KULR Technology Group, Inc. — Call Transcript 2026

Good afternoon, everyone. Thank you for joining. On our last earnings call, we told you 2026 will be measured by product revenue growth, gross margin improvement, and cost discipline. Q1 showed progress against each of these priorities. Total revenue grew 98% year-over-year to $4.8 million compared to $2.4 million in Q1 2025. Product sales grew 84% year-over-year to $2.1 million. Overall blended gross margin was approximately 29%, up from 8% of Q1 2025. Product sales gross margin was 26%. Total loss from operations decreased approximately 22% year-over-year. As we move from platform development into production scaling, we signed a new lease for additional 25,000 sq ft of manufacturing space to support new battery production lines and high volume customer programs. We remain in solid financial position with approximately $19 million in cash as of today and approximately 1,085 BTC in our treasury. We're committing all of our financial resources to our battery business and not acquiring any Bitcoin with cash. The only Bitcoin acquisition is through our existing BTC mining contracts. One quarter does not make a turnaround, but Q1 is evidence that the vision and discipline we commit to for 2026 is starting to translate into measurable results. KULR is beginning to scale its battery business with better cost discipline and improve operating leverage. The core objective of 2026 is straightforward. Scale the KULR ONE platform to build more batteries, sell more batteries while converting customer traction into margin-accretive revenue. Let me start with KULR ONE Air. Before walking through the program updates, I want to remind everyone why KULR ONE Air is positioned the way it is. On our last earnings call, I explained that the high growth markets KULR serves, autonomous platforms, direct energy systems, and digital infrastructure share one common technical constraint, power density. Drones, robots, and other autonomous systems do not need batteries that simply store energy. They need batteries that can deliver power at 5-20 times the discharge rate of a standard battery, sustain that output through repeated high demand cycles, and manage heat generated without failure. That's the engineering problem KULR ONE was built to solve, and it's the reason why our platform is gaining traction we're able to walk through. Power is the wedge. Every program update that follows is downstream from the core advantage. KULR ONE Air continues to gain strong traction with U.S. and NDAA-compliant drone manufacturers. Our S3P lift battery is seeing broad adoption. In this quarter, we expanded to lift pack family with additional configurations designed specifically for long duration flight applications. We've also advanced the KULR ONE Air power class for agriculture and heavy lifting applications. On the BMS side, we're on track with a customer for 6S, 12S, and 18S battery management systems targeting large UAV platforms. These are high volume, high demand applications, and KULR is well positioned to serve them. We've also completed design of mil-spec EMI-resistant BMS for drone-based defense applications. Customer development activities is increasing across defense, aerospace, space, and unmanned systems. We're seeing especially strong growth in our UAS battery programs. Existing customers are launching new drone models that require entirely new battery systems. We have also expanded the platform's reach into two important directions, into humanoid robots, where we are now engaged with two customers, and into large class two and class three drones. Working with a broad base of battery cell providers in cylindrical, pouch, and prismatic format is central to building out the KULR ONE ecosystem. The same platform architecture paired with the best available cell technology is what gives KULR ONE a roadmap that extends well beyond current production configurations. KULR ONE Air is now actively exploring configurations with NDAA-compliant solid state and lithium metal battery cell providers capable of exceeding 380 Wh/kg. I'm very excited about these developments. The same engineering discipline build the architecture first, then bring the best cell technology to it, is what defines our work in space in Triton, which I'll cover next. On the space side of our operation, I wanna start with the point that we made in our last earnings call. KULR ONE Space is not just a product line, it's the program that sets the performance standard for the entire KULR ONE portfolio. Space operates in an environment where battery failure is not recoverable. Every performance requirement met in a spacecraft, propagation resistance, thermal stability under extreme conditions, certification under scrutiny raises the engineering baseline that KULR ONE Air, MAX, and our maritime platforms inherit. Customers in defense drone, electric aviation, and AI data center programs are buying integrated architecture that has already been qualified in the most demanding operating environments. With that as context, I'm pleased to report that KULR ONE Space was selected by several additional LEO and GEO missions this quarter. This continues the validation that the platform and the trust our customers are placing in us for mission-critical applications. Our XLT and Reach series batteries remain active deployment across multiple satellite programs in both LEO and GEO. Recent investments in our BMS are enabling higher radiation tolerance and improved current carrying capabilities, both critical for expanded space missions. I also wanna give you a brief update on our KULR ONE Triton, our maritime battery family. Triton extends the same engineering principle I just described, the architecture first, safety first standards developed for space into autonomous surface and subsea systems. We're developing and testing Triton in partnership with several OEMs, bringing aerospace-grade and Navy 9310 reliability standards to a market where battery failure underwater carries similar non-recoverable consequences. Consistent with the cell partnership theme I covered earlier, we're currently testing Triton across multiple chemistries, solid state, nickel metal hydride, and small format lithium-ion, to identify the optimal configuration for next generation autonomous maritime vehicles. It's an exciting and fast-growing market, KULR's building the right foundation to compete in it. Moving to our data center platform. On our last earnings call, we described the shift underway in the industry. As AI workloads grow and hardware becomes more power intensive, battery backup is moving out of the dedicated UPS room into computing rack itself. A battery operating next to the processor it protects must meet higher safety standards, handle higher voltage, and responds faster than conventional backup systems. This is the opportunity for KULR ONE MAX is built for. This quarter, KULR attend the Open Compute Project EMEA Summit, where we met with major data center OEMs. Our focus was to license our PPR and thermal management IP for data center BBU applications. The data center market is enormous, and KULR's PPR architecture and thermal expertise give us a technology edge that OEMs want access to. We'll continue to advance the design and optimization of our KULR ONE MAX, our 48 V high power PPR BBU platform. Progress this quarter includes advances in power conversion efficiency, continued development of our custom distributed BMS, and PPR testing for higher energy 2170 cells. We're targeting edge, AI data center, and telecom infrastructure with this platform. Speaking of telecom infrastructure market, we observed the shift underway in telecom industry. 5G rollouts and rising uptime requirements are pushing operators away from legacy lead acid systems towards lithium ion. At the same time, operators are looking to move battery backup assets off the balance sheet entirely, shifting CapEx from non-recurring revenue assets into lower cost OpEx models with clear total cost of ownership advantages. KULR's position in this market is unique. We're demonstrating to operators that we have a proven, safe, and reliable option to contract the mission-critical DC power as a full service and never have to buy a battery again. Our platform pairs the KULR ONE battery architecture with operational and financial structure operators need to make that transition. On execution this quarter, we delivered production battery pack against our existing supply commitments, and we remain on track with the manufacturing consolidation milestones we outlined on our last earnings call. Beyond those committed programs, we now have over half a dozen engagements with telecom service providers on KULR ONE battery-as-a-service, a clear sign that the market opportunity that we described in March is materialized. I'd like to address the board changes we announced on April 28th. We appointed two new directors, Ben Frank from Microsoft and Mr. Mike Kimel, and at the same time streamlined the board to three members, two of whom are independent. The smaller, more focused board is itself part of the operating principle message. It reduces SG&A and ensures that every director seat directly contributes to expertise that we need to scale. These two appointments are not generic board additions. Each one was able to fill a specific gap that becomes critical as KULR moves from platform development into platform monetization. Mr. Frank is the Director of Workforce AI Solutions Engineering at Microsoft, where he leads engineering teams supporting large enterprise customers deploying AI platforms within Microsoft's Energy and Resource organization. Microsoft is one of the best technology companies in the world that won its markets by building an ecosystem platform and then opening that platform to broad range of partners, customers, and developers. That's the playbook KULR is running with KULR ONE. The KULR ONE ecosystem is built as follows, opening the architecture to multiple cell chemistry partners across cylindrical, pouch, and prismatic formats. Build the battery management software electronics to increase customer stickiness to the KULR ONE platform. Pursuing IP license for AI data center BBU applications, and expand the customer base in defense, aerospace, maritime, and humanoid robotics. Ben Frank brings first hand experience from inside the most successful enterprise ecosystem company of the modern era, applying directly to AI-driven industries that are core KULR end markets. Dr. Kimel has more than 30 years of experience as corporate executive, consultant, and academic, specifically focused on pricing strategies and margin performance. He holds a PhD in economics from UCLA and has previously held senior pricing positions at OmniSource, Toyo Tires, and Sears Holdings. His expertise is perfectly aligned with our 2026 mission, build and sell more batteries for product revenue growth, higher margins, and reduced costs. Dr. Kimel's appointment is how we institutionalize that progress, bring discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. Before turning the call over, I wanna share one observation about the way the industry is headed. In recent weeks, a public traded UAV component company has agreed to acquire a U.S. drone battery manufacturer for over $50 million, adding battery capabilities to a portfolio that over the past 12 months has been assembled through separate acquisitions of drone software, motor manufacturing and distribution, alongside a $75 million strategic materials purchase. We view this as validation. The UAV and broader autonomous system supply chain is consolidating around three requirements: NDAA compliance, domestic vertical integration, and a complete component ecosystem rather than a single product. That's exactly the pro-platform that KULR has been building organically with in-house engineering for the last few years. Let me put our position in context. KULR already operates over 31,000 sq ft of vertically integrated R&D and production facility in our headquarters in Webster, Texas. We're adding another 25,000 sq ft of manufacturing capacity in Q2. Our portfolio spans NDAA-compliant battery packs, custom battery management system and electronics, thermal management IP, and platform architecture qualified across drone, space, maritime, AI data center, and telecom applications. We engineer the battery cell partnerships, the cell agnostic architecture, the BMS, and the safety system together, and we're doing it for end markets that extend well beyond UAVs alone. When the industry is paying over $50 million for a battery pack manufacturing operation for UAV, it tells you what the market now believes domestic vertical integrated battery capabilities can be valued at. The market will be moving and evolving towards an ecosystem platform that KULR has been investing and building for multiple end markets for many years. We're focused on building more batteries and selling more batteries. Now back to you, Stuart. All right. Thank you, Michael. Let's pivot into the investor questions that have been sent in. Here is the first question, Michael, and it is: What were the primary drivers of Q1 2026 revenue, and how should investors think about revenue visibility for the remainder of 2026? Cost reduction is already visible in Q1 numbers. R&D expense declined 28% year-over-year. SG&A declined approximately 9%. Total operating loss declined 22% year-over-year. We'll be continuing to be more disciplined about our cost structure while investing our growth. As I said in the prepared remarks, our appointment of Mike Kimel is aligned with that strategy. With his expertise in price, margin, and profit optimization, we'll bring discipline to how we price every contract, how we structure customer agreements, and how we convert revenue to durable profitability in addition to top line growth. Yes. Cost reduction is already visible in the Q1 numbers. R&D expenses was down 35% year-over-year. SG&A declined 8% year-over-year. I think we can do a lot more on that. The total operating expenses, excluding the $500,000 credit loss, declined actually 24% year-over-year. We will continue to be more disciplined on our cost structure while investing in our growth. As I said in the prepared remarks, our appointment of Dr. Mike Kimel is also aligned with that strategy. With his expertise in pricing, margin, and profit optimization, we'll be bringing discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. All right. Here's question number three then. How many KULR ONE Air programs are moving from prototype or development work into production, and what does that imply for the second half of 2026 revenue visibility? Yes. Multiple KULR ONE Air programs are in transition. The S3P lift pack has been moved to broad adoption, as it's in production now. The expanded lift family with the long duration configurations is moving from design into quantification with customers. Also on the BMS side, the 6S, 12S, and the 18S systems for large UAV platforms are on track with customers. Our mil-spec EMI resistant BMS design is complete. Two humanoid robot customers were added in Q1, and existing UAS customers are launching new drone models that require new battery systems at all times. We haven't actually disclosed kind of a program by program count, but underneath all these activities, that's what's gonna drive second half of 2026 rev profile. All right. Speaking of drones, here's a question about that. How is demand developing for KULR's defense and drone battery solutions? Are defense related programs becoming a larger portion of the company's near-term opportunity? Yes. Defense demand is definitely accelerating from what we can see. Customer development activities is increasing across the defense, aerospace, unmanned systems. The conversation we're having with defense customers is more about volume and timeline. It's all about execution on our side now to deliver to these customers. Defense and defense adjacent programs have really become a larger part of our near-term opportunity. Our work on the NDAA compliant battery cell partnerships, including the emergent solid state and lithium metal suppliers, is really exciting for us, and that's gonna play a increasing role for these customers. What progress has KULR made with domestic battery supply? Texas-based manufacturing and NDAA compliant battery systems for government and defense adjacent customers. Yes. We have been developing a full NDAA compliant ecosystem for the KULR ONE battery platform for a while now. From battery cell suppliers, you know, in cylindrical pouch prismatic format to solid state and lithium metal chemistry, to BMS, also to electronic systems supporting all the batteries. These are all around NDAA compliance, just like our battery pack will be all made in, you know, will all be made in Texas. That is definitely a core part of our strategy. Very good, Michael. The next question talks about gross margin. It says product gross margin was low single digit in 2025. What progress did KULR make in Q1 towards improving margins? When should investors expect improvement to become visible in the financials? Yeah. Q1 is an example of that our gross margin at 29% for overall blended and also product sales margin about 26%. One quarter doesn't make it a trend or complete or complete turnaround story. That I do believe that we're on the right track to execute our strategy for 2026. Is the automated production line still on schedule for the second half of 2026? What impact could it have on production capacity, labor cost, yield consistency, and gross margin? Yes. The new production lines will be installed at our new 25,000 sq ft facility in Q2, and we expect that to start production in Q3 of this year. We will have capacity to produce 10,000 battery packs per month, and expect the unit economics for our batteries to go down and therefore improving margins. All right, well let's talk more about those 10,000 battery packs. KULR ONE Air was highlighted as the company's highest momentum platform with a target of approaching 10,000 battery packs per month in the second half of 2026. Are customer qualification schedules and production timelines still on track? Yes. Again, another question around KULR ONE Air and our production schedule, which I think a lot of investors really care about. Yes, we have the new facility now. The new production lines will be installed and operational in Q3. I would also say that there is a lot more going on behind the scenes than just the production lines themselves. We now have our own copper busbar laser cutter in-house, that really dramatically lowers our lead time to get these really high performance components made in-house and also lower our cost. We're putting a UN 38.3 certification infrastructure in-house, all the equipment in-house, so that we can build, qualify, ship batteries very quickly to customers and also lower the cost. You know, all around, we've been making significant investment in our infrastructure to make the best one-stop shop in the U.S. for all these high performance batteries. All right, Michael, here's our final question for this call today. How should investors think about cash usage, working capital needs and capital allocation priorities for the rest of 2026? Yes. It is, for us, it's all about building more batteries and selling more batteries. Our cash usage will be CapEx for equipment and facility that I talked about. Working capital for inventory, SG&A, which we are on path to reduce the cost on that. Also continue to invest in our people to build the best team in the industry, to deliver the best product for our customers at a very good value to them. This is how we're gonna win. Well, as mentioned, that was our final call or our final question for the call today, I should say. I wanna thank everyone for joining us today. More than that, I wanna thank the shareholders for their continued support and for sending in their questions throughout the quarter. Of course, our gratitude to the team at KULR Technology Group. Michael, thank you so much for your time here today. With that, we will turn the call over to the 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.

Speaker 1: Good afternoon, everyone. Thank you for joining. On our last earnings call, we told you 2026 will be measured by product revenue growth, gross margin improvement, and cost discipline. Q1 showed progress against each of these priorities. Total revenue grew 98% year-over-year to $4.8 million compared to $2.4 million in Q1 2025. Product sales grew 84% year-over-year to $2.1 million. Overall blended gross margin was approximately 29%, up from 8% of Q1 2025. Product sales gross margin was 26%. Total loss from operations decreased approximately 22% year-over-year. As we move from platform development into production scaling, we signed a new lease for additional 25,000 sq ft of manufacturing space to support new battery production lines and high volume customer programs. Good afternoon, everyone. good afternoon everyone Thank you for joining. thank you for joining On our last earnings call, we told you 2026 will be measured by product revenue growth, gross margin improvement, and cost discipline. on our last earnings call we told you 2026 will be measured by product revenue growth gross margin improvement and cost discipline Q1 showed progress against each of these priorities. q1 showed progress against each of these priorities Total revenue grew 98% year-over-year to $4.8 million compared to $2.4 million in Q1 2025. total revenue grew 98% year-over-year to $4.8 million compared to $2.4 million in q1 2025 Product sales grew 84% year-over-year to $2.1 million. product sales grew 84% year-over-year to $2.1 million Overall blended gross margin was approximately 29%, up from 8% of Q1 2025. overall blended gross margin was approximately 29% up from 8% of q1 2025 Product sales gross margin was 26%. product sales gross margin was 26% Total loss from operations decreased approximately 22% year-over-year. total loss from operations decreased approximately 22% year-over-year As we move from platform development into production scaling, we signed a new lease for additional 25,000 sq ft of manufacturing space to support new battery production lines and high volume customer programs. as we move from platform development into production scaling we signed a new lease for additional 25,000 sq ft of manufacturing space to support new battery production lines and high volume customer programs We remain in solid financial position with approximately $19 million in cash as of today and approximately 1,085 BTC in our treasury. We're committing all of our financial resources to our battery business and not acquiring any Bitcoin with cash. The only Bitcoin acquisition is through our existing BTC mining contracts. One quarter does not make a turnaround, but Q1 is evidence that the vision and discipline we commit to for 2026 is starting to translate into measurable results. KULR is beginning to scale its battery business with better cost discipline and improve operating leverage. The core objective of 2026 is straightforward. Scale the KULR ONE platform to build more batteries, sell more batteries while converting customer traction into margin-accretive revenue. Let me start with KULR ONE Air. We remain in solid financial position with approximately $19 million in cash as of today and approximately 1,085 BTC in our treasury. we remain in solid financial position with approximately $19 million in cash as of today and approximately 1,085 btc in our treasury We're committing all of our financial resources to our battery business and not acquiring any Bitcoin with cash. we're committing all of our financial resources to our battery business and not acquiring any bitcoin with cash The only Bitcoin acquisition is through our existing BTC mining contracts. the only bitcoin acquisition is through our existing btc mining contracts One quarter does not make a turnaround, but Q1 is evidence that the vision and discipline we commit to for 2026 is starting to translate into measurable results. one quarter does not make a turnaround but q1 is evidence that the vision and discipline we commit to for 2026 is starting to translate into measurable results KULR is beginning to scale its battery business with better cost discipline and improve operating leverage. kulr is beginning to scale its battery business with better cost discipline and improve operating leverage The core objective of 2026 is straightforward. the core objective of 2026 is straightforward Scale the KULR ONE platform to build more batteries, sell more batteries while converting customer traction into margin-accretive revenue. scale the kulr one platform to build more batteries sell more batteries while converting customer traction into margin-accretive revenue Let me start with KULR ONE Air. let me start with kulr one air Before walking through the program updates, I want to remind everyone why KULR ONE Air is positioned the way it is. On our last earnings call, I explained that the high growth markets KULR serves, autonomous platforms, direct energy systems, and digital infrastructure share one common technical constraint, power density. Drones, robots, and other autonomous systems do not need batteries that simply store energy. They need batteries that can deliver power at 5-20 times the discharge rate of a standard battery, sustain that output through repeated high demand cycles, and manage heat generated without failure. That's the engineering problem KULR ONE was built to solve, and it's the reason why our platform is gaining traction we're able to walk through. Power is the wedge. Every program update that follows is downstream from the core advantage. Before walking through the program updates, I want to remind everyone why KULR ONE Air is positioned the way it is. before walking through the program updates i want to remind everyone why kulr one air is positioned the way it is On our last earnings call, I explained that the high growth markets KULR serves, autonomous platforms, direct energy systems, and digital infrastructure share one common technical constraint, power density. on our last earnings call i explained that the high growth markets kulr serves autonomous platforms direct energy systems and digital infrastructure share one common technical constraint power density Drones, robots, and other autonomous systems do not need batteries that simply store energy. drones robots and other autonomous systems do not need batteries that simply store energy They need batteries that can deliver power at 5- 20 times the discharge rate of a standard battery, sustain that output through repeated high demand cycles, and manage heat generated without failure. they need batteries that can deliver power at 5- 20 times the discharge rate of a standard battery sustain that output through repeated high demand cycles and manage heat generated without failure That's the engineering problem KULR ONE was built to solve, and it's the reason why our platform is gaining traction we're able to walk through. that's the engineering problem kulr one was built to solve and it's the reason why our platform is gaining traction we're able to walk through Power is the wedge. power is the wedge Every program update that follows is downstream from the core advantage. every program update that follows is downstream from the core advantage KULR ONE Air continues to gain strong traction with U.S. and NDAA-compliant drone manufacturers. Our S3P lift battery is seeing broad adoption. In this quarter, we expanded to lift pack family with additional configurations designed specifically for long duration flight applications. We've also advanced the KULR ONE Air power class for agriculture and heavy lifting applications. On the BMS side, we're on track with a customer for 6S, 12S, and 18S battery management systems targeting large UAV platforms. These are high volume, high demand applications, and KULR is well positioned to serve them. We've also completed design of mil-spec EMI-resistant BMS for drone-based defense applications. Customer development activities is increasing across defense, aerospace, space, and unmanned systems. We're seeing especially strong growth in our UAS battery programs. Existing customers are launching new drone models that require entirely new battery systems. KULR ONE Air continues to gain strong traction with U.S. and NDAA-compliant drone manufacturers. kulr one air continues to gain strong traction with u.s and ndaa-compliant drone manufacturers Our S3P lift battery is seeing broad adoption. our s3p lift battery is seeing broad adoption In this quarter, we expanded to lift pack family with additional configurations designed specifically for long duration flight applications. in this quarter we expanded to lift pack family with additional configurations designed specifically for long duration flight applications We've also advanced the KULR ONE Air power class for agriculture and heavy lifting applications. we've also advanced the kulr one air power class for agriculture and heavy lifting applications On the BMS side, we're on track with a customer for 6S, 12S, and 18S battery management systems targeting large UAV platforms. on the bms side we're on track with a customer for 6s 12s and 18s battery management systems targeting large uav platforms These are high volume, high demand applications, and KULR is well positioned to serve them. these are high volume high demand applications and kulr is well positioned to serve them We've also completed design of mil-spec EMI-resistant BMS for drone-based defense applications. we've also completed design of mil-spec emi-resistant bms for drone-based defense applications Customer development activities is increasing across defense, aerospace, space, and unmanned systems. customer development activities is increasing across defense aerospace space and unmanned systems We're seeing especially strong growth in our UAS battery programs. we're seeing especially strong growth in our uas battery programs Existing customers are launching new drone models that require entirely new battery systems. existing customers are launching new drone models that require entirely new battery systems We have also expanded the platform's reach into two important directions, into humanoid robots, where we are now engaged with two customers, and into large class two and class three drones. Working with a broad base of battery cell providers in cylindrical, pouch, and prismatic format is central to building out the KULR ONE ecosystem. The same platform architecture paired with the best available cell technology is what gives KULR ONE a roadmap that extends well beyond current production configurations. KULR ONE Air is now actively exploring configurations with NDAA-compliant solid state and lithium metal battery cell providers capable of exceeding 380 Wh/kg. I'm very excited about these developments. The same engineering discipline build the architecture first, then bring the best cell technology to it, is what defines our work in space in Triton, which I'll cover next. We have also expanded the platform's reach into two important directions, into humanoid robots, where we are now engaged with two customers, and into large class two and class three drones. we have also expanded the platform's reach into two important directions into humanoid robots where we are now engaged with two customers and into large class two and class three drones Working with a broad base of battery cell providers in cylindrical, pouch, and prismatic format is central to building out the KULR ONE ecosystem. working with a broad base of battery cell providers in cylindrical pouch and prismatic format is central to building out the kulr one ecosystem The same platform architecture paired with the best available cell technology is what gives KULR ONE a roadmap that extends well beyond current production configurations. the same platform architecture paired with the best available cell technology is what gives kulr one a roadmap that extends well beyond current production configurations KULR ONE Air is now actively exploring configurations with NDAA-compliant solid state and lithium metal battery cell providers capable of exceeding 380 Wh/kg . kulr one air is now actively exploring configurations with ndaa-compliant solid state and lithium metal battery cell providers capable of exceeding 380 wh/kg I'm very excited about these developments. i'm very excited about these developments The same engineering discipline build the architecture first, then bring the best cell technology to it, is what defines our work in space in Triton, which I'll cover next. the same engineering discipline build the architecture first then bring the best cell technology to it is what defines our work in space in triton which i'll cover next On the space side of our operation, I wanna start with the point that we made in our last earnings call. KULR ONE Space is not just a product line, it's the program that sets the performance standard for the entire KULR ONE portfolio. Space operates in an environment where battery failure is not recoverable. Every performance requirement met in a spacecraft, propagation resistance, thermal stability under extreme conditions, certification under scrutiny raises the engineering baseline that KULR ONE Air, MAX, and our maritime platforms inherit. Customers in defense drone, electric aviation, and AI data center programs are buying integrated architecture that has already been qualified in the most demanding operating environments. On the space side of our operation, I wanna start with the point that we made in our last earnings call. on the space side of our operation i wanna start with the point that we made in our last earnings call KULR ONE Space is not just a product line, it's the program that sets the performance standard for the entire KULR ONE portfolio. kulr one space is not just a product line it's the program that sets the performance standard for the entire kulr one portfolio Space operates in an environment where battery failure is not recoverable. space operates in an environment where battery failure is not recoverable Every performance requirement met in a spacecraft, propagation resistance, thermal stability under extreme conditions, certification under scrutiny raises the engineering baseline that KULR ONE Air, MAX, and our maritime platforms inherit. every performance requirement met in a spacecraft propagation resistance thermal stability under extreme conditions certification under scrutiny raises the engineering baseline that kulr one air max and our maritime platforms inherit Customers in defense drone, electric aviation, and AI data center programs are buying integrated architecture that has already been qualified in the most demanding operating environments. customers in defense drone electric aviation and ai data center programs are buying integrated architecture that has already been qualified in the most demanding operating environments With that as context, I'm pleased to report that KULR ONE Space was selected by several additional LEO and GEO missions this quarter. This continues the validation that the platform and the trust our customers are placing in us for mission-critical applications. Our XLT and Reach series batteries remain active deployment across multiple satellite programs in both LEO and GEO. Recent investments in our BMS are enabling higher radiation tolerance and improved current carrying capabilities, both critical for expanded space missions. I also wanna give you a brief update on our KULR ONE Triton, our maritime battery family. Triton extends the same engineering principle I just described, the architecture first, safety first standards developed for space into autonomous surface and subsea systems. With that as context, I'm pleased to report that KULR ONE Space was selected by several additional LEO and GEO missions this quarter. This continues the validation that the platform and the trust our customers are placing in us for mission-critical applications. with that as context i'm pleased to report that kulr one space was selected by several additional leo and geo missions this quarter. this continues the validation that the platform and the trust our customers are placing in us for mission-critical applications Our XLT and Reach series batteries remain active deployment across multiple satellite programs in both LEO and GEO. our xlt and reach series batteries remain active deployment across multiple satellite programs in both leo and geo Recent investments in our BMS are enabling higher radiation tolerance and improved current carrying capabilities, both critical for expanded space missions. recent investments in our bms are enabling higher radiation tolerance and improved current carrying capabilities both critical for expanded space missions I also wanna give you a brief update on our KULR ONE Triton, our maritime battery family. i also wanna give you a brief update on our kulr one triton our maritime battery family Triton extends the same engineering principle I just described, the architecture first, safety first standards developed for space into autonomous surface and subsea systems. triton extends the same engineering principle i just described the architecture first safety first standards developed for space into autonomous surface and subsea systems We're developing and testing Triton in partnership with several OEMs, bringing aerospace-grade and Navy 9310 reliability standards to a market where battery failure underwater carries similar non-recoverable consequences. Consistent with the cell partnership theme I covered earlier, we're currently testing Triton across multiple chemistries, solid state, nickel metal hydride, and small format lithium-ion, to identify the optimal configuration for next generation autonomous maritime vehicles. It's an exciting and fast-growing market, KULR's building the right foundation to compete in it. Moving to our data center platform. On our last earnings call, we described the shift underway in the industry. As AI workloads grow and hardware becomes more power intensive, battery backup is moving out of the dedicated UPS room into computing rack itself. A battery operating next to the processor it protects must meet higher safety standards, handle higher voltage, and responds faster than conventional backup systems. We're developing and testing Triton in partnership with several OEMs, bringing aerospace-grade and Navy 9310 reliability standards to a market where battery failure underwater carries similar non-recoverable consequences. we're developing and testing triton in partnership with several oems bringing aerospace-grade and navy 9310 reliability standards to a market where battery failure underwater carries similar non-recoverable consequences Consistent with the cell partnership theme I covered earlier, we're currently testing Triton across multiple chemistries, solid state, nickel metal hydride, and small format lithium-ion, to identify the optimal configuration for next generation autonomous maritime vehicles. consistent with the cell partnership theme i covered earlier we're currently testing triton across multiple chemistries solid state nickel metal hydride and small format lithium-ion to identify the optimal configuration for next generation autonomous maritime vehicles It's an exciting and fast-growing market, KULR's building the right foundation to compete in it. it's an exciting and fast-growing market kulr's building the right foundation to compete in it Moving to our data center platform. moving to our data center platform On our last earnings call, we described the shift underway in the industry. on our last earnings call we described the shift underway in the industry As AI workloads grow and hardware becomes more power intensive, battery backup is moving out of the dedicated UPS room into computing rack itself. as ai workloads grow and hardware becomes more power intensive battery backup is moving out of the dedicated ups room into computing rack itself A battery operating next to the processor it protects must meet higher safety standards, handle higher voltage, and responds faster than conventional backup systems. a battery operating next to the processor it protects must meet higher safety standards handle higher voltage and responds faster than conventional backup systems This is the opportunity for KULR ONE MAX is built for. This quarter, KULR attend the Open Compute Project EMEA Summit, where we met with major data center OEMs. Our focus was to license our PPR and thermal management IP for data center BBU applications. The data center market is enormous, and KULR's PPR architecture and thermal expertise give us a technology edge that OEMs want access to. We'll continue to advance the design and optimization of our KULR ONE MAX, our 48 V high power PPR BBU platform. Progress this quarter includes advances in power conversion efficiency, continued development of our custom distributed BMS, and PPR testing for higher energy 2170 cells. We're targeting edge, AI data center, and telecom infrastructure with this platform. Speaking of telecom infrastructure market, we observed the shift underway in telecom industry. This is the opportunity for KULR ONE MAX is built for. this is the opportunity for kulr one max is built for This quarter, KULR attend the Open Compute Project EMEA Summit, where we met with major data center OEMs. this quarter kulr attend the open compute project emea summit where we met with major data center oems Our focus was to license our PPR and thermal management IP for data center BBU applications. our focus was to license our ppr and thermal management ip for data center bbu applications The data center market is enormous, and KULR's PPR architecture and thermal expertise give us a technology edge that OEMs want access to. the data center market is enormous and kulr's ppr architecture and thermal expertise give us a technology edge that oems want access to We'll continue to advance the design and optimization of our KULR ONE MAX, our 48 V high power PPR BBU platform. we'll continue to advance the design and optimization of our kulr one max our 48 v high power ppr bbu platform Progress this quarter includes advances in power conversion efficiency, continued development of our custom distributed BMS, and PPR testing for higher energy 2170 cells. progress this quarter includes advances in power conversion efficiency continued development of our custom distributed bms and ppr testing for higher energy 2170 cells We're targeting edge, AI data center, and telecom infrastructure with this platform. we're targeting edge ai data center and telecom infrastructure with this platform Speaking of telecom infrastructure market, we observed the shift underway in telecom industry. speaking of telecom infrastructure market we observed the shift underway in telecom industry 5G rollouts and rising uptime requirements are pushing operators away from legacy lead acid systems towards lithium ion. At the same time, operators are looking to move battery backup assets off the balance sheet entirely, shifting CapEx from non-recurring revenue assets into lower cost OpEx models with clear total cost of ownership advantages. KULR's position in this market is unique. We're demonstrating to operators that we have a proven, safe, and reliable option to contract the mission-critical DC power as a full service and never have to buy a battery again. Our platform pairs the KULR ONE battery architecture with operational and financial structure operators need to make that transition. On execution this quarter, we delivered production battery pack against our existing supply commitments, and we remain on track with the manufacturing consolidation milestones we outlined on our last earnings call. 5G rollouts and rising uptime requirements are pushing operators away from legacy lead acid systems towards lithium ion. 5g rollouts and rising uptime requirements are pushing operators away from legacy lead acid systems towards lithium ion At the same time, operators are looking to move battery backup assets off the balance sheet entirely, shifting CapEx from non-recurring revenue assets into lower cost OpEx models with clear total cost of ownership advantages. at the same time operators are looking to move battery backup assets off the balance sheet entirely shifting capex from non-recurring revenue assets into lower cost opex models with clear total cost of ownership advantages KULR's position in this market is unique. kulr's position in this market is unique We're demonstrating to operators that we have a proven, safe, and reliable option to contract the mission-critical DC power as a full service and never have to buy a battery again. we're demonstrating to operators that we have a proven safe and reliable option to contract the mission-critical dc power as a full service and never have to buy a battery again Our platform pairs the KULR ONE battery architecture with operational and financial structure operators need to make that transition. our platform pairs the kulr one battery architecture with operational and financial structure operators need to make that transition On execution this quarter, we delivered production battery pack against our existing supply commitments, and we remain on track with the manufacturing consolidation milestones we outlined on our last earnings call. on execution this quarter we delivered production battery pack against our existing supply commitments and we remain on track with the manufacturing consolidation milestones we outlined on our last earnings call Beyond those committed programs, we now have over half a dozen engagements with telecom service providers on KULR ONE battery-as-a-service, a clear sign that the market opportunity that we described in March is materialized. I'd like to address the board changes we announced on April 28th. We appointed two new directors, Ben Frank from Microsoft and Mr. Mike Kimel, and at the same time streamlined the board to three members, two of whom are independent. The smaller, more focused board is itself part of the operating principle message. It reduces SG&A and ensures that every director seat directly contributes to expertise that we need to scale. These two appointments are not generic board additions. Each one was able to fill a specific gap that becomes critical as KULR moves from platform development into platform monetization. Beyond those committed programs, we now have over half a dozen engagements with telecom service providers on KULR ONE battery-as-a-service, a clear sign that the market opportunity that we described in March is materialized. beyond those committed programs we now have over half a dozen engagements with telecom service providers on kulr one battery-as-a-service a clear sign that the market opportunity that we described in march is materialized I'd like to address the board changes we announced on April 28th. i'd like to address the board changes we announced on april 28th We appointed two new directors, Ben Frank from Microsoft and Mr. Mike Kimel, and at the same time streamlined the board to three members, two of whom are independent. we appointed two new directors ben frank from microsoft and mr mike kimel and at the same time streamlined the board to three members two of whom are independent The smaller, more focused board is itself part of the operating principle message. the smaller more focused board is itself part of the operating principle message It reduces SG&A and ensures that every director seat directly contributes to expertise that we need to scale. it reduces sg&a and ensures that every director seat directly contributes to expertise that we need to scale These two appointments are not generic board additions. these two appointments are not generic board additions Each one was able to fill a specific gap that becomes critical as KULR moves from platform development into platform monetization. each one was able to fill a specific gap that becomes critical as kulr moves from platform development into platform monetization Mr. Frank is the Director of Workforce AI Solutions Engineering at Microsoft, where he leads engineering teams supporting large enterprise customers deploying AI platforms within Microsoft's Energy and Resource organization. Microsoft is one of the best technology companies in the world that won its markets by building an ecosystem platform and then opening that platform to broad range of partners, customers, and developers. That's the playbook KULR is running with KULR ONE. The KULR ONE ecosystem is built as follows, opening the architecture to multiple cell chemistry partners across cylindrical, pouch, and prismatic formats. Build the battery management software electronics to increase customer stickiness to the KULR ONE platform. Pursuing IP license for AI data center BBU applications, and expand the customer base in defense, aerospace, maritime, and humanoid robotics. Mr. Frank is the Director of Workforce AI Solutions Engineering at Microsoft, where he leads engineering teams supporting large enterprise customers deploying AI platforms within Microsoft's Energy and Resource organization. mr frank is the director of workforce ai solutions engineering at microsoft where he leads engineering teams supporting large enterprise customers deploying ai platforms within microsoft's energy and resource organization Microsoft is one of the best technology companies in the world that won its markets by building an ecosystem platform and then opening that platform to broad range of partners, customers, and developers. microsoft is one of the best technology companies in the world that won its markets by building an ecosystem platform and then opening that platform to broad range of partners customers and developers That's the playbook KULR is running with KULR ONE. that's the playbook kulr is running with kulr one The KULR ONE ecosystem is built as follows, opening the architecture to multiple cell chemistry partners across cylindrical, pouch, and prismatic formats. the kulr one ecosystem is built as follows opening the architecture to multiple cell chemistry partners across cylindrical pouch and prismatic formats Build the battery management software electronics to increase customer stickiness to the KULR ONE platform. Pursuing IP license for AI data center BBU applications, and expand the customer base in defense, aerospace, maritime, and humanoid robotics. build the battery management software electronics to increase customer stickiness to the kulr one platform. pursuing ip license for ai data center bbu applications and expand the customer base in defense aerospace maritime and humanoid robotics Ben Frank brings first hand experience from inside the most successful enterprise ecosystem company of the modern era, applying directly to AI-driven industries that are core KULR end markets. Dr. Kimel has more than 30 years of experience as corporate executive, consultant, and academic, specifically focused on pricing strategies and margin performance. He holds a PhD in economics from UCLA and has previously held senior pricing positions at OmniSource, Toyo Tires, and Sears Holdings. His expertise is perfectly aligned with our 2026 mission, build and sell more batteries for product revenue growth, higher margins, and reduced costs. Dr. Kimel's appointment is how we institutionalize that progress, bring discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. Ben Frank brings first hand experience from inside the most successful enterprise ecosystem company of the modern era, applying directly to AI-driven industries that are core KULR end markets. ben frank brings first hand experience from inside the most successful enterprise ecosystem company of the modern era applying directly to ai-driven industries that are core kulr end markets Dr. Kimel has more than 30 years of experience as corporate executive, consultant, and academic, specifically focused on pricing strategies and margin performance. dr kimel has more than 30 years of experience as corporate executive consultant and academic specifically focused on pricing strategies and margin performance He holds a PhD in economics from UCLA and has previously held senior pricing positions at OmniSource, Toyo Tires, and Sears Holdings. he holds a phd in economics from ucla and has previously held senior pricing positions at omnisource toyo tires and sears holdings His expertise is perfectly aligned with our 2026 mission, build and sell more batteries for product revenue growth, higher margins, and reduced costs. his expertise is perfectly aligned with our 2026 mission build and sell more batteries for product revenue growth higher margins and reduced costs Dr. Kimel's appointment is how we institutionalize that progress, bring discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. dr kimel's appointment is how we institutionalize that progress bring discipline to how we price every contract how we structure customer engagements and how we convert revenue growth into durable profitability in addition to top line growth Before turning the call over, I wanna share one observation about the way the industry is headed. In recent weeks, a public traded UAV component company has agreed to acquire a U.S. drone battery manufacturer for over $50 million, adding battery capabilities to a portfolio that over the past 12 months has been assembled through separate acquisitions of drone software, motor manufacturing and distribution, alongside a $75 million strategic materials purchase. We view this as validation. The UAV and broader autonomous system supply chain is consolidating around three requirements: NDAA compliance, domestic vertical integration, and a complete component ecosystem rather than a single product. That's exactly the pro-platform that KULR has been building organically with in-house engineering for the last few years. Let me put our position in context. Before turning the call over, I wanna share one observation about the way the industry is headed. before turning the call over i wanna share one observation about the way the industry is headed In recent weeks, a public traded UAV component company has agreed to acquire a U.S. drone battery manufacturer for over $50 million, adding battery capabilities to a portfolio that over the past 12 months has been assembled through separate acquisitions of drone software, motor manufacturing and distribution, alongside a $75 million strategic materials purchase. in recent weeks a public traded uav component company has agreed to acquire a u.s drone battery manufacturer for over $50 million adding battery capabilities to a portfolio that over the past 12 months has been assembled through separate acquisitions of drone software motor manufacturing and distribution alongside a $75 million strategic materials purchase We view this as validation. we view this as validation The UAV and broader autonomous system supply chain is consolidating around three requirements: NDAA compliance, domestic vertical integration, and a complete component ecosystem rather than a single product. the uav and broader autonomous system supply chain is consolidating around three requirements ndaa compliance domestic vertical integration and a complete component ecosystem rather than a single product That's exactly the pro-platform that KULR has been building organically with in-house engineering for the last few years. that's exactly the pro-platform that kulr has been building organically with in-house engineering for the last few years Let me put our position in context. let me put our position in context KULR already operates over 31,000 sq ft of vertically integrated R&D and production facility in our headquarters in Webster, Texas. We're adding another 25,000 sq ft of manufacturing capacity in Q2. Our portfolio spans NDAA-compliant battery packs, custom battery management system and electronics, thermal management IP, and platform architecture qualified across drone, space, maritime, AI data center, and telecom applications. We engineer the battery cell partnerships, the cell agnostic architecture, the BMS, and the safety system together, and we're doing it for end markets that extend well beyond UAVs alone. When the industry is paying over $50 million for a battery pack manufacturing operation for UAV, it tells you what the market now believes domestic vertical integrated battery capabilities can be valued at. KULR already operates over 31,000 sq ft of vertically integrated R&D and production facility in our headquarters in Webster, Texas. kulr already operates over 31,000 sq ft of vertically integrated r&d and production facility in our headquarters in webster texas We're adding another 25,000 sq ft of manufacturing capacity in Q2. we're adding another 25,000 sq ft of manufacturing capacity in q2 Our portfolio spans NDAA-compliant battery packs, custom battery management system and electronics, thermal management IP, and platform architecture qualified across drone, space, maritime, AI data center, and telecom applications. our portfolio spans ndaa-compliant battery packs custom battery management system and electronics thermal management ip and platform architecture qualified across drone space maritime ai data center and telecom applications We engineer the battery cell partnerships, the cell agnostic architecture, the BMS, and the safety system together, and we're doing it for end markets that extend well beyond UAVs alone. we engineer the battery cell partnerships the cell agnostic architecture the bms and the safety system together and we're doing it for end markets that extend well beyond uavs alone When the industry is paying over $50 million for a battery pack manufacturing operation for UAV, it tells you what the market now believes domestic vertical integrated battery capabilities can be valued at. when the industry is paying over $50 million for a battery pack manufacturing operation for uav it tells you what the market now believes domestic vertical integrated battery capabilities can be valued at The market will be moving and evolving towards an ecosystem platform that KULR has been investing and building for multiple end markets for many years. We're focused on building more batteries and selling more batteries. Now back to you, Stuart. The market will be moving and evolving towards an ecosystem platform that KULR has been investing and building for multiple end markets for many years. the market will be moving and evolving towards an ecosystem platform that kulr has been investing and building for multiple end markets for many years We're focused on building more batteries and selling more batteries. we're focused on building more batteries and selling more batteries Now back to you, Stuart. now back to you stuart

Speaker 3: All right. Thank you, Michael. Let's pivot into the investor questions that have been sent in. Here is the first question, Michael, and it is: What were the primary drivers of Q1 2026 revenue, and how should investors think about revenue visibility for the remainder of 2026? All right. all right Thank you, Michael. thank you michael Let's pivot into the investor questions that have been sent in. let's pivot into the investor questions that have been sent in Here is the first question, Michael, and it is: What were the primary drivers of Q1 2026 revenue, and how should investors think about revenue visibility for the remainder of 2026? here is the first question michael and it is what were the primary drivers of q1 2026 revenue and how should investors think about revenue visibility for the remainder of 2026

Speaker 1: Cost reduction is already visible in Q1 numbers. R&D expense declined 28% year-over-year. SG&A declined approximately 9%. Total operating loss declined 22% year-over-year. We'll be continuing to be more disciplined about our cost structure while investing our growth. As I said in the prepared remarks, our appointment of Mike Kimel is aligned with that strategy. With his expertise in price, margin, and profit optimization, we'll bring discipline to how we price every contract, how we structure customer agreements, and how we convert revenue to durable profitability in addition to top line growth. Yes. Cost reduction is already visible in the Q1 numbers. R&D expenses was down 35% year-over-year. SG&A declined 8% year-over-year. Cost reduction is already visible in Q1 numbers. cost reduction is already visible in q1 numbers R&D expense declined 28% year- over- year. r&d expense declined 28% year- over- year SG&A declined approximately 9%. sg&a declined approximately 9% Total operating loss declined 22% year- over- year. total operating loss declined 22% year- over- year We'll be continuing to be more disciplined about our cost structure while investing our growth. we'll be continuing to be more disciplined about our cost structure while investing our growth As I said in the prepared remarks, our appointment of Mike Kimel is aligned with that strategy. as i said in the prepared remarks our appointment of mike kimel is aligned with that strategy With his expertise in price, margin, and profit optimization, we'll bring discipline to how we price every contract, how we structure customer agreements, and how we convert revenue to durable profitability in addition to top line growth. with his expertise in price margin and profit optimization we'll bring discipline to how we price every contract how we structure customer agreements and how we convert revenue to durable profitability in addition to top line growth Yes. yes Cost reduction is already visible in the Q1 numbers. cost reduction is already visible in the q1 numbers R&D expenses was down 35% year- over- year. r&d expenses was down 35% year- over- year SG&A declined 8% year- over- year. sg&a declined 8% year- over- year I think we can do a lot more on that. The total operating expenses, excluding the $500,000 credit loss, declined actually 24% year-over-year. We will continue to be more disciplined on our cost structure while investing in our growth. As I said in the prepared remarks, our appointment of Dr. Mike Kimel is also aligned with that strategy. With his expertise in pricing, margin, and profit optimization, we'll be bringing discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. I think we can do a lot more on that. i think we can do a lot more on that The total operating expenses, excluding the $500,000 credit loss, declined actually 24% year- over- year. the total operating expenses excluding the $500,000 credit loss declined actually 24% year- over- year We will continue to be more disciplined on our cost structure while investing in our growth. we will continue to be more disciplined on our cost structure while investing in our growth As I said in the prepared remarks, our appointment of Dr. Mike Kimel is also aligned with that strategy. as i said in the prepared remarks our appointment of dr mike kimel is also aligned with that strategy With his expertise in pricing, margin, and profit optimization, we'll be bringing discipline to how we price every contract, how we structure customer engagements, and how we convert revenue growth into durable profitability in addition to top line growth. with his expertise in pricing margin and profit optimization we'll be bringing discipline to how we price every contract how we structure customer engagements and how we convert revenue growth into durable profitability in addition to top line growth

Speaker 3: All right. Here's question number three then. How many KULR ONE Air programs are moving from prototype or development work into production, and what does that imply for the second half of 2026 revenue visibility? All right. all right Here's question number three then. here's question number three then How many KULR ONE Air programs are moving from prototype or development work into production, and what does that imply for the second half of 2026 revenue visibility? how many kulr one air programs are moving from prototype or development work into production and what does that imply for the second half of 2026 revenue visibility

Speaker 1: Yes. Multiple KULR ONE Air programs are in transition. The S3P lift pack has been moved to broad adoption, as it's in production now. The expanded lift family with the long duration configurations is moving from design into quantification with customers. Also on the BMS side, the 6S, 12S, and the 18S systems for large UAV platforms are on track with customers. Our mil-spec EMI resistant BMS design is complete. Two humanoid robot customers were added in Q1, and existing UAS customers are launching new drone models that require new battery systems at all times. We haven't actually disclosed kind of a program by program count, but underneath all these activities, that's what's gonna drive second half of 2026 rev profile. Yes. yes Multiple KULR ONE Air programs are in transition. multiple kulr one air programs are in transition The S3P lift pack has been moved to broad adoption, as it's in production now. the s3p lift pack has been moved to broad adoption as it's in production now The expanded lift family with the long duration configurations is moving from design into quantification with customers. the expanded lift family with the long duration configurations is moving from design into quantification with customers Also on the BMS side, the 6S, 12S, and the 18S systems for large UAV platforms are on track with customers. also on the bms side the 6s 12s and the 18s systems for large uav platforms are on track with customers Our mil-spec EMI resistant BMS design is complete. our mil-spec emi resistant bms design is complete Two humanoid robot customers were added in Q1, and existing UAS customers are launching new drone models that require new battery systems at all times. two humanoid robot customers were added in q1 and existing uas customers are launching new drone models that require new battery systems at all times We haven't actually disclosed kind of a program by program count, but underneath all these activities, that's what's gonna drive second half of 2026 rev profile. we haven't actually disclosed kind of a program by program count but underneath all these activities that's what's gonna drive second half of 2026 rev profile

Speaker 3: All right. Speaking of drones, here's a question about that. How is demand developing for KULR's defense and drone battery solutions? Are defense related programs becoming a larger portion of the company's near-term opportunity? All right. all right Speaking of drones, here's a question about that. speaking of drones here's a question about that How is demand developing for KULR's defense and drone battery solutions? how is demand developing for kulr's defense and drone battery solutions Are defense related programs becoming a larger portion of the company's near-term opportunity? are defense related programs becoming a larger portion of the company's near-term opportunity

Speaker 1: Yes. Defense demand is definitely accelerating from what we can see. Customer development activities is increasing across the defense, aerospace, unmanned systems. The conversation we're having with defense customers is more about volume and timeline. It's all about execution on our side now to deliver to these customers. Defense and defense adjacent programs have really become a larger part of our near-term opportunity. Our work on the NDAA compliant battery cell partnerships, including the emergent solid state and lithium metal suppliers, is really exciting for us, and that's gonna play a increasing role for these customers. Yes. yes Defense demand is definitely accelerating from what we can see. defense demand is definitely accelerating from what we can see Customer development activities is increasing across the defense, aerospace, unmanned systems. customer development activities is increasing across the defense aerospace unmanned systems The conversation we're having with defense customers is more about volume and timeline. the conversation we're having with defense customers is more about volume and timeline It's all about execution on our side now to deliver to these customers. it's all about execution on our side now to deliver to these customers Defense and defense adjacent programs have really become a larger part of our near-term opportunity. defense and defense adjacent programs have really become a larger part of our near-term opportunity Our work on the NDAA compliant battery cell partnerships, including the emergent solid state and lithium metal suppliers, is really exciting for us, and that's gonna play a increasing role for these customers. our work on the ndaa compliant battery cell partnerships including the emergent solid state and lithium metal suppliers is really exciting for us and that's gonna play a increasing role for these customers

Speaker 3: What progress has KULR made with domestic battery supply? Texas-based manufacturing and NDAA compliant battery systems for government and defense adjacent customers. What progress has KULR made with domestic battery supply? what progress has kulr made with domestic battery supply Texas-based manufacturing and NDAA compliant battery systems for government and defense adjacent customers. texas-based manufacturing and ndaa compliant battery systems for government and defense adjacent customers

Speaker 1: Yes. We have been developing a full NDAA compliant ecosystem for the KULR ONE battery platform for a while now. From battery cell suppliers, you know, in cylindrical pouch prismatic format to solid state and lithium metal chemistry, to BMS, also to electronic systems supporting all the batteries. These are all around NDAA compliance, just like our battery pack will be all made in, you know, will all be made in Texas. That is definitely a core part of our strategy. Yes. yes We have been developing a full NDAA compliant ecosystem for the KULR ONE battery platform for a while now. we have been developing a full ndaa compliant ecosystem for the kulr one battery platform for a while now From battery cell suppliers, you know, in cylindrical pouch prismatic format to solid state and lithium metal chemistry, to BMS, also to electronic systems supporting all the batteries. from battery cell suppliers you know in cylindrical pouch prismatic format to solid state and lithium metal chemistry to bms also to electronic systems supporting all the batteries These are all around NDAA compliance, just like our battery pack will be all made in, you know, will all be made in Texas. these are all around ndaa compliance just like our battery pack will be all made in you know will all be made in texas That is definitely a core part of our strategy. that is definitely a core part of our strategy

Speaker 3: Very good, Michael. The next question talks about gross margin. It says product gross margin was low single digit in 2025. What progress did KULR make in Q1 towards improving margins? When should investors expect improvement to become visible in the financials? Very good, Michael. very good michael The next question talks about gross margin. the next question talks about gross margin It says product gross margin was low single digit in 2025. it says product gross margin was low single digit in 2025 What progress did KULR make in Q1 towards improving margins? what progress did kulr make in q1 towards improving margins When should investors expect improvement to become visible in the financials? when should investors expect improvement to become visible in the financials

Speaker 1: Yeah. Q1 is an example of that our gross margin at 29% for overall blended and also product sales margin about 26%. One quarter doesn't make it a trend or complete or complete turnaround story. That I do believe that we're on the right track to execute our strategy for 2026. Yeah. yeah Q1 is an example of that our gross margin at 29% for overall blended and also product sales margin about 26%. q1 is an example of that our gross margin at 29% for overall blended and also product sales margin about 26% One quarter doesn't make it a trend or complete or complete turnaround story. one quarter doesn't make it a trend or complete or complete turnaround story That I do believe that we're on the right track to execute our strategy for 2026. that i do believe that we're on the right track to execute our strategy for 2026

Speaker 3: Is the automated production line still on schedule for the second half of 2026? What impact could it have on production capacity, labor cost, yield consistency, and gross margin? Is the automated production line still on schedule for the second half of 2026? is the automated production line still on schedule for the second half of 2026 What impact could it have on production capacity, labor cost, yield consistency, and gross margin? what impact could it have on production capacity labor cost yield consistency and gross margin

Speaker 1: Yes. The new production lines will be installed at our new 25,000 sq ft facility in Q2, and we expect that to start production in Q3 of this year. We will have capacity to produce 10,000 battery packs per month, and expect the unit economics for our batteries to go down and therefore improving margins. Yes. yes The new production lines will be installed at our new 25,000 sq ft facility in Q2, and we expect that to start production in Q3 of this year. the new production lines will be installed at our new 25,000 sq ft facility in q2 and we expect that to start production in q3 of this year We will have capacity to produce 10,000 battery packs per month, and expect the unit economics for our batteries to go down and therefore improving margins. we will have capacity to produce 10,000 battery packs per month and expect the unit economics for our batteries to go down and therefore improving margins

Speaker 3: All right, well let's talk more about those 10,000 battery packs. KULR ONE Air was highlighted as the company's highest momentum platform with a target of approaching 10,000 battery packs per month in the second half of 2026. Are customer qualification schedules and production timelines still on track? All right, well let's talk more about those 10,000 battery packs. all right well let's talk more about those 10,000 battery packs KULR ONE Air was highlighted as the company's highest momentum platform with a target of approaching 10,000 battery packs per month in the second half of 2026. kulr one air was highlighted as the company's highest momentum platform with a target of approaching 10,000 battery packs per month in the second half of 2026 Are customer qualification schedules and production timelines still on track? are customer qualification schedules and production timelines still on track

Speaker 1: Yes. Again, another question around KULR ONE Air and our production schedule, which I think a lot of investors really care about. Yes, we have the new facility now. The new production lines will be installed and operational in Q3. I would also say that there is a lot more going on behind the scenes than just the production lines themselves. We now have our own copper busbar laser cutter in-house, that really dramatically lowers our lead time to get these really high performance components made in-house and also lower our cost. We're putting a UN 38.3 certification infrastructure in-house, all the equipment in-house, so that we can build, qualify, ship batteries very quickly to customers and also lower the cost. Yes. yes Again, another question around KULR ONE Air and our production schedule, which I think a lot of investors really care about. again another question around kulr one air and our production schedule which i think a lot of investors really care about Yes, we have the new facility now. yes we have the new facility now The new production lines will be installed and operational in Q3. the new production lines will be installed and operational in q3 I would also say that there is a lot more going on behind the scenes than just the production lines themselves. i would also say that there is a lot more going on behind the scenes than just the production lines themselves We now have our own copper busbar laser cutter in-house, that really dramatically lowers our lead time to get these really high performance components made in-house and also lower our cost. we now have our own copper busbar laser cutter in-house that really dramatically lowers our lead time to get these really high performance components made in-house and also lower our cost We're putting a UN 38.3 certification infrastructure in-house, all the equipment in-house, so that we can build, qualify, ship batteries very quickly to customers and also lower the cost. we're putting a un 38.3 certification infrastructure in-house all the equipment in-house so that we can build qualify ship batteries very quickly to customers and also lower the cost You know, all around, we've been making significant investment in our infrastructure to make the best one-stop shop in the U.S. for all these high performance batteries. You know, all around, we've been making significant investment in our infrastructure to make the best one-stop shop in the U.S. for all these high performance batteries. you know all around we've been making significant investment in our infrastructure to make the best one-stop shop in the u.s for all these high performance batteries

Speaker 3: All right, Michael, here's our final question for this call today. How should investors think about cash usage, working capital needs and capital allocation priorities for the rest of 2026? All right, Michael, here's our final question for this call today. all right michael here's our final question for this call today How should investors think about cash usage, working capital needs and capital allocation priorities for the rest of 2026? how should investors think about cash usage working capital needs and capital allocation priorities for the rest of 2026

Speaker 1: Yes. It is, for us, it's all about building more batteries and selling more batteries. Our cash usage will be CapEx for equipment and facility that I talked about. Working capital for inventory, SG&A, which we are on path to reduce the cost on that. Also continue to invest in our people to build the best team in the industry, to deliver the best product for our customers at a very good value to them. This is how we're gonna win. Yes. yes It is, for us, it's all about building more batteries and selling more batteries. it is for us it's all about building more batteries and selling more batteries Our cash usage will be CapEx for equipment and facility that I talked about. our cash usage will be capex for equipment and facility that i talked about Working capital for inventory, SG&A, which we are on path to reduce the cost on that. working capital for inventory sg&a which we are on path to reduce the cost on that Also continue to invest in our people to build the best team in the industry, to deliver the best product for our customers at a very good value to them. also continue to invest in our people to build the best team in the industry to deliver the best product for our customers at a very good value to them This is how we're gonna win. this is how we're gonna win

Speaker 3: Well, as mentioned, that was our final call or our final question for the call today, I should say. I wanna thank everyone for joining us today. More than that, I wanna thank the shareholders for their continued support and for sending in their questions throughout the quarter. Of course, our gratitude to the team at KULR Technology Group. Michael, thank you so much for your time here today. With that, we will turn the call over to the operator. Well, as mentioned, that was our final call or our final question for the call today, I should say. well as mentioned that was our final call or our final question for the call today i should say I wanna thank everyone for joining us today. i wanna thank everyone for joining us today More than that, I wanna thank the shareholders for their continued support and for sending in their questions throughout the quarter. more than that i wanna thank the shareholders for their continued support and for sending in their questions throughout the quarter Of course, our gratitude to the team at KULR Technology Group. of course our gratitude to the team at kulr technology group Michael, thank you so much for your time here today. michael thank you so much for your time here today With that, we will turn the call over to the operator. with that we will turn the call over to the operator

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