KULR Technology Group, Inc. (NYSE:KULR) Q3 2021 Earnings Conference Call November 18, 2021 4:30 PM ET Company Participants Michael Mo - Chief Executive Officer Keith Cochran - President and Chief Operating Officer Simon Westbrook - Chief Financial Officer Conference Call Participants Operator Welcome and thank you for joining us for the KULR Technology Group Incorporated November 2021 Shareholder Update Call and Discussion of the Third Quarter 2021 Financial Results. KULR Technology Group is a publicly trad ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40454 KULR TECHNOLOGY GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 81-100 ...

Financial Data and Key Metrics Changes - KULR's Q2 revenue increased by over 200% year-over-year, generating $0.6 million in sales compared to the same period last year [6][21] - The company reported a net loss of $3 million for the quarter, up from a net loss of $0.4 million in the same period last year [24] - Cash balances at the end of June were $12.2 million, compared to $8.9 million at the end of December 2020, indicating a strong financial position [25] Business Line Data and Key Metrics Changes - The increase in revenue was primarily due to higher sales of KULR products rather than services [21] - Selling, general, and administrative expenses rose to $2.8 million from $0.4 million year-over-year, reflecting a more than 500% increase due to marketing and consulting expenses [22] - R&D expenses increased over 400% to $300,000 compared to $60,000 in the same period last year, driven by headcount and process improvements [23] Market Data and Key Metrics Changes - KULR received three U.S. Department of Transportation special permits for the safe transportation of lithium-ion batteries, allowing for up to 2.1 kilowatt hours of energy capacity, which is seven times the capacity of competitors [9] - The company is focusing on commercialization opportunities in the battery transportation and energy storage markets, aiming to provide total battery safety solutions [10] Company Strategy and Development Direction - KULR's long-term strategy involves co-developing thermal management technologies with NASA and other government agencies, aiming for mass market applications [7] - The company is evolving its business model to focus on near-term commercialization opportunities in battery transportation and energy storage [10] - KULR aims to position itself as a key technology solutions provider in the transition to a global circular economy [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in their current cash position, stating it is sufficient to fund near-term plans without needing additional capital [27] - The company is optimistic about its role in the battery recycling ecosystem and is working to engage customers in this area [29] - Management believes that their technology will address critical battery safety and thermal stability issues over the next 5 to 10 years, positioning KULR as a leading solutions provider [30] Other Important Information - KULR appointed retired 3-star Lieutenant General Stayce Harris as an Independent Director, enhancing the board's expertise [11] - The company is developing a smart battery system that integrates hardware and software for better monitoring and management of battery safety [15] Q&A Session Summary Question: Can you fund your near-term plans with the current cash position? - Yes, the current cash position is sufficient to execute product development and business plans [27] Question: How does the recycling arm of your business impact everyday life? - The battery safety case will play a significant role in the battery recycling ecosystem, with recent special permits allowing for safe transportation of batteries [28][29] Question: What problems in the EV battery space do your products currently solve? - KULR's technology addresses battery thermal stability and safety issues, with plans to develop next-generation batteries for faster charging [30] Question: How will the price of materials affect profit margins? - While there are some price increases in materials and transportation, the impact on business is minimal, and pricing adjustments can be made if necessary [31] Question: Are you planning to work with other racing teams through your partnership with Andretti? - The partnership with Andretti is in early stages, focusing on developing products for the industry [32] Question: What is KULR doing with Molicel? - KULR is working with Moli Energy battery cells to serve aerospace and defense customers [36]

Financial Performance - For the three months ended June 30, 2021, total revenue was $628,244, representing an increase of $427,116, or 212% compared to $201,128 in the same period of 2020[92]. - For the six months ended June 30, 2021, total revenue was $1,046,149, an increase of $767,521, or 275% compared to $278,628 in the same period of 2020, driven by four new contracts[92]. - Product sales increased by 760% and 662% for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020, primarily due to large contracts received[92]. - Cost of revenues for the three months ended June 30, 2021, was $439,206, an increase of $394,472, or 882% compared to $44,734 in 2020[96]. - Gross margin percentage for the three months ended June 30, 2021, was 30%, down from 78% in the same period of 2020, primarily due to changes in product mix[96]. - The company incurred a net loss of $4,741,866 during the six months ended June 30, 2021, with an accumulated deficit totaling $15,988,274[106]. Expenses - Research and development expenses for the three months ended June 30, 2021, were $352,741, an increase of $294,750, or 508% compared to $57,991 in 2020[100]. - Selling, general and administrative expenses for the three months ended June 30, 2021, were $2,723,303, an increase of $2,301,759, or 546% compared to $421,544 in 2020[102]. Cash and Financing - As of June 30, 2021, the company had a cash balance of $12,159,583 and working capital of $12,194,403[106]. - Cash provided by financing activities for the six months ended June 30, 2021, was $7,397,500, compared to $1,956,476 for the same period in 2020, representing a significant increase[109]. - The company raised aggregate gross proceeds of $6,500,000 from the sale of preferred stock and $3,712,500 from warrant exercises during the six months ended June 30, 2021[111]. - The company intends to apply for full forgiveness of its outstanding Payroll Protection Program (PPP) loan, which remains active as of June 30, 2021[111]. - The company has approximately $5,707,000 available under its Standby Equity Distribution Agreement (SEDA) with YAII, which expires on February 7, 2022, but is currently restricted from issuing shares under this agreement[111]. Business Strategy - The company plans to evolve its business model to provide total system solutions and actively seek partnerships for joint ventures and technology licensing[84]. Internal Controls and Compliance - A material weakness in internal control over financial reporting was identified, specifically regarding the independent review and approval of electronic payments[117]. - The company is implementing a remediation plan to address the identified material weakness in internal controls[117]. - As of the end of the reporting period, the company's disclosure controls and procedures were not effective at the reasonable assurance level[116]. - There have been no changes in internal control over financial reporting that materially affected the company during the second quarter of 2021[118]. COVID-19 Impact - The company continues to monitor the impact of COVID-19 on its business, with uncertainty regarding future operational results due to potential virus resurgence[110]. Off-Balance Sheet Arrangements - There are no off-balance sheet arrangements that could materially affect the company's financial conditions or results of operations[112].

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter ended March 31, 2021, show a significant increase in revenue compared to the prior year, but also a wider net loss. Total assets decreased, primarily due to a reduction in cash. The company completed a conversion of all outstanding Series B Preferred Stock into common stock. Subsequent to the quarter-end, the company secured $6.5 million in financing through a Series D convertible preferred stock offering [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, the company's total assets were $7.2 million, a decrease from $9.2 million at the end of 2020, mainly due to a $2.7 million decrease in cash. Total liabilities also decreased to $2.5 million from $3.1 million, driven by repayments of notes payable. Consequently, total stockholders' equity fell to $4.7 million from $6.1 million Condensed Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Items | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash | $6,166,755 | $8,880,140 | | Total Current Assets | $7,150,563 | $9,150,280 | | **Total Assets** | **$7,203,649** | **$9,208,137** | | Total Current Liabilities | $2,451,111 | $2,947,295 | | **Total Liabilities** | **$2,484,038** | **$3,089,585** | | **Total Stockholders' Equity** | **$4,719,611** | **$6,118,552** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2021, revenue increased significantly to $417,905 from $77,500 in the same period of 2020. However, the net loss widened to $1,714,723 from $550,253, primarily due to a substantial increase in selling, general, and administrative expenses. Net loss per share was ($0.02), compared to ($0.01) in the prior-year quarter Statement of Operations Summary (unaudited) | Metric | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Revenue | $417,905 | $77,500 | | Gross Profit | $142,637 | $47,457 | | Loss From Operations | ($1,473,157) | ($529,666) | | **Net Loss** | **($1,714,723)** | **($550,253)** | | Net Loss Per Share | ($0.02) | ($0.01) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficiency)) Stockholders' equity decreased from $6.1 million at the beginning of 2021 to $4.7 million at the end of Q1 2021. The decrease was primarily driven by the net loss of $1.7 million for the period. Key equity activities included the conversion of all outstanding Series B Preferred Stock and significant stock-based compensation expenses - Total stockholders' equity decreased by approximately **$1.4 million** during the quarter, from **$6,118,552** to **$4,719,611**[14](index=14&type=chunk) - The decrease was primarily due to a net loss of **$1,714,723**[14](index=14&type=chunk) - All **13,972 shares** of Series B Convertible Preferred Stock were converted into **698,600 shares** of common stock during the quarter[14](index=14&type=chunk)[59](index=59&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company used $1.7 million in cash from operating activities during Q1 2021, a significant increase from $0.7 million used in Q1 2020. Cash used in financing activities was $1.05 million, primarily for note repayments. This resulted in a net decrease in cash of $2.7 million, with the cash balance ending at $6.2 million Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($1,663,385) | ($698,110) | | Net Cash (Used In) Provided By Financing Activities | ($1,050,000) | $1,223,401 | | **Net (Decrease) Increase In Cash** | **($2,713,385)** | **$525,291** | | **Cash - End of Period** | **$6,166,755** | **$634,148** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Key notes highlight the company's business in high-performance thermal management, its liquidity position, and significant customer concentration. The company believes its current working capital is sufficient for at least the next twelve months. Subsequent to the quarter, KULR entered into a $6.5 million financing agreement, repaid all outstanding notes payable, and committed to a new office lease and a multi-year technology development agreement - The company develops and commercializes high-performance thermal management technologies for electronics and batteries, targeting aerospace, DOD, and mass-market commercial applications like EVs and 5G[19](index=19&type=chunk) - For Q1 2021, five customers (C, D, E) accounted for **88%** of total revenue. As of March 31, 2021, two customers (D, E) represented **78%** of accounts receivable[29](index=29&type=chunk) - On May 19, 2021, the company entered into a Securities Purchase Agreement for gross proceeds of **$6,500,000** through the issuance of Series D convertible preferred stock and warrants. In connection with this financing, the company repaid its entire notes payable obligation of **$1,540,000**[86](index=86&type=chunk)[101](index=101&type=chunk) - The company appointed a new President and Chief Operating Officer (COO) effective March 1, 2021, granting him **2,000,000 restricted shares** and eligibility for up to **1,500,000 performance-based shares**[79](index=79&type=chunk)[96](index=96&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 439% increase in revenue for Q1 2021 compared to Q1 2020, driven by growth in both product sales and contract services. However, gross margin decreased from 61% to 34% due to a low-margin large contract. Operating expenses rose significantly, led by higher marketing costs and stock-based compensation for the new COO. The company secured $6.5 million in financing in May 2021, which management believes provides sufficient working capital for at least the next twelve months [Overview](index=21&type=section&id=Overview) KULR develops and commercializes high-performance thermal management technologies for batteries and electronics. The company targets both high-end aerospace/DOD applications and commercial markets like electric vehicles and energy storage. The business model is evolving from a component supplier to a provider of total system solutions, and the company is actively seeking partnerships to accelerate this transition - KULR's core technology is a proprietary carbon fiber material providing superior thermal conductivity and heat dissipation[91](index=91&type=chunk) - The business model is shifting from component supply to providing design, testing, and total system solutions to capture more value[92](index=92&type=chunk) [Recent Developments](index=22&type=section&id=Recent%20Developments) Key recent developments include the appointment of Keith Cochran as President and COO, a multi-year technology development and sponsorship agreement with a commitment of $1.65 million, and a new 36-month office lease. In May 2021, the company raised $6.5 million in gross proceeds through a securities purchase agreement for Series D preferred stock and warrants, subsequently repaying its $1.54 million notes payable obligation in full - Appointed Keith Cochran as President and Chief Operating Officer on March 8, 2021[96](index=96&type=chunk) - Entered into a multi-year technology development and sponsorship agreement on March 31, 2021, committing to spend **$1,650,000** over three installments[98](index=98&type=chunk) - Raised **$6.5 million** in gross proceeds on May 19, 2021, through a Securities Purchase Agreement (SPA) and subsequently repaid its entire notes payable obligation of **$1,540,000**[101](index=101&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Revenue for Q1 2021 increased 439% year-over-year to $417,905. This was driven by a 537% increase in product sales and a significant rise in contract services. Cost of revenues increased 816%, causing gross margin to fall to 34% from 61% in the prior year, mainly due to a single large, low-margin contract. Selling, general, and administrative expenses grew 221% to $1.5 million, primarily from increased marketing, stock-based compensation, and new hires Revenue Breakdown (Q1 2021 vs Q1 2020) | Revenue Type | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Product sales | $178,249 | $28,000 | | Contract services | $239,656 | $49,500 | | **Total revenue** | **$417,905** | **$77,500** | - Gross margin decreased from **61%** in Q1 2020 to **34%** in Q1 2021, primarily due to a **15%** margin on a single large contract[108](index=108&type=chunk) - Selling, general and administrative expenses increased by **$1,027,401** (**221%**), driven by higher marketing spend (approx. **$486,000**) and stock-based compensation (approx. **$376,000**)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company had $6.2 million in cash and $4.7 million in working capital. Cash used in operations was $1.7 million for the quarter. In May 2021, the company raised $6.5 million in gross proceeds from a Series D preferred stock offering and used part of the funds to repay its entire $1.54 million notes payable obligation. Management believes the current working capital is sufficient to fund operations for at least the next twelve months - As of March 31, 2021, the company had cash of **$6,166,755** and working capital of **$4,699,452**[114](index=114&type=chunk) - Cash used in operating activities was **$1,663,385** for Q1 2021, compared to **$698,110** in Q1 2020[115](index=115&type=chunk) - On May 19, 2021, the company secured **$6.5 million** in gross proceeds from a financing and repaid its notes payable obligation of **$1,540,000**[123](index=123&type=chunk) - Management believes current working capital is sufficient for at least the next twelve months[124](index=124&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company, KULR is not required to provide quantitative and qualitative disclosures about market risk[127](index=127&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of March 31, 2021, the company's disclosure controls and procedures were not effective. This was due to a material weakness identified in internal control over financial reporting related to the lack of independent review and approval of electronic payments. The company is implementing a remediation plan - Management concluded that disclosure controls and procedures were not effective as of the end of the reporting period[128](index=128&type=chunk) - A material weakness was identified in internal control over financial reporting regarding the lack of independent review and approval of electronic payments[129](index=129&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2021 that materially affected, or are reasonably likely to materially affect, internal controls[130](index=130&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - None[133](index=133&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on March 19, 2021 - There have been no material changes to the risk factors discussed in the Annual Report on Form 10-K filed with the SEC on March 19, 2021[134](index=134&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2021, the company issued 698,600 shares of common stock upon the conversion of 13,972 shares of its Series B Convertible Preferred Stock. This transaction was exempt from registration requirements - In Q1 2021, the company issued **698,600 shares** of common stock upon the conversion of **13,972 shares** of Series B Convertible Preferred Stock[135](index=135&type=chunk) - The transaction was exempt from registration requirements under Section 4(a)(2) or Section 3(a)(9) of the Securities Act of 1933[136](index=136&type=chunk) [Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[137](index=137&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[138](index=138&type=chunk) [Other Information](index=27&type=section&id=Item%205.%20Other%20Information) The company reported no other information - None[139](index=139&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) The report lists exhibits filed, including CEO and CFO certifications (302 and 906) and XBRL data files - Exhibits filed include Sarbanes-Oxley Act certifications (**31.1**, **31.2**, **32.1**) and XBRL data files (**101** series)[141](index=141&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2020 ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [ ] to [ ] Commission file number 000-55564 KULR TECHNOLOGY GROUP, INC. (Name of small business issuer in its charter) | Delaware | 81-1004273 | | --- | --- | | (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2020 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55564 KULR TECHNOLOGY GROUP, INC. (Exact name of registrant as specified in its charter) Delaware (State or Other Jurisdic ...

Commission File Number: 000-55564 KULR TECHNOLOGY GROUP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2020 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (Former name, former address and former fiscal year, if changed since last report) N/A Securi ...

Financial Performance - Total revenue for the three months ended March 31, 2020, was $77,500, a decrease of $117,452, or 60%, compared to $194,952 for the same period in 2019[90] - For the three months ended March 31, 2020, revenues were $77,500, a decrease from $133,435 in the same period of 2019, representing a decline of 42%[96] - Gross profit for the three months ended March 31, 2020 was $51,574, down $81,861 or 61% from $133,435 in 2019, with a gross margin percentage of 67%[96] - Cash used in operating activities was $698,110 for the three months ended March 31, 2020, compared to $286,420 in 2019, primarily due to a net loss of $550,253[103] - Cash provided by financing activities was $1,223,401 for the three months ended March 31, 2020, significantly higher than $155,000 in the same period of 2019, driven by net proceeds from a note payable[105] Product and Service Revenue - Product sales decreased to $28,000 in Q1 2020 from $169,440 in Q1 2019, while contract services revenue increased to $49,500 from $25,512[90] - The decrease in product shipments was primarily due to COVID-19 related shutdowns affecting both the company and its clients[90] Research and Development - Research and development expenses decreased by $17,779 or 14% to $129,492 for the three months ended March 31, 2020, primarily due to reductions in patent costs and stock-based compensation[97] - The company expects R&D expenses to increase as it expands future operations[98] Operational Challenges - The company has not yet achieved profitability and expects to continue incurring cash outflows from operations, indicating substantial doubt about its ability to continue as a going concern[77] - As of March 31, 2020, the company had cash balances of $634,148 and working capital deficits of $1,163,280[102] - The company has outstanding debt principal of $1,450,000 maturing on May 31, 2021, indicating potential liquidity concerns[106] Strategic Initiatives - KULR Technology Group has developed a total battery safety solution, including patented thermal runaway shield (TRS) technology, to prevent thermal runaway propagation in lithium-ion batteries[70] - The TRS bag is currently being used on the International Space Station for storing laptop batteries to reduce the risk of thermal runaway[71] - The company plans to expand its capabilities in battery screening and testing, particularly in aerospace and defense sectors, to address increasing regulations on battery safety[73] - KULR's management projects growth in the aerospace and defense sectors, particularly in directed energy and hypersonic weapon programs[74] Financing Activities - The company has entered into a Standby Equity Distribution Agreement allowing it to sell up to $8,000,000 of common stock[82] - The company entered into a Standby Equity Distribution Agreement allowing it to sell up to $8,000,000 of common stock to fund ongoing operations[108] Cost Management - Selling, general and administrative expenses decreased by $99,664 or 18% to $469,527 for the three months ended March 31, 2020, mainly due to lower travel, rent, and salary expenses[100]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2019 ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [ ] to [ ] Commission file number 000-55564 (Name of small business issuer in its charter) (State or other jurisdiction of incorporation or organization) (IRS Employer 1999 S. B ...