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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-18 · 165 added, 364 removed, 53 unchanged (91% of the section changed)

1 unchanged sentence

The following discussion and analysis of the results of operations and financial condition of KULR Technology Group, Inc.

(“KULR”) and its wholly-owned subsidiary, KULR Technology Corporation (“KTC”) (collectively referred to as “KULR” or the “Company”) as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Quarterly Report.

(“KULR”) and its wholly-owned subsidiary, KULR Technology Corporation (“KTC”) (collectively referred to as “KULR” or the “Company”) as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Quarterly Report.

References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company.

5 unchanged sentences

Risk Factors in our Annual Report on Form 10-K which was filed with the SEC on March 31, 2026, unless disclosed elsewhere in this Quarterly Report.

KULR Technology Group, Inc., through its wholly owned subsidiary KULR Technology Corporation, operates in two principal technology domains:

energy storage systems and robotics and artificial intelligence (“A.I.”).

Energy storage is the strategic core of our business and is anchored by the KULR ONE® platform.

The Company also provides leadership in the industrial robotics and A.I.

sectors through the distribution of the Exia exoskeleton systems.

This recent expansion to KULR’s offerings complements our technology portfolio by positioning KULR within emerging automation and human–machine interface markets.

In addition, KULR maintains commitment to its Bitcoin Treasury Strategy (see “Our Bitcoin Acquisition Strategy” section below), the benefits of which are leveraged to position KULR as a dominant leader in the energy storage and robotics & A.I.

Our expertise in energy storage systems originates from the Company’s legacy proprietary carbon fiber-based thermal interface materials engineered for applications requiring high thermal conductivity and low mass.

Building on this foundation of thermal expertise, the Company has expanded into a full battery system offering also known as the KULR ONE® platform as described with the figure below.

1 Infographic description of the KULR ONE® ecosystem.

The roadmap for the KULR ONE ® platform facilitates an ecosystem of energy storage related offerings consisting of the following:

space with K1 Space (K1S) , defense applications with K1 Guardian (K1G) , grid, UPS, and datacenter back-up with the K1 Max (K1M) , and drone, UAV, UAS, eVTOL with the K1 Air (K1A) .

Additionally, the Company continues to develop safety focused space and terrestrial battery management systems (BMS) with kBMS .

Lastly, for customers wishing to leverage KULR’s expertise and capabilities, but to apply to their own battery designs, the Company provides all design, test, manufacturing, and production services

under the KULR ONE ® Design Solutions (K1-DS) umbrella.

Off the shelf (OTS) energy storage related product lines, such as KULR’s trigger cells, thermal runaway shield (TRS), and SafeX safe storage solutions are also encompassed within K1-DS.

Within KULR engineering, this ecosystem integrates thermal design, cell selection, battery pack design, battery management systems development, environmental and abuse testing, and certification support.

Within KULR operations, it includes advanced manufacturing techniques and the strategic scaling of production capacity.

All battery-related engineering and operational activities are conducted under our AS9100-certified quality management system.

In summary, our energy storage efforts focus on the design, testing, and commercialization of safe, high-performance lithium-ion (“Li-ion”) battery systems for cross industry applications.

We develop technologies that address thermal management, battery safety, and the prevention of thermal runaway and cell-to-cell propagation—challenges that are critical to markets including aerospace, defense, commercial drones, electric mobility, stationary energy storage, and battery logistics.

KULR ONE ® Space

The KULR ONE ® Space (K1S), as highlighted with the figure below, is a portfolio of modular, flight-ready battery platforms built to meet the extreme demands of spacecraft, satellites, and deep space missions.

It is available in three tailored configurations:

a JSC 20793-style thermal runaway propagation-safe architecture for maximum mission safety, a low-mass, low-volume standard flight battery design optimized for customer specific spacecraft requirements, and a simple cell arrangement variant engineered for seamless integration into customer-supplied housings and BMS systems.

All configurations leverage KULR’s heritage in thermal management, battery safety, and flight hardware.

K1S is fully modular, cell-agnostic, and rapidly customizable—dramatically reducing development time, qualification risk, and mission cost.

2 Images of (a) the 20793 (PPR) style K1S, (b) the low mass / low volume K1S, and (c) the simple cell arrangement style brick level K1S.

KULR ONE ® Guardian

The KULR ONE ® Guardian is a mission-specific, ruggedized adaptation of the KULR ONE ® platform built for military and defense applications where safety, survivability, and reliability under extreme conditions are mandatory.

Rather than a fixed product line, Guardian represents KULR’s bespoke battery architectures engineered to meet stringent standards such as NAVSEA S9310, MIL-STD-810H, and other service-specific shock, vibration, thermal, and ballistic requirements.

Guardian batteries typically integrate KULR’s passive propagation-resistant cell architecture, flame arresting thermal materials, and MIL-compliant electrical/mechanical design to ensure zero cell-to-cell propagation events as well as sustained performance in battlefield environments.

Guardian systems remain cell-agnostic and fully customizable , enabling rapid adaptation to any Department of War (DoW) application.

3 Image of KULR’s latest Guardian platform which is a 15 Ah 400 V system.

KULR ONE ® Max

The KULR ONE ® Max is a high-capacity battery platform engineered for grid energy storage, UPS systems, AI data center backup (BBU), and large-scale power infrastructure.

At its core is a cell-agnostic thermal architecture, derived from KULR’s spaceflight-proven KULR ONE ® Space platform, and designed to meet UL 9540/9540A requirements regardless of cell supplier or chemistry.

By applying space-grade safety techniques to terrestrial energy systems, it provides passive thermal runaway mitigation and cell-to-cell propagation resistance at rack and container scale.

Current development is centered around high-power 21700-format cell implementations and alignment with Open Rack V3 (ORV3) reference design standards to support rapid adoption in AI data centers.

The system scales from module to tray to rack and integrates with third-party BMS and EMS systems;

it supports NMC, LFP, high-silicon, and future chemistries with minimal redesign.

Built to meet UL 9540/9540A and global safety standards, KULR ONE ® Max delivers space-level safety and reliability to mission-critical and grid-level applications.

4 Image depicts (a) the 21700 based K1M variation for higher power applications and (b) the ORV3 based K1M architecture.

5 Example thermal runaway testing results demonstrating ability to perform multiple triggers without inducing cell-to-cell propagation;

a key requirement of UL9540A certification process.

KULR ONE ® Air

The KULR ONE ® Air is a purpose-built battery platform for unmanned aerial systems, loitering munitions, tactical ISR drones, and other high-demand defense aviation assets.

Modern high-discharge cells now outperform what traditional busbars, wiring, and connector systems can safely carry, creating new failure modes caused by overheated interconnects acting as resistance heaters against the cells.

K1A directly addresses this by engineering low-resistance current paths, increasing copper mass where needed, reducing busbar and wire temperatures, and preventing component-driven ignition that could lead to thermal runaway.

The result is an off-the-shelf pack price point with defense-grade engineering—capable of sustaining extreme C-rate discharge while extending time-on-station, enabling higher thrust profiles, and ensuring mission assurance in battlefield environments.

6 Depiction of the 6S4P K1A battery.

In parallel, variations of K1A are being developed for electric vertical takeoff and landing aircraft that require energy densities near 300 Wh kg⁻¹ packaged within DO-311–capable safety envelopes.

These architectures focus on delivering high energy per unit mass while still controlling thermal gradients, interconnect temperatures, and propagation risks during abuse or failure events.

The design maintains KULR’s emphasis on precise current path engineering, lightweight structural elements, and compatibility with aerospace-grade certification pathways.

This approach enables eVTOL manufacturers to balance endurance, payload capacity, and certification readiness without sacrificing safety or thermal stability.

KULR Battery Management System (kBMS)

The kBMS is KULR’s modular battery management system architecture, originally developed for spaceflight where radiation tolerance and multi-fault tolerance are critical for survival and mission longevity.

The space-rated version uses radiation-tolerant components tolerant up to 75 kRAD, 8 series string controls, operational amplifier–based logic instead of microprocessor-heavy designs, and redundant safety pathways to comply with standards such as NASA JSC 20793 and deep-space mission requirements.

Building on that heritage, a terrestrial variant of kBMS has been adapted for Department of War (DoW) and industrial applications, with a roadmap focused on maintaining core safety principles while supporting higher power profiles, faster telemetry, and integration with loitering munitions, unmanned systems, ground vehicles, and stationary power units.

Both versions remain cell-agnostic and are designed to interface directly with KULR ONE ® systems, providing precise balancing, state-of-charge estimation, and standard safety provisions.

7 Image of (a) the kBMS (Space) and (b) the in-house software graphical user interface (GUI).

kBMS + AI = KULR Core TM

The kBMS will serve as a foundation for KULR’s step into facilitating edge-AI for space applications.

KULR works to integrate the Company’s BMS, developed initially for space applications, with the Nvidia Jetson platform such that the processing and control of the BMS will be facilitated with the Jetson chipset.

The resulting combination of computing and battery control capabilities is the KULR Core TM .

The all-in-one AI compute chipset combined with BMS controls for the batteries will result in every battery flown with the KULR Core TM being AI enabled, thus providing KULR’s stepping stone into edge-AI.

In addition to BMS functionality, the KULR Core TM will provide every user with a flight (or mission) computer and additional data processing capabilities with the leading chipset available.

8 Rendering of the KULR Core TM .

Additional targeted capabilities of the KULR Core TM include the following:

● Operation of the Jetson platform in a radiation tolerant enclosure,

● Dual or triple redundant processing and fault checking for ensuring fault tolerance of critical operations,

● AI driven battery state-of-health monitoring and subsequent optimization of related functionality (charging, discharging, solar array interaction),

The KULR Core TM will first serve to replace the BMS and flight (mission) computer.

Moving forward, the powerful capabilities of the Jetson platform will be leveraged to facilitate other spacecraft functions for GNC, thermal management, and communications.

The end result will be a mission autonomous spacecraft.

KULR ONE ® Design Solutions (K1-DS)

The final component to the ecosystem that is the KULR ONE ® platform is KULR ONE ® Design Solutions (K1-DS).

K1-DS serves as the Company’s engineering (and production)-as-a-service platform, enabling customers to leverage KULR’s advanced design, testing, and production infrastructure without immediately procuring a KULR-branded battery product.

Through K1-DS, KULR functions as an extension of the customer’s technical organization;

integrating concept design, modeling, analysis, and rapid prototyping with a level of safety and performance rigor typically reserved for aerospace and defense programs.

Strategically, the K1-DS model is designed to serve as a gateway to long-term production partnerships .

KULR selectively engages in K1-DS programs that demonstrate alignment with the Company’s core domains;

high-performance, safety-critical energy storage for aerospace, defense, industrial, and commercial electrification markets.

These projects are pursued not as one-off consulting efforts, but as early-stage co-development opportunities intended to mature into recurring production contracts for customer-specific energy storage systems built within KULR’s manufacturing infrastructure.

The K1-DS framework provides a holistic approach (see Fig.

9) to battery system development, supported by the Company’s vertically integrated capabilities, including:

Multi-disciplinary Expertise:

Integrated electrical, thermal, mechanical, and electrochemical design and analysis.

Tier-One Cell Access:

Direct sourcing partnerships with leading cell OEMs to ensure quality, consistency, and scalability.

Cell-Level Characterization:

Advanced in-house testing to evaluate performance, quality, and safety under diverse profiles.

Concept Development & Simulation:

Digital modeling to optimize architecture, pack geometry, and energy density.

Rapid Prototyping:

Agile build capability for proof-of-concept and pilot-scale validation.

Pack-Level Qualification:

Mechanical, electrical, and abuse testing aligned with UN 38.3, UL 9540A, DO-311, and NASA 20793 protocols.

System-Level Integration:

Validation of battery management systems, control logic, and communication interfaces.

Lifecycle Support:

Compliance, transport, and recycling support from concept through end-of-life.

By carefully selecting K1-DS engagements that align with its strategic growth roadmap, KULR converts early design partnerships into long-term revenue channels, transitioning from engineering services to recurring production supply of customer-specific energy storage systems .

This disciplined approach expands the Company’s reach across emerging electrification markets while reinforcing its core mission:

to deliver safe, high-performance, and scalable energy solutions through the KULR ONE ® platform.

9 Holistic approach for life cycle of energy storage systems.

Overview of Direct Product and Service Offerings

Within the core technology domain of battery design and analysis, KULR provides custom batteries, batteries designed based on KULR ONE ® architectures (Space, Guardian and Air), and related off-the-shelf products (such as trigger cells, NASA WI37A screened cells, and TRS).

These product and service offerings are outlined with the following figure.

10 Battery design and analysis product and service offerings.

Overview of Cell and Battery Testing Service Offerings

KULR has invested heavily in an expansive cell and battery testing suite of services over the last 3 years.

Testing capabilities are grouped between abuse testing, electrical testing, and environmental testing and are reflected with the following figure.

11 Cell and battery testing service offerings.

Battery Production

A natural progression for the Company following the development of the KULR ONE platforms was to expand into the low volume production space for custom, high-end, and/or boutique lithium-ion batteries that require manual or semi manual assembly.

Reducing pricing and lead times to a level suitable for the emerging commercialized space and defense sectors also required the onboarding of machining and fabrication equipment.

KULR’s battery component fabrication and assembly production capabilities are highlighted with the following figure.

12 Battery production related offerings.

KULR VIBE Solution

In 2022, we acquired intellectual property from Vibetech International, LLC (“Vibetech”), which allows KULR to expand itself as a vertically integrated energy management company focused on sustainable energy solutions.

For nearly twenty years, the primary application has been aviation.

However, advances in measurement and computing technologies have allowed KULR VIBE to provide transformative and scalable solutions across transportation, renewable energy (wind farm), manufacturing, industrial, performance racing and autonomous aerial (drone) applications among others.

KULR VIBE addresses one the most challenging issues with advanced machinery today;

excessive energy robbing vibrations that are destructive to both the machinery and in many cases the operator.

The KULR VIBE suite of technologies utilize proprietary sensor processes with advanced learning algorithms to both achieve precision balancing solutions, and successfully predict component failure based on its comprehensive database of vibration signatures.

Its enhanced AI learning algorithms pinpoint areas where excess vibrations cause a loss of energy that can lead to system malfunctions, weakened performance, and maintenance issues.

This innovative technology can be utilized as a standalone solution or be paired with existing track and balance technology to facilitate vibration reduction, achieve increased energy production, and reduce mechanical failures thereby extending platform life.

KULR VIBE recently balanced the motors and blades of a mission critical drone to demonstrate the benefits of the technology.

The results were a 23% increase in battery life and a lift increase of 45%.

Same motors, same blades, KULR VIBE optimized.

The KULR VIBE suite of products and services have provided vibration analysis and mitigation to global companies across multiple industries and sectors.

According to Fact.MR, an insights-driven global market intelligence company, the global vibration motor market is estimated at $6.5 billion in 2023 and is forecast to reach $24.1 billion by 2032, growing at a Compounded Annual Growth Rate (“CAGR”) of 14.1% during 2023-2032.

KULR Xero Vibe Fan

Key challenges for server and data centers are cooling of components, power consumption, and acoustics.

KULR has leveraged the KULR VIBE software, developed initially for helicopter balancing applications, to develop the Xero Vibe fan.

The unprecedented low vibration levels of the Xero Vibe fan provide for increased cooling efficiency, higher fan RP, and decreased power consumption.

KULR works actively to finalize the qualification of the Xero Vibe fan and automate the balancing techniques to facilitate enough meaningful throughput to be able to provide solution for the server and data center industry.

The Future is Energy + AI

We believe the future of KULR is Energy + AI.

We are building our AI infrastructure on industry leading Nvidia and AMD semiconductor platforms, and they are hosted on a hybrid of private cloud and Microsoft Azure.

As the world faces shortages of both technical expertise to design batteries and raw materials to build batteries, KULR aims to address this need with KULR ONE AI (K1AI).

The Company is collecting large quantities of performance and safety test datasets for the most highly used commercial lithium-ion cells and combining that data with AI techniques to drive battery design and reduce engineering touch time to market.

This product is to target the following markets:

● Aerospace and defense systems, such as CubeSat batteries meeting JSC 20793 safety requirements by NASA

● Power tools and industrial equipment

● High-performance electric mobility

● Electric vertical take-off and landing (“eVOTL”)

● Electric micro-mobility vehicles

● Residential and commercial energy storage systems

Robotics, KULR ONE, and KULR CoreTM

KULR believes one of most logical terrestrial verticals for the KULR ONE platform and the KULR CoreTM is robotics;

specifically battery powered exoskeletons.

Right now, battery powered exosuits and exoskeletons rely on OTS batteries that are swappable in nature.

This is a limiting factor.

KULR will address this with the KULR ONE roadmap which focuses on high energy high power cell combinations, such as the MOLICEL 21700-P50B and its eventual successor.

KULR believes this will address two limiting factors for the robotic industry (1) increasing energy and power needs and (2) heat generation and dissipation issues.

A pack designed around the KULR ONE reference design, using MOLICEL power cells, means the utilization of a low heat generating pack due to significantly lower resistance of the cells.

This “robotics” variation of the KULR ONE platform will be KULR CoreTM enabled.

Battery Recycling and Management

KULR’s SafeCASE technology provides a safe and cost-effective solution to commercially store and transport lithium batteries, which is increasing in frequency as supply chain challenges necessitate battery recycling and end-of-lifecycle management.

Whether shipping a single battery, a battery-powered device or a load shipment of batteries, KULR’s technology mitigates the impacts of cell-to-cell thermal runaway propagation and ensures a safe journey.

KULR’s Thermal Runaway Shield (TRS) technology is trusted by NASA to ship and store astronauts’ laptop batteries on the International Space Station.

KULR is serving a total addressable market for a circular economic model for batteries that will reach over $77 billion by 2034 (estimated based on market data projections published by Allied Market Research, Inc.

stating that the global battery recycling market size is expected to reach $77.1 billion by 2034).

Aerospace/Defense

KULR’s thermal management solutions enable the defense and aerospace industries to safely deploy electronic technologies that support critical missions and protect national security.

Technology in this sector is developing at increasing rates - the space industry alone will be worth nearly $3 trillion in 30 years.

The electronic devices being placed into aircrafts, satellites, and missiles are becoming ever smaller and more powerful.

Lithium-ion batteries, which are already prone to overheating and propagation, are exposed to harsh thermal

environments as well as shock and vibration during aerospace and defense operations.

The Company has partnered with Lockheed Martin, Leidos and other prime contractors to develop and supply mission-critical technologies for hypersonic vehicles, high-power magnetic wave, and other defense systems.

KULR designs and builds advanced battery systems for autonomous platforms, digital infrastructure, e-mobility and Space – sold as a product or delivered as service subscription.

The Company addresses two primary constraints in electrification:

thermal management and safety.

As energy and power density increase across aerospace, autonomous machines, digital infrastructure and industrial applications, managing heat generation, current density, and propagation risk becomes essential to system reliability and survivability.

KULR is establishing a fully integrated battery energy storage system design and production infrastructure in Houston, Texas.

KULR brings battery pack design, prototyping, testing, certification, and manufacturing;

as well as battery management system software and electronics design capabilities together under one roof.

This full-stack approach enables faster development cycles and rapid transition from prototype to cost-effective volume production.

The facility is designed to build high-power and high-energy battery packs that require advanced thermal, mechanical, and safety engineering.

With domestic supply chain alignment and scalable production capacity, KULR is positioning itself as a leading manufacturer of advanced battery packs for mission-critical and high-performance applications in the United States.

KULR VIBE is a vibration-reduction technology designed to improve performance and reliability in high-speed and rotor-driven systems.

Derived from vibration management solutions used in defense helicopters for over 20 years, it addresses excess vibration that reduces efficiency, increases mechanical wear, and shortens vehicle lifespan.

KULR VIBE enables motors, rotating assemblies, and sensitive electronics to operate more smoothly and efficiently across a range of applications, including helicopters, drones, performance vehicles, wind turbines, and other electric and autonomous systems.

Recent Developments

Investments, Impairment and Credit Losses

During the nine months ended September 30, 2025, the Company made two investments in a private German entity (the “Investee”), including Series A7 Preferred Shares and a convertible loan receivable of $3,325,045 and $1,832,690, respectively.

On October 28, 2025, the Company loaned an additional $294,875 to the Investee pursuant to the convertible loan agreement.

In addition, the Company had accounts receivable of $780,643 due from Investee, who was also a customer.

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.

Bitcoin Treasury Strategy

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 bitcoin mining services company to operate 2,500 S-19 bitcoin mining machines on KULR’s behalf, at a total lease cost of $850,000.

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 the 2,500 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 3,570 Bitmain Antminer S19 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 three hundred and sixty five day lease agreement (the “Fourth Machine Lease Agreement”) to operate 1,157 MicroBT Whatsminer M30S++ bitcoin mining machines on KULR’s behalf, at a total lease cost of $2,646,250.

On October 1, 2025, the Company entered into a two year lease agreement (the “Fifth Machine Lease Agreement”) to operate 1,296 bitcoin mining machines on KULR’s behalf, at a total lease cost of $4,220,000.

Through September 30, 2025, 55.70 bitcoin have been earned pursuant to the Machine Lease Agreements, at an average value of $109,254 per bitcoin.

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

Caban Asset Acquisition

On December 24, 2025 (the “Acquisition Date”), we 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 we 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”).

We 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 our facility.

If we suffer any damages related to the Acquisition for which we are 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, we 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 our facility, to ensure a smooth transition of the manufacturing of the Battery Packs from Caban to KULR.

In consideration for the transition services, we 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, we incurred expenses in connection with the TSA of approximately $100,000.

Credit Agreement

In July 2025, we secured a $20 million credit facility (which has no fixed termination date) with Coinbase, our 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, we borrowed $8 million (“Initial Drawdown”) which was repaid on October 15, 2025.

On March 27, 2026, we borrowed $5 million (the “Second Drawdown”) against the facility.

The Second Drawdown bears a 7% loan fee, and we segregated 125 Bitcoin (“BTC”) 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 we incurred interest in the amount of $4,795 pursuant to the Second Drawdown.

On May 13, 2026, we 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.

We segregated 300 BTC as collateral against this loan.

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

Bitcoin Strategy

As of March 31, 2026, we had two machine lease agreements (“Machine Lease Agreements”) with digital asset mining services providers related to the operation of digital asset mining machines.

On July 30, 2025, we entered into a one-year mining services agreement and on October 1, 2025, we entered into a two-year mining services agreement with a digital asset mining services company.

During the three months ended March 31, 2026, the Company did not purchase BTC and 8.80 BTC were earned from mining operations at an average value of $75,263 per BTC.

See the section “Our Bitcoin Acquisition Strategy” below for further information regarding our Bitcoin purchases, including the source of capital used to purchase Bitcoin.

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 the at the market agreement (“First ATM Agreement”) by an additional $50 million, bringing the total aggregate offering amount to $146 million.

On May 30, 2025, the Company completed its initial ATM offering pursuant to 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 a sales agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $300 million in ATM offerings through or to the Agent.

On September 30, 2025, the Company reduced the aggregate offering amount 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 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.

Issuance of Non-Convertible Series A Voting Preferred Stock

On January 16, 2025, the Board of Directors of the Company (the “Board”) approved the issuance of an additional 270,000 shares of Non-Convertible Series A Voting Preferred Stock (“Series A Voting Preferred”) to the Chief Executive Officer (“CEO”), bringing his total holdings up to 1,000,000 shares of Series A Preferred Stock.

The issuance is 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.

This conditional arrangement is designed to ensure that the voting power conferred by the Series A Voting Preferred Stock remains tied to the active leadership of the Company.

This underscores the Board’s commitment to maintaining alignment with the long-term interests of the Company and its stockholders.

The Independent Members of the Board have determined that the issuance represents a pivotal strategic move to reinforce and enhance the Company’s flexibility to optimize the Company’s negotiating position in any potential current and/or future engagements with commercial, financial, and/or strategic parties, and to provide defenses against potential hostile third-party actions.

Departure and Appointment of Directors

On April 28, 2026, the holder of a majority of the outstanding voting stock of the Company, acting by written consent in lieu of a stockholder meeting, removed Dr.

Joanna Massey, Donna Grier, Aron Schwartz, and Shawn Canter from the Company’s Board of Directors and appointed Mr.

Ben Frank, a Director of Workforce AI Solution Engineering at Microsoft Corporation, and Dr.

Mike Kimel, a specialist in pricing and profit optimization, as directors, effective immediately.

Each newly appointed director will serve until the Company’s next annual meeting of stockholders or until his successor has been duly elected and qualified.

As a result of these actions, the Company’s Board of Directors was reduced to three members, a majority of whom are independent.

These changes were undertaken as part of the Company’s ongoing efforts to reduce selling, general and administrative expenses and improve operating efficiency in 2026.

Facility Lease

On May 12, 2026, we 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.

We 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.

At the Market Offering

As of December 22, 2025, the Company decided to pause its ATM transactions through June 30, 2026.

During the three months ended March 31, 2026, the Company did not issue any shares of common stock pursuant to the ATM Agreement.

Reverse Stock Split

On June 20, 2025, the Company filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1-for-8 reverse stock split of the shares of the Company’s common Stock, effective on June 23, 2025 (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, every eight shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share.

No fractional shares were issued as a result of the Reverse Stock Split, and any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up to the next whole number.

The number of authorized shares of common stock under the Company’s Certificate of Incorporation, as amended, remained unchanged.

All references to share and per share amounts for all periods presented in the unaudited condensed consolidated financial statements have been retrospectively restated to reflect the Reverse Stock Split.

All rights to receive shares of common stock under outstanding securities, including but not limited to, warrants, options, and restricted stock units (“RSUs”) were adjusted to give effect to the Reverse Stock Split.

Furthermore, proportionate adjustments were made to the per share exercise price and the number of shares of common stock that may be purchased upon exercise of outstanding stock options granted by the Company, and the number of shares of common stock reserved for future issuance under the Company’s 2018 Equity Incentive Plan.

Credit Agreement

On July 1, 2025, the Company entered into a Master Loan Agreement (the “Master Loan Agreement”) with Coinbase Credit, Inc., a Delaware corporation, and Coinbase, Inc., a Delaware corporation, acting in its principal capacity and as agent for each of its affiliates (each, a “Coinbase Entity” and together the “Lender”).

The Master Loan Agreement governs separate loan transactions (each, a “Loan”) whereby the Lender may, from time to time, lend to the Company (i) specified quantities of digital assets or (ii) cash in U.S.

dollars (collectively, “Loaned Assets”).

Each Loan will be documented by a written confirmation setting forth the asset type, principal amount, loan fee rate, maturity profile and any other negotiated terms.

The Master Loan Agreement provides for a multiple-draw term facility up to $20 million.

A Loan shall only be deemed to commence once the Lender transfers the Loaned Assets to the Company;

and the Company simultaneously pledges the required collateral.

Each Loan shall be documented by a written confirmation that sets forth, among other matters, the principal amount, asset type, commencement date, loan-fee rate and any other mutually agreed terms.

The Company shall grant the Lender a continuing first-priority security interest in the collateral.

On July 8, 2025, the Company borrowed $8.0 million in cash (the “Initial Drawdown”) under the Master Loan Agreement.

The Initial Drawdown is the first advance against the revolving credit facility established by the Master Loan Agreement.

The Initial Drawdown bears an 8% loan fee.

The Company’s obligations are secured by a first-priority security interest at a 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.

As of September 30, 2025, the balance on the loan was $3.8 million, which was repaid in full on October 15, 2025.

Mining Operations

On July 9, 2025, Company announced that it had successfully deployed 3,570 Bitmain S19 XP 140T Bitcoin mining machines at facilities located in Asuncion, Paraguay, thereby boosting the Company’s operational capacity to 750 petahash per second (PH/s) across multiple mining locations.

This deployment underscores KULR’s dual acquisition strategy of both mining Bitcoin and purchasing it on the open market.

On July 30, 2025, Company announced that it had successfully deployed 1,157 MicroBT Whatsminer M30S++ Bitcoin mining machines at facilities located in Asuncion, Paraguay, thereby boosting the Company’s operational capacity to 125 petahash per second (PH/s) across multiple mining locations.

This deployment underscores KULR’s dual acquisition strategy of both mining Bitcoin and purchasing it on the open market.

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.

Retirement of Executive Officer

Effective as of August 15, 2025, the Vice President of Engineering, Mr.

Carpenter, resigned from all positions of the Company in connection with his planned retirement.

Carpenter’s decision to retire was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

Carpenter served as KULR’s Vice President of Engineering since June 2017.

Risks Associated with Ongoing Conflicts

The short and long-term worldwide implications of Russia’s invasion of Ukraine are difficult to predict at this time.

The imposition of sanctions on Russia by the United States or other countries and possible counter sanctions by Russia, and the resulting economic impacts on oil prices and other materials and goods, could affect the price of materials used in the manufacture of our product candidates.

If the price of materials used in the manufacturing of our product candidates increase, that would adversely affect our business and the results of our operations.

Additionally, we do not have operations or material net sales in Israel or Gaza and we currently do not expect the recent hostilities in that region to have a material impact on our business.

Risks Associated with the Tariff War

Geopolitical developments, such as the recent changes in tariff policies by the United States and the retaliatory tariff and non-tariff responses by other countries, especially with European Union, China, Canada and Mexico, the prospect of further changes in tariff and trade policies add an additional negative affect on the supply chain.

The increased tariffs imposed by the U.S.

and other countries could have an adverse effect on our supply chain if the imposition of tariffs impact the availability of goods, potentially causing financial difficulty for our direct or indirect customers and reduced demand of our products.

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

Tariffs could increase the cost of our products and the components that go into making them.

These increased costs could adversely impact the gross margin that we earn on our products.

Tariffs could also make our products more expensive for customers, which could make our products less competitive and reduce consumer demand.

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

In addition, potential mitigation strategies could increase costs that a company may not be able to recover.

We cannot predict how the events described above will evolve.

If the events continue for a significant period of time or expand to other countries, and depending on the ultimate outcomes of these conflicts, which remain uncertain, they could heighten certain risks disclosed in Item 1A in our Annual Report on Form 10-K which was filed with the SEC on March 31, 2025, including, but not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending;

cyber-incidents;

disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack or cyber-intrusion;

adverse changes in international trade policies and relations;

claims, litigation and regulatory enforcement;

our ability to implement and execute our business strategy;

terrorist activities;

our exposure to foreign currency fluctuations;

reputational risk;

and constraints, volatility, or disruption in the capital markets, any of which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

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

All share and per share amounts have been adjusted to reflect the Reverse Stock Split.

Results of Operations

Three and Nine Months Ended September 30, 2025, Compared With Three and Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026, Compared With Three Months Ended March 31, 2025

For the Three Months Ended

For the Nine Months Ended

September 30,

Product sales

Contract services

Mining of digital assets

Grant revenue

Mining of digital assets

Total Revenue

For the three months ended September 30, 2025 and 2024, we generated $6,884,840 and $3,185,778 of revenues from 33 and 38 customers, respectively, representing an increase of $3,699,062, or 116%.

For the nine months ended September 30, 2025 and 2024, we generated $13,306,443 and $7,366,887 of revenues from 67 and 78 customers, respectively, representing an increase of $5,939,556, or 81%.

Revenue from product sales during the three months ended September 30, 2025, increased by $859,728 or 112% compared to the three months ended September 30, 2024.

We had 18 product sales customers in the third quarter of 2025, compared with 20 in the third quarter of 2024.

Product sales during these periods include sales of our component product, carbon fiber velvet (“CFV”) thermal management solution, internal short circuit battery cells and devices, patented TRS technology, thermal fiber thermal interface materials, KULR SafeCases, and exoskeleton devices.

Although the number of customers period over period was relatively consistent, the increase in revenue was primarily driven by our new client base generating more significant revenue per contract during the three months ended September 30, 2025, as compared to the same period in 2024.

Additionally, there was a significant increase in revenue generated from one of the Company’s existing customers.

Revenue from product sales during the nine months ended September 30, 2025, increased by $2,248,491 or 89% compared to the nine months ended September 30, 2024.

We had 36 product sales customers in the first nine months of 2025, compared with 47 in the first nine months of 2024.

Although the number of customers decreased, the increase in revenue was driven primarily by our new client base generating more significant revenue per contract during the nine months ended September 30, 2025, as compared to the same period in 2024.

Additionally, there was a significant increase in revenue generated from one of the Company’s existing customers.

Revenue from contract services during the three months ended September 30, 2025, decreased by $1,029,534 or 74% compared to the three months ended September 30, 2024.

The decrease in revenue is primarily due to five large contracts earned in the third quarter of 2024 which generated $1,028,063 of service revenues that did not recur in the 2025 period.

We had 13 contract services customers in the third quarter of 2025, compared with 17 in the third quarter of 2024.

Service revenue includes unique engineering design and testing projects customized for specific customers.

Revenue from contract services during the nine months ended September 30, 2025, decreased by $1,866,652 or 49% compared to the nine months ended September 30, 2024.

We had 30 contract services customers in the first nine months of 2025, compared with 30 in the first nine months of 2024.

The decrease in revenue is primarily due to a large contract earned during 2024 which generated $678,040 of service revenues, along with a significant reduction in two other contracts in 2025.

Service revenue includes unique engineering design and testing projects customized for specific customers.

For the three months ended March 31, 2026 and 2025, we generated $4.8 million and $2.4 million, respectively, of revenues from 26 customers in each period.

We had 19 product sales customers in the first quarter of 2026, compared with 16 in the first quarter of 2025.

Product sales during these periods include sales of our component product, fiber thermal interface solutions (“FTI”), battery production, internal short circuit battery cells and devices, patented thermal runaway shield technology (“TRS”), phase change material (“PCM”) heatsinks, and KULR SafeCases.

The increase in product revenue is primarily due to large sales of FTI and KULR One products to three new customers with whom we did not have contracts during the three months ended March 31, 2025.

We had 12 contract services customers in each of the first quarters of 2026 and 2025.

Although the number of customers was unchanged, the decrease in revenue was primarily driven by two large long term contracts that were completed during the three months ended March 31, 2025.

Contract services revenue includes unique engineering design and testing projects customized for specific customers.

Grant revenue during the three months ended March 31, 2026 was $1.4 million related to the reimbursement of R&D expenses.

Grant revenue consists of an award from the Texas Space Commission to perform research and development of cold-temperature lithium-ion battery solutions for the next generation of Lunar and Martian missions which is part of our ongoing major or central activities.

The contract award was executed on September 23, 2025.

Revenue is earned on the award once specific grant conditions have been met, which is generally when the costs relevant to the condition have been incurred by the Company.

There was no grant revenue recognized for the three months ended March 31, 2025.

Revenue from mining of digital assets during the three months ended March 31, 2026 was $0.7 million.

The Company continued its mining operations pursuant to existing Machine Lease Agreements entered into during 2025.

For the three months ended March 31, 2026, the Company earned 8.80 BTC from mining operations.

For the three months ended March 31, 2025, the Company earned 2.97 BTC from mining operations pursuant to the initial Machine Lease Agreement entered into on March 7, 2025.

Our customers and prospective customers are large organizations with multiple levels of management, controls/procedures, and contract evaluation/authorization.

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Accordingly, the business activity cycle between expression of initial customer interest to shipping, acceptance and billing can be lengthy, unpredictable, and lumpy, which can influence the timing, consistency and reporting of sales growth.

Revenue from mining digital assets during the three and nine months ended September 30, 2025, was $4,396,603 and $6,085,452, respectively.

The initial mining contract was entered into on March 7, 2025 and mining activities increased through September 30, 2025, with additional leases being executed during the period.

Two new mining contracts were entered into during the second quarter of 2025, and we entered into a fourth mining contract in the third quarter of 2025.

For the nine months ended September 30, 2025, we earned 55.70 bitcoin from mining operations.

There was no mining of digital assets revenue recognized prior to March 7, 2025.

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 expense totaling $245,304.

Grant revenue consists of an award from the state of Texas to perform research and development of cold-temperature lithium-ion battery solutions for the next generation of Lunar and Martian missions which is part of our ongoing major or central activities.

The contract award was executed during the three months ended September 30, 2025.

Revenue is earned on the award to reimburse approved expenses incurred by the Company.

There was no grant revenue recognized prior to this period.

Cost of Revenue, Gross Profit and Gross Profit Margin

Cost of revenue consisted of the cost of our products, labor expenses directly related to product sales or contract services, and lease costs incurred pursuant to the Machine Lease Agreements in connection with mining digital assets.

Product mix plays an important part in our reported average margins for any period.

Because we are introducing new products and contract services at an early stage in our development cycle the margins earned can vary significantly between periods, customers, products and services due to the learning process, customer negotiating strengths, and product mix.

For the three months ended September 30, 2025 and 2024, cost of revenues was $6,255,960 and $928,326, respectively, representing an increase of $5,327,634 or 574%.

For the three months ended September 30, 2025 and 2024, gross profit was $628,880 and $2,257,452, respectively, a decrease of $1,628,572 or 72%.

Our gross profit margins were 9% and 71% during the three months ended September 30, 2025 and 2024, respectively.

The decrease in the current period profit margin resulted primarily from increased hours spent on service contracts, non-recognition of revenue related to product sales to our Investee due to their financial condition, and an increase in costs related to digital assets mining leases.

For the three months ended September 30, 2025, our gross profit margins for product sales, contract services and digital assets mining were 6%, (47%), and 5%, respectively.

For the three months ended September 30, 2024, our gross profit margins for product sales and contract services were 73% and 48%, respectively.

There was no revenue from digital assets mining during 2024.

For the nine months ended September 30, 2025 and 2024, cost of revenues was $11,757,508 and $4,026,018, respectively, representing an increase of $7,731,490 or 192%.

For the nine months ended September 30, 2025 and 2024, gross profit was $1,548,935 and $3,340,869, respectively, a decline of $1,791,934 or 54%.

Our gross profit margins were 12% and 45%, during the nine months ended September 30, 2025 and September 30, 2024, respectively.

The decrease in the current period gross profit margin resulted primarily from increased hours spent on service contracts, non-recognition of revenue related to product sales to our Investee due to their financial condition, and an increase in costs related to digital assets mining leases.

For the nine months ended September 30, 2025, our gross profit margins for product sales, contract services and digital assets mining were 39%, (49%), and 2%, respectively.

For the nine months ended September 30, 2024, our gross profit margins for product sales, contract services and IP licensing agreement were 30%, 41% and 100%, respectively.

Cost of revenue consists of the cost of our products as well as labor expenses directly related to product sales or contract services, and lease and non-lease costs incurred pursuant to Machine Lease Agreements in connection with mining digital assets.

The following tables present the gross profit and gross profit margin by revenue type for the periods presented.

For the Three Months Ended

March 31, 2026

Gross Margins

Product sales

Contract services

Grant revenue

Mining of digital assets

For the Three Months Ended

March 31, 2025

Gross Margins

Product sales

Contract services

Mining of digital assets

Revenue mix plays an important part in our reported average margins for any period.

Because we are introducing new revenue streams at an early stage in our development cycle, the margins earned can vary significantly between periods, customers, products and services due to the learning process, customer negotiating strengths, and product mix.

Gross profit margin on product sales decreased compared to the prior year period, driven primarily by reduced margins recognized on various product lines during the period as a result of product mix.

Gross profit margin on contract services improved slightly in the first quarter of 2026, driven primarily by the completion of two projects that had been impacted by excess labor hours and created negative margins in the first quarter of 2025.

Mining of digital asset margins decreased during the period.

The decrease was primarily driven by the decline in BTC prices, which were down significantly in March 2026 relative to March 2025, reducing the value of BTC mined relative to the fixed costs associated with machine lease obligations.

Grant revenue, which represents a reimbursement of costs, reflected a full gross margin contribution.

The related costs include $1.4 million primarily classified within research and development expenses.

Research and Development

Research and development (“R&D”) includes expenses incurred in connection with the R&D of our CFV thermal management solution, high-areal-capacity battery electrodes, and 3D engineering for a rechargeable battery.

Research and development expenses are charged to operations as incurred.

For the three months ended September 30, 2025 and 2024, R&D expenses were $2,323,010 and $1,232,333, respectively, representing an increase of $1,090,677 or 89%.

The increase is primarily due to planned increases in R&D services and new hires in 2025, and an increase in stock-based compensation from additional awards granted in 2025.

For the nine months ended September 30, 2025 and 2024, R&D expenses were $7,209,664 and $3,492,144, respectively, representing an increase of $3,717,520 or 106%.

The increase is primarily attributable to planned increases in R&D services and new hires in 2025, and an increase in stock-based compensation from new awards granted in 2025.

R&D expenses are charged to operations as incurred.

The following table presents the dollar and percentage variances in R&D expenses for the periods presented.

For the Three Months Ended

Operating Expenses

Research and development

Total research and development

We expect that our R&D expenses will increase as we expand our future operations.

The decrease in research and development expenses was primarily attributable to progress made on several key initiatives in the prior year, including third-party engineering and development services, testing equipment purchases, and investments to support manufacturing expansion, which resulted in lower activity levels and associated costs during the current period.

Selling, General and Administrative

Selling, general and administrative expenses consisted primarily of stock-based compensation, marketing and advertising, salaries, payroll taxes and other benefits, Board compensation, accounting and tax, consulting fees, travel and entertainment, rent expense, office expenses, and legal and professional fees.

For the three months ended September 30, 2025 and 2024, selling, general and administrative expenses were $6,263,803 and $2,735,419, respectively, representing an increase of $3,528,384 or 129%.

The increase is primarily due to planned investments to support our growth related activities, including additional advertising and marketing services, professional and consulting fees, and increased salaries and stock-based compensation from new hires and new grants awarded in 2025.

For the nine months ended September 30, 2025 and 2024, selling, general and administrative expenses were $19,836,875 and $11,542,820, respectively, representing an increase of $8,294,055 or 72%.

The increase is primarily due to planned investments in growth related activities that we anticipate will accelerate our growth going forward, including additional advertising and marketing services, professional and consulting fees, travel related expenses, and increased salaries and stock-based compensation from new hires and new grants awarded in 2025.

Credit Losses on Accounts Receivable

For the three and nine months ended September 30, 2025, bad debt expenses were $780,643 and $780,643, respectively, due to the write-off of accounts receivable associated with our Investee, due to their financial condition.

There were no bad debt expenses for the three and nine months ended September 30, 2024.

Impairment of Equipment Deposits

For the three and nine months ended September 30, 2025, impairment of equipment deposits were $0 and $1,355,174, respectively, due to the write-off of equipment deposits.

There were no impairment expenses for the three and nine months ended September 30, 2024.

Selling, general and administrative expenses consisted primarily of stock-based compensation, marketing and advertising, salaries, payroll taxes and other benefits, Board member compensation, accounting and tax, consulting fees, travel and entertainment, rent expense, office expenses, and legal and professional fees.

The following table presents the dollar and percentage variances in selling, general and administrative expenses for the periods presented.

For the Three Months Ended

Operating Expenses

Selling, general, and administrative

Total selling, general, and administrative

The decrease in selling, general and administrative expenses was primarily attributable to the conclusion of strategic investment and corporate development activities that drove costs higher during 2025, including a minority investment in an external company that did not recur during the three months ended March 31, 2026.

Accounting, legal, consulting, and other professional fees decreased as these activities wound down.

Marketing, travel, insurance, and personnel-related expenses similarly reflect lower activity levels in the current period compared to the elevated investment and expansion efforts undertaken throughout 2025.

Credit Losses

During the three months ended March 31, 2026, the Company recorded a credit loss of $500,000 on Auto-Vibe assets.

There was no comparable charge in the prior year period.

Other Income (Expense)

For the three months ended September 30, 2025 and 2024, other income (expense), net was $1,764,661 and $(293,464), respectively, representing an increase of $2,058,125.

The change is primarily attributable to the $6,837,563 unrealized gain on Bitcoin holdings due to the three-month change in market price of Bitcoin from $107,176 on June 30, 2025, to $114,057 on September 30, 2025, a decrease of $278,013 for amortization of debt discount in connection with merchant cash advances, and an increase of $76,378 for the change in fair value of accrued issuable equity, partially offset by a $3,325,045 impairment of an equity investment and $1,832,690 for a credit loss on a convertible loan receivable.

For the nine months ended September 30, 2025 and 2024, other income (expense), net, was $9,994,997 and $(1,209,073), respectively, representing an increase of $11,204,070.

The change is primarily attributable to the $14,456,623 unrealized gain on Bitcoin holdings due to the nine-month change in market price of Bitcoin, from $93,384 on December 31, 2024, to $114,057 on September 30, 2025, a decrease of $897,411 for amortization of debt discount in connection with merchant cash advances, an increase of $467,807 from interest earned from the savings account, licensing agreements and loan receivable, an increase of $411,393 for the change in fair value of accrued issuable equity, a decrease of $47,213 in interest expense due to the full repayment of the prepaid advance liability on March 27, 2024, and an increase of $81,358 from the gain on debt extinguishment, partially offset by a $3,325,045 impairment of an equity investment and $1,832,690 for a credit loss on a convertible loan receivable.

The following table presents the dollar and percentage variances in other income (expense) for the periods presented.

For the Three Months Ended

Other Expense (Income)

Change in fair value of digital assets

Interest income

Interest expense

Change in fair value of accrued issuable equity

Amortization of debt discount

Gain on debt extinguishment, net

Total Other Expense, net

The change is primarily attributable to the $11.0 million increase in unrealized loss on BTC holdings reflecting the change in market price of BTC, from $82,559 on March 31, 2025, to $68,228 on March 31, 2026, $0.3 million due to the change in fair value of accrued issuable equity, $0.1 million due to the decrease in interest income, $0.1 million due to the gain on debt extinguishment, partially offset by amortization of debt discount of $0.1 million.

Our Bitcoin Acquisition Strategy

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Our strategy includes acquiring and holding Bitcoin using cash that exceeds our working capital requirements, and from time to time, subject to market conditions, issuing equity or debt securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase Bitcoin.

For example, we began issuing shares under our “at-the-market” offering program in the second half of 2024, and entered into a second ATM Agreement on June 9, 2025, to issue shares of common stock for aggregate gross proceeds of up to $150 million, and used proceeds from these capital markets transactions to acquire bitcoin.

We view our bitcoin holdings as long term holdings and expect to continue to accumulate bitcoin.

We view our Bitcoin holdings as long-term holdings however, for the foreseeable future, the Company does not expect to allocate surplus cash to Bitcoin as it prioritizes scaling its operating business, including KULR ONE and related products and services.

We have not set any specific target for the amount of Bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional Bitcoin purchases.

This overall strategy also contemplates that we could periodically leverage or sell Bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, enter into additional capital raising transactions, including those that could be collateralized by our Bitcoin holdings, and consider pursuing strategies to create income streams or otherwise generate funds using our Bitcoin holdings.

On March 7, 2025, the Company entered into a sixty-day Machine Lease Agreement with a bitcoin mining services company to operate 2,500 S-19 bitcoin mining machines on our behalf, at a total lease cost of $850,000.

Additionally, 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 the 2,500 digital assets mining machines on KULR’s behalf, at a total lease cost of $3,200,000.

Furthermore, 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.

Through September 30, 2025, 55.70 bitcoin have been earned pursuant to the Machine Lease Agreements, at an average value of $109,254 per bitcoin.

The following table presents bitcoin activity during the nine months ended September 30, 2025.

To date, KULR has not sold any Bitcoin from its treasury holdings.

As of March 31, 2026, we had contractual commitments with digital asset mining services providers related to the operation of digital asset mining machines.

On July 30, 2025, we entered into a one-year mining services agreement with a digital asset mining services company, with total committed payments of $2.6 million, of which $0.7 million remained as commitments as of March 31, 2026.

In addition, on October 1, 2025, we entered into a two-year mining services agreement with a digital asset mining services company, that included certain non-lease operating expense commitments and the remaining commitments as of March 31, 2026 for future operating expenses associated with this lease totaled $2.5 million.

For the three months ended March 31, 2026, the Company earned 8.80 BTC from mining operations.

As of March 31, 2026, we held 1,083.14 BTC with a fair value of $73.9 million.

The following table presents BTC activity during the three months ended March 31, 2026 and 2025.

Digital Assets(1)

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Digital assets mined

Digital assets received as lease incentive

Change in fair value of digital assets

Fair value as of September 30, 2025

Fair value as of March 31, 2026

Digital Assets(1)

Fair value as of December 31, 2024

Digital assets purchased

Digital assets mined

Digital assets received as lease incentive

Change in fair value of digital assets

Fair value as of March 31, 2025

(1) The source of capital used to purchase Bitcoin was primarily proceeds from ATM offerings.

Liquidity and Capital Resources

As of September 30, 2025 and December 31, 2024, we had cash balances of $20,588,596 and $29,831,858, respectively, and working capital of $21,599,040 and $29,498,421, respectively.

As of September 30, 2025 and December 31, 2024, we also had Bitcoin holdings of $120,523,261 and $20,281,184, respectively.

For the nine months ended September 30, 2025 and 2024, net cash used in operating activities was $31,039,539 and $12,498,818, respectively.

Our net cash used in operations for the nine months ended September 30, 2025, was primarily attributable to our net loss of $17,638,424, adjusted for non-cash gains in the aggregate amount of $7,761,655, which includes impairment of an equity investment and credit loss on convertible loan receivable of $3,325,045 and $1,832,690, respectively, plus $5,639,460 of net cash used to fund changes in the levels of operating assets and liabilities.

Our net cash used in operations for the nine months ended September 30, 2024, was primarily attributable to our net loss of $12,903,168, adjusted for non-cash expenses in the aggregate amount of $4,721,844, plus $4,317,494 of net cash used to fund changes in the levels of operating assets and liabilities.

For the nine months ended September 30, 2025 and 2024, net cash used in investing activities was $85,499,202 and $211,005, respectively.

Net cash used in investing activities during the nine months ended September 30, 2025, was related to investments in digital assets of $79,700,002, investment in preferred stock of $3,325,045, issuance of convertible loan receivable of $1,832,690,

purchases of property and equipment of $581,702, and deposits paid for purchases of property and equipment of $59,763.

Net cash used in investing activities during the nine months ended September 30, 2024, was related to purchases of property and equipment of $188,267 and deposits paid for purchases of property and equipment of $22,738.

For the nine months ended September 30, 2025 and 2024, net cash provided by financing activities was $107,295,479 and $12,427,476, respectively.

Net cash provided by financing activities during the nine months ended September 30, 2025, was primarily due to proceeds from ATM equity financings totaling $107,311,618, proceeds from the loan payable totaling $8,000,000, partially offset by loan payable repayments of $4,200,000, issuance costs on ATM equity financing of $2,685,424, notes payable repayments of $577,674, and payments for deferred financing costs of $562,016.

Net cash provided by financing activities during the nine months ended September 30, 2024, was primarily due to proceeds from SEPA Advance Notices totaling $9,104,950, proceeds from ATM equity financings totaling $3,431,090, proceeds from notes payable totaling $2,730,000, partially offset by notes payable repayments of $2,439,855, issuance costs on notes payable of $166,100, payments for deferred financing costs of $128,041, and issuance costs on ATM equity financings of $103,718.

Future cash requirements for our current liabilities include approximately $2,537,896 for accounts payable and accrued expenses, $3,800,000 for loan payable and $416,962 for future payments under operating and finance leases.

Future cash requirements for long-term liabilities include $1,176,101 for future payments under operating and finance leases.

On October 15, 2025, the Company repaid in full the remaining balance of the loan payable, classified in the current liabilities section of our condensed consolidated balance sheet.

As of May 13, 2026, March 31, 2026 and December 31, 2025, we had cash balances of $19.0 million, $7.7 million and $13.3 million, respectively.

As of March 31, 2026 and December 31, 2025, working capital was $6.9 million and $19.2 million, respectively.

As of March 31, 2026 and December 31, 2025, we also had BTC holdings of $73.9 million and $94.0 million, respectively.

On May 13, 2026, we borrowed an additional $15 million against the $20 million credit facility with Coinbase.

For the three months ended March 31, 2026 and 2025, net cash used in operating activities was $8.7 million and $9.6 million, respectively.

Our net cash used in operations for the three months ended March 31, 2026 was primarily attributable to our net loss of $28.1 million, adjusted for non-cash expenses in the aggregate amount of $22.4 million, as well as $3.0 million of net cash used to fund changes in the levels of operating assets and liabilities.

Our net cash used in operations for the three months ended March 31, 2025 was primarily attributable to our net loss of $18.8 million, adjusted for non-cash expenses in the aggregate amount of $11.9 million plus $2.7 million of net cash used to fund changes in the levels of operating assets and liabilities.

For the three months ended March 31, 2026 and 2025, net cash used in investing activities was $1.5 million and $44.7 million, respectively.

Net cash used in investing activities during the three months ended March 31, 2026, was related to deposits paid for purchases of property and equipment of $1.1 million, plus purchases of property and equipment of $0.2 million and payment of holdback amount related to the Caban asset acquisition of $0.2 million.

Net cash used in investing activities during the three months ended March 31, 2025, was related to investments in digital assets of $44.5 million, purchases of property and equipment of $0.1 million and deposits paid for purchases of property and equipment of $0.1 million.

For the three months ended March 31, 2026 and 2025, net cash provided by financing activities was $4.6 million and $49.0 million, respectively.

Financing activities during the three months ended March 31, 2026 were primarily due to proceeds from the loan payable totaling $5.0 million, which represents a drawdown of our collateralized credit facility with Coinbase, partially offset by payment of employee tax withholding from shares withheld of $0.4 million.

Net cash provided by financing activities during the three months ended March 31, 2025, was primarily due to net proceeds from ATM equity financing totaling $49.9 million, partially offset by notes payable repayments of $0.6 million and payments for deferred financing costs of $0.2 million.

Future cash requirements for our March 31, 2026 current liabilities include approximately $4.6 million for accounts payable and accrued expenses, $5.0 million to repay our loan payable and $2.6 million for future payments under operating and finance leases.

Future cash requirements for our March 31, 2026 long-term liabilities include $1.9 million for future payments under operating and finance leases.

Our primary source of liquidity has historically been cash generated from equity and debt offerings.

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We have a history of recurring net losses and recurring use of cash in operations.

During the nine months ended September 30, 2025, the Company received gross proceeds of $107,311,618 pursuant to the ATM.

Given our cash balance and our digital asset holdings as of September 30, 2025, there is no substantial doubt about the Company’s ability to meet its obligations as they become due within the twelve months from the date these condensed consolidated financial statements are available to be issued.

While no assurance can be provided that we will be successful in raising additional capital from the ATM, 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 ATM.

As of December 22, 2025, the Company decided to pause its ATM transactions through June 30, 2026.

As of March 31, 2026, we believe that our cash on hand, BTC holdings, cash flows from operations and working capital balances and $15.0 million of available collateralized borrowing through Coinbase as of March 31, 2026, will be sufficient to meet our obligations as they become due over the next twelve months from the date these condensed consolidated financial statements were to be issued.

The Company’s ATM transactions remain paused as of the date of this filing.

The Company continues to evaluate market conditions to determine when to resume ATM transactions.

Off-Balance Sheet Arrangements

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(i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

Assessment of impairment of investments has been identified as a critical accounting estimate during the three and nine months ended September 30, 2025.

There are other items within our condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.

There are items within our condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.

There have been no material changes to our critical accounting estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 31, 2026.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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 2. Management’s Discussion and Analysis