What changed in this filing

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Item 1. Business

2025-03-31 compared with 2024-04-12 · 364 added, 128 removed, 164 unchanged (75% of the section changed)

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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.

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 to $24.8 billion by 2025).

The Company’s disruptive technologies strive to fulfill an addressable $40 billion thermal management market (estimated based on market data projections published by Precedence Research stating that the thermal management market size was projected to grow to $40 billion by 2034).

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.

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The Company’s goal is to provide total battery safety solutions for more efficient battery systems, increased sustainability, and end-of-life battery management, making KULR a key technology solutions provider in the migration to a global circular economy.

KULR Engineering Technology Domains

The core engineering domains maintained within the organization to support the aforementioned market opportunities are (1) battery design and analysis, (2) cell and battery testing, (3) battery production, (4) battery storage & transportation, (5) advanced thermal solutions, and (6) rotary system vibration reduction.

The expertise developed within these domains drive the product and service portfolio roadmaps.

Diversification of offerings through these roadmaps is a part of the company’s strategy for revenue growth.

Items 1 through 4 reflect the primary technical domains of the KULR engineering team, 5 reflects the legacy technology from which KULR built many of its platforms, and 6 represents energy savings through vibration reduction.

KULR ONE and KULR ONE Design Solutions (K1-DS)

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

KULR’s primary technical domains (1 through 4 of the previous figure) that are shaping the future landscape of the Company are in direct relationship with developing safe, high-performance energy storage solutions.

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

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(5) Rapid prototyping and production capabilities,

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

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

(7) Battery system-level testing and characterization,

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

(9) 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.

The implementation of a holistic approach resulted in the onboarding and development of a 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.

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).

Internally, KULR has leveraged K1-DS to develop customization ready 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, reliability, and customizability.

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 Air for e-Aviation applications.

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.

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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.

KULR ONE Space

The KULR ONE Space (K1S) platform is the more mature of the KULR ONE architectures and is currently leveraged by multiple customers for upcoming space exploration missions which require energy storage with thermal runaway safe designs.

The K1S is built upon a passively propagation resistant and flame arresting (PPRFA) architecture.

This architecture, combined with KULR’s utilization of MOLICEL lithium-ion cells, provides one of the safest and highest performing off-the-shelf space flight battery designs available today.

The 400 series of the K1S platform serves as the first ever commercial offering of a 20793 rated battery with final certification expected from NASA in Q2 2025.

KULR Battery Management System (BMS) + AI = KULR Core TM

KULR’s path towards 20793 certification required the development of custom battery management system (BMS) technology built with radiation tolerant chipset.

The development of the BMS in multiple forms is nearing completion of qualification campaigns at which point they will be added to KULR’s product offering.

The ready to fly design posts radiation tolerance up to 75 kRad, 8 string control and passive balancing, and a listing of key safety features (e.g.

overcharge, overdischarge, overcurrent protections).

Moving forward, this BMS will serve as a foundation for KULR’s step into facilitating edge-AI for space applications.

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

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

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

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

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

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

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

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

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

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

The end result will be a mission autonomous spacecraft.

Battery Design and Analysis

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

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

Cell and Battery Testing

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

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

Battery Production

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

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

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

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.

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

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

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

KULR Xero Vibe Fan

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

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

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

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

The Future is Energy + AI

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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 of both

technical expertise to design batteries and raw materials to build batteries, KULR aims to address this need with KULR ONE AI (K1AI).

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.

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● High-performance electric vehicles

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

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

● Electric micro-mobility vehicles

● Residential and commercial energy storage systems

Energy Storage

Lithium-ion batteries are the dominant technology on the market for energy storage because of their cost and availability but do carry well documented safety risks.

While rare, cell to cell thermal runaway in lithium-ion batteries can cause a fire or explosion.

For example, an explosion at Arizona Public Service’s McMicken battery plant injured four emergency responders in 2019 and overheating caused the 1.2 GWh Moss Landing storage facility in California to go off-line.

To reach net zero by mid-century will require an additional 245 GWh of battery capacity each year until 2030, but incidents of the like distill trust in battery technologies and threaten to slow the pace which is needed to achieve decarbonization goals.

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, to increase deployments of safe, reliable, and durable energy storage safety systems to accelerate the broader energy transition.

Robotics, KULR ONE, and KULR Core TM

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

specifically battery powered exoskeletons.

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

This is a limiting factor.

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

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

A pack designed

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

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

Battery Recycling and Management

KULR-Tech Safe Case provides a safe and cost-effective solution to commercially store and transport lithium batteries, which is increasing in frequency as supply chain challenges and ESG commitments necessitate battery recycling and end-of-lifecycle management.

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

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

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

In addition, KULR combines its Passive Propagation Resistant (PPR) solutions with its new CellCheck intelligent battery management system to extend battery life.

The CellCheck modular battery management system platform is KULR’s AI-powered battery safety technology for e-mobility, energy storage and fleet applications.

It captures real time and lifetime battery intelligence, sensing adverse electrical, environmental, and physical events to analyze and control for maximum battery safety, reliability, and performance.

As commercial industries across the board face greater scrutiny to comply with ESG standards, KULR is serving a total addressable market for a circular economic model for batteries that will reach over $21 billion by 2025 (estimated based on market data projections published by Grand View Research, Inc.

KULR is serving a total addressable market for a circular economic model for batteries that will reach over $21 billion by 2025 (estimated based on market data projections published by Grand View Research, Inc.

stating that the global battery recycling market size is expected to reach $21.04 billion by 2025).

KULR is supporting the shift to electrified transport by enabling safer, lighter, and faster charging lithium-ion batteries for electric vehicles and micro mobility solutions.

KULR’s passive propagation resistant (PPR) battery pack solutions increase battery energy capacity while preventing thermal runaway events that can lead to hazardous explosions, helping the transportation industry to address growing public safety concerns around electric vehicles, electric aviation and micro-mobility markets.

Vehicle technology advancements and EV range anxiety requires more battery capacity to expand the range and power of existing platforms while adding new, power-demanding components for advances such as 5G data networks.

The additional strain on batteries increases the risk for overheating and serious failures and can damage sensitive chip architecture.

In addition, overheating has been a key limiting factor for advancing fast charging battery technology.

KULR’s carbon fiber thermal management technologies reduce the thermal resistance inside battery cells while increasing electrical conductivity to dissipate heat more efficiently to enable the safe deployment of fast charging batteries.

With KULR, automotive OEMs and battery manufacturers can increase the energy capacity of battery cells so less cells are needed, making for lighter vehicles that drive further before needing to be charged.

Aerospace/Defense

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

High-Powered Computing & 5G

Demand for improved, cost-effective cooling solutions in the rapidly growing 5G and cloud computing industries is ever-increasing.

KULR’s portfolio of thermal management solutions target air and liquid-cooling of high-performance computing applications such as crypto mining, cloud computing, AI, and AR/VR simulations to maximize performance, energy efficiency and safety.

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 Facility and IT-Systems

KULR currently maintains three facilities of operations.

KULR currently maintains two 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.

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WI-037 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.

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

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

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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.

This expanded space will provide room for additional personnel office space, an engineering design and prototyping sandbox, expansive shop area for 3D printing, CNCs, laser cutting systems, and other equipment, production space for low volume battery assembly and tab welding, infrastructure for volume scale TRS manufacturing and additional storage areas.

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

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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.

Our wholly-owned subsidiary, KULR Technology Corp, was formed in 2013 and is based in San Diego, California.

Our wholly-owned subsidiary, KULR Technology Corp, was formed in 2013 and is now based in Webster, Texas.

Since its inception, KTC primarily focused on developing and commercializing its thermal management technologies, which it acquired through assignment from and license with KTC’s co-founder Dr.

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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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.

In the third quarter of 2024, we moved our principal executive offices to 555 Forge River Road, Suite 100, Webster, Texas 77598.

Recent Developments

The Company reported record annual revenues of $10.7 million for 2024, as compared to its previous record revenues of $9.8 million for 2023.

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.

Bitcoin Strategy

On December 4, 2024, the Board approved, and the Company publicly announced its decision to include Bitcoin (“BTC”) as a primary asset in its treasury program.

On December 22, 2024, the Company completed its initial acquisition of BTC through Coinbase (the prime broker) and a total of 217.18 BTC was purchased at a weighted average price of approximately $96,696 per BTC, or an aggregate cost of $21 million.

Subsequent to December 31, 2024, the Company purchased 449.45 Bitcoin via trade orders on Coinbase, at an average cost of $99,008 per Bitcoin, inclusive of fees and expenses, for an aggregate $44,499,352.

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

As of March 27, 2025, 2.48 bitcoin have been mined pursuant to the Machine Lease Agreement, at an average cost of $84,225 per bitcoin.

See the section “Our Bitcoin Acquisition Strategy” on page 46 under “Item 7.

Management’s Discussion and Analysis or Plan of Operation” for further information regarding our Bitcoin purchases, including the source of capital used to purchase Bitcoin.

At the Market Offering

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “Sales Agreement”) 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 (the “ATM”).

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.

On December 4, 2024, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable under the ATM from approximately $20 million to $46 million.

On December 26, 2024, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable under the ATM by an additional $50 million, to $96 milllion, and the Company entered into an amendment (the “Amendment”) to the Sales Agreement with the Agent, entered into on July 3, 2024, to provide that the Agent’s compensation payable under the Sales Agreement shall be 2.5% of gross proceeds of any sales of shares of common stock sold under the Sales Agreement.

During the year ended December 31, 2024, the Company issued a total of 74,781,217 shares of common stock pursuant to the ATM for aggregate gross proceeds of $61,912,798.

During the period from January 2, 2025, through March 27, 2025, the Company has sold 19,387,610 shares of common stock pursuant to this offering, with gross proceeds of $ 51,122,190.

License and Opportunities for KULR VIBE Fan Balancing Applications

On September 29, 2024, we entered into a licensing agreement for our proprietary vibration reduction technology named KULR Xero Vibe (“KXV”).

The $2.35M landmark deal includes a $1.1M minimum guaranteed license and royalty fee, a unique opportunity for the licensee to purchase proprietary balancing equipment directly from the Company and additional revenue upside to the Company based on volume and technology upgrades.

The licensee, a leading Japanese corporation, specializing in systems integration and the distribution of advanced semiconductor solutions, intends to use the KXV technology to balance industrial-scale fan systems used in data center computer cooling, HVAC and other industrial applications.

The Company is exploring additional license opportunities based

on geographic regions in tangential power-consuming applications, where the Company expects substantial upside revenue potential as product sales and royalty income scales along with its customers’ growth.

License and Opportunities for CF Cathode Design Technology

On December 29, 2024 the Company entered into a ten-year licensing agreement with a customer located in Japan, for the use of intellectual property in connection with its CF Cathode Design technology (including the specifications, diagrams, schematics and instructions (together the “KULR CF Intellectual Property”) for the production of the CF Cathode (the “License”).

The Agreement gives the customer the exclusive license to use the KULR CF Intellectual Property to manufacture and sell CF Cathodes in Japan, and a non-exclusive license to manufacture and sell CF Cathodes in several other countries, including Taiwan, China, India and Korea.

Change in Address of Principal Executive Offices

In the third quarter of 2024, we moved our principal executive offices to 555 Forge River Road, Suite 100, Webster, Texas 77598.

Issuance of Non-Convertible Series A Voting Preferred Stock

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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.

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

The issuance is subject to the Board reserving the full and unequivocal right to revoke, rescind, transfer or otherwise cancel the issued Non-convertible Series A Voting Preferred Stock in the event Michael Mo is removed from any position with the Company or resigns from all positions with the Company.

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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 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 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

The Company employs various channels to market and sell its products and solutions, including direct sales to customers, as well as sales through representatives and strategic partners.

We believe that establishing direct relationships with key accounts allows for deeper technical interactions, faster turnaround times, and provides valuable feedback that helps inform product development and marketing efforts.

To ensure that our target customers fully understand the unique features and benefits of our products and services, we organize technology day events.

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, 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.

Looking ahead, we plan to further expand our direct sales team to enhance our key account coverage and support a growing representative and distributor network.

The Company employs a multi-faceted approach to market and sell its innovative products and solutions, leveraging both direct sales and partnerships with representatives and strategic allies.

By establishing direct relationships with key accounts, we facilitate deeper technical collaborations, quicker turnaround times, and real-time feedback to drive continuous product improvement and marketing effectiveness.

To ensure target customers fully understand the distinct advantages of our offerings, we organize technology showcases and innovation days that demonstrate the value of our solutions in real-world applications.

Our marketing strategies include leveraging employee and partner networks, maintaining a dynamic and resource-rich website, attending high-profile industry conferences, and performing in-depth market research to identify new opportunities and refine our approach.

In line with our growth strategy, we have appointed Jeong Song as Vice President of Business Development and Josh Steinmann as Vice President of AI.

Song is spearheading our transition from a custom service revenue model to a scalable, product-oriented approach that can be sold across multiple channels.

Steinmann is leading our effort to incorporate AI technologies into KULR’s product line-up.

This shift integrates cutting-edge artificial intelligence and data management capabilities into our value proposition, enabling us to offer intelligent, high-performance solutions tailored to diverse customer needs.

Furthermore, the ramp-up of customized battery pack production has significantly accelerated market penetration, allowing us to capitalize on prior developments and rapidly meet the demands of emerging applications.

This strategic pivot underscores our commitment to innovation and speed-to-market while maintaining the high safety and performance standards our customers expect.

Looking ahead, we are aggressively expanding our direct sales and marketing teams to deepen key account coverage while supporting a robust and growing network of representatives and distributors.

These efforts are aligned with our overarching strategy to drive sustainable growth, broaden our market reach, and reinforce KULR’s position as a leader in energy management solutions.

Advertising and Communications Strategy

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We maintain a public relations consultant who oversees our press releases and media relations, ensuring that we maintain a positive presence in newspapers, magazines, and blogs.

To bolster our social media outreach activities, we have a dedicated SEO specialist.

To bolster our social media outreach activities, we have a dedicated search engine optimization (“SEO”) specialist.

We leverage our strong reputation within the thermal management and lithium-ion battery safety communities to spread positive feedback through word-of-mouth.

Additionally, we utilize several social media platforms, such as LinkedIn, YouTube, Twitter, Instagram, and Facebook, to reach a broader audience.

Intellectual Property and Patent Strategy

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, 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, products and services we offer to customers:

KULR ONE Space:

The KULR ONE Space (K1S) has four variations that can facilitate an off the shelf model.

A 100 series, centered around a 100 Wh threshold, 200 series for 200 Wh, 300 series for 300 Wh, and 400 series for 400 Wh.

All variations are PPR and the 100, 200, and 400 variations include an external housing that facilitates flame arresting features.

The 100, 200, 300 rely on external BMS while the 400 series includes integrated BMS.

The primary configuration of the batteries utilizes MOLICEL 18650-M35A lithium-ion cells with high cell pedigree (NASA ILA, LAT qualification and WI 037 screening).

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

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TRS keeps neighboring cell temperatures from rising above 100°C (well below the 130°C threshold) and prevents TRP.

KULR Automated Battery Cell Screening and Test System:

KULR completed the installation of a fully automated battery cell testing platform this January in our Sand Diego facility.

The system fully supports the stringent requirements of NASA and the DOD.

This platform has been designed to meet the entire specifications of NASA WI-037 battery testing requirements.

This fully automated system is believed to be the only fully automated system capable of such performance.

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.

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.

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 SafeCase:

WI-037 Screened cells :

KULR leverages the “Automated Battery Cell Screening and Test System” to provide pre-screened 18650 format lithium ion cells screened to the NASA WI-037 standard.

KULR also maintains a lot of MOLICEL 18650-M35A cells which have a NASA associated Initial Lot Assessment (ILA) and Lot Acceptance Testing (LAT) set of data;

memorandum of cell pedigree is provided to all customers of these cells.

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

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The cases have been tested and granted special permits by the Department of Transportation (DOT) for shipment of Li-ion batteries up to 2.5KWh for shipment of batteries classified as DDR (damaged, defective or recall), recycling and prototype.

The Company currently maintains 3 different sizes of the SafeCASE and also a sleeve format of the product.

Fiber Thermal Interface Material (“FTI”) :

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Phase Change Material (“PCM”) Heat Sink :

KULR PCM composite heat sinks consisting of a conductive carbon fiber velvet embedded with a proprietary heat dissipation medium having high latent heat at its melting point.

KULR PCM composite heat sinks consist of a conductive carbon fiber velvet embedded with a proprietary heat dissipation medium having high latent heat at its melting point.

Such heat sinks offer passive thermal control for instruments that would otherwise overheat or under-cool during periodic operations.

A typical application involves lasers that dissipate heat but need tight thermal control where active cooling is unavailable.

Internal Short Circuit (“ISC”) Device :

Internal Short Circuit (“ISC”) Device and Trigger Cells :

In March 2018, KULR reached an agreement with the National Renewable Energy Laboratory (“NREL”), a national laboratory of the U.S.

Department of Energy, to be the exclusive manufacturing and distribution partner for the patented ISC device, which causes predictable battery cell failures in Li-ion batteries, making them easier to study and, therefore, safer.

Department of Energy, to be the exclusive

manufacturing and distribution partner for the patented ISC device, which causes predictable battery cell failures in Li-ion batteries, making them easier to study and, therefore, safer.

Li-ion batteries are the industry and consumer standard for portable power;

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

Currently, the battery industry uses a number of solutions to mitigate thermal runaway propagation that are offered by Aspen Aerogel, Unifrax, Lydall, LHS, 3M, Engineered Syntactic Systems, Celono, AllCell and others.

Each of their solutions offer unique features and benefits for a specific application.

We do not believe, however, that there is a one-size-fits-all solution across all applications.

We believe our PPR design solution offers competitive light-weight and effective solutions for high energy battery cells because it is more flexible and can fit into different design configurations.

For applications that require passive, light-weight solutions for high energy density battery cells, TRS offers a competitive solution.

Automated Battery Cell Screening and Test System:

The system fully supports the stringent requirements of NASA and the DOD.

This platform has been designed to meet the entire specifications of NASA WI-037 battery testing requirements.

This fully automated system is believed to be the only fully automated system capable of such performance.

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.

Battery Design as a Service:

KULR maintains a growing staff of expert engineers which are available to provide battery design services to the Customer based on unique requirements.

This team has been leveraged to support space, defense, aviation, and sub-sea applications.

Battery Production as a Service:

KULR’s battery production team and facilities can be used to support a build to print low volume production capability for our customers.

Customer design, KULR build to print.

Precision Machining:

KULR maintains a suite of CNCs, lasers, 3D printers, and other necessary equipment for on site battery component fabrication.

Although this is not a core component to KULR’s service offering, this equipment is utilized to provide real time support services to KULR’s primary customer base.

Fractional Thermal Runaway Calorimetry:

KULR licenses NASA’s small and large format fractional thermal runaway calorimeters.

This NASA Invention of the Year Award (IOTYA) winning technology is used to characterize the total heat generated during lithium ion cell thermal runaway and also the fraction of which the total is released through the cell can vs.

the ejecta material.

Bomb Calorimetry:

KULR leverages widely accepted bomb calorimetry testing capability as a service to our customers for determining lithium-ion cell material decomposition thresholds, acceleration temperatures, and trigger temperature.

Impingement Zone Mapping (IZM):

An emerging field is the study of thermal runaway ejecta behavior and how that behavior can be modeled.

KULR pioneered the Impingement Zone Mapping technique which combines a 360 array of cameras with a backplate instrumented with thermocouples to provide comprehensive characterization of ejecta heating behavior.

The easy to use apparatus supports rapid turnaround testing such that ejecta behavior variability can also be characterized.

Gas Analysis:

Although KULR does not maintain gas analysis equipment on site, the majority of the Company’s testing apparatus is equipped for gas capture such that samples can be submitted for 3 rd party analysis.

Pack and System Level Abuse Testing:

KULR’s testing teams are equipped to perform lithium-ion cell thermal runaway abuse testing and propagation testing at the pack and system level.

The engineering teams are equipped with all instruments required for temperature, current, and voltage measurement, cameras, IR cameras, and more.

Our data acquisition systems are modular and support card swap out so that specialized sensors can be integrated into testing at the Customer’s request.

Thermal/Humidity Environmental Testing:

KULR maintains environmental testing capabilities with a recently installed thermal/humidity test chamber.

This testing technique is useful for battery environmental qualification testing and UL/UN certifications.

Thermal Vacuum (TVAC):

KULR onboarded a TVAC chamber in Q4 2024 for simulating space environments.

Specifically, the chamber can simulate the vacuum of space and the cold and hot temperature fluctuations experienced by spacecraft, and subsequently batteries, in space environments.

This type of test is also critical for space flight hardware and battery acceptance

testing prior to flight.

Maintaining this capability internally is critical to maintaining a fast development pace for K1S.

Additionally, the availability of TVAC creates a new service offering for KULR’s space customer base.

KULR Technology offers a suite of innovative solutions designed to address critical challenges in the battery and energy markets.

By focusing on safety, reliability, and performance, KULR delivers differentiated value across a range of high-demand industries such as aerospace, defense, energy storage, and urban mobility.

With unique technologies such as the Thermal Runaway Shield (TRS), advanced Thermal Interface Material (FTI), Internal Short Circuit (ISC) device, KULR ONE, KULR VIBE, and SafeCase, the company is positioned to lead in its target markets while providing competitive advantages over established players.

Thermal interface material is a large and fragmented market with many large suppliers including Henkel Bergquist, Fujipoly, Laird, 3M, Honeywell and others.

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KULR’s FTI offers high bulk thermal conductivity and low contact pressure requirements, which we believe gives us a competitive advantage over other thermal interface solutions.

Our licensed ISC device offers a reliable way to trigger battery cell thermal runaway compared to nail penetration, over-charging or over-heating the cell.

ISC does not rely on mechanically damaging the battery exterior to activate the short, as do most of the other evaluation methodologies.

Instead, the ISC devices trigger true internal shorts.

This makes it possible to accurately pinpoint and fix problems leading to malfunctions, an ability that we believe will give us a competitive advantage over other testing solutions.

KULR ONE is a scalable, human-spaceflight-rated battery architecture offering unmatched performance in safety, reliability, and energy efficiency.

It is designed to meet rigorous standards, including NASA JSC 20793, making it an ideal solution for aerospace, defense, and energy storage applications.

● EaglePicher Technologies:

Known for mission-critical batteries for aerospace and defense, EaglePicher excels in ruggedized designs and lifecycle performance, making it a leader in extreme environments.

● Pumpkin Space Systems:

Specializing in CubeSat-compatible power systems, Pumpkin focuses on compact and efficient energy solutions tailored to low-Earth orbit platforms.

KULR ONE’s advanced thermal management, modular scalability, and compliance with human spaceflight standards distinguish it from competitors.

KULR VIBE is an advanced vibration reduction technology that enhances operational availability, reduces maintenance costs, and minimizes accident risks in rotorcraft, wind turbines, and other mechanical systems.

By addressing vibration at its source, KULR VIBE delivers measurable operational improvements.

● GE Aerospace RADS Division:

GE’s Rotorcraft Airframe Diagnostic System (RADS) offers state-of-the-art vibration analysis and diagnostics.

Known for its precision and versatility, GE’s solutions are widely adopted in aerospace and industrial sectors.

KULR VIBE differentiates itself by actively correlating vibration data with maintenance savings, providing a tailored and cost-effective solution for high-performance environments.

SafeCase is a fireproof battery enclosure that prevents thermal runaway propagation, providing a secure containment solution for lithium-ion batteries.

It is particularly suited for urban mobility, energy storage systems, and consumer electronics.

● CellBlock FCS:

A leader in fire containment and thermal mitigation products, CellBlock FCS serves industries requiring robust solutions for energy storage and transportation safety.

SafeCase exceeds industry standards, such as those under evaluation by FDNY, and offers customizable designs to meet specific use cases.

Its superior thermal runaway protection sets it apart from competitors.

Passive Propagation Resistance

The battery industry currently employs a variety of solutions to mitigate thermal runaway propagation, offered by competitors such as Aspen Aerogel, Unifrax, Lydall, LHS, 3M, Engineered Syntactic Systems, Celono, AllCell, and others.

These solutions often target specific applications and offer unique benefits.

However, we believe our Passive Propagation Resistant (PPR) design provides a more flexible, lightweight, and effective solution for high-energy-density battery cells.

KULR’s Thermal Runaway Shield (TRS) is ideal for applications requiring passive, lightweight thermal protection, delivering unmatched performance and versatility across different design configurations.

Thermal Interface Material (FTI)

Thermal interface material is a large and fragmented market with key players such as Henkel Bergquist, Fujipoly, Laird, 3M, and Honeywell.

These materials, typically based on silicone and thermal particles, address heat transfer challenges in batteries and electronics.

KULR’s FTI stands apart with high bulk thermal conductivity and low contact pressure requirements, offering superior performance and reliability compared to conventional solutions.

Internal Short Circuit (ISC) Device

KULR’s licensed ISC device provides a reliable method to trigger battery cell thermal runaway, surpassing traditional techniques such as nail penetration, over-charging, or overheating.

Unlike other methods that rely on mechanical damage, the ISC device induces true internal shorts, enabling precise identification and resolution of failure points.

This capability positions KULR’s ISC device as a critical tool for advancing battery safety and reliability testing.

KULR Technology’s portfolio addresses critical safety and performance challenges in the battery and energy sectors.

By leveraging expertise in thermal management, vibration reduction, and battery safety testing, KULR delivers market-leading solutions tailored to high-demand industries.

Products like the Thermal Runaway Shield, Thermal Interface Material, ISC device, KULR ONE, KULR VIBE, and SafeCase offer a unique combination of flexibility, reliability, and innovation.

Against established competitors such as EaglePicher, Pumpkin Space Systems, GE Aerospace, and CellBlock FCS, KULR stands out by exceeding industry standards, providing adaptable designs, and ensuring unmatched performance.

This positions KULR as a leader driving safety and efficiency advancements across the battery and energy markets.

Governmental Regulation and Environmental Compliance

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Most new materials sold in the U.S or in many other countries require regulation by government authorities.

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

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 of our ability.

As of December 31, 2024, we had 52 full-time employees and 3 contractors.

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.

Independent Contractor Agreement

Effective October 1, 2024, the Company entered into an independent contractor agreement whereby the contractor will provide consulting services for economic development incentives, grant review, and state governmental affairs within the state of Texas.

Intellectual Property

We seek to establish and maintain our proprietary rights in our technology and products through the use of patents, copyright, trademarks and trade secrets.

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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, 2023, we held six U.S.

patents and six non-provisional pending U.S.

As of December 31, 2024, KULR held five U.S.

patents and one non-provisional pending U.S.

patent applications with expiration dates ranging from 2037 to 2041.

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KULR has been granted trademarks for Class 9 and Class 17 applications.

Our Bitcoin Treasury Strategy

WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.

In December 2024, we adopted bitcoin as our primary treasury reserve asset on an ongoing basis, subject to market conditions and our anticipated cash needs.

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

For example, we began issuing shares under an “at-the-market” offering program in the second half of 2024, and used proceeds from the capital markets transaction to acquire additional bitcoin.

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

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

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

This section summarizes our current treasury strategy for bitcoin, including our bitcoin holdings, trading execution, custody, storage, and accounting considerations.

We reserve the right to update and alter our treasury strategy from time to time.

We view bitcoin as a reliable store of value and a compelling investment.

We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability.

Bitcoin is often compared to gold, which has been viewed as a dependable store of value throughout history.

Gold’s value has appreciated substantially over time.

For example, 25 years ago, the price of gold was approximately $500 per ounce.

In 2024, the price of gold has traded higher than $2,700 per ounce.

As of December 31, 2024, the total market capitalization of gold was approximately $18.0 trillion compared to approximately $1.9 trillion for bitcoin.

Bitcoin is a highly volatile asset that has traded below $51,800 per bitcoin and above $106,000 per bitcoin on Coinbase in the 12 months preceding the filing date of this annual report on Form 10-K.

While highly volatile, bitcoin’s price has also appreciated significantly since bitcoin’s inception in January 2009 (at zero per bitcoin).

We believe that a substantial portion of bitcoin’s appreciation is attributable to the view that bitcoin is or will become a reliable store of value.

Like gold, bitcoin is also viewed as a scarce asset; the ultimate supply of bitcoin is limited to 21 million coins and approximately 94% of its supply already exists.

We believe that bitcoin’s finite, digital and decentralized nature as well as its architectural resilience make it preferable to gold, which, as noted above, has a market capitalization over 10 times higher than the market capitalization of bitcoin as of December 31, 2024.

Given our belief that bitcoin is a comparable and possibly better store of value than gold, we believe that bitcoin has the potential to approach or exceed the value of gold over time.

Given the substantial gap in value between gold and bitcoin based on current market capitalization, we believe that bitcoin has the potential to generate outsize returns as it gains increasing acceptance as “digital gold.” We believe that the growing global acceptance and “institutionalization” of bitcoin supports our view that bitcoin is a reliable store of value.

We believe that bitcoin’s unique attributes discussed above not only differentiate it from fiat money, but also from other cryptocurrency assets, and for that reason, we have no plans to purchase cryptocurrency assets other than bitcoin.

Institutionalization of Bitcoin

We are encouraged by the growing global acceptance and “institutionalization” of bitcoin - reflected by the January 2024 Securities and Exchange Commission, or SEC, approval of 11 bitcoin exchange-traded funds.

These funds have reported billions of dollars of net inflows, with investments from a large number of institutions, including global banks, pensions, endowments and registered investment advisors.

It is currently estimated that more than 10% of all bitcoins are now held by institutions.

Our Bitcoin Holdings

As of December 31, 2024, we purchased a total of 217.18 bitcoins at an aggregate purchase price of approximately $21 million for an average purchase price of approximately $96,694 per bitcoin, inclusive of fees and expenses.

We did not sell any bitcoin during 2024.

During the period January 1, 2025 and March 27, 2025, we purchased a total of approximately 449.45 bitcoins at an aggregate purchase price of approximately $44 million for an average purchase price of approximately $99,008 per bitcoin.

See Note 3-Digital Assets to our consolidated financial statements included in Part IV Item 15 of this annual report in Form 10-K for further information regarding our bitcoin purchases.

As of March 27, 2025, we held approximately 666.63 bitcoins that were acquired at an aggregate purchase price of $65 million and an average purchase price of approximately $98,255 per bitcoin, inclusive of fees and expenses.

Additionally, 2.48 bitcoins acquired by us were through mining operations that we have leased.

The per bitcoin price for each such coin mined was approximately $84,225.

For details of the lease, please see Section “Recent Developments – Bitcoin Strategy” on page 46.

As of March 27, 2025, the market price of one bitcoin reported on the Coinbase exchange (our principal market) was $87,209.

Bitcoin accounting guidance has been evolving.

According to the American Institute of Certified Public Accountants “Accounting for and auditing of Digital Assets practice aid,” bitcoin would satisfy the definition of an indefinite-lived intangible asset and would be accounted for under ASC 350, Intangibles - Goodwill and Other issued by the Financial Accounting Standards Board, or FASB.

Under these guidelines, bitcoin holdings would be accounted for initially at cost and subject to impairment losses if their fair value fell below carrying value.

In December 2023, the FASB issued Accounting Standards Update No.

2023-08, Accounting for and Disclosure of Crypto Assets (ASU 2023-08), which revised bitcoin accounting treatment.

Under this new guidance, the valuation of bitcoin is to be measured based on fair value.

Hedging Strategy

We do not currently intend to hedge our bitcoin holdings and have not adopted a hedging strategy with respect to bitcoin.

However, we may from time to time engage in hedging strategies as part of our treasury management operations if deemed appropriate.

Execution of Bitcoin Transactions

We have purchased bitcoin through multiple bitcoin trade orders executed on the Coinbase exchange.

We may also in the future acquire or dispose of bitcoin via multiple trade executions, or liquidity providers, who may also serve as custodians of our bitcoin.

Our liquidity providers and custodians, or our BTC Service Providers, are regulated and licensed entities that operate under high security, regulatory, audit and governance standards.

We may transact with multiple BTC Service Providers for both trade execution and custodial services to spread our risk and to limit our exposure to any single service provider or counterparty.

In selecting our liquidity providers, we evaluated regulatory status, pricing, annual trading volume, security and customer service.

Our current agreement with our liquidity provider is non-exclusive, may be terminated by us at any time, does not impose any requirements for minimum purchases or volumes with such provider, and generally provides that we are responsible for the costs associated with transfers of bitcoin.

Custody of our Bitcoin

We currently hold and intend to continue to hold all of our bitcoin in a custodial account at a U.S.

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

Our custodian may also serve as a liquidity provider.

As of December 31, 2024, we have entered into a custodial agreement with Coinbase, Inc., acting for itself and on behalf of Coinbase Custody Trust Company, LLC, Coinbase Custody International Ltd., and Coinbase Credit, Inc., or Coinbase.

As we further execute on our strategy, we may include additional custodians.

We carefully selected our custodian after undertaking a due diligence process pursuant to which we evaluated, among other things, the quality of their security protocols, including the multifactor and other authentication procedures designed to safekeep our bitcoin that they may employ, as well as other security, regulatory, audit and governance standards.

Our custodian is required to hold our bitcoin in trust for our benefit in segregated accounts which are not commingled with their assets or the assets of its affiliates or other clients.

Should we enter into custodial agreements with additional custodians, such agreements may not prohibit such custodians from commingling our bitcoin with the digital assets of others.

Our custodial agreement with Coinbase Custody provides that Coinbase Custody will hold our bitcoin in an online “hot” wallet until it receives an instruction from us to effectuate a transfer of our bitcoin into cold storage.

Cold storage is designed to mitigate risks that a system may be susceptible to when connected to the internet, including the risks associated with unauthorized network access and cyberattacks.

Our custodian has access to the private key information associated with our bitcoin, or private keys, and it deploys security measures to secure our bitcoin holdings such as advanced encryption technologies, multi-factor identification, and a policy of storing our private keys in redundant, secure and geographically dispersed facilities.

We never store, view or directly access our private keys.

The operational procedures of our custodian are reviewed periodically by third-party advisors.

All movement of our bitcoin by our custodian is coordinated, monitored and audited.

Our custodian’s procedures to prove control over the digital assets it holds in custody are also examined by their auditors.

Going forward, we intend to periodically verify our bitcoin holdings by reconciling our custodial service ledgers to the public blockchain.

Our custodial agreement is terminable by us at any time, for any or no reason, upon advance notice given to the custodian.

Risk Mitigation Practices Related to Our Liquidity and Custodial Arrangements

We believe that our primary counterparty risk with respect to our bitcoin holdings is performance obligations under our various custody arrangements.

We may custody our bitcoin with multiple custodians to diversify our potential risk exposure to any one custodian.

Our custodial services contracts do not restrict our ability to reallocate our bitcoin or require us to hold a minimum amount of bitcoin with any particular custodian.

Our bitcoin holdings may be concentrated with a single custodian from time to time, particularly as we negotiate new arrangements or move our assets among our various service providers.

As regulated entities, our BTC Service Providers have policies, procedures and controls designed to comply with the Bank Secrecy Act, as amended by the USA PATRIOT Act, the implementing regulations of the U.S.

Treasury Department’s FinCEN, the Executive Orders and economic sanctions regulations administered by the U.S.

Treasury Department’s Office of Foreign Assets Control, or OFAC, as well as state Anti-Money Laundering, or AML laws.

Pursuant to these policies, procedures and controls, our BTC Service Providers use information systems developed in-house and by third-party vendors to conduct know your customer, or KYC, identification verification, background checks and other due diligence on counterparties and customers, and on the affiliates, related persons and authorized representatives of their customers, and to screen these parties against published sanctions lists.

These checks may, where appropriate, assess financial strength, reputation, trading capabilities and other risks that may be associated with a given customer or counterparty.

Our BTC Service Providers perform these checks and screenings during initial onboarding or in advance of a transaction, as applicable, and periodically thereafter, particularly when the sanctions lists that they monitor are updated.

Our BTC Service Providers also utilize systems that monitor and screen blockchain transactions and digital wallet addresses in their efforts to detect and report suspicious or unlawful activity.

We have engaged certain third-party bitcoin consultants to assist the Company in its due diligence process when selecting BTC service providers.

The due diligence involves giving consideration to their reputation and security level, confirming their internal compliance with applicable laws and regulations and ensuring their undertakings of contractual obligations on compliance.

With respect to our custodian, we also intend to conduct due diligence reviews during the custodial relationship to monitor the safekeeping of our bitcoin.

As part of our process, we may obtain and review our custodian’s services organization controls reports if available.

We are also contractually entitled to review our custodian’s relevant internal controls through a variety of methods.

We expect to conduct in the future, supplemental due diligence when we believe it is warranted by market circumstances or otherwise.

We negotiate liability provisions in our custodial contracts pursuant to which our custodian is held liable for failure to safekeep our bitcoin.

For example, our custodial agreement with Coinbase Custody provides that Coinbase Custody will be liable to us for up to an amount equal to the greater of the aggregate amount of fees paid in the 12 month period preceding a liability event or the value, at the time of a liability event, of the supported digital assets in our vault account that are directly affected by the liability event, in either case subject to a cap of $100 million.

In addition to custodial arrangements, we also intend to utilize affiliates of our bitcoin custodian to execute bitcoin acquisition and disposition transactions on our behalf (who may be our liquidity providers).

We also negotiate specific contractual terms and conditions with our custodian that we believe will help establish, under existing law, that our property interest in the bitcoin held by our custodian is not subject to the claims of the custodian’s creditors in the event the custodian enters bankruptcy, receivership or similar insolvency proceedings.

Our current custodian, and intended future custodians,

based and are subject to U.S.

regulatory regimes intended to protect customers in the event that a custodian enters bankruptcy, receivership or similar insolvency proceedings.

Our custodian is required to comply with the Bank Secrecy Act, as amended by the USA PATRIOT Act, the implementing regulations of the U.S.

Treasury Department’s FinCEN, the Executive Orders and economic sanctions regulations administered by the OFAC, as well as state AML laws.

However, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts.

If our custodially-held bitcoin were nevertheless considered to be the property of our custodian’s estates in the event that the custodian were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodian, inhibiting our ability to exercise ownership rights with respect to such bitcoin and this may ultimately result in the loss of the value related to some or all of such bitcoin.

Even if we are able to prevent our bitcoin from being considered the property of the custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency of the insolvency proceedings.

Additionally, the bitcoin we hold with our custodian and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Regardless of efforts we have made to securely store and safeguard assets, there can be no assurance that our crypto assets will not be subject to loss or other misappropriation.

Although our custodian is required to carry an insurance policy to cover losses for commercial crimes such as asset theft and other covered losses, such policy limits may be shared among all of their affected customers and be subject to various limitations and exclusions (such as if a loss arises due to our failure to protect our login credentials and devices).

As such, the insurance that covers losses of our bitcoin holdings may cover only a small fraction of the value of the entirety of our bitcoin holdings, and there can be no guarantee that our custodian will maintain such insurance policies or that such policies will cover any or all of our losses with respect to our bitcoin.

For a discussion of risks relating to the custody of our bitcoin, see Item 1A.

“Risk Factors – Risks Related to Our Bitcoin Treasury Strategy and Holdings – Our bitcoin treasury strategy exposes us to various risks associated with bitcoin,” and “– Our bitcoin treasury strategy exposes us to risk of non-performance by counterparties.”

Bitcoin Regulation

The laws and regulations applicable to bitcoin and digital assets are evolving and subject to interpretation and change.

Governments around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the United States, digital assets are subject to overlapping, uncertain and evolving regulatory requirements.

As digital assets have grown in both popularity and market size, the U.S.

Executive Branch, Congress and a number of U.S.

federal and state agencies, including the Financial Crimes Enforcement Network, the CFTC, the SEC, the Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS and state financial regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users.

Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors.

In addition, federal and state agencies, and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital assets.

Depending on the regulatory characterization of bitcoin, the markets for bitcoin in general, and our activities in particular, our business and our bitcoin acquisition strategy may be subject to regulation by one or more regulators in the United States and globally.

Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions in these markets, and our ability to pursue our bitcoin strategy.

Additionally, U.S.

state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity.

federal and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems.

Many state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their respective states.

The CFTC takes the position that some digital assets, including bitcoin, fall within the definition of a “commodity” under the Commodities Exchange Act of 1936, as amended, or CEA.

Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact.

Beyond instances of fraud or manipulation, the CFTC

generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing.

In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the markets on which these products trade.

The SEC and its staff have taken the position that certain other digital assets fall within the definition of a “security” under the U.S.

federal securities laws.

Public statements made by senior officials and senior members of the staff at the SEC indicate that the SEC does not consider bitcoin to be a security under the federal securities laws, and the approval of the spot bitcoin ETPs support this view.

However, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital assets.

In addition, in January 2025, the SEC acting Chairman announced a new Crypto Task Force dedicated to developing a comprehensive and clear regulatory framework for digital assets.

In addition, because transactions in bitcoin provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as money laundering.

This misuse, or the perception of such misuse, could lead to greater regulatory oversight of bitcoin and bitcoin platforms, and there is the possibility that law enforcement agencies could close bitcoin platforms or other bitcoin-related infrastructure with little or no notice and prevent users from accessing or retrieving bitcoin held via such platforms or infrastructure.

For example, a January 2021 nomination hearing before the Senate Finance Committee, it was noted that cryptocurrencies have the potential to improve the efficiency of the financial system but that they can be used to finance terrorism, facilitate money laundering, and support activities that threaten U.S.

national security interests and the integrity of the U.S.

and international financial systems.

The OFAC has issued updated advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service providers to the Specially Designated Nationals and Blocked Persons list and engaged in several enforcement actions, including a series of enforcement actions that have either shut down or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or North Korean nationals.

Activities involving bitcoin and other digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations are rapidly evolving and increasing in scope.

On March 9, 2022, an executive order relating to cryptocurrencies was signed.

While the executive order did not mandate the adoption of any specific regulations, it instructed various federal agencies to consider potential regulatory measures, including the evaluation of the creation of a U.S.

On September 16, 2022, the White House released a framework for digital asset development, based on reports from various government agencies, including the U.S.

Department of Treasury, the Department of Justice, and the Department of Commerce.

Among other things, the framework encourages regulators to pursue enforcement actions, issue guidance and rules to address current and emergent risks, support the development and use of innovative technologies by payment providers to increase access to instant payments, consider creating a federal framework to regulate nonbank payment providers, and evaluate whether to call upon Congress to amend the Bank Secrecy Act and laws against unlicensed money transmission to apply explicitly to digital asset service providers.

There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets.

With the recent change in the U.S.

administration, there is uncertainty about future regulatory oversight and enforcement and what rules and regulations may ultimately govern.

For example, in January 2025, an executive order was issued that revoked the prior administration's executive order and Treasury Department's framework, and established the Presidential Working Group on Digital Asset Markets that will be tasked with developing a federal regulatory framework governing digital assets.

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What changed 10-K

Item 1. Business