Q2 2026 KULR Technology Group Inc Earnings Call

August 13, 2026

Speaker #1: Before we can get started, please listen to the following Safe Harbor statement covering this call. This call may contain certain forward-looking statements based on the company's current expectations, intentions, and assumptions.

Speaker #1: That involves risks and uncertainties. Forward-looking statements made on this call are based on the information available to management as of the date here. KULR Technology Group's actual results may differ materially from those stated or implied in such forward-looking statements.

[Company Representative] (KULR Technology Group): KULR Technology Group's actual results may differ materially from those stated or implied in such forward-looking statements due to risks and uncertainties associated with their business, which include the risk factors disclosed in their Form 10-K filed with the Securities and Exchange Commission on 31 March 2026, as may be amended or supplemented by other reports filed by the company with the Securities and Exchange Commission from time to time. Forward-looking statements include statements regarding the company's expectations, beliefs, intentions, or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," and "would," or similar words. All such forward-looking statements that are provided by management on this call are based on information available at this time, and management expects that their internal expectations may change over time.

Speaker #1: Due to risks and uncertainties, associated with their business, which include the risk factors disclosed in their Form 10-K filed with the Securities and Exchange Commission on March 31, 2026, as may be amended or supplemented by other reports filed by the company with the Securities and Exchange Commission from time to time.

Speaker #1: Forward-looking statements include statements regarding the company’s expectations, beliefs, intentions, or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” and “would,” or similar words.

Speaker #1: All such forward-looking statements that are provided by management on this call are based on information available at this time, and management expects that their internal expectations may change over time.

Speaker #1: These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

[Company Representative] (KULR Technology Group): These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, the company assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise. With that, I will now turn the call over to Michael Mo. Michael, the call is yours.

Speaker #1: Except as otherwise required by applicable law, the company assumes no obligation to update the information included on this call, whether as a result of new information, future events, or otherwise.

Speaker #1: With that, I will now turn the call over to Michael Moe. Michael, the call is yours.

Speaker #2: Thank you, Stuart. Good afternoon, everyone. Thank you for joining. On our last earnings call, we told you 2026 would be measured by three things: product revenue growth, gross margin improvement, and cost discipline.

Michael Mo: Thank you, Stuart. Good afternoon, everyone. Thank you for joining. On our last earnings call, we told you 2026 would be measured by three things: product revenue growth, gross margin improvement, and cost discipline. I want to start today by being direct with you. Q2 fell short. Q2 revenue was $2.1 million, down significantly from both prior year and the Q1 with a gross loss. That is not the quarter we planned, and I am not going to make excuses. What I am going to do is walk you through three things: what challenged us in the Q2, what we are doing to resolve those challenges, and the growth we expect to see in the H2 of this year, and why. KULR builds high-power battery systems for the physical AI era, autonomous systems, drones, underwater vehicles, robotics, and telecom critical infrastructure.

Speaker #2: I want to start today by being direct with you. Second quarter fell short. Second quarter revenue was $2.1 million, down significantly from both the prior year and the first quarter.

Speaker #2: With a gross loss, that's not the quarter we planned. And I'm not going to make excuses. What I'm going to do is walk you through three things.

Speaker #2: What challenged us in the second quarter, what we're doing to resolve those challenges, and the growth we expect to see in the second half of this year, and why.

Speaker #2: Quarter builds high-power battery systems for the physical AI era, autonomous systems, drones, underwater vehicles, robotics, and telecom-critical infrastructure. In June, I wrote two shareholders that battery is infrastructure.

Michael Mo: In June, I wrote to shareholders that battery is infrastructure, and there is no grid in the sky, in orbit, in the ocean, or on the battlefield. Everything we do is in service of that mission, and nothing about this quarter changed it. Four things challenged us this quarter, and I will name each one. First, supply chain. New programs mean new parts, and in this environment, new parts mean long lead times and critical bottlenecks. These constraints delay the production and delivery of our battery products, and shipments we had planned for the Q2 were delayed. Second, execution focus. KULR is carrying more customer programs than our resource can execute with the speed and quality our customers demand of us. In one sense, that is a good problem. It reflects real demand, but it is still a problem, and in the Q2, it costed us.

Speaker #2: And there is no grid in the sky, in orbit, in the ocean, or on the battlefield. Everything we do is in service of that mission.

Speaker #2: And nothing about this quarter changed it. Four things challenged us this quarter, and I'll name each one. First, supply chain. New programs mean new parts, and in this environment, new parts mean long lead times and critical production and delivery of our battery products.

Speaker #2: And shipments we had planned for the second quarter were delayed. Second, execution focus. The quarter is carrying more customer programs than our resources can execute with the speed and quality our customers demand of us.

Speaker #2: Now, in one sense, this is a good problem. It reflects real demand. But it's still a problem. And in the second quarter, it cost us.

Speaker #2: We're evaluating all of our customer engagements and prioritizing our engineering and manufacturing resources toward the highest-value opportunities. Third, alignment. The board and management changes during the quarter consumed a significant amount of management bandwidth and slowed decision-making.

Michael Mo: We are evaluating all of our customer engagements and prioritizing on engineering and manufacturing resources towards the highest value opportunities. Third, alignment. The board and management changes during the quarter consumed a significant amount of management bandwidth and slowed decision-making. That transition is now behind us. Mike Kimel, our Chief Financial Officer, will talk about how we are taking this opportunity to step back and reassess some of our business processes. Fourth, production capacity. Our new Texas facility was not yet contributing in the Q2. The good news is that the facility and the production lines are coming up nicely, and we expect them to be operational in the Q3. As we work through these challenges, I believe that the demand for our products and services remains strong. Our business shift to the right, and we are in the very early phase of this market growth in the United States.

Speaker #2: That transition is now behind us. Mike Kimmel, our Chief Financial Officer, will talk about how we're taking this opportunity to step back and reassess some of our business processes.

Speaker #2: Fourth, production capacity. Our new Texas facility was not yet contributing in the second quarter. The good news is that the facility and the production lines are coming up nicely, and we expect them to be operational in the third quarter.

Speaker #2: As we work through these challenges, I believe that the demand for our products and services remains strong. Our business shifted to the right, and we're in the very early phase of this market growth in the United States.

Speaker #2: Look underneath the quarterly fluctuations, and you can see that our core energy platform business remained essentially stable on the first half basis. Energy management platform revenue was $4.76 million versus $4.73 million in the prior year period.

Michael Mo: Look underneath the quarterly fluctuations and you can see that our core energy platform business remained essentially stable on a H1 basis. Energy management platform revenue was $4.76 million versus $4.73 million in the prior period, slightly higher year-over-year. Total H1 revenue was $6.03 million versus $6.1 million a year ago. The composition of that revenue shows that demand is broadening. Q2 product sales was driven principally by two large orders, both from new customers and both involving new battery configurations. We are not just selling more of the same product to the same customer base. We are bringing new battery configurations into new accounts, and that is exactly the type of customer expansion we want to see as KULR ONE scales. Now, let me tell you what we are doing to resolve these challenges. Four things, and they map directly what I just described.

Speaker #2: Slightly higher year-over-year: $6.03 million versus $6.1 million a year ago. And the composition of that revenue shows that demand is broadening. Second quarter product sales were driven principally by two large orders, both from new customers and both involving new battery configurations.

Speaker #2: We're not just selling more of the same product to the same customer base. We're bringing new battery configurations into new accounts and that's exactly the type of customer expansion we want to see as quarter one scales.

Speaker #2: Now, let me tell you what we're doing to resolve these challenges. Four things, and they map directly what I just described. First, we're prioritizing the operating business above all else.

Michael Mo: First, we are prioritizing the operating business above all else. Our priority is clear. Deploy our technology, our capital, our people towards scaling KULR ONE and building a world-class energy system platform for physical AI economy. That means the same three accountability measures that we laid out in June, product revenue growth, gross margin improvement, and cost discipline, center around five markets, space and defense, drones and autonomous vehicles, telecom and critical infrastructure, and robotics. Within that, we are qualifying our customer engagements more carefully, concentrating our best engineering and production talent on the programs with the strongest economics and strategic value. Second, we are simplifying. Since the Q2 close, we exited Bitcoin mining, and we repaid our $20 million credit facility in full using proceeds from Bitcoin sales without issuing a single share through our ATM this year.

Speaker #2: Our priority is clear: deploy our technology, our capital, and our people toward scaling Q1 and building a world-class energy system platform for the physical AI economy.

Speaker #2: That means the same three accountability measures that we laid out in June. Product revenue growth, gross margin improvement, and cost discipline center around five markets, space and defense, drones and autonomous vehicles, telecom and critical infrastructure, and robotics.

Speaker #2: And within that, we're qualifying our customer engagements more carefully, concentrating our best engineering and production talent on the programs with the strongest economics and strategic value.

Speaker #2: Second, we're simplifying. Since the second quarter closed, we exited Bitcoin mining and repaid our $20 million credit facility in full using proceeds from Bitcoin sales.

Speaker #2: Without issuing a single share through our ATM this year. The board and the management team have decided to divest our Bitcoin treasury to focus on to focus our balance sheet on the operating business.

Michael Mo: The board and the management team have decided to divest our Bitcoin treasury to focus our balance sheet on the operating business. Mike Kimel will walk you through the balance sheet logic. But the principle is simple, reduce volatility, preserve flexibility, and then let the management team and investors see the operating business clearly. With approximately $60 million on our balance sheet and no debt, we believe we have the financial resources to execute our growth strategy. We have also brought some early-stage activities to an orderly conclusion with the conservative reserves Mike Kimel will describe. Third, we are fixing alignment and execution. The leadership team is now set, aligned with technology go-to-market strategy oriented four members, a CFO who is operationally focused, and clear priorities.

Speaker #2: Mike Kimmel will walk you through the balance sheet logic. But the principle is simple. Reduce volatility, preserve flexibility, and let the management team and investors see the operating business clearly.

Speaker #2: With approximately $60 million on our balance sheet and no debt, we believe we have the financial resources to execute our growth strategy. We have also brought some early-stage activities to an orderly conclusion with the conservative reserves Mike Kimmel will describe.

Speaker #2: Third, we're fixing alignment and execution. The leadership team is now set and aligned, with technology, go-to-market strategy-oriented board members, and a CFO who is operationally focused and has clear priorities.

Speaker #2: On that foundation, a company-wide operating review is underway to standardize our data, refine our workflows, strengthen the systems that give management real operational visibility, and become more selective about the vendors and customers that we partner with.

Michael Mo: On that foundation, a company-wide operating review is underway to standardize our data, refine our workflows, strengthen the systems that give management real operational visibility, and become more selective about the vendors and customers that we partner with. Fourth, we are building capacity. We are building a full stack operation in Texas, design, prototyping, testing, certification, manufacturing, battery management software, and electronics all together under one roof. In May, we signed a lease on approximately 25,000 square foot facility to expand our manufacturing footprint. A new automated production line for both cylindrical and pouch cells will be operational in that facility. On the supply chain side, we are multi-sourcing components to reduce single supplier as a critical bottleneck. Our cell-agnostic architecture let us qualify multiple chemistries and form factors. We are investing more in production readiness.

Speaker #2: Fourth, we're building capacity. We're building a full-stack operation in Texas designed prototyping, testing, certification, manufacturing, battery management software and electronics all together under one roof.

Speaker #2: In May, we signed a lease on approximately 25,000 square foot facility to expand our manufacturing footprint. And a new automated production line for both surgical and pouch sales will be operational in that facility.

Speaker #2: On the supply chain side, we're a multi-sourcing components to reduce single supplier as critical bottleneck. Our cell agnostic architecture that has qualified multiple chemistries and form factors.

Speaker #2: And we're investing more in production readiness. Raw materials inventory is up roughly fivefold since the end of 2025, and you should expect inventory to increase further in the second half as we position ourselves to meet anticipated demands.

Michael Mo: Raw materials inventory is up roughly five-fold since end of 2025, and you should expect inventory to increase further in the H2 as we position ourselves to meet anticipated demands. The infrastructure we're putting in place is designed to shorten the path from customer requirements to prototype, to qualification, to volume production. That vertical integration is central to how we improve speed, control, and ultimately economics. Let me share with you on why we expect the H2 to look different. The American drone market is converting from policy to purchase orders. The United States is at the early cycle of its unmanned system build-out. Europe shows where that curve goes. Ukraine produced roughly 4 million drones last year and is targeting 7 million this year. The United States, by comparison, produced on the order of 100,000 small drones a year.

Speaker #2: The infrastructure we're putting in place is designed to shorten the path from customer requirements to prototype, to qualification, to volume production. That vertical integration is central to how we improve speed, control, and ultimately economics.

Speaker #2: Now, let me share with you why we expect the second half to look different. The American drone market is converting from policy to purchase orders.

Speaker #2: The United States is at the early cycle of its unmanned system build-out. Europe shows where that curve goes. Ukraine produced roughly 4 million drones last year and is targeting 7 million this year.

Speaker #2: The United States, by comparison, produced on the order of 100,000 small drones a year. And Washington has decided to close that gap. Department of Wars $1.1 billion drone dominance program moved from plan to purchase order this summer.

Michael Mo: Washington has decided to close that gap. Department of Defense's $1.1 billion Drone Dominance program moved from plan to purchase order this summer. The first delivery order has been accepted. Roughly 30,000 units are being delivered right now, and the department has said it will order 60,000 more in September on the way to hundreds of thousands of drones by 2027. The fiscal 2027 budget request includes more than $70 billion for drones and counter-drone systems, the largest such investment in the US history. Here's why that matters for KULR. American drone makers are being required to stop using foreign parts, including batteries. That makes American-made power like ours more important every quarter. When drones are classified as consumables, batteries become consumables too, which means recurring demand. The rest of the market tells the same story.

Speaker #2: The first delivery order has been accepted. Roughly 30,000 units are being delivered right now. And the department has set it will order 60,000 more in September on the way to hundreds of thousands of drones by 2027.

Speaker #2: The fiscal 2027 budget requests include more than $70 billion for drones and counter-drone systems, the largest such investment in U.S. history. Here's why that matters for KULR.

Speaker #2: American drone makers are being required to stop using foreign parts, including batteries. That makes American-made power like ours more important every quarter. And when drones are classified as consumables, batteries become consumables too, which means recurring demand.

Speaker #2: The rest of the market tells the same story. One of the largest drone battery cell suppliers in the market reported this month that about 16% of its latest quarterly revenue came from North America, while roughly 70% came from Europe and the Middle East, much of it shipping directly to Ukraine.

Michael Mo: One of the largest drone battery cell suppliers in the market reported this month that about 16% of its latest quarterly revenue came from North America, while roughly 70% came from Europe and the Middle East, much of it shipping directly to Ukraine. The overseas cycle is at scale. The American cycle is just beginning to convert to orders. That's a demand wave that KULR is positioned for. We're executing across dozens of active customer programs, supporting Drone Dominance-related customers, maritime programs, and "space programs." In Q2, we secured initial defense drone battery orders from a US drone maker participating in the Drone Dominance initiative. It is a customer opportunity that exceeds $5 million. We demonstrated KULR ONE Air with next-generation solid-state cells at over 350 watt-hour per kilogram, and were selected by Orion Space Solutions as battery providers for its orbital transport mission.

Speaker #2: The overseas cycle is at scale. The American cycle is just beginning to convert to orders. That's a demand wave that KULR is positioned for.

Speaker #2: We're executing across dozens of active customer programs, supporting drone dominance-related customers, maritime programs, and KULR space programs. In the second quarter, we secured initial defense drone battery orders from a U.S. drone maker participating in the drone dominance initiative.

Speaker #2: It is a customer opportunity that exceeds $5 million. We demonstrated KULR on air with next-generation solid-state cells at over $350 watt-hour per kilogram. And we're select by Oracle Space as battery providers for its orbital transfer transport mission.

Speaker #2: Meanwhile, we're building the ecosystem around batteries. Not just the pack itself, we're now sampling NDA-compliant 6S chargers, supporting both cylindrical and pouch cells. We have completed our 18S charger prototype and by the end of 2026, we expect to be shipping NDA-compliant chargers to US customers.

Michael Mo: Meanwhile, we're building the ecosystem around batteries, not just the pack itself. We're now sampling NDAA-compliant 6S chargers, supporting both cylindrical and pouch cells. We have completed our 18S charger prototype, and by the end of 2026, we expect to be shipping NDAA-compliant chargers to US customers. Power, thermal management, BMS, charging, all from one compliant stack, engineered and built by one supplier. That's how we're positioning KULR ONE to be the power platform for physical AI. So here's how the H2 of 2026 could look like in summary. Delay shipments will be recovering. New Texas facility and battery production lines will be operational and contributing to the business. Pack volume starting to ramp, and NDAA-compliant power electronics and chargers shipping by the end of the year. While US drone procurement cycles is converting into orders.

Speaker #2: Power, thermal management, BMS, charging, all from one compliant stack, engineered and built by one supplier. That's how we're positioning KULR 1 to be the power platform for physical AI.

Speaker #2: So here's how the second half of 2026 could look in summary: Delayed shipments will be recovering. The new Texas facility and battery production lines will be operational and contributing to the business.

Speaker #2: Pack volume is starting to ramp, and NDA-compliant power electronics and chargers are shipping by the end of the year. Meanwhile, US drone procurement cycles are converting into orders.

Speaker #2: One quarter doesn't make a turnaround for us in Q1, and one difficult quarter doesn't break the plan. Hold us accountable for the same three measures we set out in June: product, revenue growth, gross margin improvement, and cost discipline.

Michael Mo: One quarter doesn't make a turnaround for us in Q1, and one difficult quarter doesn't break the plan. Hold us accountable for the same three measures we set out in June: product revenue growth, gross margin improvement, and cost discipline. The mission has not changed. The market is ripening, and our job is to execute, build more batteries, and sell more batteries. With that, let me turn the call over to Mike Kimel to take you through the financials and operating changes underway.

Speaker #2: The mission has not changed. The market is riving and our job is to execute, build more batteries, and sell more batteries. With that, let me turn the call over to Mike Kimmel to take you through the financials and operating changes underway.

Speaker #3: Thank you, Mike. We make batteries and we sell batteries. That's what I wanted to discuss today. Unfortunately, our second quarter results were below our expectations and today I want to focus on the actions we are taking to strengthen performance and position the business for growth.

Michael Kimel: Thank you, Mike. We make batteries, and we sell batteries. That's what I wanted to discuss today. Unfortunately, our Q2 results were below our expectations, and today I want to focus on the actions we are taking to strengthen performance and position the business for growth. We fell short on both revenue and profitability, and we're not satisfied with that outcome. Since quarter end, though, we've moved quickly, sharpening our priorities, simplifying the business, and concentrating our resources on the opportunities we believe can create the most value. There were also meaningful areas of progress during the quarter. We reduced SGA spending compared with both the Q2 of last year and the Q1 of this year, which reflects real, if early, progress in making this company more efficient. SGA declined about 9% year-over-year in Q2 and approximately 5% in the H1.

Mike Kimel: Thank you, Mike. We make batteries, and we sell batteries. That's what I wanted to discuss today. Unfortunately, our Q2 results were below our expectations, and today I want to focus on the actions we are taking to strengthen performance and position the business for growth. We fell short on both revenue and profitability, and we're not satisfied with that outcome. Since quarter end, though, we've moved quickly, sharpening our priorities, simplifying the business, and concentrating our resources on the opportunities we believe can create the most value. There were also meaningful areas of progress during the quarter. We reduced SGA spending compared with both the Q2 of last year and the Q1 of this year, which reflects real, if early, progress in making this company more efficient. SGA declined about 9% year-over-year in Q2 and approximately 5% in the H1.

Speaker #3: We fell short on both revenue and profitability, and we were not satisfied with that outcome. Since quarter-end, though, we've moved quickly—sharpening our priorities, simplifying the business, and concentrating our resources on the opportunities we believe can create the most value.

Speaker #3: There were also meaningful areas of progress during the quarter. We reduced SG&A spending compared with both the second quarter of last year and the first quarter of this year, which reflects real if early progress in making this company more efficient.

Speaker #3: SG&A declined about 9% year over year in Q2, and approximately 5% in the first half. First half R&D expense was also about 3% lower.

Michael Kimel: H1 R&D expense was also about 3% lower. Cost discipline is not enough. A company cannot cut its way to prosperity. We also have to convert demand into revenue, serve our customers well, and execute consistently. That's where we are directing our attention now. We're becoming more deliberate about where every dollar goes. To be clear, the goal isn't just to spend less, but to move resources away from activities that are not central to the business and toward the products and programs that can drive revenue and manufacturing scale. Increasingly, that means focusing our capital, manufacturing capability, and commercial efforts around KULR ONE. These actions reflect a company becoming increasingly focused on production, commercialization, and disciplined capital allocation. From my perspective as CFO, that means maintaining conservative financial practices, strengthening our processes, and building an operating structure that can support a larger business.

Mike Kimel: H1 R&D expense was also about 3% lower. Cost discipline is not enough. A company cannot cut its way to prosperity. We also have to convert demand into revenue, serve our customers well, and execute consistently. That's where we are directing our attention now. We're becoming more deliberate about where every dollar goes. To be clear, the goal isn't just to spend less, but to move resources away from activities that are not central to the business and toward the products and programs that can drive revenue and manufacturing scale. Increasingly, that means focusing our capital, manufacturing capability, and commercial efforts around KULR ONE. These actions reflect a company becoming increasingly focused on production, commercialization, and disciplined capital allocation. From my perspective as CFO, that means maintaining conservative financial practices, strengthening our processes, and building an operating structure that can support a larger business.

Speaker #3: But cost discipline is not enough. A company cannot cut its way to prosperity. We also have to convert demand into revenue, serve our customers well, and execute consistently.

Speaker #3: That's where we are directing our attention now. We're becoming more deliberate about where every dollar goes. To be clear, the goal isn't just to spend less, but to move resources away from activities that are not central to the business and toward the products and programs that can drive revenue and manufacturing scale.

Speaker #3: Increasingly, that means focusing our capital, manufacturing capability, and commercial efforts around Cooler One. These actions reflect a company becoming increasingly focused on production, commercialization, and disciplined capital allocation.

Speaker #3: From my perspective as CFO, that means maintaining conservative financial practices, strengthening our processes, and building an operating structure that can support a larger business.

Speaker #3: I also want to talk about our Bitcoin position. The treasury strategy provided financial flexibility, including the ability to repay our $20 million credit facility after quarter-end.

Michael Kimel: I also want to talk about our Bitcoin position. The treasury strategy provided financial flexibility, including the ability to repay our $20 million credit facility after quarter end. At the same time, though, carrying a large digital asset position introduces meaningful volatility into both the balance sheet and reported results. Of our approximately $51 million H1 net loss, about $31.4 million reflected the non-cash mark-to-market change in the value of our digital asset holdings. That's worth repeating. That movement was unrelated to the operating performance of the battery business. As we evaluated our capital priorities, we determined that simplifying the digital asset position would give us greater flexibility and allow us to concentrate more fully on the operating business. That's why, since the quarter closed, we've exited Bitcoin mining, begun reducing our Bitcoin holdings in a deliberate manner, and taken steps to simplify the balance sheet.

Mike Kimel: I also want to talk about our Bitcoin position. The treasury strategy provided financial flexibility, including the ability to repay our $20 million credit facility after quarter end. At the same time, though, carrying a large digital asset position introduces meaningful volatility into both the balance sheet and reported results. Of our approximately $51 million H1 net loss, about $31.4 million reflected the non-cash mark-to-market change in the value of our digital asset holdings. That's worth repeating. That movement was unrelated to the operating performance of the battery business. As we evaluated our capital priorities, we determined that simplifying the digital asset position would give us greater flexibility and allow us to concentrate more fully on the operating business. That's why, since the quarter closed, we've exited Bitcoin mining, begun reducing our Bitcoin holdings in a deliberate manner, and taken steps to simplify the balance sheet.

Speaker #3: At the same time, though, carrying a large digital asset position introduces meaningful volatility into both the balance sheet and reported results. Of our approximately $51 million first half net loss, about $31.4 million reflected the non-cash mark-to-market change in the value of our digital asset holdings.

Speaker #3: That's worth repeating. That movement was unrelated to the operating performance of the battery business. As we evaluated our capital priorities, we determined that simplifying the digital asset position would give us greater flexibility and allow us to concentrate more fully on the operating business.

Speaker #3: That's why, since the quarter close, we've exited Bitcoin mining, begun reducing our Bitcoin holdings in a deliberate manner, and taken steps to simplify the balance sheet.

Speaker #3: We used proceeds from the sale of 333 Bitcoin to fully repay the $20 million Coinbase loan, releasing the 565 Bitcoin pledged as collateral. We also terminated our mining services agreement, eliminating about $2.1 million of remaining operating expense commitments for a $150,000 termination fee.

Michael Kimel: We used proceeds from the sale of 333 Bitcoin to fully repay the $20 million Coinbase loan, releasing the 565 Bitcoin pledged as collateral. We also terminated our mining services agreement, eliminating about $2.1 million of remaining operating expense commitments for a $150,000 termination fee. Going forward, the board has authorized management to sell any and all Bitcoin holdings and to focus on the core business. Each of these steps reduces balance sheet volatility and simplifies the business. They also increase our flexibility to allocate capital based on the needs and opportunities of the operating business. The principle behind these decisions is simple: support the operating business, preserve flexibility, and remain mindful of dilution. Consistent with that approach, we were able to avoid issuing any shares through the ATM during the H1 2026.

Mike Kimel: We used proceeds from the sale of 333 Bitcoin to fully repay the $20 million Coinbase loan, releasing the 565 Bitcoin pledged as collateral. We also terminated our mining services agreement, eliminating about $2.1 million of remaining operating expense commitments for a $150,000 termination fee. Going forward, the board has authorized management to sell any and all Bitcoin holdings and to focus on the core business. Each of these steps reduces balance sheet volatility and simplifies the business. They also increase our flexibility to allocate capital based on the needs and opportunities of the operating business. The principle behind these decisions is simple: support the operating business, preserve flexibility, and remain mindful of dilution. Consistent with that approach, we were able to avoid issuing any shares through the ATM during the H1 2026.

Speaker #3: Going forward, the board has authorized management to sell any and all Bitcoin holdings and to focus on the core business. Each of these steps reduces balance sheet volatility and simplifies the business.

Speaker #3: They also increase our flexibility to allocate capital based on the needs and opportunities of the operating business. The principal behind these decisions is simple.

Speaker #3: Support the operating business, preserve flexibility, and remain mindful of dilution. Consistent with that approach, we were able to avoid issuing any shares through the ATM during the first half of 2026.

Speaker #3: At the same time, the Board and management have been refining the company's strategic priorities and operating structure to support the next stage of KULR's development.

Michael Kimel: At the same time, the board and management have been refining the company's strategic priorities and operating structure to support the next stage of KULR's development. The board changes announced on 28 April and the management realignment in June accelerated that work and gave us the opportunity to sharpen priorities, simplify decision-making, and align resources more closely with the core business. That company-wide operating review is underway right now. As part of the review, we've identified opportunities to improve data consistency, increase the use of existing ERP functionality, and strengthen the operational visibility available to management. We've also reviewed our professional services relationships with a clear focus on cost, performance, and value. Depending on the situation, we are evaluating bringing work in-house and renegotiating terms or moving to a provider that better fits our needs. We are applying the same discipline to how we evaluate customer and program economics.

Mike Kimel: At the same time, the board and management have been refining the company's strategic priorities and operating structure to support the next stage of KULR's development. The board changes announced on 28 April and the management realignment in June accelerated that work and gave us the opportunity to sharpen priorities, simplify decision-making, and align resources more closely with the core business. That company-wide operating review is underway right now. As part of the review, we've identified opportunities to improve data consistency, increase the use of existing ERP functionality, and strengthen the operational visibility available to management. We've also reviewed our professional services relationships with a clear focus on cost, performance, and value. Depending on the situation, we are evaluating bringing work in-house and renegotiating terms or moving to a provider that better fits our needs. We are applying the same discipline to how we evaluate customer and program economics.

Speaker #3: The board changes announced on April 28, and the management realignment in June, accelerated that work and gave us the opportunity to sharpen priorities, simplify decision-making, and align resources more closely with the core business.

Speaker #3: That company-wide operating review is underway right now. As part of the review, we've identified opportunities to improve data consistency, increase the use of existing ERP functionality, and strengthen the operational visibility available to management.

Speaker #3: We've also reviewed our professional services relationships with a clear focus on cost, performance, and value. Depending on the situation, we are evaluating bringing work in-house, renegotiating terms, or moving to a provider that better fits our needs.

Speaker #3: We are applying the same discipline to how we evaluate customer and program economics. Not every opportunity warrants the same commitment of engineering and manufacturing resources, and we intend to prioritize the programs that offer the strongest combination of economic and strategic value.

Michael Kimel: Not every opportunity warrants the same commitment of engineering and manufacturing resources, and we intend to prioritize the programs that offer the strongest combination of economic and strategic value. Our engineering and production resources are valuable, and the resources applied to one program are resources that cannot be deployed elsewhere. As the company grows, we can be increasingly selective about where we deploy those resources. Since quarter end, we have strengthened the way we qualify new opportunities and evaluate existing ones. That doesn't mean walking away from difficult work. It does mean being more thoughtful about whether the economics and strategic value of a program justify the engineering and manufacturing resources it requires. We're standardizing data, rebuilding workflows, and building better systems.

Mike Kimel: Not every opportunity warrants the same commitment of engineering and manufacturing resources, and we intend to prioritize the programs that offer the strongest combination of economic and strategic value. Our engineering and production resources are valuable, and the resources applied to one program are resources that cannot be deployed elsewhere. As the company grows, we can be increasingly selective about where we deploy those resources. Since quarter end, we have strengthened the way we qualify new opportunities and evaluate existing ones. That doesn't mean walking away from difficult work. It does mean being more thoughtful about whether the economics and strategic value of a program justify the engineering and manufacturing resources it requires. We're standardizing data, rebuilding workflows, and building better systems.

Speaker #3: Our engineering and production resources are valuable, and they are resources that cannot be deployed elsewhere. As the company grows, we can be increasingly selective about where we deploy those resources.

Speaker #3: And since quarter-end, we have strengthened the way we qualify new opportunities and evaluate existing ones. Now, that doesn't mean walking away from difficult work.

Speaker #3: It does mean being more thoughtful about whether the economics and strategic value of a program justify the engineering and manufacturing resources it requires. We're standardizing data, rebuilding workflows, and building better systems.

Speaker #3: As KULR moves from a business historically centered on R&D and highly customized, lower-volume work toward larger and more repeatable production, our operating infrastructure is evolving with it.

Michael Kimel: As KULR moves from a business historically centered on R&D and highly customized, lower volume work toward larger and more repeatable production, our operating infrastructure is evolving with it. We're designing processes to support greater scale, accountability, visibility, and speed. The point of that is not to build more bureaucracy. It's to give our people better information, clearer accountability, and systems that allow the company to grow without adding unnecessary complexity. This is an ongoing process, and a number of changes are already underway. We're building a company that's more focused, more efficient, and better positioned to scale. Where does that leave us? Q2 was a challenging quarter, but our view of the underlying opportunity hasn't changed. Demand remains, our customers are engaged, and we continue to see attractive opportunities across our core markets. Our focus is now straightforward.

Mike Kimel: As KULR moves from a business historically centered on R&D and highly customized, lower volume work toward larger and more repeatable production, our operating infrastructure is evolving with it. We're designing processes to support greater scale, accountability, visibility, and speed. The point of that is not to build more bureaucracy. It's to give our people better information, clearer accountability, and systems that allow the company to grow without adding unnecessary complexity. This is an ongoing process, and a number of changes are already underway. We're building a company that's more focused, more efficient, and better positioned to scale. Where does that leave us? Q2 was a challenging quarter, but our view of the underlying opportunity hasn't changed. Demand remains, our customers are engaged, and we continue to see attractive opportunities across our core markets. Our focus is now straightforward.

Speaker #3: We're designing processes to support greater scale, accountability, visibility, and speed. But the point of that is not to build more bureaucracy; it's to give our people better information, clearer accountability, and systems that allow the company to grow without adding unnecessary complexity.

Speaker #3: This is an ongoing process and a number of changes are already underway. We're building a company that's more focused, more efficient, and better positioned to scale.

Speaker #3: So where does that leave us? Q2 was a challenging quarter, but our view of the underlying opportunity hasn't changed. Demand remains. Our customers are engaged, and we continue to see attractive opportunities across our core markets.

Speaker #3: Our focus is now straightforward. Concentrate our resources around the core battery business with cooler one at the center of that effort and convert demand into revenue more consistently.

Michael Kimel: Concentrate our resources around the core battery business, with KULR ONE at the center of that effort, and convert demand into revenue more consistently. We believe strongly in our products, our customer relationships, and the markets we serve. The changes we are making are designed to put more of our capital, manufacturing capability, and management attention behind those strengths. Becoming leaner and more focused doesn't mean retreating from growth. It means directing resources toward the programs and customers where we believe they can create the greatest value while building the operating infrastructure necessary to support a larger business. We have also identified additional applications for our battery systems that could open new markets over time. We will talk about those when they are further along and appropriate to share. The immediate priority is the business already in front of us. Demand remains that the company concentrates resources around KULR ONE.

Mike Kimel: Concentrate our resources around the core battery business, with KULR ONE at the center of that effort, and convert demand into revenue more consistently. We believe strongly in our products, our customer relationships, and the markets we serve. The changes we are making are designed to put more of our capital, manufacturing capability, and management attention behind those strengths. Becoming leaner and more focused doesn't mean retreating from growth. It means directing resources toward the programs and customers where we believe they can create the greatest value while building the operating infrastructure necessary to support a larger business. We have also identified additional applications for our battery systems that could open new markets over time. We will talk about those when they are further along and appropriate to share. The immediate priority is the business already in front of us. Demand remains that the company concentrates resources around KULR ONE.

Speaker #3: We believe strongly in our products, our customer relationships, and the markets we serve. The changes we're making are designed to put more of our capital, manufacturing capability, and management attention behind those strengths.

Speaker #3: Becoming leaner and more focused doesn't mean retreating from growth. It means directing resources toward the programs and customers where we believe they can create the greatest value, while building the operating infrastructure necessary to support a larger business.

Speaker #3: We've also identified additional applications for our battery systems that could open new markets over time. We'll talk about those when they're further along and appropriate to share.

Speaker #3: But the immediate priority is the business already in front of us. Demand remains as the company concentrates resources around Cooler One. Management's job is now to convert that demand into consistent revenue, improve profitability, and drive sustainable growth.

Michael Kimel: Management's job is now to convert that demand into consistent revenue, improved profitability, and sustainable growth. That is where our attention is focused, where our resources are going, and how we intend to measure our progress. Thank you very much.

Mike Kimel: Management's job is now to convert that demand into consistent revenue, improved profitability, and sustainable growth. That is where our attention is focused, where our resources are going, and how we intend to measure our progress. Thank you very much.

Speaker #3: That's where our attention is focused, where our resources are going, and how we intend to measure our progress. Thank you very much.

Speaker #1: Thank you, Mike. And thank you very much, Michael Moe. That concludes our call for today. I will now turn the call back over to our operator.

[Company Representative] (KULR Technology Group): Thank you, Mike, and thank you very much, Michael Mo. That concludes our call for today. I will now turn the call back over to our operator. Thank you so much for joining us. Operator, the call is yours.

Speaker #1: Thank you so much for joining us. Operator, the call is yours.

Speaker #2: Thank you. This does conclude today's webcast and conference call. You may disconnect at this time and have a wonderful day. Thank you once again for your participation.

Operator 2: Thank you. This does conclude today's webcast and conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.

Operator: Thank you. This does conclude today's webcast and conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.