lived intangible assets are tested for impairment based on undiscounted cash flows when triggering events occur. 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 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.
F-14
Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
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 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
The Company records repurchases of its own common stock at cost. Repurchased common stock is presented as a reduction of equity in the consolidated balance sheets. Subsequent reissuances of treasury stock are accounted for on a weighted average cost basis. Gains resulting from differences between the cost of treasury stock and the re-issuance proceeds are credited to additional paid-in capital. Losses resulting from differences between the cost of treasury stock and the re-issuance proceeds are debited to additional paid-in capital.
Income Taxes
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
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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 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. Once the underlying shares of common stock are issued, the accrued issuable equity is reclassified to equity as of the share issuance date at the then current fair market value of the common stock.
Deferred Financing Costs
Direct, incremental fees incurred in connection with a debt or equity financing, are capitalized as deferred financing costs (a non-current asset) on the balance sheet. Once the financing closes, the Company reclassifies such costs as either discounts to notes payable or as a reduction of proceeds received from equity transactions so that such costs are recorded as a reduction of additional paid-in capital. If the completion of a contemplated financing was deemed to be no longer probable, the related deferred financing costs would be charged to general and administrative expense in the consolidated financial statements.
Revenue Recognition
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.
The following five steps are applied to achieve that core principle:
● Step 1: Identify the contract with the customer;
● Step 2: Identify the performance obligations in the contract;
● Step 3: Determine the transaction price;
● Step 4: Allocate the transaction price to the performance obligations in the contract; and
● Step 5: Recognize revenue when the company satisfies a performance obligation.
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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. IP license revenue for the right to access IP is recognized over time and the right to use IP is recognized at a point in time.
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 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.
● 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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:
For the Years Ended
December 31,
2025
2024
Revenue Recognized at a Point in Time:
Product sales
$
5,052,771
$
3,644,240
Contract services
2,028,201
3,412,030
IP license
—
2,687,218
Grant revenue
1,886,376
—
Total
8,967,348
9,743,488
Revenue Recognized Over Time:
Mining of digital assets
7,029,924
—
Contract services
173,132
993,993
Total Revenue
$
16,170,404
$
10,737,481
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenues (contract liabilities) on the Consolidated Balance Sheet. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers resulting in contract liabilities (See Deferred Revenue , below). 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.
IP License Agreements
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 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 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 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: $ 300,000 due on February 15, 2025; $ 150,000
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. Therefore, the Company immediately recognized revenue in an amount equal to the present value ($ 1,658,451 ) of the $ 1,800,000 license fee, using the prevailing interest rate in the relevant market (prime rate) of 7.5 %.
Deferred Revenue
As of December 31, 2025 and 2024, the Company had $ 107,267 and $ 32,768 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract, or the customers have not officially accepted the goods or services provided under the contract. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the year ended December 31, 2025 and 2024, the Company recognized $ 2,500 and $ 529,880 of revenue that was deferred at the previous year end. The Company did not recognize revenue from performance obligations satisfied in prior periods during the years ended December 31, 2025 or 2024.
Deferred Labor Costs
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. The Company will recognize the deferred labor costs as cost of revenue at the point in time that the Company satisfies its performance obligation under the respective contract, which is generally at the time the services are fulfilled and/or accepted by the customer.
Shipping and Handling Costs
The Company has elected to treat shipping and handling activities as fulfillment costs. Accordingly, amounts billed to a customer in a sales transaction related to shipping and handling are recorded as revenue. Costs incurred for shipping and handling are included as cost of revenue on the accompanying consolidated statements of operations.
Research and Development
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 and Marketing Costs
Advertising costs are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2025 and 2024 were $ 4,937,350 and $ 2,825,351 , respectively, and are included in selling, general and administrative expense in the consolidated statements of operations.
Stock-Based Compensation
The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award since the fair value of the award is more readily determinable than the value of the services. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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:
For the Years Ended
December 31,
2025
2024
Numerator:
Net Loss
$
( 61,899,782 )
$
( 17,523,629 )
Denominator (weighted average quantities):
Common shares issued
39,655,202
23,301,012
Less: Treasury shares purchased
( 21,474 )
( 16,395 )
Less: Unvested restricted stock awards
( 7,739 )
( 70,447 )
Add: Accrued issuable equity
1,045
13,392
Add: Vested unissued restricted stock units
100,171
97,080
Denominator for basic and diluted net loss per share
39,727,205
23,324,642
Basic and diluted net loss per common share
$
( 1.56 )
$
( 0.75 )
The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:
December 31,
2025
2024
Unvested restricted stock awards
4,687
9,375
Unvested restricted stock units
1,610,847
717,826
Options
27,188
40,938
Warrants
88,905
88,902
Total
1,697,411
857,041
Operating and Finance Leases
The Company determines if an arrangement is a lease or contains a lease at inception. 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. The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset.
Classification criteria in Topic 842 is applied in order to determine whether the lease is a finance lease or an operating lease. Operating lease expense is recorded on a straight-line basis over the life of the lease and is included in research and development and general and administrative expenses on the accompanying statements of operations. Finance lease right-of-use assets are depreciated on a straight-line base over the estimated useful life of the asset; the depreciation expense is included in research and development expense on the accompanying statements of operations. Finance lease liabilities are subsequently remeasured by increasing the liability to reflect interest accrued during a period and decreasing the liability to reflect payments made during the period. Interest expense incurred on finance leases is included in interest expense on the statements of operations. 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes
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.
Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2025 and 2024. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.
The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, general and administrative expenses in the consolidated statements of operations.
Reclassifications
Certain prior period balances have been reclassified in order to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share.
Subsequent Events
The Company has evaluated subsequent events through the date on which the consolidated financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed. 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 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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,
2025
2024
Beginning balance
$
20,281,184
$
—
Additions - purchased
79,700,002
21,000,010
Additions - mined
7,029,924
—
Dispositions
—
—
Digital assets received as downtime credits
784,187
—
Change in fair value
( 13,800,041 )
( 718,826 )
Ending balance
$
93,995,256
$
20,281,184
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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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
$
2,269,649
Receivables
1,837,097
Deposits in segregated account
940,013
Balance, December 31, 2025
$
5,046,759
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INVENTORY DEPOSITS
Inventory deposits consist of amounts paid in advance to vendors to secure future deliveries of specific finished goods and raw materials, which will be received and sold in future periods.
As of December 31, 2025 and December 31, 2024, the Company had outstanding inventory deposits of $ 839,644 and $ 0 , respectively.
NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
As of December 31, 2025 and 2024, prepaid expenses and other current assets consisted of the following:
December 31,
December 31,
2025
2024
Deferred expenses
$
440,954
$
405,463
Professional fees
378,109
40,142
Insurance
323,850
—
Prepaid grant expense
317,136
—
Bitcoin mining leases
206,625
—
Rent
58,150
—
Security deposits
50,213
50,213
Dues and subscriptions
22,512
25,355
Other receivables
10,438
52,981
Marketing and advertising
10,000
285,000
Vendor receivables
7,386
7,386
Other
476
—
Compensation costs
—
275,000
Total prepaid expenses and other current assets
$
1,825,849
$
1,141,540
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
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the future. 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
As of December 31, 2025 and 2024, property and equipment consisted of the following:
December 31,
December 31,
2025
2024
Estimated Useful Life
Machinery & equipment
$
7,532,746
$
4,012,527
5 - 8 years
Leasehold improvements
2,160,762
2,144,565
Lesser of the useful life of the asset or remaining life of the lease
Construction in progress
—
750,236
Software
425,476
314,932
3 years
Research and development equipment
265,625
216,525
5 years
Computer equipment
225,645
212,616
3 years
Research and development laboratory
77,700
77,700
10 years
Furniture and fixtures
22,642
22,642
3 years
10,710,596
7,751,743
Less: accumulated depreciation
( 5,227,853 )
( 4,075,199 )
Property and equipment, net
$
5,482,743
$
3,676,544
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.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
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
$
1,921,127
Holdback Amount (consideration payable)
594,860
Direct acquisition-related costs
381,200
Total purchase price
$
2,897,187
Assets acquired (at relative fair values):
Manufacturing and related equipment
$
2,648,461
Software tools
110,545
Intangible asset (Customer Supply Contract)
138,181
$
2,897,187
NOTE 11 – INTANGIBLE ASSETS
The Company’s intangible assets consist of the following:
December 31,
2025
2024
Patent
$
—
$
218,000
Intellectual property
543,572
618,572
Technology license
60,000
60,000
Supply Agreement
138,180
—
741,752
896,572
Less: accumulated amortization
( 370,827 )
( 319,473 )
Intangible assets, net
$
370,925
$
577,099
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
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,
2026
$
142,350
2027
115,166
2028
33,636
2029
33,636
2030
33,636
Thereafter
12,501
Total future intangible amortization
$
370,925
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:
December 31,
December 31,
2025
2024
Professional fees
$
813,889
$
176,875
Purchase consideration payable
594,860
—
Payroll and vacation
423,318
369,847
Bitcoin mining costs
260,000
—
Franchise tax payable
145,380
—
Research and development
112,970
50,000
Inventory purchases
92,070
332,094
Sales and marketing
68,304
—
Sales tax payable
38,787
111,732
Royalties
37,266
48,402
Equipment purchases
10,966
21,751
Interest payable
—
24,102
Other
31,104
25,643
Total accrued expenses and other current liabilities
$
2,628,914
$
1,160,446
NOTE 13 – LEASES
Operating Leases
On January 18, 2023, the Company entered into a lease agreement for office space in Webster, Texas. The initial lease term is twelve months and thirteen days. Monthly rental payments under the lease are $ 5,047 , which is comprised of $ 4,245 of base rent plus $ 802 of common area maintenance fees. The Company determined that the value of the lease liability and the related right-of-use asset at inception was $ 51,154 , using an estimated incremental borrowing rate of 5 %.
On January 31, 2024, the initial lease for Webster, Texas dated January 18, 2023, expired. On January 27, 2024, the Company entered into a new lease agreement for new office space in Webster, Texas. The initial lease term is 63 months . The lease contains an option to renew for an additional 36 months , which is not reasonably certain to be exercised and therefore is not included in the measurement of the operating lease ROU asset and related lease liability. 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 were due for the first three months of the lease.
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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, 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 . The Company determined that the value of the modified operating lease liability and related right-of-use asset to be $ 559,919 using an incremental borrowing rate of 10 %. 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 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
2026
$
496,224
2027
511,772
2028
527,319
2029
180,092
Total future minimum lease payments
1,715,407
Less: amount representing imputed interest
( 269,895 )
Present value of lease liabilities
1,445,512
Less: current portion
( 366,937 )
Lease liabilities, non current portion
$
1,078,575
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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
December 31,
2025
2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease
$
558,558
$
324,870
Repayment of finance lease liability
$
989,772
$
1,453
Right-of-use assets obtained in exchange for lease obligations
Operating leases
$
691,852
$
1,534,902
Financing leases
$
987,932
$
7,768
Weighted Average Remaining Lease Term (Years)
Operating leases
3.33 years
3.51 years
Financing leases
1.83 years
2.49 years
Weighted Average Discount Rate
Operating leases
10.0
%
10.0
%
Financing leases
N/A
10.0
%
NOTE 14 – NOTES PAYABLE
A summary of the notes payable activity during the years ended December 31, 2025 and 2024 is presented below:
Notes
Debt
Payable
Discount
Total
Outstanding, January 1, 2024
$
250,000
$
—
$
250,000
Obligations in connection with merchant cash advances
2,959,200
( 1,148,163 )
1,811,037
Proceeds from promissory notes
700,000
( 60,000 )
640,000
Repayments in cash
( 3,331,526 )
—
( 3,331,526 )
Amortization of debt discount
—
1,125,285
1,125,285
Outstanding, January 1, 2025
$
577,674
$
( 82,878 )
$
494,796
Repayments in cash
( 577,674 )
—
( 577,674 )
Amortization of debt discount
—
82,878
82,878
Total notes payable as of December 31, 2025
$
—
$
—
$
—
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, 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. On February 26, 2024, the parties added an addendum to the agreement for an early payoff discount whereby the Company will owe $ 756,000 if paid by March 22, 2024, or $ 783,000 if paid by April 22, 2024. The Company did not take advantage of the early payoff discount and continued making weekly payments over the original thirty-two week term. On July 11, 2024, the Company used proceeds from the Third Cash Advance Agreement to repay this cash advance in full.
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, 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
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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.
On April 2, 2024, the Company entered into an agreement (the “Promissory Note”), with a lender (the “Lender”), pursuant to which the Lender purchased an unsecured promissory note with an initial principal amount of $ 500,000 , for cash proceeds of $ 440,000 . The Company recorded a debt discount of $ 60,000 , which consists of an original issue discount of $ 50,000 and cash issuance costs of $ 10,000 . 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 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.
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. The First Warrant and the Second Warrant (collectively the “Warrants”) were exercisable immediately and expire on January 22, 2027 and February 26, 2027, respectively. The Warrants had a grant date fair value of $ 112,863 . The value of the Warrants was recognized as additional debt discount, which was amortized over the repayment period.
The Warrants contain a cashless exercise provision in the form of a net share settlement, whereby, if, at the time the holder exercises the Warrants, there is no effective registration statement registering the common stock subject to the Warrants, the holder may elect to receive the number of shares of the Company’s common stock determined according to a formula set forth in the warrant agreements.
The following assumptions were used in the Black-Scholes Model to measure the fair value of the warrants:
Market price at measurement date
$
5.92
Exercise price
$
1.11 - $ 1.48
Risk free interest rate
4.52
%
Expected term (years)
2.8 - 2.9
Expected volatility
93
%
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.
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. The Company received cash proceeds of $ 200,000 . The promissory note carries an annual interest rate of 16 %. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12 % of the prepayment amount instead of 16 %. On October 31, 2024, this promissory note was repaid in full.
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 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 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. In addition, the Third Cash Advance Agreement amended the Second Cash Advance Agreement to revise the repayment terms, 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. This Third Cash Advance was repaid in full on January 8, 2025.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 – INCOME TAXES
The following table summarizes income before income taxes:
For the Years Ended,
12/31/2025
12/31/2024
Domestic
$
( 61,899,782 )
$
( 17,523,629 )
Foreign
—
—
Total
$
( 61,899,782 )
$
( 17,523,629 )
The Company’s income tax expense (benefit) is as follows:
For the Years Ended,
12/31/2025
12/31/2024
U.S. federal
$
—
$
—
State
—
—
Foreign
—
—
Current income tax expense (benefit)
—
—
U.S. federal
( 12,746,999 )
( 2,542,839 )
State
( 1,642,546 )
( 200,562 )
Foreign
—
—
Deferred income tax expense (benefit)
( 14,389,545 )
( 2,743,401 )
Change in valuation allowance
14,389,545
( 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,
12/31/2025
12/31/2024
Amount
Percent
Amount
Percent
Income tax expense (benefit) at federal statutory rate
$
( 13,041,538 )
21.0
%
$
( 3,676,946 )
21.0
%
State and local income taxes, net of federal benefit of state
—
0.0
%
—
0.0
%
Foreign jurisdictions
—
0.0
%
—
0.0
%
Federal law changes
—
0.0
%
—
0.0
%
Tax credits (federal)
—
0.0
%
—
0.0
%
Federal R&D tax credit
—
0.0
%
—
0.0
%
Other federal tax credits (Orphan Drug)
—
0.0
%
—
0.0
%
Valuation allowance (federal)
12,749,892
( 20.5 )
%
2,539,107
( 14.5 )
%
Non-deductible or non-taxable items
—
0.0
%
—
0.0
%
Section 162(m) limitation
176,494
( 0.3 )
%
303,460
( 1.7 )
%
Share based compensation
157,680
( 0.3 )
%
782,949
( 4.5 )
%
Other
( 42,529 )
0.1
%
51,429
( 0.3 )
%
Unrecognized tax benefits
—
0.0
%
—
0.0
%
Other adjustments
—
0.0
%
—
0.0
%
Effective tax rate
$
—
0.0
%
$
—
( 0.0 )
%
For the periods ended December 31, 2025 and 2024, the Company’s state tax expense was $0.00.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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,
12/31/2025
12/31/2024
Accrued expenses
$
43,454
$
16,113
Property & equipment
306,052
268,474
Intangible assets
110,285
42,312
Credit carry-forward
222,645
222,645
Net operating losses carryforward
25,955,934
15,514,550
Section 174 costs
1,861,126
2,587,355
Stock based compensation
909,402
461,408
Lease liability (ASC 842)
345,299
313,458
Unrealized gains/losses
3,468,214
171,710
Capital loss carryforward
794,275
—
Gross deferred tax assets
$
34,016,686
$
19,598,025
Valuation allowance
( 33,696,912 )
( 19,307,367 )
Net deferred tax assets
319,774
290,658
Deferred tax liabilities
Lease liability (ASC 842)
( 319,774 )
( 290,658 )
Total deferred tax liabilities
( 319,774 )
( 290,658 )
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.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 – STOCKHOLDERS’ EQUITY (DEFICIT)
Authorized Capital
The Company is authorized to issue 500,000,000 shares of common stock, par value of $ 0.0001 per share, and 20,000,000 shares of preferred stock, par value of $ 0.0001 per share. The holders of the Company’s common stock are entitled to one vote per share. The preferred stock is designated as follows: 1,000,000 shares designated as Series A Preferred Stock, 31,000 shares designated as Series B Convertible Preferred Stock, 400 shares designated as Series C Preferred Stock, and 650 shares designated as Series D Convertible Preferred Stock.
Equity Incentive Plan
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, 1,875,000 shares of common stock of the Company are authorized for issuance. The 2018 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 2018 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 119,126 shares available for issuance under the 2018 Plan. 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
On May 13, 2022, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville up to an aggregate of $ 50,000,000 of its shares of common stock, par value $ 0.0001 per share, at the Company’s request any time during the commitment period commencing on May 13, 2022 and terminating on the first day of the month following the 24-month anniversary of the SEPA.
Each sale (an “Advance”) that the Company requests under the SEPA (via an “Advance Notice”) may be for a number of shares of common stock with an aggregate value of up to $ 5,000,000 . Shares are sold under the SEPA at 98.0 % of the average of the VWAPs during each of the three consecutive trading days commencing on the trading day following the Company’s submission of an Advance Notice to Yorkville. Advances are subject to certain limitations, including that Yorkville will not purchase any shares that would result in it owning more than 4.99 % of the Company’s outstanding common stock at the time of an Advance, or more than the amount of shares registered under the registration statement in effect at the time of the Advance. Under the terms of the Supplemental Agreement, the aggregate number of shares purchased under the SEPA could not initially exceed 19.9 % of the Company’s outstanding common stock as of the date of the SEPA (“Exchange Cap”). Pursuant to its obligations under the agreement, on February 9, 2024, the Company obtained stockholder approval for the issuance of shares of common stock to Yorkville beyond the Exchange Cap.
During the year ended December 31, 2024, the Company issued 6,957,435 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate gross proceeds of $ 15,173,357 . Of the shares issued pursuant to the SEPA Advance Notices, 2,724,854 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. The remaining 4,232,581 shares were issued for cash proceeds of $ 9,104,950 , which was retained by the Company to fund operations. 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 was repaid in full and the SEPA terminated on June 1, 2024.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At the Market Offering
On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM Agreement”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $ 20,000,000 in “at the market” (“ATM”) offerings through or to the Agent. 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 3 % of the gross proceeds of any shares of common stock sold pursuant to the ATM Agreement. On December 4, 2024, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable under the ATM Agreement from approximately $ 20 million to $ 46 million. 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.
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
Each record holder of Series A Preferred Stock shall have the right to vote on any matter with holders of the Company’s common stock and other securities entitled to vote, if any, voting together as one class. Each record holder of Series A Preferred Stock is entitled to one-hundred votes per share of Series A Preferred Stock held by such holder.
The Series A Preferred Stock is not convertible into any series or class of stock of the Company. In addition, holders of the Series A Preferred Stock shall not be entitled to receive dividends, nor do they have a right to distribution from the assets of the Company in the event of any liquidation, dissolution, or winding up of the Company.
On November 5, 2018, the Company received a written consent of the majority of the stockholders to issue 1,000,000 shares of the Company’s Series A Preferred Stock to the Chief Executive Officer of the Company, if necessary, as a measure to protect the Company from an uninvited takeover.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On January 26, 2024, the Board of Directors (“Board”), approved, authorized, and ratified the issuance of 730,000 shares of previously designated Non-Convertible Series A Voting Preferred Stock to the Chairman and Chief Executive Officer of the Company, Michael Mo, for no consideration, 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 Michael Mo is removed from any position with the Company or resigns from all positions with the Company. 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. 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.
Series B Convertible Preferred Stock
Holders of shares of Series B Convertible Preferred Stock are not entitled to voting rights or dividend rights. The Series B Convertible Preferred Stock does not contain any redemption provisions or other provisions requiring cash settlement within control of the holder. Series B Convertible Preferred Stock is senior in liquidation preference to common stock. Each share of Series B Convertible Preferred Stock, after 181 days after issuance and without the payment of additional consideration, is convertible at the option of the holder into fifty ( 50 ) fully paid and non-assessable shares of common stock.
There are no Series B Convertible shares outstanding or available to issue at December 31, 2025.
Series C Convertible Preferred Stock
Series C Convertible Preferred Stock is senior in liquidation preference to the Company’s common stock for an amount equal to the stated value per share of $ 10,000 (“Stated Value”). Holders of shares of Series C Convertible Preferred Stock shall vote on an as-if-converted-to-common-stock basis with the common stockholders. Holders of shares of Series C Convertible Preferred Stock are entitled to receive dividends when, as and if declared by the Board of Directors, at an annual rate of twelve percent ( 12 )% beginning one year after each share’s issuance. The Company may elect to redeem all or part of each share of Series C Convertible Preferred Stock for the Stated Value.
There are no Series C Convertible shares outstanding or available to issue at December 31, 2025.
Series D Convertible Preferred Stock
Holders of the Series D Preferred shall vote on an as-if-converted basis and are entitled to receive cumulative dividends annually at an annual rate equal to ten percent ( 10 %).
There are no Series D Convertible shares outstanding or available at December 31, 2025.
Common Stock
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, 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.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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.
Warrants
A summary of warrants activity during the year ended December 31, 2025 is presented below:
Weighted
Weighted
Average
Average
Number of
Exercise
Remaining
Intrinsic
Warrants
Price
Term (Yrs)
Value
Outstanding, January 1, 2025
88,905
$
8.50
—
—
Issued
—
—
—
—
Exercised
—
—
—
—
Expired
( 88,905 )
( 8.50 )
—
—
Forfeited
—
—
—
—
Outstanding, December 31, 2025
—
$
—
—
$
—
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 Years Ended
December 31,
2025
2024
Shares issued for legal and consulting services
$
130,220
$
61,161
Shares issued to board members
—
17,400
Common stock issued for asset purchase
—
565,165
Amortization of stock options
51,030
88,878
Amortization of restricted stock awards, units and other common stock compensation
6,341,331
1,960,083
Total
$
6,522,581
$
2,692,687
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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.
Stock Options
A summary of options activity during the year ended December 31, 2025 is presented below:
Weighted
Weighted
Average
Average
Number of
Exercise
Remaining
Intrinsic
Options
Price
Term (Yrs)
Value
Outstanding, January 1, 2025
40,938
$
11.88
—
—
Granted
6,250
9.60
—
—
Forfeited
( 18,312 )
—
—
—
Exercised
( 1,688 )
6.48
—
—
Outstanding, December 31, 2025
27,188
$
11.33
3.6
$
—
Exercisable, December 31, 2025
13,442
$
14.00
1.6
$
—
The following table presents information related to stock options as of December 31, 2025:
Options Outstanding
Options Exercisable
Weighted
Range of
Outstanding
Average
Exercisable
Exercise
Number of
Remaining Term
Number of
Prices
Options
In Years
Options
$ 2.24 - $ 7.92
5,625
3.4
1,407
$ 9.60 - $ 12.00
8,125
1.8
1,407
$ 12.40 - $ 15.92
7,188
1.1
5,938
$ 16.40 - $ 18.48
6,250
1.3
4,688
27,188
1.5
13,440
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. The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model. In applying the Black-Scholes option pricing model, the Company used the following assumptions:
For The Years Ended
December 31, 2025
2025
2024
Risk free interest rate
4.15 %
4.27 % - 4.81 %
Expected term (years)
6.3
3.8
Expected volatility
120 %
110 % - 114 %
Expected dividends
0 %
0 %
Option forfeitures are accounted for at the time of occurrence. The expected term used is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of employee option grants. The Company utilizes an expected volatility figure based on the historical volatility of its common stock over a period of time equivalent to the expected term of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.
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.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted Stock Awards
The following table presents information related to restricted stock awards for the year ended December 31, 2025:
Weighted Average
Shares of Restricted
Grant Date
Common Stock
Fair Value
Non-vested RSAs, January 1, 2025
9,375
$
16.48
Granted
—
—
Vested
( 4,688 )
16.48
Forfeited
—
—
Non-vested RSAs, December 31, 2025
4,687
$
16.48
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.
During the year ended December 31, 2024, the Company issued 271,064 restricted stock units (“RSUs”) in exchange for the same quantity of restricted stock awards. The exchange of RSAs for RSUs did not result in a modification of any other terms, such as the grant date fair value or vesting period.
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.
Restricted Stock Units
The following table presents information related to RSUs for the year ended December 31, 2025:
Weighted Average
Shares of Restricted
Grant Date
Common Stock
Fair Value
Non-vested RSUs, January 1, 2025
786,257
$
10.03
Granted
1,173,673
11.68
Vested
( 304,489 )
8.97
Forfeited
( 44,594 )
12.13
Non-vested RSUs, December 31, 2025
1,610,847
$
11.35
Vested RSUs undelivered December 31, 2025
140,625
$
16.40
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 .
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
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
During April 2023, the Company entered into a licensing agreement whereby the Company obtained an exclusive license to commercialize its patented Format Fractional Thermal Runaway Calorimeter. The agreement is effective as long as the licensed patents are enforceable, subject to certain early termination provisions specified in the agreement. In consideration, the Company agreed to pay the following: (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.
Legal Matters
The Company may be involved in litigation and arbitrations from time to time in the ordinary course of business. As of December 31, 2025, the Company was not involved in any ongoing litigation. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.
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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, 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.
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 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 related to the energy management platform. 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.
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Table of Contents
KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
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
Energy
Energy
Management
Mining of
Corporate &
Management
Mining of
Corporate &
Platform
Digital Assets
Other
Total
Platform
Digital Assets
Other
Total
Revenue
$
9,140,480
$
7,029,924
$
—
$
16,170,404
$
10,737,481
$
—
$
—
$
10,737,481
Cost of revenue
7,908,657
7,490,775
—
15,399,432
5,254,283
—
—
5,254,283
Gross Profit (Loss)
1,231,823
( 460,851 )
—
770,972
5,483,198
—
—
5,483,198
Operating Expenses
Research and development
10,755,036
—
—
10,755,036
4,738,305
—
—
4,738,305
Selling, general, and administrative (1)
31,606,701
1,409,740
—
33,016,441
15,979,852
—
—
15,979,852
Total Operating Expenses
42,361,737
1,409,740
—
43,771,477
20,718,157
—
—
20,718,157
Segment Operating Loss
( 41,129,914 )
( 1,870,591 )
—
( 43,000,505 )
( 15,234,959 )
—
—
( 15,234,959 )
Other (Expense) Income
Other segment (expense) income (2)
353,374
—
—
353,374
( 1,569,844 )
—
—
( 1,569,844 )
Impairment of equity investment
( 3,325,045 )
—
—
( 3,325,045 )
—
—
—
—
Credit loss on loan receivable
( 2,127,565 )
—
—
( 2,127,565 )
—
—
—
—
Change in fair value of digital assets
—
—
( 13,800,041 )
( 13,800,041 )
—
—
( 718,826 )
( 718,826 )
Total Other Expense, net
( 5,099,236 )
—
( 13,800,041 )
( 18,899,277 )
( 1,569,844 )
—
( 718,826 )
( 2,288,670 )
Net Loss
$
( 46,229,150 )
$
( 1,870,591 )
$
( 13,800,041 )
$
( 61,899,782 )
$
( 16,804,803 )
$
—
$
( 718,826 )
$
( 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.
As of
December 31, 2025
December 31, 2024
Energy
Energy
Management
Mining of
Corporate &
Management
Mining of
Corporate &
Platform
Digital Assets
Other
Total
Platform
Digital Assets
Other
Total
Segment Assets
Cash
$
13,300,188
$
—
$
—
$
13,300,188
$
29,831,858
$
—
—
$
29,831,858
Digital assets
—
—
93,995,256
93,995,256
—
—
20,281,184
20,281,184
All other assets
21,672,260
—
—
21,672,260
12,814,145
—
—
12,814,145
Total Assets
$
34,972,448
$
—
$
93,995,256
$
128,967,704
$
42,646,003
$
—
$
20,281,184
$
62,927,187
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. customers. During the year ended December 31, 2024, $ 4,210,321 of revenue was generated from non-U.S. customers.
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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 – SUBSEQUENT EVENTS
Digital Assets
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.
Loan Payable
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.
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