What changed in this filing

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Item 1. Financial Statements

2024-08-12 compared with 2024-05-15 · 235 added, 171 removed, 462 unchanged (47% of the section changed)

21 unchanged sentences

Notes payable, net of discount, current portion

Prepaid advance liability, net of discount, current portion

Deferred revenue

Total Current Liabilities

Notes payable, non-current portion

Lease liabilities, non-current portion

Prepaid advance liability, net of discount, non-current portion

Accrued interest, non-current portion

Notes payable, non-current portion

Prepaid advance liability, net of discount

Accrued interest

Total Liabilities

3 unchanged sentences

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

730,000 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

730,000 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively;

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

none issued and outstanding at March 31, 2024 and December 31, 2023

none issued and outstanding at June 30, 2024 and December 31, 2023

Series C Preferred Stock, 400 shares designated;

none issued and outstanding at March 31, 2024 and December 31, 2023

none issued and outstanding at June 30, 2024 and December 31, 2023

Series D Preferred Stock, 650 shares designated;

none issued and outstanding at March 31, 2024 and December 31, 2023

none issued and outstanding at June 30, 2024 and December 31, 2023

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

173,310,469 and 173,179,307 shares issued and outstanding at March 31, 2024, respectively;

188,086,914 and 187,955,752 shares issued and outstanding at June 30, 2024, respectively;

134,031,669 and 133,900,507 shares issued and outstanding at December 31, 2023, respectively

1 unchanged sentence

Treasury stock, at cost;

131,162 shares held at March 31, 2024 and December 31, 2023

131,162 shares held at June 30, 2024 and December 31, 2023.

Accumulated deficit

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Cost of revenue

6 unchanged sentences

( 6,079,980 )

( 9,983,795 )

( 12,340,698 )

Other (Expense) Income

6 unchanged sentences

( 6,334,992 )

( 10,899,404 )

( 12,937,853 )

Net Loss Per Share

5 unchanged sentences

AND SUBSIDIARY

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

FOR THE THREE MONTHS ENDED MARCH 31, 2024

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

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

Preferred Stock

8 unchanged sentences

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

Warrants issued in connection with note payable

Stock-based compensation:

9 unchanged sentences

( 71,296,470 )

(1) Equity financing gross proceeds of $ 6,068,407 less issuance costs of $ 13,577 .

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

Warrants isued in connection with note payable

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

Stock-based compensation:

Restricted stock units vested

Common stock issued for services

Amortization of restricted common stock

Amortization of stock options

( 5,890,528 )

Balance - June 30, 2024

( 77,186,998 )

(1) Represents gross proceeds of $ 6,068,407 , less issuance costs of $ 13,577 .

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

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

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

1 unchanged sentence

AND SUBSIDIARY

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

FOR THE THREE MONTHS ENDED MARCH 31, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY, continued

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023

Treasury Stock

2 unchanged sentences

( 42,594,038 )

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices

Common stock issued for the repayment of prepaid advance liability and related interest accrual

Shares repurchased for payroll taxes and canceled

9 unchanged sentences

( 49,196,899 )

Common stock issued for the repayment of prepaid advance liability and related interest accrual

Stock-based compensation:

Amortization of restricted common stock

Amortization of stock options

( 6,334,992 )

Balance - June 30, 2023

( 55,531,891 )

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:

8 unchanged sentences

Stock-based compensation

Loss on disposal of property and equipment

Changes in operating assets and liabilities:

Accounts receivable

( 1,025,531 )

( 1,046,532 )

Inventory deposits

2 unchanged sentences

Accounts payable

( 1,768,098 )

Accrued expenses and other current liabilities

Lease liability

Lease liabilities

Deferred revenue

4 unchanged sentences

Cash Flows From Investing Activities:

Equipment deposits

Purchases of property and equipment

8 unchanged sentences

Repayments of notes payable

( 1,525,195 )

Repurchase of common stock

Net Cash Provided By Financing Activities

8 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

Right-of-use asset for lease liability

Shares repurchased for payroll taxes (not paid as of period-end) and canceled

Restricted stock awards converted to restricted stock units

1 unchanged sentence

Original issue discount on indebtedness

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

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

Common stock issued in satisfaction of prepaid advance liability and interest

Deposits applied to purchases of property and equipment

Additions to property and equipment included in accounts payable

Additions to property and equipment included in accrued purchases

Additions to property and equipment included in accounts payable and accrued expenses

Equipment deposits included in accounts payable

Deferred financing costs charged to additional paid-in capital

Accrued underwriting fees for notes payable

Value of warrants issued in connection with notes payable

Accrued deferred financing costs

Preferred shares issued for no consideration

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

11 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, 2024, and for the three months ended March 31, 2024 and 2023.

The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the operating results for the full year ending December 31, 2024 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, 2024, and for the three and six months ended June 30, 2024 and 2023.

The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the operating results for the full year ending December 31, 2024, 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, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 12, 2024.

3 unchanged sentences

Going Concern and Management’s Liquidity Plans

As of March 31, 2024, the Company had cash of $ 798,843 and working capital deficit of $ 3,907,626 .

For the three months ended March 31, 2024, the Company incurred a net loss of $ 5,008,876 and used cash in operating activities of $ 3,907,406 .

As of June 30, 2024, the Company had cash of $ 1,016,943 and a working capital deficit of $ 2,381,478 .

For the six months ended June 30, 2024, the Company incurred a net loss of $ 10,899,404 and used cash in operating activities of $ 9,198,453 .

The Company’s primary source of liquidity has historically been cash generated from equity and debt offerings along with cash flows from revenue.

2 unchanged sentences

However, since the Company’s inception, we have had a history of recurring net losses from operations, recurring use of cash in operating activities and working capital deficits.

Future cash requirements for our current liabilities include $ 5,800,667 for accounts payable and accrued expenses, $ 1,259,534 for merchant cash advances (see Note 9 – Notes Payable), $ 981,371 for capital expenditures and $ 435,707 for future payments under operating leases.

Future cash requirements for long-term liabilities include $ 250,000 for unsecured promissory notes.

Future cash requirements for our current liabilities include $ 4,811,565 for accounts payable and accrued expenses, $ 784,006 for secured promissory notes (see Note 9 – Notes Payable) and $ 487,369 for future payments under operating leases.

Future cash requirements for long-term liabilities include $ 1,059,898 for future payments under operating leases and $ 250,000 for unsecured promissory notes.

On December 20, 2023, the Company received a notice of noncompliance from NYSE Regulation (“NYSE”) stating it is not in compliance with Section 1003(a)(iii) 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.

7 unchanged sentences

Management’s plans to mitigate the factors which raise substantial doubt include (i) revenue growth, (ii) reducing operating expenses through careful cost management, and (iii) raising additional funds through future financings.

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock having an aggregate offering price of up to $ 20,000,000 in “at the market” offerings through or to the Agent.

Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent.

The Agent will receive a commission from the Company of 3 % of the gross proceeds of any shares of common stock sold under the Sales Agreement.

During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the Sales Agreement for aggregate proceeds of $ 1,416,940 .

See Note 12 – Subsequent Events – At the Market Offering for additional information.

The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives.

On April 2, 2024, the Company received cash proceeds of $ 440,000 related to an unsecured Promissory Note comprised of an initial principal amount of $ 500,000 and discount of $ 60,000 , for cash proceeds of $ 440,000 .

The Promissory Note carries an annual interest rate of 0 % and increases to 15 % in the event of default and shall be repaid in cash representing all outstanding principal and accrued and unpaid interest due on October 2, 2024, as defined by the terms of the agreement.

See Note 12 – Subsequent Events – Promissory Notes for additional information.

On April 9, 2024, the Company received cash proceeds of $ 200,000 related to an unsecured Promissory Note which matures on the first anniversary of its issuance and carries an annual interest rate of 16 %.

In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12 % of the prepayment amount.

See Note 12 – Subsequent Events – Promissory Notes for additional information.

Subsequent to March 31, 2024, and through May 13, 2024, the Company issued a total of 9,453,767 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $ 4,321,479 .

See Note 12 – Subsequent Events – Standby Equity Purchase Agreement for additional information.

As of the date of the issuance of these condensed consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, or assurance the Company will be able to obtain additional funds on commercially acceptable terms, if at all.

There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations.

There is no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations.

The aforementioned factors indicate that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

9 unchanged sentences

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

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash Concentrations

2 unchanged sentences

Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution.

There were uninsured balances of $ 298,843 and $ 694,763 as of March 31, 2024 and December 31, 2023, respectively.

There were uninsured balances of $ 516,943 and $ 694,764 as of June 30, 2024 and December 31, 2023, respectively.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Customer and Revenue Concentrations

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Less than 10%

There is no assurance the Company will continue to receive significant revenues from any of these customers.

There is no assurance the Company will continue to receive significant revenue from any of these customers.

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

1 unchanged sentence

Vendor Concentrations

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

The Company had vendors whose purchases of inventory individually represented 10% or more of the Company’s total purchases of inventory, for the three and six months ended June 30, 2024 and 2023, as follows:

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.

As of March 31, 2024 and December 31, 2023, no allowances for credit losses were determined to be necessary.

Management estimates the allowance for credit losses based on

As of June 30, 2024 and December 31, 2023, no allowances for credit losses were determined to be necessary.

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

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

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

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts.

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

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

The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized.

4 unchanged sentences

Cost is determined by the first-in, first-out method.

The cost of inventory that is sold to third parties is included within cost of sales and the cost of inventory that is given as samples is included within operating expenses.

The cost of inventory that is sold to third parties is included within cost of revenue and the cost of inventory that is given as samples is included within operating expenses.

The Company periodically reviews for slow-moving, excess or obsolete inventories.

1 unchanged sentence

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 consolidated balance sheet.

As of March 31, 2024 and December 31, 2023, inventory deposits were $ 27,500 .

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 sheets.

As of June 30, 2024 and December 31, 2023, inventory deposits were $ 10,883 and $ 27,500 , respectively.

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

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

Inventory at March 31, 2024 and December 31, 2023 was comprised of the following:

Inventory at June 30, 2024 and December 31, 2023 was comprised of the following:

Raw materials

11 unchanged sentences

Recognize revenue when the company satisfies a performance obligation.

The Company recognizes 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.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes revenue primarily from the following different types of contracts:

● Contract services – Revenue is recognized pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract.

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Revenue Recognized at a Point in Time:

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

( 5,890,528 )

( 6,334,992 )

( 10,899,404 )

( 12,937,853 )

Denominator (weighted average quantities):

11 unchanged sentences

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

Prepaid advance liability (1)

Unvested restricted stock awards

Restricted stock units

Unvested restricted stock units

(1) Shares issuable estimated using the floor price of $ 0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 6 – Prepaid Advance Liability).

Operating Leases

2 unchanged sentences

The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate.

The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset.

The right-of-use asset is measured at the amount of the lease liability adjusted for 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.

Operating lease expense consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset.

1 unchanged sentence

Reclassifications

Certain prior period balances have been reclassified in order to conform to the current period presentation.

Certain prior period balances have been reclassified to conform to the current period presentation.

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

7 unchanged sentences

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

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

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

3 unchanged sentences

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

Since this new ASU addresses only disclosures, the Company

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows.

The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023–09.

8 unchanged sentences

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of March 31, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:

As of June 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:

Compensation costs

Dues and subscriptions

Deferred expenses

Security deposits

Professional fees

Dues and subscriptions

Vendor receivables

Security deposits

Conferences and seminars

Investor relationships

Investor relations

Total prepaid expenses and other current assets

3 unchanged sentences

NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of March 31, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:

As of June 30, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:

Professional fees

Payroll and vacation

Research and development

Refund due to customer

Payroll and vacation

Inventory purchases

Tools and supplies

Sales tax payable

Board compensation

Securities fees

Refund due to customer

Cost of sales

Total accrued expenses and other current liabilities

2 unchanged sentences

NOTE 5 – ACCRUED ISSUABLE EQUITY

A summary of the accrued issuable equity activity during the three months ended March 31, 2024 is presented below:

For the Three Months Ended

March 31, 2024

A summary of the accrued issuable equity activity during the six months ended June 30, 2024 is presented below:

For the Six Months Ended

June 30, 2024

Beginning balance at January 1, 2024

Mark-to-market

Fair value at March 31, 2024

During the three months ended March 31, 2024, the Company entered into and settled certain contractual arrangements for services in exchange for a fixed number of shares of common stock of the Company.

On the respective dates the contracts were entered into, the estimated fair value of the shares to be issued was an aggregate of $ 26,003 based on the quoted market prices of the shares.

During the three months ended March 31, 2024 and 2023, the Company recorded gains (losses) in the aggregate amount of $( 13,002 ) and $ 64,108 , respectively, related to changes in the fair value of accrued issuable equity (see Note 10 – Stockholders’ Equity, Stock-Based Compensation for additional details).

The fair value of the accrued but unissued shares as of March 31, 2024, was $ 52,007 , based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets.

NOTE 6 – PREPAID ADVANCE LIABILITY

The Company’s prepaid advance liability consists of the following:

Fair value at June 30, 2024

During the six months ended June 30, 2024, the Company became obligated to issue a fixed number of shares of common stock of the Company as consideration for services provided by an employee pursuant to a contractual arrangement previously entered into with the employee.

On the date the contract was entered into, the estimated fair value of the shares to be issued was an aggregate of $ 53,375 based on the quoted market prices of the shares.

The Company recorded losses in the aggregate amount of $ 2,737 and $ 15,739 during the three and six months ended June 30, 2024, respectively, and recorded gains in the aggregate amount of $ 156,652 and $ 220,760 during the three and six months ended June 30, 2023, respectively, related to changes in the fair value of accrued issuable equity (see Note 10 – Stockholders’ Equity, Stock-Based Compensation for additional details).

The fair value of the accrued but unissued shares as of June 30, 2024, was $ 82,116 , based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

The Company’s prepaid advance liability, net of discount, consists of the following:

Gross Amount of

7 unchanged sentences

Amortization of debt discount

Balance, March 31, 2024

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Balance, June 30, 2024

On January 9, 2024, the Company entered into a letter agreement with Yorkville to defer the Company’s December 31, 2023 (the “December Payment”) payment of $ 2,000,000 plus accrued interest and a 5 % cash payment premium until February 29, 2024.

On February 13, 2024, the Company and Yorkville entered into another agreement to extend all payment due dates and defer all payment obligations to December 31, 2024.

During the three months ended March 31, 2024, the Company issued 41,027,181 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $ 8,979,058 .

During the six months ended June 30, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $ 15,173,357 .

Of the shares issued pursuant to the SEPA Advance Notices, 21,798,830 shares valued at $ 6,068,407 were issued in satisfaction of $ 5,918,430 of principal and $ 118,619 of accrued interest owed in connection with the Company’s prepaid advance liability.

The Company recorded $ 31,358 in extinguishment loss and charged $ 13,577 of deferred financing costs to additional paid-in capital in connection with the shares issued in satisfaction of the prepaid advance liability.

As of March 31, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full.

As of June 30, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA has been terminated.

See Note 10 – Stockholders’ Equity (Deficit) - Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA for additional information.

The remaining 33,860,646 shares issued pursuant to the SEPA Advance Notices were issued for cash proceeds of $ 9,104,950 , which was used to fund the operations of the Company.

2 unchanged sentences

On January 31, 2024, the initial lease for Webster, Texas dated January 18, 2023, expired.

The Company expects to recover the security deposit of $ 5,095 , which is included in the prepaid expenses and other current assets section of the condensed consolidated balance sheet.

On January 27, 2024, the Company entered into a lease agreement for new office space in Webster, Texas.

The initial lease term is 63 months .

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

Monthly rental payments under the new lease are $ 33,086 , which is comprised of $ 21,950 of base rent and $ 11,136 of common area maintenance fees.

1 unchanged sentence

The Company determined that the value of the lease liability and related right-of-use asset at inception was $ 1,085,497 , using an incremental borrowing rate of 10 %.

The Company paid a security deposit of $ 37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of March 31, 2024.

The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which expires May 31, 2024 (the “San Diego Lease”).

The Company paid a security deposit of $ 37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of June 30, 2024.

The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which expired May 31, 2024 (the “San Diego Lease”).

On January 25, 2024, the Company entered into an amendment to the lease dated April 5, 2021, for the facility located at 4863 Shawline Street, San Diego, CA 92111 (the “First Renewal”).

2 unchanged sentences

The Company determined that the value of the modified lease liability and related right-of-use asset to be $ 490,422 , using an incremental borrowing rate of 10 %.

As of March 31, 2024, the Company does not have any financing leases.

During the three months ended March 31, 2024 and 2023, operating lease expense was $ 111,902 and $ 65,873 , respectively.

As of June 30, 2024, the Company does not have any financing leases.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities as of March 31, 2024, were as follows:

4/1/24 to 12/31/24

During the three and six months ended June 30, 2024, operating lease expense was $ 111,591 and $ 226,708 , respectively.

During the three and six months ended June 30, 2023, operating lease expense was $ 65,873 and $ 131,746 , respectively.

Maturities of lease liabilities as of June 30, 2024, were as follows:

July 1, 2024 through December 31, 2024

Total future minimum lease payments

4 unchanged sentences

Supplemental cash flow information related to the lease was as follows:

For the Three Months Ended

For the Six Months Ended

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

2 unchanged sentences

Operating leases

Weighted Average Remaining Lease Term (Years)

Operating leases

Weighted Average Discount Rate

Operating leases

NOTE 8 – RELATED PARTY TRANSACTIONS

Effective August 26, 2022, the Company entered into a consulting agreement with the father of the Company’s Chief Technology Officer (the “Related Consultant”).

On July 24, 2023, the Related Consultant accepted an employment offer by the Company which became effective on August 7, 2023.

During the three months ended March 31, 2023, expense recognized for services provided by the Related Consultant were $ 10,455 , and is included within selling, general and administrative expenses on the unaudited condensed consolidated statements of operations.

As of March 31, 2024 and December 31, 2023, the Company did no t have any accounts payable outstanding with related parties.

During the three and six months ended June 30, 2023, the Company recognized expenses of $ 16,755 and $ 27,210 , respectively, for consulting services provided by the father of the company’s Chief Technology Officer, which are included within selling, general and administrative expenses on the unaudited condensed consolidated statements of operations.

For the three and six months ended June 30, 2024, there were no expenses with related parties.

As of June 30, 2024 and December 31, 2023, the Company did no t have any accounts payable outstanding with related parties.

KULR TECHNOLOGY GROUP, INC.

2 unchanged sentences

NOTE 9-NOTES PAYABLE

A summary of the notes payable activity during the three months ended March 31, 2024, is presented below:

A summary of the notes payable activity during the six months ended June 30, 2024 is presented below:

Outstanding, January 1, 2024

Proceeds from merchant cash advances

Proceeds from promissory notes

Issuance costs paid in cash

2 unchanged sentences

Repayments in cash

( 1,525,195 )

Amortization of debt discount

1 unchanged sentence

Notes payable, non-current portion

Total Notes payable as of March 31, 2024

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $ 504,900 of cash (net of underwriting fees of $ 35,100 ), and paid finder’s fees in cash of $ 21,600 and finder’s fees to be issued in equity with an aggregate value of $ 16,200 , with the obligation to repay a total of $ 804,600 over thirty-two weekly payments of $ 25,143.75 , beginning January 30, 2024.

The difference between the total repayment amount and the net proceeds received is being accounted for as an original issue discount, and along with the finder’s fees, is being amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 184 %.

The Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts.

Total notes payable as of June 30, 2024

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $ 504,900 of cash (net of underwriting fees of $ 35,100 ), and paid finder’s fees in cash of $ 21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $ 804,600 over thirty-two weekly payments of $ 25,143.75 , beginning January 30, 2024.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, is being amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 217 %.

The Cash Advance Agreement was secured by the Company’s accounts receivable and related cash receipts.

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

The Company did not take advantage of the early payoff discount and will continue making weekly payments over the original thirty-two-week term.

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the same lender mentioned above whereby the Company received $ 502,200 of cash (net of underwriting fees of $ 37,800 ), and paid finder’s fees in cash of $ 21,600 and finder’s fees to be issued in equity with an aggregate value of $ 16,200 , with the obligation to repay a total of $ 804,600 over thirty weekly payments of $ 26,820 , beginning February 29, 2024.

The difference between the total repayment amount and the net proceeds received is being accounted for as an original issue discount, and along with the finder’s fees, is being amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate of 195 %.

On July 11, 2024, the Company used proceeds from a new merchant cash advance to repay this cash advance in full.

See Note 12 – Subsequent Events – Merchant Cash Advance for additional information.

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the same lender mentioned above whereby the Company received $ 502,200 of cash (net of underwriting fees of $ 37,800 ), and paid finder’s fees in cash of $ 21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $ 804,600 over thirty weekly payments of $ 26,820 , beginning February 29, 2024.

The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, is being amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate of 249 %.

The Second Cash Advance is secured by the Company’s accounts receivable and related cash receipts.

See Note 12 – Subsequent Events – Promissory Notes for information related to notes payable issued subsequent to March 31, 2024, and warrants subsequently issued to satisfy the equity obligation.

On July 11, 2024, the terms of the agreement were revised whereby the weekly repayment amounts will be reduced from $ 26,820 to $ 15,620 and the repayment period will be extended from September 27, 2024, to November 15, 2024.

On April 4, 2024, the Company and the finder of the First and Second Cash Advance Agreements determined that the equity compensation would be by issuance of warrants to purchase up to 81,788 shares (the “First Warrant”) and up to 108,389 shares (the “Second Warrant”), respectively, of the Company’s common stock at an exercise price of $ 0.1852 per share and $ 0.139 per share, respectively.

The First Warrant and the Second Warrant (collectively the “Warrants”) were exercisable immediately and expire on January 22, 2027 and February 26, 2027, respectively.

The Warrants had a grant date fair value of $ 112,863 .

The value of the Warrants was recognized as additional debt discount, which will be amortized over the repayment period.

The Warrants contain a cashless exercise provision in the form of a net share settlement, whereby, if, at the time the holder exercises the Warrants, there is no effective registration statement registering the common stock subject to the Warrants, the holder may elect to receive the number of shares of the Company’s common stock determined according to a formula set forth in the warrant agreements.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following assumptions were used in the Black-Scholes Model to measure the fair value of the warrants:

Market price at measurement date

Exercise price

0.14 - $ 0.19

Risk free interest rate

Expected term (years)

Expected volatility

On April 2, 2024, the Company entered into an agreement (the “Promissory Note”), with a lender (the “Lender”), pursuant to which the Lender purchased an unsecured promissory note with an initial principal amount of $ 500,000 , for cash proceeds of $ 440,000 .

The Company recorded a debt discount of $ 60,000 , which consists of an original issue discount of $ 50,000 and cash issuance costs of $ 10,000 .

The Promissory Note carries an annual interest rate of 0 %, which shall increase to 15 % in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due.

On May 28, 2024, the Company repaid the Promissory Note in full, and recognized $ 60,000 of amortization expense related to the debt discount.

On April 9, 2024, the Company entered into a note purchase agreement pursuant to which the Company issued an unsecured promissory note with an initial principal amount of $ 200,000 and which matures on the first anniversary of its issuance.

The Company received cash proceeds of $ 200,000 .

The promissory note carries an annual interest rate of 16 %.

In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12 % of the prepayment amount instead of 16 %.

NOTE 10 - STOCKHOLDERS’ EQUITY (DEFICIT)

1 unchanged sentence

On May 13, 2022, the Company entered into the SEPA with Yorkville.

Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville up to an aggregate of $ 50,000,000 of its shares of common stock, par value $ 0.0001 per share, at the Company’s request any time during the commitment period commencing on May 13, 2022, and terminating on the first day of the month following the 24-month anniversary of the SEPA.

Pursuant to the SEPA, the Company had the right, but not the obligation, to sell to Yorkville up to an aggregate of $ 50,000,000 of its shares of common stock, at the Company’s request any time during the commitment period commencing on May 13, 2022, and terminating on June 1, 2024.

Each sale (an “Advance”) that the Company requests under the SEPA (via an “Advance Notice”) may be for a number of shares of common stock with an aggregate value of up to $ 5,000,000 .

Shares are sold under the SEPA at 98.0 % of the average of the volume-weighted average price (“VWAP”) during each of the three consecutive trading days commencing on the trading day following the Company’s submission of an Advance Notice to Yorkville.

Advances are subject to certain limitations, including that Yorkville will not

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

purchase any shares that would result in it owning more than 4.99 % of the Company’s outstanding common stock at the time of an Advance, or more than the amount of shares registered under the registration statement in effect at the time of the Advance.

Advances are subject to certain limitations, including that Yorkville will not purchase any shares that would result in it owning more than 4.99 % of the Company’s outstanding common stock at the time of an Advance, or more than the number of shares registered under the registration statement in effect at the time of the Advance.

Of the gross proceeds, $ 9,104,950 was retained by the Company to fund operations.

The remaining proceeds were applied against the principal and interest owed in connection with the Prepaid Advance Liability.

As of March 27, 2024, The Prepaid Advance Liability and the related accrued interest has been repaid in full.

As of March 27, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA terminated on June 1, 2024.

See Note 6 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA.

During the three months ended March 31, 2024, the Company issued an aggregate of 35,500 shares of immediately vested common stock with a grant date value of $ 6,390 for legal services.

During the three months ended March 31, 2024, the Company issued 384,627 shares of common stock upon the vesting of restricted stock units previously granted.

See Note 10 - Stockholders’ Equity - Restricted Stock Awards, for details related to restricted equity grants and Note 6 - Prepaid Advance Liability for details related to additional share issuances.

During the six months ended June 30, 2024, the Company issued an aggregate of 79,650 shares of immediately vested common stock with a grant date value of $ 27,141 for legal services.

During the six months ended June 30, 2024, the Company issued 454,627 shares of common stock upon the vesting of restricted stock units previously granted.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the six months ended June 30, 2024, the Company issued 30,000 shares of immediately vested common stock with a grant date value of $ 17,400 as equity compensation to its independent members of the Board of Directors.

See Restricted Stock Awards , for details related to restricted equity grants and Note 6 - Prepaid Advance Liability for details related to additional share issuances.

Preferred Stock

4 unchanged sentences

Treasury Stock

As of March 31, 2024 and December 31, 2023, the Company has 131,162 shares held in treasury recorded at their cost of $ 296,222 .

As of June 30, 2024 and December 31, 2023, the Company has 131,162 shares held in treasury recorded at their cost of $ 296,222 .

A summary of warrants activity during the six months ended June 30, 2024, is presented below:

Outstanding, January 1, 2024

Outstanding, June 30, 2024

Exercisable, June 30, 2024

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of warrants activity during the three months ended March 31, 2024, is presented below:

Outstanding, January 1, 2024

Outstanding, March 31, 2024

Exercisable, March 31, 2024

A summary of outstanding and exercisable warrants as of March 31, 2024, is presented below:

A summary of outstanding and exercisable warrants as of June 30, 2024, is presented below:

Warrants Outstanding

1 unchanged sentence

Remaining Life

See Note 9 – Notes Payable for additional details related to the 2024 warrant issuances.

Stock Options

A summary of stock options activity during the three months ended March 31, 2024, is presented below:

A summary of stock options activity during the six months ended June 30, 2024, is presented below:

Outstanding, January 1, 2024

Outstanding, March 31, 2024

Exercisable, March 31, 2024

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents information related to stock options as of March 31, 2024:

Outstanding, June 30, 2024

Exercisable, June 30, 2024

The following table presents information related to stock options as of June 30, 2024:

Options Outstanding

Options Exercisable

Remaining Life

Remaining Term

$ 0.19 - $ 0.99

2 unchanged sentences

$ 2.05 - $ 2.44

For the three months ended March 31, 2024 and 2023, the weighted average grant date fair value per share of options was $ 0.14 and $ 0.67 , respectively.

For the three and six months ended June 30, 2024, the weighted average grant date fair value per share of options granted was $ 0.21 and $ 0.20 , respectively, compared to $ 0.48 and $ 0.74 , for the three and six months ended June 30, 2023.

KULR TECHNOLOGY GROUP, INC.

AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

4.75 % - 4.81

4.07 % - 4.52

4.27 % - 4.81

3.92 % - 4.52

Expected term (years)

7 unchanged sentences

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

As of March 31, 2024, there was $ 269,531 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.3 years.

As of June 30, 2024, there was $ 238,418 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.1 years.

Restricted Stock Awards

The following table presents information related to restricted stock awards activity during the three months ended March 31, 2024:

The following table presents information related to restricted stock awards activity during the six months ended June 30, 2024:

Weighted Average

2 unchanged sentences

( 2,168,508 )

Non-vested RSAs, March 31, 2024

Non-vested RSAs, June 30, 2024

During the six months ended June 30, 2024, the Company issued 2,168,508 restricted stock units in exchange for the same quantity of restricted stock awards.

The exchange of RSAs for RSUs did not result in a modification of any other terms, such as the grant date fair value or vesting period.

As of June 30, 2024, there was $ 1,134,833 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 0.91 years.

KULR TECHNOLOGY GROUP, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2024, the Company issued 2,168,508 restricted stock units in exchange for the same quantity of restricted stock awards.

The exchange of RSAs for RSUs did not result in a modification of any other terms, such as the grant date fair value and vesting period.

As of March 31, 2024, there was $ 1,513,146 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 1.13 years.

Restricted Stock Units

The following table presents information related to restricted stock units (“RSUs”) activity during the three months ended March 31, 2024:

The following table presents information related to restricted stock units (“RSUs”) activity during the six months ended June 30, 2024:

Weighted Average

1 unchanged sentence

RSAs exchanged for RSUs

Non-vested RSUs, March 31, 2024

As of March 31, 2024, there was $ 4,348,245 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 3.0 years.

Non-vested RSUs, June 30, 2024

As of June 30, 2024, there was $ 4,202,362 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 2.68 years.

Stock-Based Compensation

During the three months ended March 31, 2024 and 2023, the Company recognized stock-based compensation expense of $ 845,930 and $ 920,155 , respectively, related to restricted stock awards, restricted stock units and stock options, of which $ 808,106 and $ 903,995 , respectively, is included within selling, general and administrative expenses, and $ 37,824 and $ 16,160 , respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations.

The following table presents information related to stock-based compensation for the three months ended March 31, 2024 and 2023:

During the three and six months ended June 30, 2024, the Company recognized stock-based compensation expense of $ 909,026 and $ 1,754,955 , respectively, related to restricted stock awards, restricted stock units, stock options and stock issued for services, of which $ 870,837 and $ 1,678,942 , respectively, is included within selling, general and administrative expenses, and $ 38,189 and $ 76,013 , respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations.

During the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $ 964,201 and $ 1,966,929 , respectively, related to restricted stock awards, restricted stock units, stock options and stock issued for services, of which $ 927,375 and $ 1,831,370 , respectively, is included within selling, general and administrative expenses, and $ 36,826 and $ 52,986 , respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations.

The following table presents information related to stock-based compensation for the three and six months ended June 30, 2024 and 2023:

For The Three Months Ended

For The Six Months Ended

Common stock for services (includes accrued, unissued shares)

4 unchanged sentences

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

As of March 31, 2024, the Company was not involved in any ongoing litigation.

As of June 30, 2024, the Company was not involved in any ongoing litigation.

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

4 unchanged sentences

NOTE 12 - SUBSEQUENT EVENTS

Promissory Notes

The Company received cash proceeds of $ 440,000 , resulting in a discount of $ 60,000 , made up of an original issue discount of $ 50,000 and debt issuance costs of $ 10,000 .

The Company received cash proceeds of $ 200,000 .

The promissory note carries an annual interest rate of 16 %.

In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12 % of the prepayment amount.

Board of Director Activities and Compensation

On April 15, 2024, the Company announced the appointment of a new independent director, Donna H.

Grier, to the Company’s Board of Directors (the “Board”).

Grier will serve as Chair of the Audit Committee, and a member of both the Nominating and Corporate Governance, and Compensation Committees of the Board.

Grier was granted cash compensation of $ 17,500 per quarter, and 140,000 restricted stock units of the Company’s common stock, which vest over four quarters in 35,000 share increments, beginning on June 30, 2024.

Concurrent with the appointment of Ms.

Grier, director Mr.

Morio Kurosaki retired from the Board, and was issued immediately vested equity compensation of 15,000 shares of common stock.

In addition, director Dr.

Joanna Massey was issued 15,000 shares of immediately vested common stock, and 140,000 restricted stock units of the Company’s common stock, which vest over four quarters in 35,000 share increments, beginning on June 30, 2024.

Standby Equity Purchase Agreement

Pursuant to the January 2024 and February 2024 Merchant Cash Advance Agreements (see Note 9 – Notes Payable), on April 9, 2024, the Company issued and delivered a total of 190,177 warrants to the FINRA-registered financial advisor that assisted with arranging the facility in satisfaction of the obligation to issue equity to the advisor.

The warrants grant the advisor the right to purchase one share of common stock for each warrant, at prices ranging from $ 0.14 per share to $ 0.19 per share, with a final expiration date of February 26, 2027 .

At the Market Offering

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $ 20,000,000 in “at the market” offerings through or to the Agent.

Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent.

The Agent will receive a commission from the Company of 3 % of the gross proceeds of any shares of common stock sold pursuant to the ATM.

During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the ATM for aggregate proceeds of $ 1,416,940 .

Merchant Cash Advance

On July 11, 2024, the Company entered into a merchant cash advance agreement (the “Third Cash Advance Agreement”) whereby the Company received $ 758,850 of cash (net of underwriting fees of $ 40,000 and $ 201,150 used to pay the remaining balance of the first merchant cash advance), with the obligation to repay a total of $ 1,350,000 over forty-three weekly payments of $ 31,395 , beginning July 18, 2024.

The agreement contains an early payoff discount whereby the Company will owe $ 1,230,000 if paid by August 11, 2024, or $ 1,310,000 if paid by September 11, 2024.

The Company does not anticipate taking advantage of the early payoff discount and will continue making weekly payments over the original forty-three-week term.

In addition, the Third Cash Advance Agreement amended the Second Cash Advance Agreement to revise the repayment terms, whereby the weekly repayment amounts will be reduced from $ 26,820 to $ 15,620 and the repayment period will be extended from September 27, 2024, to November 15, 2024.

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