What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-14 · 350 added, 285 removed, 564 unchanged (53% of the section changed)

4 unchanged sentences

Current Assets:

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

Restricted cash

Accounts receivable, net of allowance for credit losses of $ 2,005,492 and $ 1,450,000 as of June 30, 2026 and December 31, 2025, respectively

Grant receivable

Inventory deposits

Digital assets

Digital assets, pledged as collateral

Auto-Vibe assets

1 unchanged sentence

Total Current Assets

Digital assets

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

Digital assets, non-current

Restricted cash, non-current

Accounts receivable, non-current, net of allowance for credit losses of $ 717,397 and $ 0 as of June 30, 2026 and December 31, 2025, respectively

Auto-Vibe assets, non-current, net of allowance for credit losses of $ 500,000 and $ 0 as of June 30, 2026 and December 31, 2025, respectively

Property and equipment, net

17 unchanged sentences

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

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

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

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

1,000,000 shares issued and outstanding at June 30, 2026 and December 31, 2025;

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

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

Series C Preferred Stock, 400 shares designated;

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

Series D Preferred Stock, 650 shares designated;

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

none issued and outstanding at June 30, 2026 and December 31, 2025

Series C Convertible Preferred Stock, 400 shares designated;

none issued and outstanding at June 30, 2026 and December 31, 2025

Series D Convertible Preferred Stock, 650 shares designated;

none issued and outstanding at June 30, 2026 and December 31, 2025

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

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

46,293,969 and 46,272,047 shares issued and outstanding at June 30, 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 shares held at March 31, 2026 and December 31, 2025.

21,922 shares held at June 30, 2026 and December 31, 2025

Accumulated deficit

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Cost of revenue

Gross Profit (Loss)

Operating Expenses

1 unchanged sentence

Selling, general, and administrative

Credit losses on accounts receivable

Credit losses on R&D activity

Impairment expense

Total Operating Expenses

2 unchanged sentences

( 9,451,040 )

( 19,489,755 )

( 18,894,845 )

Other Income (Expense)

3 unchanged sentences

Interest income

Miscellaneous income

Interest expense

2 unchanged sentences

Gain on debt extinguishment, net

Total Other Expense

Total Other Income (Expense)

( 10,766,238 )

( 31,500,905 )

Net Income (Loss)

( 21,970,816 )

( 50,990,660 )

Net Loss Per Share

- Basic and Diluted

( 10,664,509 )

Net Income (Loss) Per Share

Weighted Average Number of Common Shares Outstanding

- Basic and Diluted

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026

Preferred Stock

12 unchanged sentences

( 174,730,849 )

FOR THE THREE MONTHS ENDED MARCH 31, 2025

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

( 21,970,816 )

Balance - June 30, 2026

( 196,701,665 )

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

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

Preferred Stock

7 unchanged sentences

Common stock issued for at the market offering (1)

Common stock issued upon vesting of restricted stock units

Shares withheld for employee payroll tax obligations

1 unchanged sentence

Common stock issued for services

Common stock issued upon vesting of restricted stock units

Amortization of restricted common stock

4 unchanged sentences

( 102,617,881 )

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 )

(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 .

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six 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 accounts receivable

Credit losses on R&D activity

4 unchanged sentences

Stock-based compensation

Impairment of equipment deposits

Write down of equipment deposits

Change in fair value of accrued issuable equity

Change in fair value of digital assets

( 7,619,060 )

Digital assets received as downtime credits

Mining of digital assets

( 1,268,293 )

( 1,368,323 )

( 4,156,178 )

Changes in operating assets and liabilities:

4 unchanged sentences

Prepaid expenses and other current assets

( 1,445,242 )

( 4,236,870 )

Security deposit

Accounts payable

9 unchanged sentences

Cash Flows From Investing Activities:

Equity investments

( 3,325,045 )

Equipment deposits

20 unchanged sentences

( 9,261,750 )

( 5,382,561 )

Cash - Beginning of Period

Cash - End of Period

Cash and Restricted Cash - Beginning of Period

Cash and Restricted Cash - End of Period

(1) Excludes $ 351,400 of deferred financing costs paid in prior periods.

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

For the Three Months Ended

For the Six Months Ended

Supplemental Disclosures of Cash Flow Information:

2 unchanged sentences

Digital assets, pledged as collateral

Purchase consideration payable

Deposits applied to purchases of property and equipment

Right-of-use asset for operating lease liability

Accounts payable and accrued expenses for property and equipment purchases

3 unchanged sentences

Preferred shares issued for no consideration

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

Common shares issued for restricted stock units vested

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

4 unchanged sentences

Organization and Operations

KULR Technology Group, Inc.

was incorporated on December 11, 2015 under the laws of the State of Delaware as KT High-Tech Marketing, Inc.

Effective August 30, 2018, KT High-Tech Marketing, Inc.

changed its name to KULR Technology Group, Inc.

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

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

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

The Company offers commercial-off-the-shelf and custom next-generation energy storage systems in rapid timelines.

Reverse Stock Split

6 unchanged sentences

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 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.

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 June 30, 2026, and for the three and six months ended June 30, 2026 and 2025.

The results of operations for the three and six months ended June 30, 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.

The accompanying condensed consolidated balance sheet as of December 31, 2025, has been derived from the audited financial statements included in the Form 10-K.

Immaterial Revision of Previously Reported Financial Information

See Note 3 – Immaterial Revision of Previously Reported Financial Information.

As of June 30, 2026, the Company had unrestricted cash of approximately $ 12.8 million, and digital assets (Bitcoin or “BTC”) holdings with an aggregate fair value of approximately $ 63.9 million.

Subsequent to June 30, 2026, the Company repaid its outstanding loan balance of $ 20.0 million, plus interest, with proceeds from sales of BTC (see Note 13 – Subsequent Events).

The Company believes that its cash on hand, BTC holdings and other working capital will be sufficient to meet its obligations as they become due over the next twelve months from the date these condensed consolidated financial statements were issued.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

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

Restricted Cash

Restricted cash consists of cash held at a financial institution as collateral for a letter of credit of $ 284,050 issued in connection with the Houston Facility Lease (see Note 9 – Leases).

The collateral requirement decreases by approximately 50 % each year during the lease term, therefore a portion of the restricted cash has been classified as current.

The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown in the condensed consolidated statements of cash flows:

Restricted cash, current

Restricted cash, non-current

Total cash and restricted cash

Concentrations of Credit Risk

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

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

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

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

There were uninsured cash balances of $ 12,283,933 and $ 12,800,188 as of June 30, 2026 and December 31, 2025, respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Customer and Revenue Concentrations

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:

During the three and six months ended June 30, 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

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

Mining of Digital Assets

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

Less than 10%

1 unchanged sentence

Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects.

As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As a result of the Company’s significant customer concentrations, its gross profit (loss) and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers.

Custody of Digital Assets

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

based, institutional-grade custodian (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, including digital assets pledged as collateral under the Company’s loan agreement with Coinbase (see Note 4 – Digital Assets).

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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Vendor Concentrations

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.

During the three and six months ended June 30, 2026, the Company operated two operating segments, the EMP and Mining of Digital Assets.

The tables below present, by operating segment, vendors whose purchases individually represented more than 10% of total purchases during the applicable periods.

Energy Management Platform

For the Three Months Ended

For the Six Months Ended

Mining of Digital Assets

For the Three Months Ended

For the Six Months Ended

* Less than 10%

1 unchanged sentence

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

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 Company recognizes an allowance for credit losses on receivables in accordance with Accounting Standards Codification (“ASC”) 326-20, Financial Instruments — Credit Losses.

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.

3 unchanged sentences

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 .

As of June 30, 2026 and December 31, 2025, the allowance for credit losses on customer accounts receivable was $ 2,722,889 and $ 1,450,000 , respectively.

Of the $ 2,722,889 allowance as of June 30, 2026, $ 2,005,492 was recorded against current accounts receivable and $ 717,397 was recorded against noncurrent accounts receivable.

See Note 5 – Auto-Vibe Assets for information regarding a separate allowance for credit losses of $ 500,000 on the Auto-Vibe receivable.

KULR TECHNOLOGY GROUP, INC.

2 unchanged sentences

Digital Assets

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

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

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

5 unchanged sentences

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.

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.

The Company reflects digital assets at fair value on the condensed consolidated balance sheets and the activity from the remeasurement of digital assets at fair value on the condensed consolidated statements of operations and cash flows, and includes disclosures in Note 4 - Digital Assets.

Digital assets are generally valued using prices as reported by the Company’s principal market, Coinbase, 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.

1 unchanged sentence

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.

The Company’s digital assets are recorded on the condensed consolidated balance sheets at their fair value.

Unrealized gains or losses on the remeasurement of digital assets are recorded in the condensed consolidated statements of operations.

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

1 unchanged sentence

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.

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, Leases (“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.

15 unchanged sentences

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

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

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 related primarily to the manufacture of safe cases, KULR ONE battery systems, and other battery products.

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.

4 unchanged sentences

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

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

As of 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:

These payments are recorded as inventory deposits until the goods are received and are reflected as a current asset in the condensed consolidated balance sheets.

As of June 30, 2026 and December 31, 2025, inventory deposits were $ 440,035 and $ 839,644 , respectively.

Inventory at June 30, 2026 and December 31, 2025 consisted of the following:

Raw materials

4 unchanged sentences

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 establishes required disclosures about fair value measurements.

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurement” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and establishes required 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.

4 unchanged sentences

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.

The carrying amounts of the Company’s financial assets and financial liabilities, such as cash, restricted 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.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

The carrying amount of the Company’s digital assets is recorded at fair value in accordance with ASC 820, based on quoted prices on the active exchange(s) that the Company has determined is the principal market for such assets (Level 1 inputs).

The cost basis of digital assets is determined using the first-in, first-out method of each unit received.

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

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

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

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

The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

8 unchanged sentences

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

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

1 unchanged sentence

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

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2026 and 2025, the Company recognized revenue primarily from the following different types of contracts:

During the three and six months ended June 30, 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.

7 unchanged sentences

Revenue from digital assets is considered non-cash consideration.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

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.

Grant revenue for the six months ended June 30, 2026 reflects the correction of an immaterial error in previously reported grant revenue for the three months ended March 31, 2026;

see Note 3 – Immaterial Revision of Previously Reported Financial Information for further information.

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

For the Three Months Ended

For the Six Months Ended

Revenue Recognized at a Point in Time:

6 unchanged sentences

Total Revenue

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

2 unchanged sentences

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.

As of June 30, 2026 and December 31, 2025, the Company had customer accounts receivable, net of $ 1,908,688 and $ 3,075,328 , 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.

Deferred revenue represents payments received from customers for which the Company had not yet satisfied its performance obligation under the contract, or the customers or grantors 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.

The Company did not recognize revenue from performance obligations satisfied in prior periods during the three months ended June 30, 2026 or 2025.

During the six months ended June 30, 2026 and 2025, the Company recognized $ 104,478 and $ 11,627 of revenue that was deferred at the previous year end.

Deferred revenues from customers were $ 89,522 and $ 107,267 as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025, deferred revenue included deferred grant revenue of $ 268,823 and $ 0 , respectively, related to the Texas Grant.

Because government grants are not within the scope of ASC 606 and the grantor is not a customer, this amount is not customer deferred revenue;

it represents amounts received under the Texas Grant in advance of recognizing the related grant revenue, which is recognized as qualifying costs are incurred.

See “Grant revenue” within Note 2 – Summary of Significant Accounting Policies for further information.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

As of June 30, 2026 and December 31, 2025, the Company had $ 297,750 and $ 216,874 , respectively, of deferred labor costs, which is part of prepaid expenses and other current assets in the Company’s condensed 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.

Research and Development Costs

Research and development costs are expensed as incurred and consist primarily of personnel-related costs, materials and supplies, third-party engineering and development services, and testing and related costs.

Research and development expenses were $ 2,985,659 and $ 2,436,754 for the three months ended June 30, 2026 and 2025, respectively, and $ 4,756,159 and $ 4,886,654 for the six months ended June 30, 2026 and 2025, respectively.

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.

Advertising costs charged to operations for the three months ended June 30, 2026 and 2025 were $ 354,613 and $ 1,570,659 , respectively.

Advertising costs charged to operations for the six months ended June 30, 2026 and 2025 were $ 573,279 and $ 3,306,831 , respectively, and are included in selling, general and administrative expense in the condensed consolidated statements of operations.

Stock-Based Compensation

8 unchanged sentences

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.

Classification criteria in ASC 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 selling, general, and administrative expenses on the accompanying condensed consolidated statements of operations.

Finance lease right-of-use assets are depreciated on a straight-line basis over the estimated useful life of the asset;

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

Net Loss Per Common Share

Net Income (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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the Three Months Ended

For the Six Months Ended

Net Income (Loss)

( 21,970,816 )

( 50,990,660 )

( 10,664,509 )

Denominator (weighted average quantities):

1 unchanged sentence

Treasury shares purchased

Unvested restricted shares

Unvested restricted stock awards

Accrued issuable equity

Vested unissued restricted stock units

Denominator for basic and diluted net loss per share

Basic and diluted net loss per common share

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

Denominator for basic net income (loss) per share

Denominator for diluted net income (loss) per share

Net Income (Loss) Per Share

The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive as a result of the net loss for these periods:

For the Three and Six

June 30, 2026

June 30, 2025

Unvested restricted stock awards

Unvested restricted stock units

For the purposes of the three-month diluted net income per share calculation for the three months ended June 30, 2025, common stock warrants, unvested restricted stock units and stock options were considered to be potentially dilutive securities and were included in the calculation of diluted net income per share for the three months ended June 30, 2025.

Reclassifications

1 unchanged sentence

These reclassifications have no effect on previously reported results of operations or loss per share.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent Events

1 unchanged sentence

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 13 – Subsequent Events.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Segment Reporting

2 unchanged sentences

Energy Management Platform and Mining of Digital Assets, as discussed more fully in Note 12.

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

Recent Issued Accounting Pronouncements

In determining the appropriateness of segment definition, the Company considers the criteria of ASC 280, Segment Reporting.

Recently Issued Accounting Pronouncements

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

19 unchanged sentences

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

NOTE 3 – IMMATERIAL REVISION OF PREVIOUSLY REPORTED FINANCIAL INFORMATION

During June 2026, the Company identified a misstatement in grant revenue related to its Texas Space Commission grant (the “Texas Grant”) for the three months ended March 31, 2026 as reported in the Company’s Form 10-Q as of and for the three months ended March 31, 2026 filed on May 14, 2026.

The misstatement, which was caused by a clerical error, resulted in an overstatement of grant revenue and gross profit of $ 900,000 for the three months ended March 31, 2026, and a corresponding overstatement of the grant receivable as of March 31, 2026, but it did not impact the 2025 annual or interim financial statements.

Based on an evaluation including both quantitative and qualitative factors pursuant to the SEC Staff’s Accounting Bulletins Nos.

99 (“SAB 99”) and 108 (“SAB 108”) and interpretations therewith, the Company concluded that the aforementioned misstatement was not material to the Company’s previously filed March 31, 2026 condensed consolidated financial statements and that amendment of these previously issued interim condensed consolidated financial statements was not required.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To correct the misstatement, the Company revised its previously reported March 31, 2026 amounts, and such revised amounts and disclosures are reflected in the accompanying condensed consolidated financial statements for the six months ended June 30, 2026.

See the table below for the details of the revision:

For The Three Months Ended March 31, 2026

As Originally Reported

Condensed Consolidated Statements of Operations:

( 28,119,844 )

( 29,019,844 )

Net loss per share, basic and diluted

As of March 31, 2026

Condensed Consolidated Balance Sheets:

Grant receivable

Total current assets

Total stockholders’ equity

NOTE 4 – DIGITAL ASSETS

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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 .

Management has determined that Coinbase, an active exchange market, represents the Company’s 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 June 30, 2026, the Company held 1,091.69 BTC at Coinbase with a cost basis of $ 109,801,107 , and a fair value of $ 63,922,870 , of which 565 BTC with a fair value of $ 33,083,010 were pledged as collateral under the Company’s loan agreement with Coinbase and are presented as digital assets, pledged as collateral, on the condensed consolidated balance sheet.

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,

The following table presents the roll forward of activity related to the Company’s digital assets for the six months ended June 30, 2026:

Digital Assets and

Digital Assets Pledged

As Collateral

Beginning balance at January 1, 2026

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( 31,359,380 )

Balance, June 30, 2026

Digital assets, pledged as collateral

( 33,083,010 )

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 .

Digital assets, net

During the three months ended June 30, 2026, the Company did no t purchase BTC.

During the three months ended June 30, 2025, the Company purchased 244.36 BTC at an average cost of $ 103,949 per BTC, inclusive of fees and expenses, for an aggregate cost of $ 25,400,657 .

During the three months ended June 30, 2026 and 2025, 8.44 and 11.25 BTC have been earned from mining operations, at an average value of approximately $ 71,821 and $ 99,428 per BTC, respectively.

During the three months ended June 30, 2026 and 2025, the Company recognized mining revenue of $ 605,982 and $ 1,118,569 , respectively, and received BTC with an aggregate fair value of $ 8,373 and $ 320,526 , respectively, from the lessors as compensation for machine downtime, which is used to offset lease costs.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the six months ended June 30, 2026, the Company did no t purchase BTC.

During the six months ended June 30, 2025, the Company purchased 693.81 BTC at an average cost of $ 100,748 per BTC, inclusive of fees and expenses, for an aggregate cost of $ 69,900,009 .

During the six months ended June 30, 2026 and 2025, 17.23 and 14.22 BTC have been earned from mining operations, at an average value of approximately $ 73,594 and $ 96,225 per BTC, respectively.

During the six months ended June 30, 2026 and 2025, the Company recognized mining revenue of $ 1,268,293 and $ 1,368,323 , respectively, and received BTC with an aggregate fair value of $ 18,701 and $ 320,526 from the lessors as compensation for machine downtime, which is used to offset lease costs.

During the three months ended June 30, 2026, the Board of Directors approved management’s decision that the Company’s BTC holdings would be available to fund operations, and accordingly, all digital assets were reclassified into current assets as of June 30, 2026.

Loan Agreement

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, 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.

The Second Drawdown bears a 7 % loan fee, and the Company segregated 125 BTC as collateral against this loan.

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.

During the three months ended June 30, 2026, the Company segregated an additional 440 BTC as collateral, bringing the total BTC pledged as collateral under the credit facility to 565 BTC.

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

As of June 30, 2026, the full $ 20 million of principal was outstanding and the Company incurred interest expense in the amount of $ 228,219 and $ 233,013 for the three and six months ended June 30, 2026.

See Note 13 – Subsequent Events for details related to subsequent repayment of the loan.

NOTE 5 – AUTO-VIBE ASSETS

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The Company purchased a range of autos and performed vibration diagnostic testing on a select number of the autos.

During December 2025, the Company allocated $ 5.0 million toward this project.

Since December 2025, the Company purchased and sold automobiles totaling approximately $ 4.9 million.

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.

As of June 30, 2026, the Auto-Vibe assets consist of a gross past due receivable of $ 1.0 million, and other gross receivables of approximately $ 4.0 million that are past due as of the date of this filing.

A credit loss reserve of $ 0.5 million was recorded during the six months ended June 30, 2026 against the gross receivables, resulting in a net receivable balance of approximately $ 4.5 million as of June 30, 2026.

The parties are in the process of negotiating a planned settlement of the remaining amount due.

The Company expects that collection of the $ 4.5 million will likely occur beyond a one-year period and accordingly, such receivable has been reflected as a non-current asset in the June 30, 2026 condensed consolidated balance sheet.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

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:

As of June 30, 2026 and December 31, 2025, auto-vibe assets consisted of the following:

Auto-Vibe Assets

Receivables – gross

Credit losses on R&D activity

Credit loss reserve on Auto-Vibe receivables

Receivables – net

7 unchanged sentences

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 .

During the six months ended June 30, 2026, the Company paid the Holdback Amount in full.

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

In consideration for the transition services, the Company agreed to pay Caban service fees not to exceed $ 500,000 in the aggregate unless otherwise agreed in writing.

During the three and six months ended June 30, 2026, the Company incurred expenses in connection with the TSA of approximately $ 0 and $ 100,000 , respectively, which are presented within cost of revenue in the condensed consolidated statements of operations.

NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

As of June 30, 2026 and December 31, 2025, prepaid expenses and other current assets consisted of the following:

Deferred grant expenses

Prepaid research and development expenses

Deferred labor costs

Bitcoin mining leases

Deferred expenses

Professional fees

Dues and subscriptions

Marketing and advertising

Other receivables

Vendor receivables

Security deposits

Professional fees

Security deposit

Total prepaid expenses and other current assets

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:

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of June 30, 2026 and December 31, 2025, accrued expenses and other current liabilities consisted of the following:

Professional fees

Payroll and vacation

Inventory purchases

Purchase consideration payable

Franchise tax payable

Payroll and vacation

Research and development

Interest payable

Franchise tax payable

Sales tax payable

Purchase consideration payable

Bitcoin mining costs

Research and development

Sales and marketing

Sales tax payable

Equipment purchases

2 unchanged sentences

Operating Leases

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.

On May 12, 2026, the Company entered into a lease agreement for a new facility consisting of approximately 24,700 rentable square feet located in Houston, Texas (the “Houston Facility Lease”).

The initial lease term is 36 months , with monthly base rental payments ranging from $ 23,671 to $ 25,357 , plus common area maintenance costs.

The Houston Facility Lease contains an option to renew for an additional 60 months at the then-fair market rental rate but shall be no less than the annual base rent amount during the third year of the initial term, exercisable no more than nine months and no less than six months prior to the expiration of the initial term.

Management assessed the renewal option as reasonably certain to be exercised, and accordingly the renewal period was included in the measurement of the initial operating lease liability and related right-of-use asset, resulting in a lease term of 96 months .

The value of the operating lease liability and related right-of-use asset at inception was $ 1,536,777 , measured using an incremental borrowing rate of 8.75 %.

The present value of the lease liability includes a $ 197,600 tenant improvement allowance to be received from the landlord after the Company completes all tenant improvements, which the Company estimates will be received in full.

In connection with the Houston Facility Lease, the Company paid a cash security deposit of $ 67,551 , which is included in security deposits on the condensed consolidated balance sheets, and is required to secure a letter of credit of $ 284,050 within sixty days of the lease effective date.

The letter of credit must be maintained in successive twelve-month terms throughout the lease term and, provided no event of default has occurred, is reduced to $ 142,025 at the beginning of the second year of the lease term and to $ 71,013 at the beginning of the third year.

Upon delivery of the letter of credit, the landlord will refund the cash security deposit.

Cash collateralizing the letter of credit is classified as restricted cash;

During the three and six months ended June 30, 2026, operating lease expense was $ 291,451 and $ 469,591 , respectively.

During the three and six months ended June 30, 2025, operating lease expense was $ 186,328 and $ 337,175 , respectively.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 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

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:

Maturities of operating lease liabilities as of June 30, 2026, were as follows:

Operating Lease

5 unchanged sentences

Lease liabilities, non current portion

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the Three Months Ended

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

For the Six Months Ended

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

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NOTE 10 – 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

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 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 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.

During the six months ended June 30, 2026, the Company issued 353,738 shares of common stock upon the vesting of restricted stock units previously granted, of which 122,941 shares were withheld to cover payroll tax obligations.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Treasury Stock

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

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 months ended March 31, 2026 and 2025:

The following table presents information related to stock-based compensation for the three and six months ended June 30, 2026 and 2025:

For The Three Months Ended

For The Six Months Ended

Shares issued for legal services

2 unchanged sentences

Amortization of restricted stock awards and units

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.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $ 908,045 and $ 2,367,523 , respectively, of which $ 698,902 and $ 1,969,052 , respectively, are included within selling, general and administrative expenses, and $ 209,143 and $ 398,471 , respectively, are included within research and development expenses in the condensed consolidated statements of operations.

During the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $ 1,584,799 and $ 3,222,167 , respectively, of which $ 1,162,910 and $ 2,396,145 , respectively, are included within selling, general and administrative expenses, and $ 421,889 and $ 826,022 , respectively, are included within research and development expenses in the condensed consolidated statements of operations.

Stock Options

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

A summary of stock options activity during the six months ended June 30, 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:

Outstanding, June 30, 2026

Exercisable, June 30, 2026

The following table presents information related to stock options as of June 30, 2026:

Options Outstanding

5 unchanged sentences

$ 16.40 - $ 18.48

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.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no stock options granted during the three and six months ended June 30, 2026.

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

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

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 Six Months Ended

Risk free interest rate

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

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

As of June 30, 2026, there was $ 43,468 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.

Restricted Stock Awards

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

The following table presents information related to restricted stock awards (“RSAs”) activity during the six months ended June 30, 2026:

Weighted Average

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Non-vested RSAs, January 1, 2026

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.

Non-vested RSAs, June 30, 2026

As of June 30, 2026, there was $ 17,387 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 0.34 years.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

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

The following table presents information related to restricted stock units (“RSUs”) activity during the six months ended June 30, 2026:

Weighted Average

Number of Restricted

Shares of Restricted

Non-vested RSUs, January 1, 2026

Non-vested RSUs, March 31, 2026

Vested RSUs undelivered March 31, 2026

Non-vested RSUs, June 30, 2026

Vested RSUs undelivered June 30, 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 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

As of June 30, 2026, there was $ 9,673,608 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 2.66 years.

NOTE 11 – 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 March 31, 2026, the Company was not involved in any ongoing litigation.

As of June 30, 2026, the Company was not involved in any ongoing litigation.

The Company records legal costs associated with loss contingencies as incurred.

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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.

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 June 30, 2026 for future operating expenses associated with this lease totaled $ 2.1 million.

See Note 13 – Subsequent Events for further detail related to the termination of this digital asset mining agreement.

NOTE 12 – SEGMENT REPORTING

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 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 is not regularly provided disaggregated expense information, other than the expense information for each segment included in the captions within the condensed 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 of the Mining of Digital Assets segment.

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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 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.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

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 are presented separately from segment operating results.

The Company has designated a Corporate & Other category, which is not considered an operating segment, which includes the changes in fair value of the Company’s digital asset holdings.

The following table presents the breakout of the operations of the Energy Management Platform and Mining of Digital Assets segments for the three and six months ended June 30, 2026 and 2025:

For the Three Months Ended

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Digital Assets

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( 10,591,667 )

Total Other (Expense) Income, net

( 10,591,667 )

( 10,766,238 )

Total Other (Expense) Income, net

Net Income (Loss)

( 10,831,154 )

2 unchanged sentences

( 9,241,342 )

For the Six Months Ended

June 30, 2026

June 30, 2025

Digital Assets

Cost of revenue

Gross Profit (Loss)

Operating Expenses

Research and development

Selling, general, and administrative (1)

Total Operating Expenses

Segment Net Loss

( 18,364,908 )

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( 18,894,845 )

Other (Expense) Income

Other segment (expense) income (2)

Change in fair value of digital assets

( 31,359,380 )

March 31, 2026

( 31,359,380 )

Total Other (Expense) Income, net

( 31,359,380 )

( 31,500,905 )

( 18,506,433 )

( 1,124,847 )

( 31,359,380 )

( 50,990,660 )

( 18,209,154 )

( 10,664,509 )

June 30, 2026

December 31, 2025

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Segment Assets

Cash and Restricted Cash

Digital assets

All other assets

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.

Selling, general, and administrative included credit losses on Auto-Vibe assets and accounts receivable for 2026 and impairment of equipment deposits for 2025.

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

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

NOTE 13 – 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.

Repayment of Coinbase Loan and Sales of Bitcoin

Subsequent to June 30, 2026, the Company repaid the outstanding principal and interest balance under its $ 20.0 million loan agreement with Coinbase.

In accordance with the terms of the loan agreement, the repayment resulted in the automatic release of 565 BTC from the collateral account.

The Company sold an aggregate of 333 BTC for total proceeds of approximately $ 21.5 million, at an average price of approximately $ 64,467 per BTC, of which the Company used proceeds of approximately $ 20.0 million to fund the principal repayment.

Digital Asset Mining Services Agreement Termination

Effective July 31, 2026, the Company terminated its remaining digital asset mining services agreement (originally expiring October 2027), relieving the Company of a future commitment of $ 2.1 million, in exchange for an early termination fee of $ 0.15 million.

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