KULR Technology Group, Inc. — FY2023 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2023; it does not provide standalone fourth-quarter results. KULR develops battery safety and energy-storage systems, thermal-management products and services, and vibration-reduction technology, targeting aerospace and defense as well as commercial markets. Its strategy is evolving from supplying components toward providing design, testing, and complete system solutions. The financial statements were audited and presented fairly under U.S. GAAP; the auditor included a going-concern explanatory paragraph.
Financial performance and condition
| Metric | FY2023 / Dec. 31, 2023 | FY2022 / Dec. 31, 2022 |
|---|---|---|
| Revenue | $9.83 million | $3.99 million |
| Gross profit; gross margin | $3.67 million; 37% | $2.36 million; 59% |
| Operating expenses | $26.08 million | $20.65 million |
| Loss from operations | $22.41 million | $18.29 million |
| Net loss; loss per share | $23.69 million; $0.20 | $19.44 million; $0.18 |
| Cash used in operating activities | $11.97 million | $17.35 million |
| Cash used in investing activities | $1.05 million | $4.65 million |
| Cash provided by financing activities | $3.87 million | $17.47 million |
| Cash | $1.19 million | $10.33 million |
| Working capital | $(2.99) million | $6.06 million |
| Total liabilities; stockholders’ equity (deficit) | $13.05 million; $(2.18) million | $13.13 million; $10.49 million |
Product-sales margin fell to 26% from 44%; contract-services margin declined to 63% from 89%. Cost of revenue rose 278%, faster than revenue, reflecting higher activity, staffing and materials, new equipment depreciation, and a $294,000 inventory write-down. R&D rose 48% to $6.20 million, while selling, general and administrative expense rose 21% to $19.88 million. The filing reports no income-tax provision in either year.
Material changes and financing
- Revenue grew 146% year over year, from 36 customers to 53. Product sales rose 161% to $6.90 million; contract-services revenue rose to $2.93 million, including $1.76 million recognized over time.
- Two customers accounted for 61% of 2023 revenue in management’s discussion; the concentration note identifies Customer A at 51% and Customer B at 9% (60% in aggregate as presented in that table). Customer A was 32% of revenue in 2022.
- Year-end prepaid-advance liability was $5.89 million, classified as non-current; notes payable were $250,000. Subsequent to year-end, KULR issued 40.28 million shares under its Yorkville facility for $8.33 million gross proceeds. It retained $2.61 million for operations and applied the remainder to the prepaid advance, which was repaid in full by March 27, 2024.
- During 2023, public offerings generated $3.91 million gross proceeds, less issuance costs. Common shares issued and outstanding rose from 113.20 million at December 31, 2022 to 134.03 million at December 31, 2023; further substantial issuance occurred after year-end.
Outlook, risks, and unusual items
Management expects continued operating losses and cash outflows and says profitability depends on significant revenue growth. It identifies revenue growth, expense control, and additional financing as liquidity measures, but provides no specific revenue, earnings, or cash-flow guidance. Management and the auditor conclude that substantial doubt about the company’s ability to continue as a going concern remains; planned actions do not alleviate that doubt.
- Liquidity and subsequent borrowing: The filing cites significant obligations and limited cash. Two 2024 merchant cash advances provided approximately $1.01 million net cash but require $1.61 million total repayment through weekly payments. The filing also discloses 2024 promissory notes of $500,000 principal (with $440,000 proceeds, due October 2024) and $200,000 principal at 16% interest.
- NYSE American compliance: The company received notices concerning stockholders’ equity and an average share price below $0.20. Its equity-compliance plan was accepted through June 20, 2025; the price deficiency requires sustained improvement by August 12, 2024 or a reverse split. Failure to regain compliance could lead to delisting.
- Workforce and facilities: KULR announced a workforce reduction of approximately 15% in January 2024 and relocated to a larger Texas facility in February 2024, adding capacity intended to support growth.
- Control and dilution: In January 2024, the company issued 730,000 Series A voting preferred shares to its CEO for no consideration, subject to cancellation in specified circumstances. Each share carries 100 votes. The CEO was reported to hold 38.36% of voting power. Shareholders also authorized potential issuances exceeding 20% of outstanding common shares and a reverse split within a 1-for-2 to 1-for-80 range.
- Operating risks: Management highlights lengthy, unpredictable customer sales cycles, limited experience scaling manufacturing, dependence on a small number of customers, competition, need for financing, supply-chain and geopolitical uncertainty, and technology and intellectual-property risks. The company reported no current legal or administrative proceedings.
Most important facts for investors to verify
- Whether cash resources and financing access are sufficient to meet obligations, sustain operations, and address the auditor’s going-concern warning.
- Whether the post-year-end Yorkville share issuance and repayment figures, remaining facility availability, and resulting dilution reconcile to subsequent filings.
- Whether KULR regains NYSE American equity and share-price compliance within the stated deadlines, including any reverse split or further share issuance.
- Whether revenue growth converts into improved margins and lower operating losses, particularly given customer concentration and declining product and service margins.
- The repayment status and effective cost of the merchant cash advances and subsequent promissory notes, and their impact on near-term liquidity.