KULR Technology (US:KULR)2025-03-31 12:31Part I Business KULR specializes in energy storage, thermal management, and vibration reduction, expanding into new markets and adopting Bitcoin as a treasury asset - The company's core technology domains are energy storage systems and recycling, thermal management solutions, and rotary system vibration reduction12 - KULR is expanding into energy storage and vibration reduction markets, targeting a combined addressable market exceeding $500 billion by 2030 across energy storage, battery recycling, and aircraft maintenance1314 - The company's primary product and service portfolio, KULR ONE Design Solutions (K1-DS), offers a holistic approach to battery development, from design and testing to transport and recycling21 - KULR is developing the KULR Core™, which integrates its Battery Management System (BMS) with the Nvidia Jetson platform to create an AI-enabled compute and battery control system for space and robotics applications3146 - In December 2024, the company adopted a Bitcoin treasury strategy, acquiring 217.18 BTC for approximately $21 million61117 - The company relocated its Texas facility to a much larger space (17,560 sq ft vs. 4,800 sq ft) to support growth and expand R&D and production capabilities52 Recent Developments KULR achieved record annual revenues in 2024, adopted a Bitcoin treasury program, and secured significant licensing agreements Key Financial and Strategic Developments in 2024 | Metric | Value/Detail | | :--- | :--- | | Annual Revenue (2024) | $10.7 million (record high) | | Bitcoin Purchase (Dec 2024) | 217.18 BTC for ~$21 million | | ATM Offering Gross Proceeds (2024) | $61.9 million | | KULR VIBE License Deal | $2.35M deal with $1.1M guaranteed minimum | | CF Cathode License Deal | 10-year agreement with a Japanese customer | | Series A Preferred Stock | 1,000,000 shares issued to CEO with 100 votes per share | - Subsequent to year-end, the company purchased an additional 449.45 Bitcoin for ~$44.5 million and entered a 60-day lease for 2,500 bitcoin mining machines61 - The ATM offering was expanded multiple times, from an initial $20 million to $96 million, with the agent's commission reduced from 3% to 2.5%62 Our Bitcoin Treasury Strategy KULR adopted Bitcoin as its primary treasury asset in December 2024, viewing it as a long-term store of value and inflation hedge - The company's rationale for holding Bitcoin is its belief that it is a reliable store of value, a hedge against inflation, and has the potential for significant appreciation, comparing it to digital gold118 Bitcoin Holdings as of March 27, 2025 | Metric | Value | | :--- | :--- | | Total Bitcoins Held | ~669.11 (666.63 purchased + 2.48 mined) | | Aggregate Purchase Price | ~$65 million | | Average Purchase Price | ~$98,255 per bitcoin | | Average Mined Price | ~$84,225 per bitcoin | - KULR holds its Bitcoin in a custodial account at Coinbase, which is required to hold the assets in segregated accounts, and the company does not directly access its private keys126127128 - The company does not currently intend to hedge its Bitcoin holdings but may consider it in the future123 Risk Factors KULR faces significant risks from its limited operating history, new Bitcoin treasury strategy, and potential stock delisting or dilution Risks Related to Our Business and Our Industry Key business risks include limited operating history, need for capital, supply chain disruptions, and customer concentration - The company has a limited operating history, has not yet achieved profitability, and will require substantial additional capital to fund future operations146150 - The company is exposed to customer concentration risk, with two customers accounting for an aggregate of 25% of total revenue in 2024162 - The average sales cycle for products can range from one to five years, creating a long and complex path to revenue generation159 - The company has limited experience in higher volume manufacturing, which is necessary to support profitable operations, and currently relies on outsourced partners for high-volume products158 Risks Relating to Our Bitcoin Treasury Strategy and Holdings Bitcoin treasury strategy exposes KULR to high volatility, counterparty risk, and regulatory uncertainty - Bitcoin is a highly volatile asset, with its price fluctuating between $38,000 and $106,000 in 2024, which could significantly impact the company's financial condition200 - The company is subject to counterparty risk, particularly with its custodians, potentially losing access to or the value of its Bitcoin holdings in the event of a custodian's bankruptcy206 - The legal and regulatory landscape for digital assets is uncertain and evolving, and a determination that Bitcoin is a security could lead to the company being classified as an 'investment company' under the 1940 Act212227 - The approval and trading of spot Bitcoin ETPs in January 2024 provides investors with alternative ways to gain exposure to Bitcoin, which could adversely affect the market price of KULR's common stock218219 Risks Relating to Our Common Stock and Preferred Stock Stock risks include potential delisting, dilution from future issuances, and concentrated voting power by the CEO - The company is subject to NYSE American continued listing requirements and has previously received non-compliance notices regarding stockholders' equity and low trading price, though it has since regained compliance248249252 - The Chairman and CEO, Michael Mo, holds 1,000,000 shares of Series A Voting Preferred Stock, with each share entitled to 100 votes, giving him 31.78% of the company's total voting power265269 - The Board has the authority to issue additional common and preferred stock without shareholder approval, which could dilute existing shareholders and affect their voting power256270 Unresolved Staff Comments As a smaller reporting company, KULR is not required to provide information for this item - The company, as a smaller reporting company, is not required to provide the information required by this item274 Cybersecurity KULR manages cyber risks via a NIST-aligned program overseen by its CTO and Board, actively pursuing CMMC level 2 compliance - The company's cyber risk management program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework280 - KULR is actively working with third-party specialists to institute controls for Cybersecurity Maturity Model Certification (CMMC) level 2 compliance280 - The Chief Technology Officer (CTO), along with third-party providers, is responsible for the cyber risk program, and the Board of Directors provides oversight, receiving updates at quarterly meetings277279 Properties The company's principal executive office is located in Webster, Texas, in a recently expanded facility - The company's principal executive office is located at 555 Forge River Road, Suite 100, Webster, Texas 77598283 Legal Proceedings The company is not currently a party to any legal or administrative proceedings - The company is not currently a party to any legal or administrative proceedings284 Mine Safety Disclosures This item is not applicable to the company - Not applicable285 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities KULR common stock trades on NYSE American, with approximately 106 shareholders, and the company has not paid dividends - The company's common stock trades on the NYSE American under the symbol "KULR"288 - As of March 27, 2025, the company had approximately 106 record and street shareholders290 - The company has never paid dividends and does not intend to pay any in the foreseeable future291 Management's Discussion and Analysis of Financial Condition and Results of Operation KULR reported record 2024 revenue of $10.7 million, improved gross profit, reduced net loss, and strengthened liquidity with Bitcoin holdings Consolidated Results of Operations In 2024, revenue increased 9% to $10.7 million, gross profit grew 50% to $5.5 million, and net loss improved to $17.5 million Revenue by Type (2024 vs. 2023) | Revenue Type | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Product sales | $3,644,240 | $6,903,988 | -47% | | Contract services | $4,406,023 | $2,926,178 | +51% | | IP licensing | $2,687,218 | $0 | N/A | | Total Revenue | $10,737,481 | $9,830,166 | +9% | Key Operational Metrics (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Gross Profit | $5,483,198 | $3,665,856 | | Gross Margin | 51% | 37% | | R&D Expenses | $4,738,305 | $7,135,452 | | SG&A Expenses | $15,979,852 | $18,942,350 | | Net Loss | $(17,523,629) | $(23,693,556) | - The increase in gross profit margin was primarily due to new licensing agreements that generated $2.7 million in revenue with no corresponding cost of revenue319 Liquidity and Capital Resources KULR significantly improved liquidity in 2024, ending with $29.8 million cash and $20.3 million Bitcoin, primarily from equity financing Financial Position (as of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cash | $29,831,858 | $1,194,764 | | Bitcoin Holdings | $20,281,184 | $0 | | Working Capital | $29,498,421 | $(2,994,753) | Cash Flow Summary (Year Ended Dec 31) | Cash Flow | 2024 | 2023 | | :--- | :--- | :--- | | Operating Activities | $(17,341,675) | $(11,965,387) | | Investing Activities | $(21,596,192) | $(1,046,113) | | Financing Activities | $67,574,961 | $3,872,701 | - The company's primary source of liquidity has shifted from debt to equity offerings, with the ATM providing $61.9 million in gross proceeds in 2024336 - As of March 27, 2025, the company's cash and Bitcoin balances were approximately $25 million and $58 million, respectively337 Controls and Procedures Management concluded that KULR's disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective345 - Based on an evaluation using the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024348 - The annual report does not contain an attestation report from the company's auditor on internal controls, as an exemption is available for smaller reporting companies351 Part III Directors, Executive Officers, and Corporate Governance KULR's leadership includes CEO Michael Mo, with a three-member Board of Directors, two of whom are independent, overseeing key committees - The Board of Directors consists of three members: Michael Mo (Chairman), Dr. Joanna Massey (Lead Director), and Donna Grier356366 - The board has determined that directors Donna Grier and Dr. Joanna Massey are independent under NYSE American rules368 - The Audit, Compensation, and Nominating and Corporate Governance committees are all composed of the two independent directors, Donna Grier and Dr. Joanna Massey370373374 Executive Compensation 2024 executive compensation included salaries, bonuses, and stock awards, with CEO Michael Mo receiving $475,239 total compensation 2024 Named Executive Officer Compensation | Name and Principal Position | Salary | Bonus | Stock Awards | Total Earned | | :--- | :--- | :--- | :--- | :--- | | Michael Mo, CEO | $272,196 | $100,000 | $103,043 | $475,239 | | Shawn Canter, CFO | $250,001 | $45,000 | $0 | $295,001 | | William Walker, CTO | $228,270 | $50,000 | $0 | $278,270 | - The company's 2018 Equity Incentive Plan authorizes up to 15,000,000 shares for issuance to employees, directors, and consultants386 - Independent directors receive significant compensation, with the Lead Director receiving $150,000 in annual cash compensation and the non-Lead Director receiving $70,000, in addition to equity awards387 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters CEO Michael Mo holds 31.69% of total voting power due to Series A Preferred Stock, indicating concentrated control Security Ownership of Management (as of March 27, 2025) | Name of Beneficial Owner | Percentage Ownership (Common) | Vote With Series A Preferred | | :--- | :--- | :--- | | Michael Mo (CEO and Chairman) | 7.64% | 31.69% | | All directors and executive officers as a group (6 persons) | 8.21% | 32.11% | - CEO Michael Mo's significant voting power stems from his ownership of 1,000,000 shares of Non-Convertible Series A Voting Preferred Stock, which entitles him to 100 votes per share391394 - Under the company's equity compensation plans, 5,095,017 securities remained available for future issuance as of December 31, 2024396 Certain Relationships and Related Transactions, and Director Independence No material related party transactions were reported, and two of the three directors are determined to be independent - No material related party transactions were reported for the period since January 1, 2023, other than standard compensation arrangements398 - The Board has determined that directors Dr. Joanna Massey and Ms. Donna Grier are independent401 Principal Accountant Fees and Services Marcum LLP served as the independent auditor, with audit fees of $294,135 in 2024, and the Audit Committee pre-approves all services Accountant Fees | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | $294,135 | $339,025 | | Tax Fees | $0 | $0 | | Total | $294,135 | $339,025 | - The Audit Committee has a pre-approval policy for all services provided by the independent auditors to ensure independence406 Part IV Exhibits, Financial Statement Schedules This section lists all exhibits filed with the Form 10-K, including key agreements and corporate governance documents - Key exhibits include the At The Market Offering Agreement (10.38), the Asset Purchase Agreement for Vibetech (10.30), and the Certificate of Designation for Series A Voting Preferred Stock (3.6)410411412 Financial Statements and Notes Consolidated Financial Statements KULR's 2024 financial statements show significant asset growth to $62.9 million, reduced liabilities, and a positive stockholders' equity of $57.4 million Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Assets | $62,927,187 | $10,864,356 | | Cash | $29,831,858 | $1,194,764 | | Digital Assets | $20,281,184 | $0 | | Total Liabilities | $5,499,202 | $13,047,052 | | Prepaid advance liability | $0 | $5,892,056 | | Total Stockholders' Equity (Deficit) | $57,427,985 | $(2,182,696) | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $10,737,481 | $9,830,166 | | Gross Profit | $5,483,198 | $3,665,856 | | Loss From Operations | $(15,234,959) | $(22,411,946) | | Net Loss | $(17,523,629) | $(23,693,556) | | Net Loss Per Share | $(0.09) | $(0.20) | Notes to Consolidated Financial Statements Notes detail accounting policies for digital assets, repayment of liabilities, changes in equity from ATM offerings, and subsequent Bitcoin purchases - The company adopted ASU 2023-08 for crypto assets, measuring them at fair value, holding 217.18 Bitcoin with a cost basis of $21.0 million and a fair value of $20.3 million as of Dec 31, 2024, resulting in an unrealized loss of $718,826 for the period465524525 - The company fully repaid its prepaid advance liability to Yorkville in 2024 by issuing 21.8 million shares valued at $6.1 million in satisfaction of the debt545556 - In 2024, the company issued 74.8 million shares under its ATM agreement for gross proceeds of $61.9 million, and subsequent to year-end, through March 27, 2025, it issued another 19.4 million shares for gross proceeds of $51.1 million593636 - Subsequent to year-end, the company purchased an additional 449.45 Bitcoin and entered into a 60-day agreement to operate 2,500 bitcoin mining machines637640