KULR Technology Group, Inc. [KULR] Filings

10-Q 1 tmb-20230930x10q.htm 10-Q

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, 2023

☐ 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		81-1004273
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4863 Shawline Street, San Diego, California		92111
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 408-663-5247

(Former name, former address and former fiscal year, if changed since last report) N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	KULR	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b- 2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of November 10, 2023, there were 127,884,674 shares outstanding.

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION

	Item 1. Financial Statements.	3

	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	3

	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	7

	Notes to Unaudited Condensed Consolidated Financial Statements	9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	31

	Item 4. Controls and Procedures.	31

PART II - OTHER INFORMATION

	Item 1. Legal Proceedings.	32

	Item 1A. Risk Factors.	32

	Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	32

	Item 3. Defaults Upon Senior Securities.	32

	Item 4. Mine Safety Disclosures	32

	Item 5. Other Information.	32

	Item 6. Exhibits.	33

	SIGNATURES	34

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,		December 31,
	2023		2022
	(unaudited)
Assets
Current Assets:
Cash	$	1,167,315	$	10,333,563
Accounts receivable		1,296,811		1,542,118
Inventory		1,551,399		1,962,035
Inventory deposits		91,033		285,260
Prepaid expenses and other current assets		945,303		1,613,008
Total Current Assets		5,051,861		15,735,984
Property and equipment, net		4,909,766		3,193,041
Equipment deposits		1,615,286		3,514,937
Security deposits		10,228		60,441
Intangible assets, net		754,968		720,768
Right of use asset, net		193,210		328,941
Deferred financing costs		71,818		71,818
Total Assets	$	12,607,137	$	23,625,930

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	1,813,191	$	1,408,017
Accrued expenses and other current liabilities		3,018,326		2,142,277
Accrued issuable equity		98,540		227,956
Lease liability, current portion		172,569		223,645
Prepaid advance liability, net of discount, current portion		5,910,405		5,655,612
Deferred revenue		393,934		23,000
Total Current Liabilities		11,406,965		9,680,507
Lease liability, non-current portion		—		97,958
Prepaid advance liability, net of discount, non-current portion		—		3,196,678
Accrued interest, non-current		—		157,054
Total Liabilities		11,406,965		13,132,197

Commitments and contingencies (Note 12)

Stockholders’ Equity
Preferred stock, $0.0001 par value, 20,000,000 shares authorized;
Series A Preferred Stock, 1,000,000 shares designated; none issued and outstanding at September 30, 2023 and December 31, 2022		—		—
Series B Convertible Preferred Stock, 31,000 shares designated; none issued and outstanding at September 30, 2023 and December 31, 2022		—		—
Series C Preferred Stock, 400 shares designated; none issued and outstanding at September 30, 2023 and December 31, 2022		—		—
Series D Preferred Stock, 650 shares designated; none issued and outstanding at September 30, 2023 and December 31, 2022		—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized; 127,697,113 shares issued and 127,565,951 shares outstanding at September 30, 2023; 113,202,749 shares issued and 113,071,587 shares outstanding at December 31, 2022		12,770		11,320
Additional paid-in capital		62,577,789		53,372,673
Treasury stock, at cost; 131,162 shares held at September 30, 2023 and December 31, 2022		(296,222)		(296,222)
Accumulated deficit		(61,094,165)		(42,594,038)
Total Stockholders’ Equity		1,200,172		10,493,733
Total Liabilities and Stockholders' Equity	$	12,607,137	$	23,625,930

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

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue	$	3,041,007	$	1,393,185	$	7,496,315	$	2,181,230
Cost of revenue		1,703,553		932,364		4,513,285		1,478,954
Gross Profit		1,337,454		460,821		2,983,030		702,276

Operating Expenses
Research and development		1,640,959		1,069,852		4,873,841		2,790,683
Selling, general, and administrative		4,793,523		4,349,373		15,546,915		12,210,458
Total Operating Expenses		6,434,482		5,419,225		20,420,756		15,001,141
Loss From Operations		(5,097,028)		(4,958,404)		(17,437,726)		(14,298,865)

Other (Expense) Income
Interest expense		(187,574)		(633,342)		(544,615)		(676,622)
Gain on forgiveness of PPP loan and interest		—		158,675		—		158,675
Amortization of debt discount		(234,899)		(172,407)		(695,773)		(275,626)
Loss on debt extinguishment		—		(8,508)		—		(8,508)
Change in fair value of accrued issuable equity		(42,773)		27,401		177,987		123,121
Total Other Expense, net		(465,246)		(628,181)		(1,062,401)		(678,960)
Net Loss	$	(5,562,274)	$	(5,586,585)	$	(18,500,127)	$	(14,977,825)

Net Loss Per Share
- Basic and Diluted	$	(0.05)	$	(0.05)	$	(0.16)	$	(0.14)

Weighted Average Number of Common Shares Outstanding
- Basic and Diluted		117,144,452		105,572,820		115,149,761		104,223,378

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

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

(unaudited)


				Additional							Total
	Common Stock			Paid-In		Treasury Stock			Accumulated		Stockholders'
	Shares	Amount		Capital		Shares	Amount		Deficit		Equity
Balance - January 1, 2023	113,202,749	$	11,320	$	53,372,673	131,162	$	(296,222)	$	(42,594,038)	$	10,493,733
Common stock issued for the repayment of prepaid advance liability and related interest accrual	3,153,036		315		3,750,653	—		—		—		3,750,968
Shares repurchased for payroll taxes and canceled	(175,000)		(17)		(229,232)	—		—		—		(229,249)
Stock-based compensation:
Restricted stock awards granted	1,848,508		185		(185)	—		—		—		—
Unvested restricted stock awards canceled	(75,000)		(8)		8	—		—		—		—
Common stock issued for services	5,500		1		6,819	—		—		—		6,820
Amortization of restricted common stock	—		—		765,100	—		—		—		765,100
Amortization of stock options	—		—		40,605	—		—		—		40,605
Net loss	—		—		—	—		—		(6,602,861)		(6,602,861)
Balance - March 31, 2023	117,959,793		11,796		57,706,441	131,162		(296,222)		(49,196,899)		8,225,116
Common stock issued for the repayment of prepaid advance liability and related interest accrual	925,935		93		715,565	—		—		—		715,658
Stock-based compensation:
Amortization of restricted common stock	—		—		823,540	—		—		—		823,540
Amortization of stock options	—		—		44,311	—		—		—		44,311
Net loss	—		—		—	—		—		(6,334,992)		(6,334,992)
Balance - June 30, 2023	118,885,728		11,889		59,289,857	131,162		(296,222)		(55,531,891)		3,473,633
Common stock issued pursuant to the equity financing:
For cash, net of issuance costs ⁽¹⁾	8,214,285		821		2,285,949	—		—		—		2,286,770
Stock-based compensation:
Restricted stock awards granted	370,000		37		(37)	—		—		—		—
Common stock issued for services	227,100		23		137,637	—		—		—		137,660
Amortization of restricted common stock	—		—		808,316	—		—		—		808,316
Amortization of stock options	—		—		56,067	—		—		—		56,067
Net loss	—		—		—	—		—		(5,562,274)		(5,562,274)
Balance - September 30, 2023	127,697,113	$	12,770	$	62,577,789	131,162	$	(296,222)	$	(61,094,165)	$	1,200,172

⁽¹⁾ Equity financing gross proceeds of $2,875,000 less issuance costs of $588,230.

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

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

(unaudited)


				Additional							Total
	Common Stock			Paid-In		Treasury Stock			Accumulated		Stockholders'
	Shares	Amount		Capital		Shares	Amount		Deficit		Equity
Balance - January 1, 2022	104,792,072	$	10,479	$	39,512,122	—	$	—	$	(23,157,559)	$	16,365,042
Treasury stock held upon the vesting of restricted common stock	—		—		—	194,704		(439,728)		—		(439,728)
Common stock issued upon the exercise of warrants	70,143		7		87,672	—		—		—		87,679
Common stock issued upon the exercise of options	2,500		—		5,075	—		—		—		5,075
Stock-based compensation:
Common stock issued for services	6,000		1		43,159	—		—		—		43,160
Amortization of restricted common stock	—		—		519,231	—		—		—		519,231
Amortization of stock options	—		—		15,883	—		—		—		15,883
Amortization of market-based awards	—		—		730,048	—		—		—		730,048
Net loss	—		—		—	—		—		(4,136,555)		(4,136,555)
Balance - March 31, 2022	104,870,715		10,487		40,913,190	194,704		(439,728)		(27,294,114)		13,189,835
Treasury stock issued upon the exercise of options	—		—		(46,305)	(33,000)		74,529		—		28,224
Common stock issued upon the exercise of warrants	2,346,525		234		2,932,922	—		—		—		2,933,156
Stock-based compensation:
Common stock issued for services	6,000		1		10,260	—		—		—		10,261
Amortization of restricted common stock	—		—		422,128	—		—		—		422,128
Amortization of stock options	—		—		26,535	—		—		—		26,535
Amortization of market-based awards	—		—		565,421	—		—		—		565,421
Net loss	—		—		—	—		—		(5,254,685)		(5,254,685)
Balance - June 30, 2022	107,223,240		10,722		44,824,151	161,704		(365,199)		(32,548,799)		11,920,875
Treasury stock issued upon the exercise of options	—		—		—	(30,542)		68,977		(48,819)		20,158
Common stock issued pursuant to the SEPA agreement:
For cash, net of issuance costs ⁽¹⁾	160,782		16		247,855	—		—		—		247,871
In satisfaction of notes payable	94,458		9		149,991	—		—		—		150,000
For the repayment of prepaid advances	221,605		22		274,635	—		—		—		274,658
Stock-based compensation:
Amortization of restricted common stock	—		—		403,812	—		—		—		403,812
Amortization of stock options	—		—		23,959	—		—		—		23,959
Amortization of market-based awards	—		—		477,700	—		—		—		477,700
Net loss	—		—		—	—		—		(5,586,585)		(5,586,585)
Balance - September 30, 2022	107,700,085	$	10,770	$	46,402,103	131,162	$	(296,222)	$	(38,184,203)	$	7,932,448

⁽¹⁾ Represents gross proceeds of $250,000 less $2,129 for amortization of issuance costs.

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

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Nine Months Ended
	September 30,
	2023		2022
Cash Flows From Operating Activities:
Net loss	$	(18,500,127)	$	(14,977,825)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		695,773		275,626
Non-cash lease expense		186,885		143,861
Loss on debt extinguishment		—		8,508
Depreciation and amortization expense		1,532,796		140,829
Gain on forgiveness of PPP loan and interest		—		(158,675)
Change in fair value of accrued issuable equity		(177,987)		(123,121)
Non-cash interest expense		—		576,932
Stock-based compensation		2,730,989		3,208,778
Changes in operating assets and liabilities:
Accounts receivable		245,307		(1,208,646)
Inventory		410,636		(150,863)
Inventory deposits		194,227		(721,462)
Prepaid expenses and other current assets		667,705		(741,937)
Security deposits		50,213		—
Accounts payable		(103,457)		377,987
Accrued expenses and other current liabilities		1,003,244		248,301
Lease liability		(200,188)		(151,997)
Deferred revenue		370,934		(112,303)
Total Adjustments		7,607,077		1,611,818
Net Cash Used In Operating Activities		(10,893,050)		(13,366,007)

Cash Flows From Investing Activities:
Deposits for purchase of property and equipment		(621,107)		(2,198,626)
Purchases of property and equipment		(237,592)		(573,942)
Acquisition of intangible assets		(135,000)		—
Net Cash Used In Investing Activities		(993,699)		(2,772,568)

Cash Flows from Financing Activities:
Proceeds from equity financing		2,875,000		—
Issuance costs on equity financing		(320,250)		—
Proceeds from the SEPA		—		247,871
Proceeds from prepaid advance liability		2,000,000		10,573,068
Issuance costs on prepaid advance liability		(30,000)		(85,000)
Repayments of prepaid advance liability		(1,575,000)		—
Proceeds from notes payable ⁽¹⁾		—		4,750,000
Issuance costs on notes payable		—		(17,200)
Repayments of note payable		—		(1,000,000)
Payment of financing costs incurred in connection with the SEPA		—		(72,800)
Payment of financing costs incurred in connection with notes payable		—		2,129
Repurchase of common stock		(229,249)		—
Proceeds from the exercise of options		—		25,233
Proceeds from the exercise of warrants		—		3,020,836
Net Cash Provided By Financing Activities		2,720,501		17,444,137
Net (Decrease) Increase In Cash		(9,166,248)		1,305,562
Cash - Beginning of Period		10,333,563		14,863,301
Cash - End of Period	$	1,167,315	$	16,168,863

⁽¹⁾ Face value of $5,000,000, less $250,000 original issue discount.

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

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(unaudited)


	For the Nine Months Ended
	September 30,
	2023		2022
Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for:
Interest	$	264,731	$	676,281
Taxes	$	—	$	—

Non-cash investing and financing activities:
Right of use asset for lease liability	$	51,154	$	143,640
Common stock held in treasury upon the vesting of restricted common stock	$	—	$	(439,728)
Treasury stock issued upon the exercise of stock options	$	—	$	143,506
Original issue discount on prepaid advance liability	$	105,263	$	—
Common stock issued in satisfaction of prepaid advance liability and interest	$	4,466,626	$	—
Prepaid advance for repayment of note payable	$	—	$	3,850,000
Shares issued i

KULR Technology Group, Inc. [KULR] Filings
10-Q	[2023-11-14]
10-Q	[2023-08-16]
10-Q	[2023-05-15]
10-K	[2023-03-28]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-28]
10-Q	[2021-11-15]
10-Q	[2021-08-16]
10-Q	[2021-05-21]
10-K	[2021-03-19]
10-Q	[2020-11-13]
10-Q	[2020-08-14]
10-Q	[2020-06-25]
10-K	[2020-05-14]
10-Q	[2019-11-01]
10-Q	[2019-08-14]
10-Q	[2019-05-14]
10-K	[2019-03-29]
10-Q	[2018-11-13]
10-Q	[2018-08-14]
10-Q	[2018-05-15]
10-K	[2018-04-17]
10-Q	[2017-11-17]
10-Q	[2017-08-18]
10-Q	[2017-05-22]
10-K	[2017-03-30]
10-Q	[2016-11-16]
10-Q	[2016-08-15]
10-K	[2016-07-15]
S-1	[2016-06-28]
10-Q	[2016-05-23]