Executive Summary / Key Takeaways

• KULR Technology Group is undergoing a significant transformation, strategically positioning itself at the convergence of high-performance energy management, artificial intelligence (AI), and the burgeoning Bitcoin ecosystem.
• The company achieved record annual revenue of $10.7 million in 2024, demonstrating growth despite challenges, and expects to at least double revenue in 2025, driven by production ramps for its KULR ONE battery platform and new strategic initiatives.
• KULR's differentiated thermal management and battery safety technologies, including its proprietary carbon fiber materials and KULR ONE architecture, provide quantifiable performance and safety advantages crucial for demanding applications in aerospace, defense, and emerging AI/robotics markets.
• A strong balance sheet, bolstered by significant cash and a growing Bitcoin treasury ($55.28M as of March 31, 2025, growing to ~$74M by May 10, 2025), provides capital for strategic investments and operations, while the Bitcoin strategy is viewed as both a long-term store of value and a cultural catalyst for navigating market volatility.
• Key growth drivers include the ramp-up of KULR ONE Space and Guardian production, expansion into AI robotics via the German Bionic partnership, high-margin licensing deals (like the multi-million dollar nuclear application license), and increasing demand for battery testing and design services.

Setting the Scene: KULR's Evolution at the Forefront of Critical Technologies

KULR Technology Group, Inc. is no longer solely defined by its origins in thermal management components. While its foundation remains rooted in developing high-performance thermal solutions for electronics and batteries, the company is undergoing a strategic metamorphosis, aiming to become a leader at the nexus of energy, artificial intelligence, and digital capital. This transformation is driven by a recognition of converging mega-trends: the accelerating privatization and expansion of the space economy, the insatiable energy and cooling demands of AI infrastructure, and the global imperative for safer, more efficient energy storage and utilization.

From its history as a component supplier, KULR has evolved to offer sophisticated design and testing services, culminating in the development of total system solutions like the KULR ONE battery platform. This journey has been marked by strategic investments in capabilities, notably the expansion of its Webster, Texas facility, and key acquisitions like Vibetech, which brought vibration reduction technology into the fold. The recent pivot to embrace a Bitcoin treasury strategy underscores a bold move to align the company with the digital transformation of capital, viewing Bitcoin not just as an asset but as a strategic element fostering resilience and adaptability in a volatile technological landscape.

In a competitive arena populated by larger, more established players like EnerSys (ENS), Flux Power, and Amphenol (APH), KULR carves out its position through technological differentiation and a focus on high-performance, safety-critical applications. While competitors like EnerSys and Amphenol leverage scale and broad market coverage, KULR's strength lies in its specialized, proprietary technologies that offer distinct, quantifiable advantages in niche, high-growth segments.

Technological Foundation and Differentiation: The Core of KULR's Moat

At the heart of KULR's offering is its proprietary carbon fiber thermal management technology. This material provides superior thermal conductivity and heat dissipation in an ultra-lightweight and pliable form. This core technology is the bedrock for several product lines and platforms:

• Thermal Runaway Shield (TRS): Trusted by NASA for applications on the International Space Station, TRS technology is designed to mitigate the impacts of cell-to-cell thermal runaway propagation in lithium-ion batteries. This is a critical safety feature, particularly as battery energy density increases and applications become more demanding.
• KULR ONE Platform: This architecture represents KULR's holistic approach to energy storage solutions. It integrates multi-disciplinary expertise (electrical, thermal, mechanical, electrochemical) with advanced cell technology (like MOLICEL), testing capabilities, and production processes. The KULR ONE Space (K1S) platform, for instance, is built on a passively propagation resistant and flame arresting (PPRFA) design, targeting NASA JSC-20793 certification. The 400 series K1S is expected to receive final certification in Q2 2025. This platform offers a balance of performance, quality, safety, and cost advantage for markets like CubeSats and SmallSats.
• KULR VIBE / KULR Xero Vibe: Leveraging intellectual property from Vibetech, KULR VIBE addresses excessive vibrations in machinery. This technology uses proprietary sensors and AI algorithms for precision balancing and failure prediction. In drone applications, it has demonstrated a 23% increase in battery life and a 45% lift increase. The KULR Xero Vibe fan applies this to server and data center cooling, aiming to reduce vibration for increased cooling efficiency, higher fan speed (RP), and decreased power consumption – a critical need as AI chips demand more cooling than traditional air systems can efficiently provide.
• KULR Battery Management System (BMS) AI KULR Core™: This custom, radiation-tolerant BMS is nearing qualification and is intended to enable edge-AI capabilities in space applications by integrating with the Nvidia Jetson platform. It aims to provide AI-driven battery state-of-health monitoring and optimization, potentially serving as a mission computer.
• Emerging Technologies: KULR is also investing in high-areal-capacity battery electrodes, 3D engineering for rechargeable batteries, and collaborating with Scripps Research on novel pyrolytic carbon electrode technology for synthetic organic electrochemistry. A recent multi-million dollar licensing deal for carbon fiber cathode applications in Japanese nuclear reactor systems highlights the potential for its core material science expertise in diverse, high-value markets.

These technological differentiators provide KULR with a competitive moat. The ability to offer superior thermal performance and safety, backed by rigorous testing and certifications like AS9100 (achieved by the Webster facility in Feb 2025), allows KULR to compete effectively against larger players in demanding sectors like aerospace and defense. While competitors like Amphenol offer broad electronic components, KULR's specialized battery safety and thermal solutions provide a critical edge in preventing catastrophic events like thermal runaway. The quantifiable benefits, such as improved efficiency and reduced failure rates, translate into a compelling value proposition for customers where safety and reliability are paramount, potentially commanding higher average selling prices and contributing to improved gross margins (51% in FY 2024, though impacted by mix and mining losses in Q1 2025).

Strategic Expansion and Operational Strength

KULR's strategy is centered on leveraging its technological foundation to capitalize on high-growth market opportunities and evolve its business model for scalability.

The expansion of the Webster, Texas facility to over 31,000 square feet is a cornerstone of this strategy. This investment doubles battery production capacity and consolidates key capabilities – design, testing, prototyping, and low-volume production – into a "one-stop shop." This operational strength is crucial for serving customers in aerospace and defense who require rapid turnaround times, as demonstrated by the 6-week design-to-delivery timeline for AstroForge's battery. The AS9100 certification further validates KULR's manufacturing quality for these critical sectors.

Strategic partnerships are key to market penetration and scalability. The exclusive North American partnership with German Bionic for their AI-powered exoskeletons marks a significant entry into the rapidly growing AI robotics market, projected to reach $42 billion by 2033. This allows KULR to address labor shortages and physical demands in industries like manufacturing and healthcare with a proven product, leveraging its energy management expertise for battery-powered solutions. The business model includes both product sales and leasing, applicable to the U.S. market.

The multi-million dollar nuclear license deal in Q3 2024 represents a pivotal expansion into a high-margin IP licensing model, which management intends to pursue across different applications and geographies. Collaborations with entities like the US Army (for battery prototypes and KULR ONE Guardian production, targeting pilot production in Fall 2025, and KULR VIBE evaluation for helicopters), Worksport (battery tech, AI-integrated BMS), EDOM Technology (AI ecosystem supply chain in Taiwan), and the Texas Space Commission ($6.7M grant for cold-temp batteries) further illustrate KULR's strategy to embed its technology within critical supply chains and emerging ecosystems.

Financial Performance and Liquidity

KULR's financial performance reflects a company in a growth and investment phase, marked by increasing revenue alongside continued operating losses as it builds out capabilities and pursues new markets.

For the full year 2024, KULR achieved record revenue of $10.74 million, a 9% increase over 2023. This growth was driven by a 51% increase in service revenue and the recognition of $2.7 million from initial licensing agreements, offsetting a 47% decline in product revenue. Gross margin improved significantly in 2024, reaching 51% compared to 37% in 2023, benefiting from the higher-margin service and licensing revenue. Operating expenses saw some streamlining in 2024, with R&D down 34% and SG&A down 16% year-over-year, contributing to a 55% improvement in EPS.

The first quarter of 2025 saw revenue of $2.45 million, a 40% increase compared to Q1 2024 ($1.75 million). This included an 87% increase in product sales (driven by new customers), an 8% decrease in contract services, and the first recognition of revenue from digital asset mining ($249,754). However, gross profit declined to $206,345 (8% margin) in Q1 2025 from $510,789 (29% margin) in Q1 2024, primarily due to increased labor hours on service contracts and a net loss on mining operations. Operating expenses increased substantially in Q1 2025 (Total Operating Expenses $9.65M vs $5.17M in Q1 2024), driven by higher R&D (consulting, stock-based comp, facility costs) and SG&A (marketing, equipment write-down, stock-based comp, insurance, consulting). The net loss for Q1 2025 was $18.81 million, significantly higher than $5.01 million in Q1 2024, largely due to a $9.75 million unrealized loss on Bitcoin holdings from mark-to-market adjustments.

Despite operating losses, KULR maintains a strong liquidity position. As of March 31, 2025, the company held $24.45 million in cash and $55.28 million in digital assets (Bitcoin). This represents a substantial increase in total assets to $93.80 million from $62.93 million at the end of 2024. Total liabilities were low at $4.12 million, with no material financial debt. The company's primary source of capital has been equity financing, notably through its At-the-Market (ATM) offering. In Q1 2025, KULR raised $51.15 million in gross proceeds from the ATM, and an additional $19.83 million from April 23 to May 15, 2025. This strong balance sheet and access to capital are critical for funding ongoing operations, strategic investments, and the Bitcoin treasury strategy. Management has stated that the cash balance provides no substantial doubt about the company's ability to meet obligations over the next twelve months and that they do not anticipate using Bitcoin holdings for normal working capital needs.

Outlook and Growth Drivers

Management is highly optimistic about the near-term outlook, projecting revenue to at least double in 2025. This guidance is based on the expectation that recent investments and strategic initiatives will translate into accelerated revenue growth.

Key drivers for this anticipated growth include:

• Ramp-up of KULR ONE Production: As service and design customers transition to the production phase, particularly for KULR ONE Space and Guardian platforms, volume sales are expected to increase significantly.
• New Strategic Partnerships: The entry into the AI robotics market with German Bionic is expected to provide immediate revenue opportunities through product sales and leasing in North America.
• High-Margin Licensing Deals: Building on the success of the nuclear application license, KULR aims to secure more IP licensing agreements across various applications and geographies, contributing to both revenue growth and margin expansion.
• Increased Demand for Services: Continued growth in battery testing and design services, particularly for demanding applications in aerospace, defense, and automotive, provides a pipeline for future product sales and generates high-margin revenue.
• Bitcoin Mining: While currently operating at a loss, the mining operation is intended to accumulate Bitcoin at a potentially favorable cost basis and increase overall BTC yield, aligning with the treasury strategy.

The confidence in doubling revenue in 2025 is notable, especially as it does not rely on forecasting orders from a significant customer who did not purchase in 2024. This suggests that the expected growth is broad-based, driven by new customer wins and the maturation of strategic initiatives.

Risks and Challenges

Despite the ambitious growth plans and strategic pivots, KULR faces significant risks inherent in its industry and stage of development.

• Market Volatility: The markets KULR serves, particularly space, AI, and digital assets, are subject to rapid technological change and market fluctuations. The significant unrealized loss on Bitcoin holdings in Q1 2025 highlights the volatility risk associated with the treasury strategy.
• Execution Risk: Doubling revenue requires flawless execution across multiple new initiatives, including ramping up production, integrating new partnerships, and successfully commercializing new technologies. Delays or setbacks in any of these areas could impact the ability to meet guidance.
• Competition: KULR competes with larger, well-capitalized companies that have established market positions and economies of scale. While KULR's technology is differentiated, competing on price and securing large-volume contracts can be challenging.
• Customer Concentration: Although efforts are being made to diversify, a significant portion of revenue and receivables still comes from a few customers, making the company vulnerable to changes in their purchasing decisions.
• Supply Chain Issues: The Tariff War and ongoing geopolitical conflicts pose risks to the supply chain, potentially increasing costs and causing delays.
• Contingent Loss: The unresolved issue with the undelivered automated manufacturing system and the associated write-down represent a potential for further financial loss depending on the outcome of negotiations.
• Need for Future Financing: Despite a strong current cash position, continued operating losses mean KULR will eventually need to generate significant revenues or raise additional capital to achieve profitability and sustain operations long-term.

Competitive Positioning: Innovation vs. Scale

KULR operates in a competitive landscape where its technological innovation is its primary weapon against the scale and market dominance of larger players. Companies like EnerSys and Amphenol benefit from extensive global distribution networks, established customer relationships, and significant manufacturing capacity, allowing them to compete effectively on price and volume across broad markets. EnerSys, for instance, has a much larger market share in energy storage and robust profitability metrics, while Amphenol excels in electronics components with strong margins and cash flow. Flux Power, while smaller than EnerSys and Amphenol, has a stronger focus on specific EV/material handling battery markets and has shown significant revenue growth, albeit with profitability challenges similar to KULR.

KULR's strategy is not to compete head-to-head on scale or broad market coverage but to leverage its differentiated technology to target high-value, performance-critical niches. Its proprietary carbon fiber thermal management, advanced battery safety solutions (TRS, KULR ONE architecture), and specialized testing capabilities provide a competitive edge in areas where standard solutions are insufficient. The quantifiable benefits – improved thermal efficiency, enhanced safety, faster heat dissipation, reduced failure rates – are compelling for customers in aerospace, defense, and emerging AI/robotics applications where performance and reliability outweigh upfront cost considerations.

The "one-stop shop" capability at the expanded Texas facility further strengthens KULR's position by offering speed and integrated services that larger, more siloed competitors may struggle to match for custom, high-end battery solutions. The move into high-margin licensing deals and strategic partnerships like German Bionic allows KULR to scale its technology and reach new markets without requiring massive capital investments in manufacturing infrastructure, countering the scale advantage of competitors.

While KULR's financial metrics (margins, cash flow) currently lag behind profitable giants like Amphenol and EnerSys, its higher relative R&D investment and faster revenue growth rate (in 2024) indicate a company actively investing to disrupt and gain market share in rapidly expanding sectors. The challenge lies in translating technological leadership and strategic partnerships into sustainable profitability and closing the operational efficiency gap with larger rivals.

Conclusion

KULR Technology Group is navigating a period of ambitious transformation, seeking to leverage its core expertise in thermal management and battery safety to become a significant player at the intersection of energy, AI, and digital capital. The strategic pivots into AI robotics, Bitcoin treasury/mining, and high-margin licensing, coupled with investments in operational capacity, position the company for potentially accelerated growth. The expectation to at least double revenue in 2025, driven by production ramps and new partnerships, signals management's confidence in the trajectory.

While the company faces inherent risks associated with market volatility, execution, and competition from larger players, its differentiated technology and strategic focus on high-performance, safety-critical niches provide a foundation for carving out market share. The strong balance sheet, bolstered by recent capital raises and Bitcoin holdings, offers crucial flexibility to fund these initiatives. For investors, KULR represents a high-growth opportunity tied to compelling technological and market trends, but one that requires careful monitoring of execution, profitability improvement, and the successful integration of its diverse strategic initiatives into a cohesive, scalable business model.