What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-18 · 405 added, 589 removed, 444 unchanged (69% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets:

Accounts receivable billed, current portion

Accounts receivable unbilled, current portion

Accounts receivable, net of allowance for credit losses of $ 1,450,000 as of March 31, 2026 and December 31, 2025

Grant receivable

Inventory deposits

Auto-Vibe assets

Prepaid expenses and other current assets

1 unchanged sentence

Digital assets

Digital assets held as collateral

Accounts receivable billed, non-current portion

Accounts receivable unbilled, non-current portion

Digital assets, pledged as collateral

Accounts receivable, non-current portion

Auto-Vibe assets, non-current, net of allowance for credit losses of $ 500,000 as of March 31, 2026 and $ 0 as of December 31, 2025

Property and equipment, net

2 unchanged sentences

Intangible assets, net

Operating lease right-of-use assets, net

Finance lease right-of-use asset, net

Operating lease right-of-use assets

Deferred financing costs

Other non-current assets

Liabilities and Stockholders’ Equity

2 unchanged sentences

Accrued expenses and other current liabilities

Accrued issuable equity

Operating lease liabilities, current portion

Finance lease liability, current portion

Notes payable, net of discount, current portion

Deferred revenue

1 unchanged sentence

Operating lease liabilities, non-current portion

Finance lease liability, non-current portion

Other non-current liabilities

Total Liabilities

3 unchanged sentences

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

1,000,000 and 730,000 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively;

1,000,000 shares issued and outstanding at March 31, 2026 and December 31, 2025

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

none issued and outstanding at September 30, 2025 and December 31, 2024

none issued and outstanding at March 31, 2026 and December 31, 2025

Series C Preferred Stock, 400 shares designated;

none issued and outstanding at September 30, 2025 and December 31, 2024

none issued and outstanding at March 31, 2026 and December 31, 2025

Series D Preferred Stock, 650 shares designated;

none issued and outstanding at September 30, 2025 and December 31, 2024

none issued and outstanding at March 31, 2026 and December 31, 2025

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

42,636,858 and 42,614,936 shares issued and outstanding at September 30, 2025, respectively;

46,279,087 and 46,257,165 shares issued and outstanding at March 31, 2026, respectively;

46,063,172 and 46,041,250 shares issued and outstanding at December 31, 2025, respectively

1 unchanged sentence

Treasury stock, at cost;

21,922 and 16,395 shares held at September 30, 2025 and December 31, 2024, respectively.

21,922 shares held at March 31, 2026 and December 31, 2025.

Accumulated deficit

8 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Cost of revenue

2 unchanged sentences

Selling, general, and administrative

Credit losses on accounts receivable

Impairment of equipment deposits

Credit losses on R&D activity

Total Operating Expenses

2 unchanged sentences

( 9,443,805 )

( 27,633,421 )

( 11,694,095 )

Other Income (Expense)

Change in fair value of digital assets

Impairment of equity investment

( 20,767,713 )

( 9,748,600 )

Credit loss on convertible loan receivable

( 1,832,690 )

Interest income

Change in fair value of accrued issuable equity

Interest expense

Change in fair value of accrued issuable equity

Amortization of debt discount

Gain (loss) on debt extinguishment, net

Total Other Income (Expense), net

( 1,209,073 )

Gain on debt extinguishment, net

Total Other Expense

( 20,734,667 )

9 unchanged sentences

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026

Preferred Stock

3 unchanged sentences

( 145,711,005 )

Preferred stock issued for no consideration

Shares returned to treasury for employee payroll tax obligations

Common stock issued upon the exercise of options

Common stock issued for at the market offering (1)

Shares withheld for employee payroll tax obligations

Stock-based compensation:

Common stock issued for services

Common stock issued upon vesting of restricted stock units

5 unchanged sentences

( 173,830,849 )

Common stock issued upon the exercise of options

Common stock issued for at the market offering (2)

Shares returned to treasury for employee payroll tax obligations

Shares withheld for employee payroll tax obligations

Stock-based compensation:

Common stock issued for services

Common stock issued upon vesting of restricted stock units

Amortization of restricted common stock

Amortization of stock options

Effect of reverse stock split

Balance - June 30, 2025

( 94,475,732 )

Common stock issued for at the market offering(3)

Shares withheld for employee payroll tax obligations

Stock-based compensation:

Common stock issued upon vesting of restricted stock units

Amortization of restricted common stock

Amortization of stock options

( 6,973,915 )

Balance - September 30, 2025

( 101,449,647 )

(1) Represents gross proceeds of $ 51,152,353 , less issuance costs of $ 1,509,423 .

(2) Represents gross proceeds of $ 38,331,721 , less issuance costs of $ 1,081,712 .

(3) Represents gross proceeds of $ 17,827,544 , less issuance costs of $ 502,374 .

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

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2025

Preferred Stock

1 unchanged sentence

Stockholders’

Equity (Deficit)

Balance - January 1, 2025

( 83,811,223 )

( 2,182,696 )

Preferred stock issued for no consideration

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

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

Stock-based compensation:

Restricted stock awards exchanged for restricted stock units

Common stock issued upon vesting of restricted stock units

Common stock issued for services

Amortization of restricted common stock

Amortization of stock options

( 5,008,876 )

Balance - March 31, 2024

( 71,296,470 )

Warrants issued in connection with note payable

Common stock issued for cash pursuant to Advance Notices (3)

Stock-based compensation:

Shares returned to treasury for employee payroll tax obligations

Common stock issued upon the exercise of options

Common stock issued for at the market offering (1)

Common stock issued upon vesting of restricted stock units

Common stock issued for services

Amortization of restricted common stock

Amortization of stock options

( 5,890,528 )

Balance - June 30, 2024

( 77,186,998 )

Common stock issued for cash pursuant to ATM offering(4)

Shares withheld for employee payroll tax obligations

Stock-based compensation:

Common stock issued upon vesting of restricted stock units

Common stock issued for services

3 unchanged sentences

( 18,806,658 )

Balance - September 30, 2024

Balance - March 31, 2025

( 102,617,881 )

(1) Represents gross proceeds of $ 51,152,353 , less issuance costs of $ 1,509,423 .

(2) Represents gross proceeds of $ 2,910,651 , less issuance costs of $ 4,238 .

(3) Represents gross proceeds of $ 6,194,299 , less issuance costs of $ 52,792 .

(4) Represents gross proceeds of $ 3,431,090 , less issuance costs of $ 136,631 .

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash Flows From Operating Activities:

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Credit losses on R&D activity

Amortization of debt discount

Non-cash operating lease expense

(Gain) loss on debt extinguishment

Gain on debt extinguishment

Depreciation and amortization expense

Credit losses on accounts receivable

Impairment of equity investment

Credit loss on convertible loan receivable

Stock-based compensation

Impairment of equipment deposits

1 unchanged sentence

Change in fair value of digital assets

( 14,456,623 )

Stock-based compensation

Digital assets received as downtime credits

Mining of digital assets

( 6,085,452 )

Loss on disposal of property and equipment

Changes in operating assets and liabilities:

Accounts receivable billed

( 2,147,542 )

Accounts receivable unbilled

Accounts receivable

( 1,291,724 )

Auto-Vibe assets

Inventory deposits

Prepaid expenses and other current assets

( 1,641,699 )

Security deposits

Accounts payable

3 unchanged sentences

Deferred revenue

Total Adjustments

( 3,032,507 )

( 2,710,615 )

Net Cash Used In Operating Activities

2 unchanged sentences

Cash Flows From Investing Activities:

Loan receivable

( 1,832,690 )

Equity investments

( 3,325,045 )

Equipment deposits

( 1,123,099 )

Payment of holdback amount related to Caban asset acquisition

Purchases of property and equipment

3 unchanged sentences

( 1,542,966 )

( 44,716,519 )

Cash Flows from Financing Activities:

Proceeds from loan payable

Proceeds from ATM equity financing

1 unchanged sentence

( 1,280,726 )

Proceeds from the SEPA

Proceeds from exercise of stock options

Proceeds from notes payable (2)

Issuance costs on notes payable

Repayments of notes payable

( 2,439,855 )

Proceeds from loan payable

Repayments of loan payable

( 4,200,000 )

Payments for deferred financing costs

Repayments of notes payable

Repayment of finance lease liability

Payment of employee tax withholdings from shares withheld

Net Cash Provided By Financing Activities

1 unchanged sentence

( 5,623,880 )

( 5,382,561 )

Cash - Beginning of Period

Cash - End of Period

(1) Excludes $ 408,085 and $ 32,913 of deferred financing costs for 2025 and 2024, respectively.

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

(1) Excludes $ 228,697 of deferred financing costs paid in prior periods.

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

For the Nine Months Ended

September 30,

For the Three Months Ended

Supplemental Disclosures of Cash Flow Information:

1 unchanged sentence

Non-cash investing and financing activities:

Right-of-use asset for lease liability

Digital assets, pledged as collateral

Purchase consideration payable

Accounts payable and accrued expenses for property and equipment purchases

Deferred financing costs charged to additional paid-in capital

Shares withheld for employee payroll tax obligations

Shares returned to treasury for employee payroll tax obligations

Common stock issued in satisfaction of accrued issuable equity

Accounts payable and accrued expenses for property and equipment purchases

Shares returned to treasury for employee payroll tax obligations

Preferred shares issued for no consideration

Common shares issued for restricted stock units vested

Restricted stock awards converted to restricted stock units

Original issue discount on indebtedness

Deferred financing costs included in accounts payable

Additions to property and equipment included in note payable

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

Right-of-use asset for finance lease liability

Value of warrants issued in connection with notes payable

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

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

4 unchanged sentences

Organization and Operations

KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), is a Bitcoin+ Treasury company that builds a portfolio of frontier technology businesses ranging from high-performance energy systems to AI Robotics.

KULR delivers cutting-edge energy storage solutions for space, aerospace, and defense by leveraging a foundation of in-house battery design expertise, comprehensive cell and battery testing suite, and battery fabrication and production capabilities.

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

Since late 2024, KULR has included bitcoin as a primary asset in its treasury program and committed to allocating up to 90% of its excess cash to the acquisition of bitcoin.

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

1 unchanged sentence

All share and per share amounts in this Quarterly 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.

Risks and Uncertainties

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

ability to obtain future financing;

advances and trends in new technologies and industry standards;

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

development of sales channels;

certain strategic relationships;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Basis of Presentation

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GAAP for annual financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024.

The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the operating results for the full year ending December 31, 2025, or any other period.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2026, and for the three months ended March 31, 2026 and 2025.

The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the operating results for the full year ending December 31, 2026, or any other period.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2025 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on March 31, 2026.

5 unchanged sentences

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 unaudited condensed consolidated 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.

The Company’s significant estimates used in these unaudited condensed consolidated financial statements include, but are not limited to, allowance for credit losses, valuation of inventory, valuation of intangible assets, digital assets, property, plant and equipment, stock-based compensation, deferred revenue 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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash, digital assets and accounts receivable.

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

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

3 unchanged sentences

Cash held in US bank institutions is currently insured by the FDIC up to $250,000 at each institution.

There were uninsured balances of $ 20,088,596 and $ 29,331,858 as of September 30, 2025 and December 31, 2024, respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were uninsured cash balances of $ 7,176,308 and $ 12,800,188 as of March 31, 2026 and December 31, 2025, respectively.

Customer and Revenue Concentrations

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

During the three months ended March 31, 2026, the Company operated two segments — the Energy Management Platform (“EMP”) and Mining of Digital Assets — and had certain customers across both segments whose revenue individually represented 10% or more of total revenue, or whose accounts receivable balances individually represented 10% or more of total accounts receivable, as follows:

Energy Management Platform

Accounts Receivable

For the Three Months Ended

For the Nine Months Ended

September 30,

Mining of Digital Assets

Accounts Receivable

For the Three Months Ended

Less than 10%

2 unchanged sentences

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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

The custodian may also serve as a liquidity provider.

If the Company’s custodially-held 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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Vendor Concentrations

The Company purchases inventory from vendors who individually represented 10% or more of the Company’s total purchases of inventory, as follows:

During the three months ended March 31, 2026 and 2025, the Company operated two operating segments, the EMP, and Mining of Digital Assets.

The EMP segment had several vendors whose purchases individually represented more than 10% of total purchases during the two periods, as detailed in the table below.

The Mining of Digital Assets segment had two vendors whose purchases individually represented 62 % and 38 % of total purchases during the three months ended March 31, 2026.

The Mining of Digital Assets segment had one vendor whose purchases represented 100 % of total purchases in the March 31, 2025 period.

Energy Management Platform

For the Three Months Ended

For the Nine Months Ended

September 30,

* Less than 10%

Accounts Receivable

Accounts Receivable and Allowance for Credit Losses

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

During the three and nine months ended September 30, 2025, credit losses of $ 780,643 related to receivables from one customer were recorded (see Note 5 – Investments, Impairment and Credit Losses for further details).

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

Management estimates the allowance for credit losses based on historical credit loss experience, existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts.

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

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

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 and aging status.

The Company uses its historical loss experience and makes appropriate adjustments for current and forecasted macroeconomic conditions, known customer financial distress, or other specific risk factors.

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

As of March 31, 2026 and December 31, 2025, the allowance for credit losses was $ 1,450,000 .

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Digital Assets

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

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

The Company 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:

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

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

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

Equity Investment

The Company holds an investment in non-marketable equity securities of a company that does not have a readily available fair value.

The investment is measured under the measurement alternative provided in Accounting Standards Codification (“ASC”) 321 on the Company’s condensed consolidated balance sheets.

Under the measurement alternative method, the equity investment is carried at cost less impairment losses, adjusted for price changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

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 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.

Unrealized gains or losses on the remeasurement of digital assets 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 (in the form of BTC) issued in accordance with the agreements.

These credits are recorded as a reduction to lease costs.

The Company has leased 2,321 digital asset mining machines, 1,157 of which had less than a one-year term so were not recorded on the balance sheet pursuant to the practical expedient in ASC 842.

One digital asset mining machine lease had a two-year term, and accordingly, that lease was reflected on the balance sheet when executed.

See Note 8 - Leases for further information.

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.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2025 the Company valued this investment at zero and recorded an impairment expense of $ 3,325,045 (see Note 5 – Investments, Impairment and Credit Losses for further details).

Mining of Digital Assets

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

The Company derives a portion of its revenue from its digital asset mining activities by providing hash calculations as part of transaction verification services within the digital currency networks of cryptocurrencies, such as bitcoin, commonly termed “cryptocurrency mining.” In consideration for these services, the Company receives digital awards which are recorded as revenue, based on the daily amount of bitcoin earned.

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

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

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

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, exoskeleton devices, as well as raw materials and work in process related primarily to the manufacture of safe cases.

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.

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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.

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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.

Inventory at September 30, 2025 and December 31, 2024 was comprised of the following:

September 30,

As of March 31, 2026 and December 31, 2025, inventory deposits were $ 113,736 and $ 839,644 , respectively.

Inventory at March 31, 2026 and December 31, 2025 consisted of the following:

Raw materials

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Total inventory

As of September 30, 2025 and December 31, 2024, inventory deposits were $ 457,892 and $ 0 , respectively, which consists of inventory purchases of goods that were paid for but not received as of period end.

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

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

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

Fair Value Measurements

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

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

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Level 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 and loan payable approximate fair values due to the short-term nature of these instruments.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, loan receivable, accounts payable, accrued expenses and other current liabilities, notes payable and loan 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 (expense) income, net in our 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.

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

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.

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

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Recognize revenue when the company satisfies a performance obligation.

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

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 condensed consolidated statements of operations.

Principal versus Agent Considerations

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and nine months ended September 30, 2025 and 2024, the Company recognized revenue primarily from the following different types of contracts:

During the three months ended March 31, 2026 and 2025, 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, 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.

● Mining of digital assets – The Company has entered into multiple lease agreements with digital asset mining services companies 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.

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● Grant revenue - The Company has determined that government grant revenue does not fall under the Financial Accounting Standards Board (“FASB”) ASC 606.

Under the grant contract, the State of Texas receives no direct benefit from the product development, and therefore does not meet the definition of a customer pursuant to ASC 606.

As there is no authoritative guidance under U.S.

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

Under the grant contract with the Texas Space Commission (“Texas Grant”) entered into during September 2025, 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, the grant is considered revenue, which is only recognized when qualifying costs are incurred and it is reasonably assured that the conditions will be met.

Grant revenue during the three and nine months ended September 30, 2025, was $ 501,032 , for the reimbursement of equipment purchases totaling $ 255,728 , and R&D expenses totaling $ 245,304 .

As such, the grant is considered revenue, which is only recognized when qualifying costs are incurred and it is reasonably assured that the conditions for reimbursement will be met.

Grant revenue during the three months ended March 31, 2026 and 2025, was $ 1,368,236 and zero , respectively.

The amount recorded as revenue during the three months ended March 31, 2026 relates to the reimbursement of R&D expenses.

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

For the Three Months Ended

For the Nine Months Ended

September 30,

Revenue Recognized at a Point in Time:

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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 condensed 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.

As of September 30, 2025, the Company had billed accounts receivable of $ 2,956,726 and unbilled accounts receivable of $ 1,670,352 .

As of December 31, 2024, the Company had billed accounts receivable of $ 3,431,007 and unbilled accounts receivable of $ 660,672 .

Deferred revenues were $ 21,489 and $ 32,768 as of September 30, 2025 and December 31, 2024, respectively.

Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of vested shares of common stock outstanding during the period.

Diluted net loss per share of common stock 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 share of common stock:

The timing of revenue recognition, billings and cash collections results in accounts receivable, and deferred revenues (contract liabilities) on the condensed consolidated balance sheets.

Generally, billing occurs subsequent to revenue recognition.

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

As of March 31, 2026 and December 31, 2025, the Company had accounts receivable, net of $ 2,998,816 and $ 3,075,328 , respectively.

Deferred revenues were $ 2,789 and $ 107,267 as of March 31, 2026 and December 31, 2025, respectively.

Deferred Revenue

As of March 31, 2026 and December 31, 2025, the Company had $ 2,789 and $ 107,267 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 three months ended March 31, 2026 and 2025, the Company recognized $ 104,478 and $ 11,627 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 three months ended March 31, 2026 or 2025.

Deferred Labor Costs

As of March 31, 2026 and December 31, 2025, the Company had $ 211,968 and $ 312,333 , 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.

Advertising and Marketing Costs

Advertising costs are expensed in the period incurred.

Advertising costs charged to operations for the three months ended March 31, 2026 and 2025 were $ 218,656 and $ 1,736,172 , 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.

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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 basis over the estimated useful life of the asset;

the depreciation expense is included in cost of revenue on the accompanying condensed consolidated 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 condensed consolidated statements of operations.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period.

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 Three Months Ended

For the Nine Months Ended

September 30,

( 28,119,844 )

( 18,806,658 )

( 17,638,424 )

( 12,903,168 )

Denominator (weighted average quantities):

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Treasury shares purchased

Unvested restricted stock awards

Unvested restricted shares

Accrued issuable equity

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Basic and diluted net loss per common share

The following shares were excluded from the calculation of weighted average dilutive shares of common stock for the three and nine months ended September 30, 2025 and for the three and nine months ended September 30, 2024 because their inclusion would have been anti-dilutive:

For the Three and Nine

September 30, 2025

September 30, 2024

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

Unvested restricted stock awards

Unvested restricted stock units

Subsequent Events

The Company has evaluated subsequent events through the date on which these unaudited condensed 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 condensed consolidated financial statements, except as disclosed in Note 15 – Subsequent Events.

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.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent Events

The Company has evaluated subsequent events through the date on which these unaudited condensed consolidated financial statements were issued.

Segment Reporting

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Recent Issued Accounting Pronouncements

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

Improvements to Income Tax Disclosures.

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

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

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

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

The Company expects that the adoption of ASU 2023-09 will require certain additional income tax disclosures.

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.

Based on a preliminary assessment, the Company does not expect the adoption of this ASU will result in a material change to our accounting policies, results of operation, financial position or cash flows.

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

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

NOTE 3 – DIGITAL ASSETS

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

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

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

As of September 30, 2025, the Company held 1,056.69 digital assets at Coinbase with a cost basis of $ 106,785,454 , and a fair value of $ 120,523,261 .

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 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.

The Company adopted this standard on January 1, 2026, which did not have a material impact on its condensed consolidated financial statements.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table is a summary of Bitcoin activity during the nine months ended September 30, 2025:

Digital Assets and

Digital Assets Held

As Collateral

Beginning balance at December 31, 2024

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 March 31, 2026, the Company held 1,083.14 BTC at Coinbase with a cost basis of $ 109,186,753 , and a fair value of $ 73,900,182 .

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 .

The following table presents the roll forward of activity related to the Company’s digital assets for the three months ended March 31, 2026 and 2025:

Digital Assets

For the Three Months Ended March 31,

Beginning balance at January 1

Additions - purchased

Additions - mined

Received as downtime credits

Change in fair value

Balance, September 30, 2025

During the three months ended September 30, 2025, the Company purchased 90.00 Bitcoin via trade orders on Coinbase (the prime broker) at an average cost of $ 108,889 per Bitcoin, inclusive of fees and expenses, for an aggregate cost of $ 9,799,993 .

During the nine months ended September 30, 2025, the Company purchased 783.81 Bitcoin via trade orders on Coinbase at an average cost of $ 101,683 per Bitcoin, inclusive of fees and expenses, for an aggregate cost of $ 79,700,002 .

On March 7, 2025, the Company entered into a sixty-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 two hundred and twenty eight-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 .

During the three and nine months ended September 30, 2025, the Company recognized revenue of $ 4,396,603 and $ 6,085,452 , respectively, in connection with its digital assets mining operations.

( 20,767,713 )

( 9,748,600 )

Balance, March 31

During the three months ended March 31, 2026, the Company did no t purchase BTC.

The Company continued its digital asset mining operations pursuant to existing machine lease agreements.

During the three months ended March 31, 2026, 8.80 BTC have been earned from mining operations, at an average value of $ 75,263 per BTC.

During the three months ended March 31, 2026, the Company recognized mining revenue of $ 662,311 , and received BTC with an aggregate fair value of $ 10,328 from the lessors as compensation for machine downtime, which is used to offset lease costs.

During the three months ended March 31, 2025, the Company purchased 449.45 Bitcoin at an average cost of $ 99,008 per BTC, inclusive of fees and expenses, for an aggregate cost of $ 44,499,352 .

During the three months ended March 31, 2025, 2.97 BTC have been earned from mining operations, at an average value of $ 84,186 per BTC.

During the three months ended March 31, 2025, the Company recognized mining revenue of $ 249,754 .

Loan Agreement

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

In July 2025, the Company secured a $ 20 million credit facility (which has no fixed termination date) with Coinbase, its digital assets custodian (the “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 business on any day that is a calendar 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 bitcoin as collateral against this loan.

The initial Drawdown bears an 8 % loan fee.

The Company’s obligations are 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 Bitcoin.

As of September 30, 2025 the Company repaid $ 4.2 million principal and $ 91,178 in interest.

As of September 30, 2025, 70 Bitcoin valued at $ 7,983,990 , are being held as collateral for the outstanding loan balance.

Outstanding, January 1, 2025

Proceeds from loan payable

Repayments in cash

( 4,200,000 )

Total loan payable as of September 30, 2025

On October 15, 2025, the Company repaid the outstanding balance in full, and the full $ 20 million credit facility remains available.

On July 8, 2025, we borrowed $ 8 million (“Initial Drawdown”) which was repaid on October 15, 2025.

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.

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

As of March 31, 2026, the full $ 5 million of principal was outstanding and the Company incurred interest in the amount of $ 4,795 pursuant to the Second Drawdown.

See Note 12 – Subsequent Events for information related to activity that occurred subsequent to March 31, 2026.

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 as a research and development activity, 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 a select number of the autos.

KULR TECHNOLOGY GROUP, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During December 2025, the Company allocated $ 5,000,000 toward this project.

During the three months ended March 31, 2026, the Company received $ 826,616 of its open receivable from the Dealership, purchased additional vehicles for $ 2,681,658 , and sold $ 3,242,052 worth of vehicles that were on hand.

The 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.

The $ 500,000 loss associated with auto sales was recorded in the operating expenses section of the condensed consolidated statements of operations.

See Note 12 – Subsequent Events for information related to activity that occurred subsequent to March 31, 2026.

As of March 31, 2026 and December 31, 2025, auto-vibe assets consisted of the following:

Auto-Vibe Assets

Receivables – gross

Credit losses on R&D activity

Receivables – net

Vehicles owned

Deposits in segregated account

Total Auto-Vibe assets

NOTE 5 – 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.

As of March 31, 2026, the remaining balance of the Holdback Amount was $ 348,601 .

In connection with the Purchase 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.

During the three months ended March 31, 2026, the Company incurred expenses in connection with the TSA of approximately $ 100,000 , which are presented within cost of revenue in the condensed consolidated statements of operations.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of September 30, 2025 and December 31, 2024, prepaid expenses and other current assets consisted of the following:

September 30,

As of March 31, 2026 and December 31, 2025, prepaid expenses and other current assets consisted of the following:

Prepaid grant expense

Prepaid research and development

Bitcoin mining leases

Professional fees

Deferred expenses

Security deposits

Professional fees

Dues and subscriptions

Marketing and advertising

Other receivables

Vendor receivables

Compensation costs

Security deposits

Total prepaid expenses and other current assets

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – INVESTMENTS, IMPAIRMENT AND CREDIT LOSSES

During the nine months ended September 30, 2025, the Company made two investments in a private German entity (“Investee”), who is 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 September 30, 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 , reflected in Impairment of equity investment within Other expense for the three and nine months ended September 30, 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 Investee pursuant to the Note (see Note 15 – Subsequent Events for details about a subsequent distribution 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 the future.

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 $ 1,832,690 , reflected in Credit loss on convertible loan receivable within Other expense for the three and nine months ended September 30, 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 , reflected within operating expenses for the three and nine months ended September 30, 2025.

NOTE 6 – EQUIPMENT DEPOSITS

Equipment deposits at September 30, 2025 and December 31, 2024 are $ 59,763 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 three and nine months ended September 30, 2025, the Company recorded a write-down of $ 0 and $ 1,355,174 , respectively, related to the equipment deposits.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of September 30, 2025 and December 31, 2024, accrued expenses and other current liabilities consisted of the following:

September 30,

Payroll and vacation

NOTE 7 – ACCRUED EXPENSES AND OTHER LIABILITIES

As of March 31, 2026 and December 31, 2025, accrued expenses and other current liabilities consisted of the following:

Professional fees

Payroll and vacation

Inventory purchases

Sales tax payable

Research and development

Purchase consideration payable

Franchise tax payable

Interest payable

Business development

Equipment purchases

Bitcoin mining costs

Research and development

Sales and marketing

Total accrued expenses and other liabilities

current portion

( 1,300,059 )

( 1,160,446 )

Other non-current liabilities

NOTE 8 – ACCRUED ISSUABLE EQUITY

A summary of the accrued issuable equity activity during the nine months ended September 30, 2025 is presented below:

For the Nine Months Ended

September 30, 2025

Beginning balance at January 1, 2025

Gain from mark-to-market

Shares issued in satisfaction of accrued issuable equity

Fair value at September 30, 2025

During the nine months ended September 30, 2025, the Company entered into certain contractual arrangements for services in exchange for a fixed number of shares of common stock of the Company.

The estimated fair value of the shares to be issued was an aggregate of $ 210,904 based on the quoted market prices of the shares as of the respective contract dates.

During the nine months ended September 30, 2025, the Company settled certain of its accrued issuable equity obligations through the issuance of an aggregate of 6,250 of its shares of common stock with an aggregate fair value of $ 69,500 , remeasured as of the date of settlement based on the quoted market prices of the shares.

During the three and nine months ended September 30, 2025, the Company recorded gains in the aggregate amount of $ 89,815 and $ 409,091 , respectively, and recorded (losses) gains in the aggregate amount of $ 13,437 and $( 2,302 ) during the three and nine months ended September 30, 2024, respectively, related to changes in the fair value of accrued issuable equity (see Note 12 – Stockholders’ Equity, Stock-Based Compensation for additional details).

The fair value of the accrued but unissued shares as of September 30, 2025, was $ 152,740 , based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets.

Sales tax payable

Equipment purchases

Total accrued expenses and other current liabilities

NOTE 8 – LEASES

Operating Leases

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, with an initial lease term of 63 months .

The lease contains an option

On January 27, 2024, the Company entered into a lease agreement for office space in Webster, Texas (“Webster Lease”).

The initial lease term is 63 months .

The Webster Lease contains an option to renew for an additional 36 months , which was not reasonably certain to be exercised and therefore was not included in the measurement of the initial operating lease ROU asset and related lease liability.

Monthly rental payments under the Webster 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.

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 which is recorded within the security deposits section of the balance sheet as of March 31, 2026.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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 sheets as of September 30, 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 at 555 Forge River Road, 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.

On April 15, 2025, the Company amended the Webster Lease (the “First Amendment”) 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 was 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.

No cash payments were 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 leases 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 does not plan to 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 September 30, 2025.

During the three and nine months ended September 30, 2025, operating lease expense was $ 204,070 and $ 541,245 , respectively.

During the three and nine months ended September 30, 2024, operating lease expense was $ 150,846 and $ 377,554 , respectively.

The Company previously leased office space at 4863 Shawline Street, San Diego, CA, pursuant to an operating lease.

On January 25, 2024, the Company entered into an amendment extending the lease through November 30, 2025.

The Company did not renew this lease upon its expiration.

During the three months ended March 31, 2026 and 2025, operating lease expense was $ 120,642 and $ 150,846 , respectively.

Finance Lease

The Company recorded depreciation expense in the amount of $ 388 and $ 1,165 in connection with ROU assets held under the finance lease during the three and nine months ended September 30, 2025.

The Company recorded interest expense of $ 41 and 138 during the three and nine months ended September 30, 2025, in connection with its finance lease liability.

The Company recorded depreciation expense in the amount of $ 388 in connection with ROU assets held under the finance lease during the three and nine months ended September 30, 2024.

The Company recorded interest expense of $ 62 during the three and nine months ended September 30, 2024, in connection with its finance lease liability.

Supplemental Information

Maturities of lease liabilities as of September 30, 2025, were as follows:

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, which are non-lease components.

Upon lease commencement, the Company recorded a ROU asset in the amount of $ 987,932 , with no corresponding lease liability, as the full prepayment had been made prior to the commencement of the related 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 .

Maturities of operating lease liabilities as of March 31, 2026, were as follows:

Operating Lease

Financing Lease

4/1/26 to 12/31/26

8 unchanged sentences

Supplemental cash flow information related to the leases are as follows:

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

10 unchanged sentences

Financing leases

NOTE 10-NOTES PAYABLE

A summary of the notes payable activity during the nine months ended September 30, 2025, is presented below:

Outstanding, January 1, 2025

Repayments in cash

Amortization of debt discount

Total notes payable as of September 30, 2025

NOTE 11 – INCOME TAX

The Company’s effective tax rate was zero for the three and nine months ended September 30, 2025 and 2024, respectively.

The effective tax rates for all periods differs from the statutory rate of 21 % as a result of the net change in valuation allowance against the net deferred tax asset that the Company believes is not more likely than not to be realized.

The Company continues to carry a full valuation allowance on its net deferred tax assets.

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 is currently evaluating the impact of the Tax Reform Act of 2025 on its condensed consolidated financial statements.

The effects of the new law, including remeasurement of deferred tax assets and liabilities and changes to current and future tax expense, will be evaluated.

No material impact is expected given the Company’s historical net operating losses.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – STOCKHOLDERS’ EQUITY

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 Company’s 2018 Equity Incentive Plan (the “2018 Plan”), 15,000,000 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 awards (“RSAs”) and restricted stock units (“RSUs”) 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 November 21, 2025, no shares were available for issuance under the 2018 Plan.

On September 24, 2025, the Board of Directors adopted, and on November 21, 2025, a majority of the Company’s shareholders 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 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 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, RSAs and RSUs 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 September 30, 2025, there were 130,170 shares available for issuance under the 2018 Plan.

At the Market Offerings

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 14,783,393 shares issued for gross proceeds of $ 146 million, of which 9,347,644 shares were issued and gross proceeds of $ 61.9 million were received in 2024 pursuant to the First ATM agreement.

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 nine months ended September 30, 2025, the Company issued a total of 9,420,337 shares of common stock pursuant to the ATM Agreements for aggregate gross proceeds of $ 107,311,618 , with cash issuance costs of $ 2,685,424 .

During the nine months ended September 30, 2024, the Company issued a total of 1,602,810 shares of common stock pursuant to the First ATM Agreement for aggregate gross proceeds of $ 3,431,090 , with cash issuance costs of $ 103,718 .

During the nine months ended September 30, 2025, the Company issued an aggregate of 9,000 shares of common stock valued at $ 95,570 for legal and consulting services, of which 6,250 shares valued at issuance at $ 69,500 were accrued at January 1, 2025 for services rendered in prior years.

During the nine months ended September 30, 2024, the Company issued an aggregate of 43,957 shares of common stock valued at $ 104,960 for equity compensation to its independent members of the Board of Directors, legal and consulting services.

During the nine months ended September 30, 2025, the Company issued 1,688 shares of common stock upon the exercise of stock options for gross proceeds of $ 10,815 .

No stock options were exercised during the nine months ended September 30, 2024.

As of March 31, 2026, there were 6,808,110 shares available for issuance under the 2025 Plan.

During the three months ended March 31, 2026, the Company issued 328,739 shares of common stock upon the vesting of restricted stock units previously granted, of which 93,750 shares vested in prior periods and 112,824 shares were withheld to cover payroll tax obligations.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the nine months ended September 30, 2025, the Company issued 141,200 shares of common stock upon the vesting of restricted stock units previously granted, of which 35,635 shares were withheld to cover payroll tax obligations.

During the nine months ended September 30, 2024, the Company issued 77,142 shares of common stock upon the vesting of restricted stock units previously granted, and no shares were withheld to cover payroll tax obligations.

See At The Market Offerings, above , for share issuances pursuant to the Company’s ATM Agreements.

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 nine months ended September 30, 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 September 30, 2025 and December 31, 2024, respectively, recorded at their cost of $ 393,744 and $ 296,222 , respectively.

The Company’s equity-based compensation plans allows for the grant of non-vested stock options, RSUs and RSAs to its employees pursuant to the terms of its equity incentive plan.

Under the provision of the plans, unless otherwise elected, participants fulfill their related income tax withholding obligation by having shares withheld at the time of vesting.

The shares withheld are then either transferred to the Company’s treasury stock at cost or go back to the pool of unissued and available shares.

The Company had 21,922 shares held in treasury as of March 31, 2026 and December 31, 2025, recorded at their cost of $ 393,744 .

Preferred Stock

On January 16, 2025, the Board of Directors approved the issuance of an additional 270,000 shares of Non-convertible Series A Voting Preferred Stock (“Series A Preferred”) to the CEO, such that the total shares of Series A Preferred held by the CEO as of September 30, 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.

Accordingly, there was no value ascribed to these shares when issued.

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.

There was no warrant activity during the three and nine months ended September 30, 2025.

The weighted average exercise price of warrants outstanding at September 30, 2025 was $ 8.50 .

Outstanding, January 1, 2025

Outstanding, September 30, 2025

Exercisable, September 30, 2025

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of outstanding and exercisable warrants as of September 30, 2025, is presented below:

Warrants Outstanding

Warrants Exercisable

Remaining Life

As of March 31, 2026 and December 31, 2025, the CEO held 1,000,000 shares of Non-convertible Series A Voting Preferred Stock (“Series A Preferred”).

The issuance of up to 1,000,000 shares of Series A Preferred to the CEO was previously approved by a majority stockholder vote, subject to the Board’s right to revoke, rescind, transfer, or cancel the issued shares in the event the CEO is removed from, or resigns from, all positions with the Company.

There were no changes to the CEO’s Series A Preferred holdings during the three months ended March 31, 2026.

Holders of Non-convertible Series A Voting Preferred Stock are not entitled to dividends, and such shares are not convertible 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 has 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.

Stock-Based Compensation

The following table presents information related to stock-based compensation for the three and nine months ended September 30, 2025 and 2024:

The following table presents information related to stock-based compensation for the three months ended March 31, 2026 and 2025:

For The Three Months Ended

For The Nine Months Ended

September 30,

Shares issued for legal and consulting services

Shares issued to board members

Shares issued for legal services

Accrued issuable equity (common stock)

1 unchanged sentence

Amortization of restricted stock awards and units

During the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $ 1,288,074 and $ 4,510,241 respectively, of which $ 1,140,466 and $ 3,536,611 , respectively, are included within selling, general and administrative expenses, and $ 147,608 and $ 973,630 , respectively are included within research and development expenses in the condensed consolidated statements of operations.

During the three and nine months ended September 30, 2024, the Company recognized stock-based compensation expense of $ 56,199 and $ 1,811,156 , respectively, of which $ 25,561 and $ 1,704,505 , respectively, is included within selling, general and administrative expenses, and $ 30,638 and $ 106,651 , respectively is included within research and development expenses in the condensed consolidated statements of operations.

Stock Options

A summary of stock options activity during the nine months ended September 30, 2025, is presented below:

Outstanding, January 1, 2025

Outstanding, September 30, 2025

Exercisable, September 30, 2025

During the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of $ 1,459,478 and $ 1,637,368 respectively, of which $ 1,270,150 and $ 1,233,235 , respectively, are included within selling, general and administrative expenses, and $ 189,328 and $ 404,133 , respectively are included within research and development expenses in the condensed consolidated statements of operations.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents information related to stock options as September 30, 2025:

Stock Options

A summary of stock options activity during the three months ended March 31, 2026, is presented below:

Outstanding, January 1, 2026

Outstanding, March 31, 2026

Exercisable, March 31, 2026

The following table presents information related to stock options as of March 31, 2026:

Options Outstanding

Options Exercisable

Remaining Life

Remaining Term

$ 2.24 - $ 7.92

2 unchanged sentences

$ 16.40 - $ 18.48

No options were granted during the three months ended September 30, 2025.

The weighted average grant date fair value per share of options granted during the nine months ended September 30, 2025 was $ 8.47 .

For the nine months ended September 30, 2024, the weighted average grant date fair value per share of options granted was $ 1.58 .

No options were granted during the three months ended September 30, 2024.

For the three months ended March 31, 2025, the weighted average grant date fair value per share of options granted was $ 1.06 .

There were no stock options granted during the three months ended March 31, 2026.

The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model.

1 unchanged sentence

For The Three Months Ended

For The Nine Months Ended

September 30,

Risk free interest rate

4.27 % - 4.81

Expected term (years)

7 unchanged sentences

Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

As of September 30, 2025, there was $ 81,115 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.44 years.

As of March 31, 2026, there was $ 51,433 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.52 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards

The following table presents information related to restricted stock awards activity during the three and nine months ended September 30, 2025:

The following table presents information related to restricted stock awards activity during the three months ended March 31, 2026:

Weighted Average

1 unchanged sentence

Non-vested RSAs, January 1, 2026

Non-vested RSAs, September 30, 2025

As of September 30, 2025, there was $ 69,538 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 0.98 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Non-vested RSAs, March 31, 2026

As of March 31, 2026, there was $ 31,072 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 0.6 years.

Restricted Stock Units

The following table presents information related to restricted stock units (“RSUs”) activity during the three and nine months ended September 30, 2025:

The following table presents information related to restricted stock units (“RSUs”) activity during the three months ended March 31, 2026:

Weighted Average

Shares of Restricted

Number of Restricted

Non-vested RSUs, January 1, 2026

Non-vested RSUs, September 30, 2025

Vested RSUs undelivered September 30, 2025

To date, RSUs have only been granted to employees and consultants in accordance with the Company’s 2018 Equity Incentive Plan.

Non-vested RSUs, March 31, 2026

Vested RSUs undelivered March 31, 2026

To date, RSUs have only been granted to employees and consultants 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 are to be settled on January 1, 2027.

As of September 30, 2025, there was $ 14,172,986 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 3.13 years.

As of March 31, 2026, there was $ 13,424,379 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 2.76 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Facility Lease

See Note 12 – Subsequent Events for information regarding a new facility lease.

Legal Matters

The Company may be involved in litigation and arbitrations from time to time in the ordinary course of business.

As of September 30, 2025, the Company was not involved in any ongoing litigation.

As of March 31, 2026, 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.

Digital Asset Mining Leases

As of March 31, 2026, 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 $ 661,563 remained as commitments as of March 31, 2026.

These commitments are not recorded on the accompanying consolidated balance sheet as of March 31, 2026 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 March 31, 2026 for future operating expenses associated with this lease totaled $ 2,470,000 .

See Note 8 - Leases for additional information.

NOTE 11 – 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 bitcoin.

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 chief operating decision maker (“CODM”), who is the Company’s chief executive officer, reviews profit and loss information for the EMP in order to assess performance, make decisions about the allocation of operating and capital resources, and evaluate pricing strategies related to the EMP segment.

The CODM is not regularly provided disaggregated expense information, other than the expense information for each segment included in the captions within the consolidated statements of operations.

The CODM also uses these reviews of the two segments to make strategic operational decisions and manage 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.

Gains and losses associated with the Company’s digital assets (which is not considered an operating segment) are presented separately from segment operating results.

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.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the breakout of the operations of the energy management and digital asset mining segments for the three and nine months ended September 30, 2025 and 2024:

The following table presents the breakout of the operations of the Energy Management Platform and Mining of Digital Assets segments for the three months ended March 31, 2026 and 2025:

For the Three Months Ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Digital Assets

Cost of revenue

Gross Profit (Loss)

Operating Expenses

1 unchanged sentence

Selling, general, and administrative (1)

Credit losses on accounts receivable

Total Operating Expenses

Segment Operating (Loss) Gain

Segment Net Loss

( 6,808,326 )

4 unchanged sentences

Other segment (expense) income (2)

Impairment of equity investment

( 3,325,045 )

Credit loss on convertible loan receivable

( 1,832,690 )

Change in fair value of digital assets

Total Other Income (Expense), net

( 20,767,713 )

Net (Loss) Income

( 20,767,713 )

1 unchanged sentence

( 9,748,600 )

( 2,003,764 )

For the Nine Months Ended

September 30, 2025

September 30, 2024

Cost of revenue

Operating Expenses

Research and development

Selling, general, and administrative

Credit losses on accounts receivable

Total Operating Expenses

Segment Operating (Loss) Gain

( 27,464,070 )

( 27,633,421 )

( 11,694,095 )

Other (Expense) Income

Other segment (expense) income (1)

( 1,209,073 )

Impairment of equity investment

( 3,325,045 )

Total Other (Expense) Income, net

( 20,767,713 )

Credit loss on convertible loan receivable

( 20,734,667 )

( 9,748,600 )

Change in fair value of digital assets

Total Other Income (Expense), net

( 9,362,853 )

1 unchanged sentence

( 20,767,713 )

Net (Loss) Income

( 28,119,844 )

2 unchanged sentences

( 18,806,658 )

September 30, 2025

March 31, 2026

December 31, 2025

Digital Assets

Segment Assets

1 unchanged sentence

All other assets

Other segment expenses and losses include interest income, interest expense, amortization of debt discount, gain (loss) on extinguishment of debt and change in fair value of accrued issuable equity.

Selling, general, and administrative includes credit losses on Auto-Vibe assets.

Other segment expense and income include interest income, interest expense, amortization of debt discount, gain (loss) on extinguishment of debt and change in fair value of accrued issuable equity.

Geographic Information

As of March 31, 2026, 100 % of the Company’s long-lived assets are located in the U.S.

During the three months ended March 31, 2026 and 2025, $ 165,237 and $ 1,039,423 of revenue was generated from foreign entities, respectively.

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated events that have occurred after the balance sheet date and through the date the condensed consolidated financial statements were issued.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

As of September 30, 2025, $ 126,354,558 of the Company’s long-lived assets are located in the U.S., and $ 1,180,129 are in a foreign nation.

As of December 31, 2024, all of the Company’s long-lived assets were located in the U.S.

During the three and nine months ended September 30, 2025, $ 287,492 and $ 2,453,860 of revenue was generated from non-U.S.

During the three and nine months ended September 30, 2024, $ 1,913,527 and $ 2,219,588 of revenue was generated from non-U.S.

NOTE 15 - SUBSEQUENT EVENTS

At the Market Offering

During the period from October 1, 2025 through November 14, 2025, the Company issued 3.0 million shares of common stock for gross proceeds of $ 15.1 million pursuant to the Second ATM Agreement.

Digital Assets

During the period from October 1, 2025 through November 14, 2025, the Company has earned 7.43 Bitcoin from mining services.

Digital Asset Mining Lease Agreement

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 $ 4.2 million.

Repayment of Loan Payable

Subsequent to September 30, 2025, the Company repaid the remaining $ 3.8 million principal balance of the loan payable and $ 49,139 of interest pursuant to the Loan Agreement entered into on July 8, 2025.

Convertible Loan Receivable

On October 24, 2025, the Company loaned an additional $ 294,875 (€ 250,000 ) to the Investee pursuant to the convertible loan agreement, which has been fully impaired.

See Note 5 – Investments, Impairment and Credit Losses for additional information.

Investment in Foreign Entity

On November 13, 2025, the Company was notified that its Investee, that is also a customer, filed an application with a German insolvency court to open insolvency proceedings.

See Note 5 – Investments, Impairment and Credit Losses for additional information.

Auto-Vibe Assets

On May 7, 2026, the Company executed a transaction to sell the remainder of the Auto-Vibe vehicles owned.

As of the date of this filing, the Auto-Vibe assets consist of a gross past due receivable of $ 1.0 million, a gross receivable amount of $ 3.9 million related to the sale of the remaining vehicles owned as of December 31, 2025, which is due on July 10, 2026, a credit loss reserve of $ 0.5 million against the gross receivables, and deposits in a segregated account of $ 0.1 million.

Facility Lease

On May 12, 2026, the Company executed a 3 -year lease agreement for a new facility located in Houston, Texas.

The facility is approximately 24,700 rentable square feet and monthly rent is $ 30 thousand, which consists of base rent plus common area maintenance costs.

The Company will pay a security deposit of $ 70 thousand and secure a letter of credit in the amount of $ 0.3 million within sixty days of the effective date of the agreement.

Credit Agreement

On May 13, 2026, the Company borrowed an additional $ 15 million (the “Third Drawdown”) against the $ 20 million credit facility with Coinbase.

The Third Drawdown bears a 7 % loan fee rate per annum, paid monthly, with no scheduled maturity date.

The Company segregated 300 BTC as collateral against this loan.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements