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Item 1. Business

2024-04-12 compared with 2023-03-28 · 111 added, 108 removed, 181 unchanged (55% of the section changed)

Overview and Market Opportunities

KULR Technology Group, Inc., through our wholly owned subsidiary KULR Technology Corporation, develops and commercializes an energy management platform to accelerate the global transition to a sustainable electrification economy.

This energy management platform consists of high-performance thermal management technologies for batteries and electronics, AI-powered battery management and vibration mitigation software solutions, and reusable energy storage modules.

Our mission is advance and apply these technologies to make our world more sustainable by using less energy;

KULR Technology Group, Inc., through our wholly owned subsidiary KULR Technology Corporation, maintains expertise in three key technology domain areas:

(1) energy storage systems and recycling, (2) thermal management solutions, and (3) rotary system vibration reduction.

Historically, KULR, focused on thermal energy management solutions for space and Department of Defense (DoD) applications, with recent expansion into energy storage and vibration reduction markets as the logical next step.

Combined, this energy management platform consists of high-performance thermal management technologies for batteries and electronics, AI-powered battery management and vibration mitigation software solutions, and reusable energy storage modules.

Our mission is to advance and apply these technologies to make our world more sustainable by using less energy;

using energy more efficiently;

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Global lithium-ion battery recycling industry is to grow from $4.6B in 2021 to $22.8B by 2030, according to Market and Markets Research.

The Company’s disruptive technologies strive to fulfill an addressable $24 billion thermal management systems market (estimated based on market data projections published by Converged Markets stating that the thermal management systems market size was projected to grow from $11.1 billion in 2017 to $24.8 billion by 2025.

The Company’s integrated design approach offers comprehensive solutions in thermal interface materials, lightweight heat exchangers, and protection against lithium-ion battery thermal runaway propagation.

Its high-performance solutions can be designed to fit demanding configurations and applications.

Additionally, the domain driving the growth of KULR’s battery design and production capabilities is the private space exploration market sector, which requires highly custom, safe, and reliable energy storage systems, and is expected to reach $1,110.8B by 2030 according to CoherentMI.

E-aviation growth and continued reliance on traditional aviation vehicles drives an aircraft maintenance market size that is expected to reach $127.2B by 2032, an increase from $82.7B in 2023, according to Precedence Research.

KULR VIBE, the Company’s rotary system vibration reduction software, positions KULR to access this market area.

As companies and governments around the world pledge to meet net zero emissions over the next few decades, KULR is uniquely positioned to accelerate the adoption of clean energy solutions and sustainable products and facilitate the migration to a global circular economy.

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KULR ONE and KULR ONE Design Solutions (K1DS)

The KULR ONE family of battery packs represent a groundbreaking innovation that is driving the world's transition to a more sustainable electrification economy.

KULR’s primary technical domain that is shaping the future landscape of the Company is safe, high-performance energy storage solutions.

To effectively support and provide energy storage solutions, a holistic approach is necessary.

Batteries are an interdisciplinary technology which require:

(1) Multi-disciplinary expertise to address related electrical, thermal, mechanical, and electrochemical requirements,

(2) Cell supply access to top-tier OEMs,

(3) Cell level testing capabilities to characterize performance, quality, and safety behavior at the cell level,

(4) Expertise in early concept design, modeling, and analysis,

(5) Rapid prototyping and production capabilities,

(6) Pack and system level thermal, mechanical, electrical, and abuse testing capabilities,

(7) Expertise in battery management, controls, and monitoring,

(8) Ability to support beginning of life to end of life requirements for transport and recycling.

To address the need for a holistic approach, KULR developed a battery product and service portfolio over the course of the last decade that provides products, safety testing services, modeling and analysis services, electrical testing services, transport and recycling packaging and logistics, and battery design solutions.

Collectively, this is referred to as KULR ONE Design Solutions (K1-DS), which is actively leveraged by the Company to facilitate engagement with customers no matter the battery life cycle phase they are in.

Currently, the primary aspects of K1-DS utilized by industry are product sales of trigger cells and TRS, the safety testing methodologies, and the utilization of the K1-DS platform as a whole to develop customized energy storage solutions.

Internally, KULR has leveraged K1-DS to develop off the shelf KULR ONE architectures which represent a groundbreaking innovation that is driving the world’s transition to a more sustainable electrification economy.

These revolutionary designs offer a unique combination of cutting-edge features, including unparalleled safety, exceptional performance, intelligent functionality, modular construction, reliability, and customizability.

The KULR ONE battery packs have been engineered to meet the exacting demands of the world's most demanding applications.

They offer a comprehensive solution that addresses the critical need for safe and reliable energy storage in a wide range of industries, from aerospace and defense to electric vehicles and consumer electronics.

One of the key features of the KULR ONE family of battery packs is its modular design.

This allows for greater flexibility as customers can easily adjust the size and configuration of the battery pack to suit their specific application requirements.

The intelligent functionality of the KULR ONE packs also allows for real-time monitoring and optimization of battery performance, ensuring optimal efficiency and longevity.

The KULR ONE battery packs have been engineered to meet the exacting demands of the

world’s most demanding applications.

As of now, the Company is focused on the KULR ONE Space for space exploration, the KULR ONE Guardian for military applications, and the KULR ONE Max for rack-style grid energy storage systems, also referred to as Battery Energy Storage Systems (BESS).

These architectures collectively offer a comprehensive solution that addresses the critical need for safe and reliable energy storage in a wide range of industries, from aerospace and defense to electric vehicles and consumer electronics.

One of the key features of the KULR ONE family of battery packs is the modularity and consistency of the architectures.

This allows for greater flexibility as customers can easily adjust the size and configuration of the battery pack to suit their specific application requirements while still also benefitting from testing previously conducted by the KULR team for their specific architecture.

In addition to offering exceptional performance and reliability, the KULR ONE battery packs are also designed with safety as a top priority.

They incorporate state-of-the-art thermal management technology to prevent overheating and ensure safe operation even in the most challenging environments.

Overall, the KULR ONE family of battery packs is at the forefront of the global drive towards sustainable electrification.

Overall, the KULR ONE family of battery packs, depicted with the following picture, is at the forefront of the global drive towards sustainable electrification.

With its unparalleled combination of safety, performance, intelligence, modularity, reliability, and customizability, KULR ONE is positioned to revolutionize the way we think about energy storage and powering the world’s most demanding applications.

K1DS offers a comprehensive approach to designing safe and reliable battery solutions for a wide range of applications.

Our services start with the quality and reliable cell supply from North American sources to ensure that our customers receive high-performing and long-lasting batteries.

To ensure the performance and safety of our batteries, we have various cell testing capabilities, including cell screening to NASA 37A.

We also conduct extensive cell testing to ensure that our batteries meet the highest standards for safety and reliability.

Our Multiphysics modeling capabilities, which include the use of GTC Suite software, enable us to optimize battery performance and minimize the risk of failure.

Our battery design services focus on designing custom solutions that meet our customers' specific needs.

We conduct rigorous testing of those battery packs to ensure reliability and safety, including systems-level testing that helps customers understand the safety and reliability of their applications.

Additionally, we provide real-time monitoring of their batteries to ensure battery health and safety in the field, minimizing the risk of failure and prolonging battery life.

In summary, KULR ONE design services offer a comprehensive approach to battery design and testing, ensuring that our customers receive high-performing and safe battery solutions that meet their unique needs.

We strive to be the go-to provider for reliable and innovative battery solutions that accelerate the global transition to a sustainable electrification economy.

KULR VIBE Solution

During 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.

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 of the most challenging issues with advanced machinery today;

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.

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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 in supply of raw materials to produce enough Li-ion batteries to power everything from EV’s to smartphones, KULR is developing a modular battery storage architecture that can be used across multiple applications with real-time monitoring by AI-powered CellCheck.

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:

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● Residential and commercial energy storage systems

Through our partnership with MoliCel, KULR has access to best-in-class Li-ion battery cells with high power and energy to build battery modules with the highest safety ratings.

As part of the strategic relationship, KULR has access to over 700MWh of battery energy capacity to further accelerate its production and supply chain localization initiatives within North America.

Securing this MoliCel battery cell supply accelerates our ability to provide total solutions to high value customer applications with revenue potential that could exceed $350 million annually in five years.

Energy Storage

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KULR’s passive propagation resistant (PPR) and thermal runaway shield (TRS) technologies prevent cell to cell thermal runaway propagation and inhibit fire and ejecta of a single cell from exiting the battery enclosure, making battery energy storage packs safe for homes, hospitals, schools, and universities, and more.

KULR is partnering with leaders in the energy storage industry such as Volta Energy Products, the subsidiary of Buffalo NY based parent company, Viridi Parente, to increase deployments of safe, reliable, and durable energy storage safety systems to accelerate the broader energy transition.

KULR is partnering with leaders in the energy storage industry such as Volta Energy Products, the subsidiary of Buffalo NY based parent company, Viridi, to increase deployments of safe, reliable, and durable energy storage safety systems to accelerate the broader energy transition.

Battery Recycling and Management

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KULR’s proprietary carbon fiber-based suite of thermal interface materials leverage advanced carbon fiber based heatsink technology that offers customers highly customizable, lightweight, and cost-effective solutions with industrial-level reliability due to their high thermal conductivity, lightweight, and low contact pressure.

New Battery Cell Development

KULR started a research and development initiative using carbon fiber structures to produce battery cells with higher energy density and faster charging capabilities.

Fast-charging will be the killer app for next-gen batteries.

Right now, overheating is a key limiting factor in advancing fast-charging battery technology.

There may be a way to solve that problem by using carbon fiber inside the battery cell to reduce thermal and electrical resistance which can dissipate heat more effectively.

The R&D initiatives include thicker cathode with higher loading factor, silicon anode, lithium metal anode and solid-state electrolyte development.

This is a long-term strategic development for KULR.

Commercial Partnerships

KULR has a long-term technology and developmental partnership with Andretti Technologies (ATEC), the advanced technology arm of racing team Andretti Autosport.

The alliance will establish a thermal management testing and design platform for high-performance battery solutions with the highest safety ratings that will be adapted to the technical requirements of Andretti’s racing enterprise with the goal of transferring solutions to mass-market electric vehicle (EV) applications.

New Facility and IT-Systems

KULR relocated in October 2021 to a new facility located at 4863 Shawline St, San Diego, CA.

The facility is 3 times larger than the previous facility with adequate room to support our new automated battery cell testing capability that will launch in Q123 as well as personnel growth.

Additionally, we installed independently enclosed areas to support the machine shop, testing lab, battery lab, and Fiber Thermal Interface Material (“FTI”) manufacturing lab.

We have implemented a 5S standard for the entire facility and received ISO 9001 certification in July 2022.

KULR opened a new facility in January 2023 at 1692 N.

Texas Avenue, Webster, TX.

This facility provides 4800 ft2 space in an industrial complex where KULR will focus on research and development related activities for lithium-ion battery systems.

This space will provide room for additional personnel office space, an engineering design and prototyping sandbox, a 3D printing room, an electrical room for tab welding operations, and a small warehouse for storage.

Once fully operational, activities will be completed to have the new location included in KULR’s existing ISO 9001 certification.

KULR TRS (Thermal Runaway Shield) Manufacturing:

KULR will be onboarding a fully automated TRS manufacturing system in our Texas facility in early Q323.

The intent of this system is to further onshore the manufacturing of TRS thereby reducing supply chain risks, costs, and improve LT performance for our customers.

This is another example of KULR nearshoring/onshoring our manufacturing of products to gain further direct control of manufacturing.

By developing automated systems, we are capable of being very competitive, and in certain cases, more competitive than offshore manufacturing we considering total cost of ownership.

KULR currently maintains three facilities of operations.

KULR California, located at 4863 Shawline St, San Diego, CA., supports our fully automated battery cell screening line and remains the only U.S.

automated facility capable of executing the test requirements of NASA Work Instruction 37(WI37).

WI37 is the testing standard required for battery cells used on all manned missions for NASA.

Additionally, the facility produces our patented Thermal Runaway Shields, Fiber Thermal Interface materials, Cathodes, Phase Change Materials, and heatsinks.

KULR, on February 1 st , 2024, relocated the KULR Texas facility previously located at 1692 N.

Texas Avenue, Webster, TX to a significantly larger facility located at 555 Forge River Road, Suite 100, Webster, TX.

The previous location provided 4800 ft 2 , whereas the new facility provides 17,560 ft 2 supporting the growth of our customer base and engineering team.

The facility is conveniently located 2.1 miles from NASA Johnson Space Center and is surrounded by a large number of KULR existing and targeted customers.

The facility will support research and development related activities for lithium-ion battery systems.

This expanded space will provide room for additional personnel office space, an engineering design and prototyping sandbox, a 3D printing room, an electrical room for tab welding operations, an expanded CNC capability, Laser welding, Volume TRS manufacturing and a large warehouse for storage.

Once fully operational, necessary actions will be completed to have the new location included in KULR’s existing ISO 9001 certification.

Our testing facility in San Leon, TX, will be consolidated into KULR Texas during the second quarter of 2024.

This consolidation allows for maximum efficiency of operations of our engineering talent while creating a showcase of advanced Fractional Thermal Runaway Calorimetry (FTRC), Bomb Calorimetry, Thermal Modeling, Destructive Battery pack testing, and SafeCase verification testing.

This new location provides for greater customer engagements both on site and via live feed internationally.

KULR has engaged with Managed Solutions to enhance our IT infrastructure and improve all aspects of Cybersecurity.

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They also will audit our current level of threat sophistication and ensure any weak link is addressed immediately.

See Item 1C - Cybersecurity for additional information.

KULR was incorporated in the State of Delaware in December 2015 and was formerly known as “KT High-Tech Marketing, Inc.” and, prior to that, as “Grant Hill Acquisition Corporation.” In April 2016, KULR implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors.

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Timothy Knowles.

Prior to 2013, KTC’s technologies were used in numerous advanced space and industrial applications for NASA, Boeing, and Raytheon.

Prior to 2013, KTC’s technologies were used in numerous

advanced space and industrial applications for NASA, Boeing, and Raytheon.

A few notable achievements were the use of KTC’s technologies in the X-31 aircraft (battery heat sink), Mercury Messenger (battery heat sink), and X-51 Scramjet (heat exchanger).

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The Share Exchange was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America, with KTC being treated as the acquiring company for accounting purposes.

Accordingly, the financial statements included in this Annual Report reflect the assets, liabilities and historical results of KTC prior to the completion of the Share Exchange.

On August 30, 2018, KULR changed its name from “KT High-Tech Marketing, Inc.” to “KULR Technology Group, Inc.” by filing a certificate of amendment to its Certificate of Incorporation with the office of the Secretary of State of the State of Delaware.

On December 31, 2018, KULR filed a certificate of amendment with the Secretary of State of the State of Delaware, to increase the number of authorized shares of its common stock from 100,000,000 to 500,000,000.

As a result, the aggregate number of the Company’s authorized capital stock became 520,000,000 shares.

Recent Developments

In December 2019, an outbreak of a novel strain of coronavirus, COVID-19, was identified in Wuhan, China.

Since then, COVID-19 has spread across the globe, including the U.S., and other countries in which the Company or its affiliates operate, and was recognized as a pandemic by the World Health Organization.

The COVID-19 pandemic resulted in a sharp contraction in many areas of the global economy and increased volatility and uncertainty in the capital markets.

In response to the pandemic, the governments of many countries, provinces, states, municipalities, and other geographic regions took preventative or protective actions, including closures of certain businesses, mandatory quarantines, limits on individuals’ time outside of their homes, travel restrictions and social distancing or other preventative measures.

Such measures have been eased or lifted in varying degrees by different governments of various countries, states and municipalities since implementation in 2020, but the continued spread of COVID-19 and increased infection rates has caused, and may continue to cause, some jurisdictions to roll back reopening plans that had been underway and re-impose quarantines, border closures, closure of certain businesses and stay-at-home orders.

The COVID-19 pandemic continues to impact the global economy and, specifically, the U.S., and the other countries in which the Company or its affiliates operate.

We continue to closely monitor and respond, where possible, to the ongoing COVID-19 pandemic.

As the global situation continues to change rapidly, ensuring the health and safety of our employees remains one of our top priorities.

In the U.S., numerous states have continued to remove their COVID-19 related restrictions.

This has resulted in the re-opening of, and increased occupancy capacities in, retail outlets, including those that sell our products.

Any reinstatement of restrictions on the operations of retail outlets could negatively impact our short-term results of operations in the U.S.

Additionally, in the U.S., there have been a number of supply chain challenges, such as container ships facing delays due to congestion in ports, impacting many industries, including the industries in which we operate.

For example, during the quarterly period ended March 31, 2022, we experienced significant impact to our business due to the COVID-19 lockdown in Shanghai, China, during which time inventory in excess of $325,000 could not be shipped.

The product was shipped, and revenue was recognized during the subsequent quarter.

COVID-related challenges have resulted in delays in product shipment, not cancellations.

As restrictions have eased in recent months, we expect to make up for lost time and revenue as we move through our sizeable inventory.

We are currently taking active steps to direct our production and supply chain activities to North America to geographically diversify and potentially reduce further COVID-19 impacts.

Although we have not yet seen a significant impact from supply chain disruptions, we continue to monitor our supply chain closely.

Collectively, the effects of the COVID-19 pandemic have adversely affected our results of operations and, if the effects continue unabated, could continue to do so as long as measures to combat the COVID-19 pandemic remain in effect or supply chains continue to be challenged.

At this time, neither the duration nor scope of the disruption can be predicted;

therefore, the ultimate impact to our business cannot be reasonably estimated, but such impact could materially adversely affect our business, financial condition and results of operations.

Despite the impacts of the COVID-19 pandemic, we believe that our significant cash on hand and short-term investments will be adequate to meet liquidity and capital requirements for at least the next twelve months.

The Company reported record annual revenues of $9.8 million for 2023, as compared to its previous record revenues of $4.0 million for 2022.

Liability Repayment

Subsequent to December 31, 2023, the Company repaid in full all remaining principal and interest owed in connection with the prepaid advance liability.

Equity Financing

On September 15, 2023, the Company completed a public offering of 8,214,285 shares of common stock, priced at $0.35 per share, with gross proceeds of $2,875,000 less issuance costs of $588,230, for net proceeds of $2,286,770.

On December 22, 2023, the Company completed a public offering of 5,175,000 shares of common stock, priced at $0.20 per share, with gross proceeds of $1,035,000 less issuance costs of $257,800, for net proceeds of $777,200.

Compliance with NYSE American Continued Listing Requirements

On December 20, 2023, the Company received a notice of noncompliance (the “Stockholders’ Equity Notice”) from NYSE Regulation (“NYSE”) stating that it is not in compliance with Section 1003(a)(i) in the NYSE American Company Guide (the “Company Guide”) since the Company reported stockholders’ equity of $1,200,172 at September 30, 2023, and losses from continuing operations and/or net losses in its five most recent fiscal years.

Section 1003(a)(iii) of the Company Guide requires a listed company to have stockholders’ equity of $6 million or more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years.

As required by the Stockholders’ Equity Notice, on January 19, 2024, the Company submitted a plan (the “Plan”) to NYSE advising of actions it has taken or will take to regain compliance with the continued listing standards by June 20, 2025.

NYSE staff will review the Company periodically for compliance with the initiatives outlined in the Plan.

If the Company is not in compliance with the continued listing standards by June 20, 2025, or if the Company does not make progress consistent with the Plan during the Plan period, NYSE staff will initiate delisting proceedings as appropriate.

On March 5, 2024, the Company received a notification (the “Acceptance Letter”) from the NYSE American that the Company’s plan to regain compliance was accepted.

The NYSE American has granted the Company a plan period through June 20, 2025 to regain compliance with Section 1003(a)(iii).

If the Company is not in compliance with the continued listing standards by that date or if the Company does not make progress consistent with the plan during the plan period, the NYSE American may commence delisting procedures.

On February 12, 2024, the Company received a notice letter (the “Letter”) from NYSE stating that it is not incompliance with Section 1003(f)(v) of the Company Guide since the Company’s securities were trading at an average of less than $0.20 per share for 30 days.

The Company intends to cure the stock price deficiency and return to compliance with NYSE continued listing standards, however, the Company can provide no assurance that this measure will be successful.

Issuance of Non-Convertible Series A Voting Preferred Stock

On January 26, 2024, the Board of Directors (“Board”) of the Company, following extensive strategic evaluation, including consultation with advisors, approved, authorized, and ratified the issuance of 730,000 shares of previously designated Non-convertible Series A Voting Preferred Stock to the Chairman and Chief Executive Officer of the Company, Michael Mo, subject to certain limitations as set forth below, for no consideration.

The issuance of up to 1,000,000 shares of Non-convertible Series A Voting Preferred Stock was previously approved and authorized by a vote of the majority stockholders of the Company.

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 Michael Mo 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 Non-convertible 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.

Appointment of Officers and Management

Appointment of Chief Technology Officer

On November 1, 2022, the Company announced the appointment by the Company’s Board of Directors (the “Board”) of Dr.

William Walker as Chief Technology Officer (“CTO”) of the Company.

Appointment of Lead Director of the Board

On November 1, 2022, the Board appointed Dr.

Joanna Massey as lead director (the “Lead Director”) of the Board.

Massey has served on the Board, and its committees, since June 2021.

The Board, believing that the Lead Director position would enhance corporate governance and relieve certain duties of the Board’s Chairman, Michael Mo, to allow him to focus on the performance of his Chief Executive Officer duties, designated certain responsibilities to be fulfilled by the Lead Director, including but not limited to:

(i) coordinating the activities of the independent directors;

(ii) setting the agenda for board meetings in conjunction with the CEO and corporate secretary;

(iii) chairing executive sessions of the independent directors;

and (iv) performing such other duties as are assigned from time to time by the board.

Appointment of Vice President, Sales

On January 16, 2023, the Company appointed a Vice President of Sales (the “VP of Sales”), and issued the VP of Sales 298,507 shares of restricted common stock.

The restricted common stock had a grant date fair value of $400,000, and vests in four equal annual installments beginning January 16, 2024 based solely on continued service.

The grant date fair value will be amortized ratably over the vesting period.

In addition, the Company committed to a one-year guaranteed commission of $200,000, payable in four quarterly installments as well as a severance package of $250,000 and one-year of family health insurance if the VP of Sales is terminated without cause (as defined) within one year of hire.

Appointment of Chief Financial Officer

On March 31, 2023, the Company appointed a Chief Financial Officer (the “CFO”) and issued the CFO 1,500,000 shares of restricted stock.

The restricted common stock had an aggregate grant date fair value of $1,380,000, and vests in five equal annual installments beginning March 31, 2024 based solely on continued service.

Management Equity Incentive Grants

On November 1, 2022, the Board unanimously approved equity grants, to each of Dr.

Joanna Massey and Morio Kurosaki, equal to 30,000 shares of the Company’s common stock to be vested in four equal quarterly installments (the first vest occurred on December 31, 2022), and grants of a fully vested 7,500 shares for services performed during the quarter ended September 30, 2022.

On November 1, 2022, the Board also unanimously approved the termination of a previously issued equity incentive grant of 1,500,000 shares to each of Keith Cochran and Michael Mo, which grants had vesting schedules corresponding with the achievement of certain market-capitalization milestones.

In order to more accurately reflect the incentive compensation that the previously issued grants were intended to achieve, the Board approved replacement equity grants to each of Keith Cochran and Michael Mo in the form of Restricted Stock Units (“RSUs”) for the stock settlement of 1,500,000 shares, which RSUs contain provisions for delayed stock settlement and for vesting to occur in four equal annual installments.

The foregoing is a summary description of certain terms of the RSUs.

On July 12, 2023, the Board unanimously approved an equity grant to the Chief Technology Officer, of 350,000 shares of restricted common stock.

The restricted common stock had a grant date fair value of $266,000 and vests in four equal annual installments beginning on July 12, 2024.

Merchant Cash Advance Agreement

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $504,900 of cash (net of underwriting fees of $35,100) with the obligation to repay a total of $804,600 over thirty-two weekly payments of $25,143.75, beginning January 30, 2024.

On February 26, 2024, the parties added an addendum to the agreement for an early payoff discount whereby the Company will owe $756,000 if paid by March 22, 2024, or $783,000 if paid by April 22, 2024.

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) whereby the Company received $502,200 of cash (net of underwriting fees of $37,800) with the obligation to repay a total of $804,600 over thirty weekly payments of $26,820, beginning February 29, 2024.

Recent Shareholder Vote by Majority Written Consent

On February 9, 2024, the shareholders of the Company, acted by way of majority written consent (in lieu of a special meeting of stockholders) to approve resolutions authorizing the Company’s Board of Directors to take the following actions:

(1) to issue shares of Common Stock to current or future engagements with commercial or strategic parties, which may result in issuances of over 20% of the issued and outstanding shares of Common Stock;

(2) to amend the Company’s Bylaws to decrease the number of shares of Common

Stock needed to establish a quorum for meetings of stock holders to thirty-three-and-one-third percent (33 1/3 %) of the outstanding voting securities of the Company;

(3) to amend the Certificate of Incorporation of the Company to effect a reverse split within a ratio range between 1-for-2 and 1-for-80;

(4) to issue shares of common stock, in connection with an existing financing facility, which may result in the potential issuance of over 20% of the issued and outstanding shares.

The resolution was approved by shareholders holding in aggregate of 55.72% of outstanding shares as of February 9, 2024.

Sales and Marketing Strategy

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We use a combination of marketing approaches to reach prospects and customers, such as leveraging employee, representative, and strategic partner relationships, maintaining an informative website, attending industry conferences, and conducting market research.

Recently, we expanded our direct sales and marketing teams, and we are excited to welcome Mr.

Recently, we expanded our direct sales and marketing teams, including Mr.

Ted Krupp, a highly experienced professional with important relationships in the Aerospace and Defense sectors, as our new VP of Sales and Marketing.

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Our intellectual property strategy includes pursuing patent protection for new innovations in core carbon fiber architecture development, application development, acquisition of intellectual property, and licensing of third-party patents and intellectual property.

As of December 31, 2022, we have twelve patents granted and assigned to KULR, an exclusive license to four third party patents, and ten pending nonprovisional and provisional patent applications.

As of December 31, 2023, we have six patents granted and assigned to KULR, an exclusive license to four third party patents, and ten pending nonprovisional and provisional patent applications.

Product and Services

In addition to KULR ONE and KULR VIBE, here are some of the technologies and products we offer to customers:

In addition to KULR ONE and KULR VIBE, here are some of the technologies, products and services we offer to customers:

Lithium-Ion Battery Thermal Runaway Shield (“TRS”) :

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We have designed the system to be modular and have installed a minimum of 500K cell capacity annually capable of handling 18650 and 21700 cells.

Volume processing will start in February 2023.

A scalable battery management platform to provide a new level of safety, performance optimization and regulatory compliance capabilities to our customers.

We achieve this by putting together a modular architecture that is built on large data sets, performing an array of analytics, and then layering on top of it AI algorithms to provide predictive and preventative intelligence to our customers.

We achieve this by putting together a modular architecture that is built on large data

sets, performing an array of analytics, and then layering on top of it AI algorithms to provide predictive and preventative intelligence to our customers.

It’s modular so that we can incorporate new capabilities and enhancements to the platform as the battery evolution accelerates in the coming years.

This is another significant step to position KULR as a one-stop-shop total solutions provider of battery thermal energy and safety management.

KULR-Tech Safe Case:

KULR SafeCase:

This product was developed for the commercial transportation and storage of Li-ion batteries.

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The CRUX Cathode is composed of a carbon fiber velvet, providing a means of generating powerful electron pulses by field emission from the tops of the carbon fibers.

CRUX Cathodes can be customized for different applications

including the generation of microwaves, x-rays, and laser radiation.

CRUX Cathodes can be customized for different applications including the generation of microwaves, x-rays, and laser radiation.

They can be fabricated in a wide variety of physical configurations, ranging from simple planar and cylindrical forms to more complex lobed shapes.

18 unchanged sentences

In most other countries, there are no specific regulations that require additional regulation, but some countries do have registration requirements with which we comply to the best our ability.

As of December 31, 2022, we had 62 full time employees and 16 contractors.

As of December 31, 2023, we had 57 full time employees and 3 contractors (after the Workforce Reduction discussed below).

We believe that we maintain a good working relationship with our employees, and we have not experienced any significant labor disputes.

In addition, KULR leverages outsource partners for IT management, Software Development, Battery Cell R&D, and Machine Automation.

On January 9, 2024, the Company announced that it had completed a reduction of its total workforce of approximately 15% in an effort to allocate its resources to key business priorities to focus on improving the profitability of commercial customer engagements.

Intellectual Property

2 unchanged sentences

We also seek to maintain our trade secrets and confidential information by implementing organizational nondisclosure policies and through the use of appropriate confidentiality agreements.

As of December 31, 2022, we held eight U.S.

As of December 31, 2023, we held six U.S.

patents and six non-provisional pending U.S.

9 unchanged sentences

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

What changed 10-K

Item 1. Business