Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

KULR Technology Group, Inc.

1999 South Bascom Avenue, Suite 700

Campbell, CA 95008

 

Ladies and Gentlemen:

 

1.       Subscription. The undersigned (the “Purchaser”) by execution of this
Subscription Agreement (“Subscription Agreement”), intending to be legally
bound, hereby irrevocably agrees to purchase from KULR Technology Group, Inc., a
Delaware corporation (the “Company”) the number of units (the “Units” and each a
“Unit”) set forth on the signature page hereto at a purchase price of Nine
Thousand Dollars ($9,000.00) per Unit, for the aggregate subscription price set
forth on the signature page hereto (the “Purchase Price”). Each Unit consists,
but need not remain a unit, of (i) one share of the Company’s Series C
Convertible Preferred Stock, par value $0.0001 per share (the “Preferred
Stock”), the rights, limitations and preferences for which are set forth in the
Certificate of Designation attached hereto as Exhibit B, and (ii) a warrant in
the form attached hereto as Exhibit C (each, a “Warrant” and collectively, the
“Warrants”) to purchase Two Thousand Five Hundred (2,500) shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), at an
exercise price of $1.50 per share of Common Stock, subject to adjustment as set
forth in the Warrants, which Warrants expire two (2) years after the date of the
Warrant’s issuance. The Units, the Preferred Stock, the Warrants, the Common
Stock issuable upon conversion of the Preferred Stock and the Common Stock
issuable upon exercise of the Warrants shall be collectively referred to as the
“Securities” throughout this Subscription Agreement.

 

If this subscription is accepted, the Company will signify such acceptance by
executing counterparts of this Subscription Agreement and causing one such
mutually executed counterpart to be returned to the undersigned. This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement and all attachments,
schedules and exhibits hereto (collectively, the “Subscription Agreement”),
including but not limited to the risk factors (“Risk Factors”) set forth on
Schedule I hereto, relating to the offering (the “Offering”) by the Company of
up to a maximum of $3,600,000 in the Securities (the “Maximum Offering Amount”).

 

The offering price of the Securities has been unilaterally determined by the
Company and is not based on its assets or earnings.

 

By execution hereof, Purchaser acknowledges that this is an unregistered
offering of restricted securities, which securities, subject to the satisfaction
of certain requirements, may be sold in accordance with Rule 144. Rule 144
requires at least a six month holding period before shares of Common Stock can
be publicly traded (the Company does not currently have a trading symbol and no
assurances can be made that it will be assigned a trading symbol or if a trading
symbol is assigned that the trading market will develop). Although the Company
is currently a reporting issuer in the United States, there is no assurance that
it will remain a reporting issuer and/or remain in compliance with all
requirements, including without limitation the timely filing of its periodic
reports, that allow for Purchasers to transfer restricted securities of the
Company in reliance upon Rule 144 or any other exemption to the registration
requirement of the Securities Act of 1933, as amended (the “Securities Act”).

 

 

 

Furthermore, Purchaser acknowledges that a significant portion of the net
proceeds of this Offering will be applied to working capital and other general
corporate purposes, including but not limited to research and development,
capital expenditures, sales and marketing costs and compensation (in the form of
salary and bonuses) to officers and directors. Accordingly, the Company’s
management will have broad discretion as to the application of such proceeds.
There can be no assurance that management’s use of proceeds generated through
this Offering will prove optimal or translate into revenue or profitability for
the Company. Purchasers are urged to consult with their attorneys, accountants
and personal investment advisors prior to making any decision to invest in the
Company and to carefully review, with the assistance of their attorneys,
accountants and personal investment advisors, the Risk Factors set forth on
Schedule I hereto, all of the Company’s public filings.

 

2.       Payment. The undersigned shall cause the Purchase Price to be deposited
in the escrow account (the “Escrow Account”) of Sichenzia Ross Ference LLP, (the
“Escrow Agent”), as escrow agent for the Company, as follows:

 

(a)       by check or money order made payable to the order of, or endorsed to
the order of, “Sichenzia Ross Ference LLP as Escrow Agent for KULR Technology
Group, Inc.”, and delivered to the Escrow Agent at the following address: 1185
Avenue of the Americas, 37th Floor, New York, NY 10036; or

 

(b)      by wire transfer of immediately available funds to:

 

Citibank

153 East 53rd Street

23rd Floor

New York, NY 10022

A/C of Sichenzia Ross Ference LLP

A/C#:                    4974921703

ABA#:                  021000089

SWIFT Code:       CITIUS33

Reference:            KULR Technology Group, Inc.

 

The Escrow Account is a non-interest-bearing account. Funds deposited in the
Escrow Account will be held for the Purchaser's benefit, and will be returned
promptly, without interest or offset, if (i) this Subscription Agreement is not
accepted by the Company, or (ii) the Offering is terminated without the Company
withdrawing the undersigned’s proceeds from the Escrow Account. All payments
delivered to the Company shall be deposited in the Escrow Account of the Escrow
Agent as soon as practicable after receipt thereof. Together with the
undersigned’s payment of the Purchase Price, the undersigned is delivering a
properly completed and executed investor questionnaire (“Accredited Investor
Certification”), a form of which is attached as Exhibit A hereto.

 

3.       Closing.

 

(a)       Closing. Following the Company’s receipt of subscriptions for the
Securities and the Company’s acceptance of such subscriptions, a closing will
occur to effect the purchase and sale of such Securities (the “Closing”).

 

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(b)     Subsequent Closings. The Company may continue to offer and accept
subscriptions for the Securities and conduct additional closings (each, a
“Subsequent Closing”) for the sale of such Securities after the Closing and
until the termination of the Offering. Unless earlier terminated, this Offering
will continue until December 31, 2019 unless the Compnay, in its sole discretion
and without notice to Purchasers, extends the offering by 45 days. There may be
more than one Subsequent Closing; provided, however, that the final Subsequent
Closing shall take place no later than December 31, 2019 (or if the Company
extends the termination date the date to which the Company extends the
termination). The date of any subsequent closing is referred to as a “Subsequent
Closing Date.” Notwithstanding the foregoing, no more than $3,600,000 in
Securities will be sold at the Closing and all Subsequent Closings.

 

The Closing and any applicable Subsequent Closings are each referred to in this
Subscription Agreement as a “Closing.” The Closing Date and any Subsequent
Closing Dates are sometimes referred to herein as a “Closing Date.”

 

(c)       Closing Deliveries. At or within 10 business days of each Closing, the
Company shall deliver to the Purchaser duly executed certificates or evidence of
book-entry recordations representing the Securities due to such Purchaser
against the Purchaser’s Purchase Price.

 

4.       Acceptance of Subscription. The Purchaser understands and agrees that
the Company, in its sole discretion, reserves the right to accept or reject this
or any other subscription for the Securities, in whole or in part. The Company
shall have no obligation hereunder until the Company shall execute and deliver
to the Purchaser an executed copy of this Subscription Agreement. If this
subscription is rejected in whole or the Offering of Securities is terminated,
all funds received from the Purchaser will be returned without interest or
offset, and this Subscription Agreement shall thereafter be of no further force
or effect. If this subscription is rejected in part, the funds for the rejected
portion of this subscription will be returned without interest or offset, and
this Subscription Agreement will continue in full force and effect to the extent
this subscription was accepted.

 

5.       Representations and Warranties of the Purchaser.

 

The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:

 

(a)       None of the Securities offered pursuant to this Subscription Agreement
are registered under the Securities Act, or any state securities laws. The
Purchaser understands that the offering and sale of the Securities is intended
to be exempt from registration under the Securities Act, by virtue of Section
4(a)(2) thereof or the provisions of Regulation D (“Regulation D”) or Regulation
S (“Regulation S”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the Securities Act, based, in part, upon the
representations, warranties and agreements of the Purchaser contained in this
Subscription Agreement. Notwithstanding the foregoing, if the Purchaser is a
Non-U.S. Person (a “Reg S Person”) and intends to rely upon Regulation S, such
Purchaser hereby represents that the representations contained in paragraphs (i)
through (viii) of this Section 5(a) are true and correct with respect to such
Purchaser:

 

(i)       (A) the issuance and sale to such Reg S Person of the Securities is
intended to be exempt from the registration requirements of the Securities Act,
pursuant to the provisions of Regulation S; (B) it is not a “U.S. Person,” as
such term is defined in Regulation S, and is not acquiring the Securities for
the account or benefit of any U.S. Person; and (C) the offer and sale of the
Securities has not taken place, and is not taking place, within the United
States of America or its territories or possessions. Such Reg S Person
acknowledges that the offer and sale of the Securities has taken place, and is
taking place in an “offshore transaction,” as such term is defined in Regulation
S.

 

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(ii)       Such Reg S Person acknowledges and agrees that, pursuant to the
provisions of Regulation S, the Securities cannot be sold, assigned,
transferred, conveyed, pledged or otherwise disposed of to any U.S. Person or
within the United States of America or its territories or possessions for a
period of six months from and after the closing date of the Offering, unless
such securities are registered for sale in the United States pursuant to an
effective registration statement under the Securities Act or another exemption
from such registration is available. Such Reg S Person acknowledges that it has
not engaged in any hedging transactions with regard to the Securities.

 

(iii)       Such Reg S Person consents to the placement of a legend on any
certificate or other document evidencing the Securities and understands that the
Company shall be required to refuse to register any transfer of securities not
made in accordance with applicable U.S. securities laws.

 

(iv)       Such Reg S Person is not a “distributor” of securities, as that term
is defined in Regulation S, nor a dealer in securities.

 

(v)       Such Reg S Person understands that the Securities have not been
registered under the Securities Act, or the securities laws of any state and are
subject to substantial restrictions on resale or transfer. The Securities are
“restricted securities” within the meaning of Regulation S and Rule 144,
promulgated under the Securities Act.

 

(vi)       Such Reg S Person acknowledges that the Securities may only be sold
offshore in compliance with Regulation S or pursuant to an effective
registration statement under the Securities Act or another exemption from such
registration, if available. In connection with any resale of the Securities
pursuant to Regulation S, the Company will not register a transfer not made in
accordance with Regulation S, pursuant to an effective registration statement
under the Securities Act or in accordance with another exemption from the
Securities Act.

 

(vii)       The Purchaser has not acquired the Securities as a result of, and
will not itself engage in, any “directed selling efforts” (as defined in
Regulation S under the Securities Act) in the United States in respect of the
Securities which would include any activities undertaken for the purpose of, or
that could reasonably be expected to have the effect of, conditioning the market
in the United States for the resale of the Securities; provided, however, that
the Purchaser may sell or otherwise dispose of the Securities pursuant to
registration thereof under the Securities Act and any applicable state and
provincial securities laws or under an exemption from such registration
requirements.

 

(viii)       Such Reg S Person makes the representations, declarations and
warranties as contained in this Section 5(a)(i)-(viii) with the intent that the
same shall be relied upon by the Company in determining its suitability as a
purchaser of such Securities;

 

(b)       Prior to the execution of this Subscription Agreement, the Purchaser
and the Purchaser's attorney, accountant, purchaser representative and/or tax
adviser, if any (collectively, the “Advisers”), have received or accessed and
actually reviewed this Subscription Agreement, including the Risk Factors
contained in Schedule I hereof, all the Company’s public filings filed with the
SEC (the “SEC Reports”) and all other documents requested by the Purchaser, and
have carefully reviewed them and understand the information contained therein;

 

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(c)        All documents, records, and books pertaining to the investment in the
Securities (including, without limitation, this Subscription Agreement) have
been made available for inspection by such Purchaser and its Advisers, if any;

 

(d)       In making an investment decision Purchasers must rely on their own
examination of the Company and the terms of the Offering, including the merits
and risks involved. The Purchaser should be aware that it will be required to
bear the financial risks of this investment for an indefinite period of time;

 

(e)       The Purchaser and its Advisers, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering of the Securities and
the business, financial condition and results of operations of the Company, and
all such questions have been answered to the full satisfaction of the Purchaser
and its Advisers, if any;

 

(f)       In evaluating the suitability of an investment in the Company, the
Purchaser has not relied upon any representation or information (oral or
written) other than as stated in this Subscription Agreement;

 

(g)       The Purchaser is unaware of, is in no way relying on, and did not
become aware of the Offering of the Securities through or as a result of, any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media or broadcast over television, radio
or the Internet (including, without limitation, internet “blogs,” bulletin
boards, discussion groups and social networking sites) in connection with the
Offering and sale of the Securities and is not subscribing for the Securities
and did not become aware of the Offering of the Securities through or as a
result of any public statement or filing of he Company or through or as a result
of any seminar or meeting to which the Purchaser was invited by, or any
solicitation of a subscription by, a person not previously known to the
Purchaser in connection with investments in securities generally;

 

(h)       The Purchaser has taken no action that would give rise to any claim by
any person for brokerage commissions, finders' fees or the like relating to this
Subscription Agreement or the transactions contemplated hereby;

 

(i)       The Purchaser, together with its Advisers, if any, has such knowledge
and experience in financial, tax, and business matters, and, in particular,
investments in securities, so as to enable it to utilize the information made
available to it in connection with the Offering to evaluate the merits and risks
of an investment in the Securities and the Company and to make an informed
investment decision with respect thereto;

 

(j)       The Purchaser is not relying on the Company or any of its employees or
agents with respect to the legal, tax, economic and related considerations of an
investment in the Securities, and the Purchaser has relied on the advice of, or
has consulted with, only its own Advisers;

 

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(k)       The Purchaser is acquiring the Securities solely for such Purchaser's
own account for investment purposes only and not with a view to or intent of
resale or distribution thereof, in whole or in part. The Purchaser has no
agreement or arrangement, formal or informal, with any person to sell or
transfer all or any part of the Securities, and the Purchaser has no plans to
enter into any such agreement or arrangement;

 

(l)       The Purchaser must bear the substantial economic risks of the
investment in the Securities indefinitely because none of the Securities may be
sold, hypothecated or otherwise disposed of unless subsequently registered under
the Securities Act and applicable state securities laws or an exemption from
such registration is available. Legends shall be placed on the Securities to the
effect that they have not been registered under the Securities Act or applicable
state securities laws and appropriate notations thereof will be made in the
Company's stock books. Appropriate notations will be made in the Company's stock
books to the effect that the Securities have not been registered under the
Securities Act or applicable state securities laws. Stop transfer instructions
will be placed with the transfer agent of the Securities. There can be no
assurance that there will be any market for resale of the Securities, nor can
there be any assurance that the Securities will be freely transferable at any
time in the foreseeable future;

 

(m)       The Purchaser understands the substance of and acknowledges the legend
that will be placed on the Securities in substantially the following form:

 

For Non-U.S. Purchasers:

 

THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). ACCORDINGLY,
NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED HEREIN)
OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN ACCORDANCE WITH THE SECURITIES ACT. “UNITED STATES" AND "U.S. PERSON"
ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.

 

For U.S. Purchasers:

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND
SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT
AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES
HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION
AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL

 

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(n)       The Purchaser is aware that an investment in the Securities is high
risk, involving a number of very significant risks;

 

(o)       The Purchaser meets the requirements of at least one of the
suitability standards for an “accredited investor” as that term is defined in
Regulation D and as set forth on the Accredited Investor Certification attached
hereto;

 

(p)       The Purchaser (i) if a natural person, represents that the Purchaser
has reached the age of 21 and has full power and authority to execute and
deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Securities, such entity is duly organized, validly existing and in
good standing under the laws of the state of its organization, the consummation
of the transactions contemplated hereby is authorized by, and will not result in
a violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the Securities, the
execution and delivery of this Subscription Agreement has been duly authorized
by all necessary action, this Subscription Agreement has been duly executed and
delivered on behalf of such entity and is a legal, valid and binding obligation
of such entity; or (iii) if executing this Subscription Agreement in a
representative or fiduciary capacity, represents that it has full power and
authority to execute and deliver this Subscription Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Purchaser is executing this Subscription Agreement, and such
individual, partnership, ward, trust, estate, corporation, or limited liability
company or partnership, or other entity has full right and power to perform
pursuant to this Subscription Agreement and make an investment in the Company,
and represents that this Subscription Agreement constitutes a legal, valid and
binding obligation of such entity. The execution and delivery of this
Subscription Agreement will not violate or be in conflict with any order,
judgment, injunction, agreement or controlling document to which the Purchaser
is a party or by which it is bound;

 

(q)       The Purchaser and the Advisers, if any, have had the opportunity to
obtain any additional information, to the extent the Company has such
information in its possession or could acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information contained in this
Subscription Agreement and all documents received or reviewed in connection with
the purchase of the Securities and have had the opportunity to have
representatives of the Company provide them with such additional information
regarding the terms and conditions of this particular investment and the
financial condition, results of operations, business of the Company deemed
relevant by the Purchaser or the Advisers, if any, and all such requested
information, to the extent the Company had such information in its possession or
could acquire it without unreasonable effort or expense, has been provided to
the full satisfaction of the Purchaser and the Advisers, if any;

 

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(r)       Any information which the Purchaser has heretofore furnished or is
furnishing herewith to the Company is complete and accurate and may be relied
upon by the Company in determining the availability of an exemption from
registration under federal and state securities laws in connection with the
offering of securities as described in this Subscription Agreement. The
Purchaser further represents and warrants that it will notify and supply
corrective information to the Company immediately upon the occurrence of any
change therein occurring prior to the Company's issuance of the Securities;

 

(s)       The Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities. The Purchaser is
knowledgeable about investment considerations in companies with limited
operating histories. The Purchaser has a sufficient net worth to sustain a loss
of its entire investment in the Company in the event such a loss should occur.
The Purchaser's overall commitment to investments which are not readily
marketable is not excessive in view of the Purchaser’s net worth and financial
circumstances and the purchase of the Securities will not cause such commitment
to become excessive. The investment is a suitable one for the Purchaser;

 

(t)        The Purchaser is satisfied that the Purchaser has received adequate
information with respect to all matters which it or the Advisers, if any,
consider material to its decision to make this investment;

 

(u)       The Purchaser acknowledges that any estimates or forward-looking
statements or projections included in this Subscription Agreement were prepared
by the Company in good faith but that the attainment of any such projections,
estimates or forward-looking statements cannot be guaranteed by the Company and
should not be relied upon;

 

(v)       No oral or written representations have been made, or oral or written
information furnished, to the Purchaser or the Advisers, if any, in connection
with the Offering which are in any way inconsistent with the information
contained in SEC Reports;

 

(w)       Within five (5) days after receipt of a request from the Company, the
Purchaser will provide such information and deliver such documents as may
reasonably be necessary to comply with any and all laws and ordinances to which
the Company is subject;

 

(x)       The Purchaser's substantive relationship with the Company predates the
Company’s contact with the Purchaser regarding an investment in the Securities;

 

(y)       (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”)
represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Purchaser fiduciary or
Plan (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Purchaser
fiduciary or Plan has not relied primarily on any advice or recommendation of
the Company or any of its affiliates;

 

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(z)       The Purchaser should check the Office of Foreign Assets Control
(“OFAC”) website at <http://www.treas.gov/ofac> before making the following
representations. The Purchaser represents that the amounts invested by it in the
Company in the Offering were not and are not directly or indirectly derived from
activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and
Executive Orders administered by OFAC prohibit, among other things, the
engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities and individuals. The lists of OFAC
prohibited countries, territories, persons and entities can be found on the OFAC
website at <http://www.treas.gov/ofac>. In addition, the programs administered
by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in
certain countries regardless of whether such individuals or entities appear on
the OFAC lists;

 

(aa)       To the best of the Purchaser’s knowledge, none of: (1) the Purchaser;
(2) any person controlling or controlled by the Purchaser; (3) if the Purchaser
is a privately-held entity, any person having a beneficial interest in the
Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. The Purchaser acknowledges that the Company may not accept any amounts
from a prospective investor if such prospective investor cannot make the
representation set forth in the preceding paragraph. The Purchaser agrees to
promptly notify the Company should the Purchaser become aware of any change in
the information set forth in these representations. The Purchaser understands
and acknowledges that, by law, the Company may be obligated to “freeze the
account” of the Purchaser, either by prohibiting additional subscriptions from
the Purchaser, declining any redemption requests and/or segregating the assets
in the account in compliance with governmental regulations, and may also be
required to report such action and to disclose the Purchaser’s identity to OFAC.
The Purchaser further acknowledges that the Company may, by written notice to
the Purchaser, suspend the redemption rights, if any, of the Purchaser if the
Company reasonably deems it necessary to do so to comply with anti-money
laundering regulations applicable to the Company or any of the Company’s service
providers. These individuals include specially designated nationals, specially
designated narcotics traffickers and other parties subject to OFAC sanctions and
embargo programs;

 

(bb)       To the best of the Purchaser’s knowledge, none of: (1) the Purchaser;
(2) any person controlling or controlled by the Purchaser; (3) if the Purchaser
is a privately-held entity, any person having a beneficial interest in the
Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a senior foreign political
figure,2 or any immediate family3 member or close associate4 of a senior foreign
political figure, as such terms are defined in the footnotes below; and

 

 

1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions

and embargo programs

2 A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a

foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government- owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

3 “Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.

4A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure.

 

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(cc)       If the Purchaser is affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if the Purchaser receives deposits from, makes payments on
behalf of, or handles other financial transactions related to a Foreign Bank,
the Purchaser represents and warrants to the Company that: (1) the Foreign Bank
has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities; (2) the
Foreign Bank maintains operating records related to its banking activities; (3)
the Foreign Bank is subject to inspection by the banking authority that licensed
the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate. 

 

6.       Representations by the Company.

 

The Company hereby represents and warrants to the Purchaser as follows:

 

(a)       Organization. The Company is a company duly organized and validly
existing under the Laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as it is now being conducted. The
Company is in good standing under the Laws of Delaware.

 

(b)       Due Authorization; Enforceability. The Company has all right,
corporate power and authority to enter into, execute and deliver this
Subscription Agreement. The execution and delivery by the Company of this
Subscription Agreement and the compliance by the Company with each of the
provisions of this Subscription Agreement are within the corporate power and
authority of the Company and have been duly authorized by all requisite
corporate and other action of the Company. This Subscription Agreement has been
duly and validly executed and delivered by the Company, and this Subscription
Agreement constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforcement is limited by bankruptcy, insolvency and other
similar Laws affecting the enforcement of creditors’ rights generally and for
limitation imposed by general principles of equity, regardless of whether
enforcement is sought at law or in equity and insofar as indemnification and
contribution provisions may be limited by applicable Law.

 

(c)       Subsidiaries. Except as set forth in the SEC Reports, the Company does
not own any securities or other interests in any corporation or other Person
having the power to elect a majority of that corporation’s or other Person’s
board of directors or similar governing body, or otherwise having the power to
direct the business and policies of that corporation or other Person. “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

(d)       Capitalization.

 

(i)       The SEC Reports contain information about the authorized capital of
the Company and the issued and outstanding shares (as of the date of such SEC
Reports) of each class of authorized capital. All of the outstanding equity
securities of the Company have been duly authorized and validly issued and are
fully paid and non-assessable.

 

(ii)      Except as set forth in the SEC Reports, as defined below, there are no
(i) outstanding subscriptions, warrants, options, calls, rights of first offer,
rights of first refusal, tag along rights, drag along rights, subscription
rights, conversion rights, exchange rights, or commitments or rights of any
character relating to or entitling any Person to purchase or otherwise acquire
any equity securities of the Company or requiring the Company to issue or sell
any equity securities, (ii) obligations or securities convertible into or
exchangeable for shares of any equity securities of the Company or any
commitments of any character relating to or entitling any Person to purchase or
otherwise acquire any such obligations or securities, (iii) statutory preemptive
rights or preemptive rights granted under the organizational documents of the
Company, (iv) stock appreciation rights, phantom stock, profit participation, or
other similar rights with respect to the Company, or (v) there are no securities
or instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities. There are no stockholder
agreements, voting trusts, proxies or other agreements, instruments or
understandings with respect to the purchase, sale, transfer or voting of the
outstanding shares of equity securities of the Company. There are no commitments
under which the Company is obligated to repurchase, redeem, retire or otherwise
acquire any equity securities of the Company.

 

A-10

 

 

(iii)       The Securities have been duly authorized and when issued and
delivered in accordance with the terms of this Subscription Agreement, will be
validly issued and outstanding, fully paid and non-assessable (in jurisdictions
where such concept is recognized), free and clear of any and all encumbrances
and not subject to the preemptive or other similar rights of any shareholders of
the Company, other than restrictions imposed by applicable securities Laws,
including, but not limited to the statutes of the State of Delaware.

 

(e)       SEC Reports. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the “Exchange Act”), including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) and when filed, each SEC Report was in compliance
in all material respects with the requirements of its report form, the Exchange
Act and the Securities Act. All proxy statements, reports, registration
statements, schedules, forms and other documents required to be filed with the
SEC by the Company under the Exchange Act and the Securities Act after the date
hereof through the relevant Closing Date will, if and when filed, be in
compliance in all material respects with the requirements of its respective
report form, the Exchange Act and the Securities Act and will not, at the time
they are filed or declared effective, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading; provided, however, that any failure by the Company to
file any proxy statement, report, registration statement, schedule, form and
other documents shall not constitute a breach of this Section 6.

 

(f)       Litigation. Except as set forth in the SEC Reports, there is no claim,
action, suit, investigation or proceeding pending or, to the Company’s
knowledge, threatened before any court, arbitrator or other governmental entity.
Except as disclosed in the SEC Reports, the Company is not in default under or
in breach of any order, judgment, injunction or decree of any court, arbitrator
or other governmental entity.

 

A-11

 

 

(g)          No Conflicts or Violation; Consents and Approvals. Neither the
execution, delivery or performance by the Company of this Subscription
Agreement, nor the consummation of the transactions contemplated hereby will:

 

(i) conflict with, or result in a breach or a violation of, any provision of the
organizational documents of the Company or (ii) constitute a breach, violation
or default, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under any (1) law applicable to or binding on the Company or (2) provision of
any commitment to which the Company is a party, except in the case of clause
(a)(ii)(2), where such conflict, breach, violation or default would not result
in a Material Adverse Change. “Material Adverse Change” means any material
adverse change on the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company and its subsidiaries, taken as a whole; and

 

(ii) apart from the filing of a Form D with the SEC after the issuance of the
Securities, if applicable, require the Company to make or obtain the consent,
waiver, agreement, approval, permit or authorization of, or declaration, filing,
notice or registration to or with, or assignment by, any governmental entity or
any Person that is not a governmental entity (including any party to any
commitment to which the Company is a party to).

 

(h)          Compliance. Except as set forth in the SEC Reports, neither the
Company nor its subsidiaries (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company under), nor has the Company or
its subsidiaries received written notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any judgment, decree or order of any court,
arbitrator or governmental authority, and (iii) is in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its
business, except in each case as could not have or reasonably be expected to
result in a Material Adverse Change.

 

(i)           Transactions With Affiliates and Employees. None of the officers
or directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or its subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner, in each case in excess of $500,000 other
than for: (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option, restricted stock or other
compensation-related agreements under any equity plan of the Company.

 

(j)           Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 5, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby.

 

A-12

 

 

(k)          Investment Company. The Company is not, and immediately after
receipt of payment for the Securities, and for so long as any Purchaser holds
any Securities, will not be, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall conduct its
business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended. The
Company is not controlled by an “investment company” and shall not take any
actions that would cause the Company to be controlled by an “investment
company”.

 

(l)           Listing and Maintenance Requirements. The Common Stock is
registered pursuant to Section 12 (b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration.

 

(m)         No Payment of Transfer Taxes. No transfer, documentary, stamp,
sales, use and other taxes have been or will be required or imposed by reason
of, the transfer of the Securities to the Purchasers.

 

(n)          Office of Foreign Assets Control. Neither the Company nor, to the
Company’s knowledge, any director, officer, agent, employee or affiliate of the
Company is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department. “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144 under the Securities Act.

 

(o)          Money Laundering. The operations of the Company are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

 

7.             Indemnification.

 

(a)          The Purchaser agrees to indemnify and hold harmless the Company and
its officers, directors, employees, agents, control persons and affiliates from
and against all losses, liabilities, claims, damages, costs, fees and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of any actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission to
state a material fact, or breach by the Purchaser of any covenant or agreement
made by the Purchaser herein or in any other document delivered in connection
with this Subscription Agreement.

 

(b)          The Company agrees to indemnify and hold harmless the Purchaser and
its officers, directors, employees, agents, control persons and affiliates from
and against all losses, liabilities, claims, damages, costs, fees and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of any actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission to
state a material fact, or breach by the Company of any covenant or agreement
made by the Company herein or in any other document delivered in connection with
this Subscription Agreement.

 

A-13

 

 

8.             Irrevocability; Binding Effect. The Purchaser hereby acknowledges
and agrees that the subscription hereunder is irrevocable by the Purchaser,
except as required by applicable law, and that this Subscription Agreement shall
survive the death or disability of the Purchaser and shall be binding upon and
inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns. If the Purchaser is
more than one person, the obligations of the Purchaser hereunder shall be joint
and several and the agreements, representations, warranties, and acknowledgments
herein shall be deemed to be made by and be binding upon each such person and
such person's heirs, executors, administrators, successors, legal
representatives, and permitted assigns.

 

9.             Modification. This Subscription Agreement shall not be modified
or waived except by an instrument in writing signed by the party against whom
any such modification or waiver is sought.

 

10.           Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given (a) if to the Company, at the address set forth above, or (b) if
to the Purchaser, at the address set forth on the signature page hereof (or, in
either case, to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 10). Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.

 

11.           Assignability. This Subscription Agreement and the rights,
interests and obligations hereunder are not transferable or assignable by the
Purchaser and the transfer or assignment of the Securities shall be made only in
accordance with all applicable laws.

 

12.           Applicable Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts to be wholly- performed within said State.

 

13.           Arbitration. The parties agree to submit all controversies to
arbitration in accordance with the provisions set forth below and understand
that:

 

(a)          Arbitration is final and binding on the parties.

 

(b)          The parties are waiving their right to seek remedies in court,
including the right to a jury trial.

 

(c)          Pre-arbitration discovery is generally more limited and different
from court proceedings.

 

(d)          The arbitrator's award is not required to include factual findings
or legal reasoning and any party's right to appeal or to seek modification of
rulings by arbitrators is strictly limited.

 

(e)          The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.

 

A-14

 

 

(f)          All controversies which may arise between the parties concerning
this Subscription Agreement shall be determined by arbitration pursuant to the
rules then pertaining to the Financial Industry Regulatory Authority, Inc.
(“FINRA”) in New York City, New York. Judgment on any award of any such
arbitration may be entered in the Supreme Court of the State of New York or in
any other court having jurisdiction of the person or persons against whom such
award is rendered. Any notice of such arbitration or for the confirmation of any
award in any arbitration shall be sufficient if given in accordance with the
provisions of this Agreement. The parties agree that the determination of the
arbitrators shall be binding and conclusive upon them.

 

14.           Blue Sky Qualification. The purchase of Securities under this
Subscription Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Securities from applicable federal
and state securities laws. The Company shall file such notices and related
documents as necessary to permit the Securities to be sold without registration
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification).

 

15.           Use of Pronouns. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons referred to may require.

 

16.           Confidentiality. The Purchaser acknowledges and agrees that any
information or data the Purchaser has acquired from or about the Company, not
otherwise properly in the public domain, was received in confidence. The
Purchaser agrees not to divulge, communicate or disclose, except as may be
required by law or for the performance of this Agreement, or use to the
detriment of the Company or The Company or for the benefit of any other person
or persons, or misuse in any way, any confidential information of the Company or
The Company, including any scientific, technical, trade or business secrets of
the Company or The Company and any scientific, technical, trade or business
materials that are treated by the Company or The Company as confidential or
proprietary, including, but not limited to, ideas, discoveries, inventions,
developments and improvements belonging to the Company or The Company and
confidential information obtained by or given to the Company or The Company
about or belonging to third parties.

 

17.           Miscellaneous.

 

(a)         This Subscription Agreement, together with all attachments,
schedules and exhibits hereto, and the Accredited Investor Certification,
constitute the entire agreement between the Purchaser and the Company with
respect to the subject matter hereof and supersede all prior oral or written
agreements and understandings, if any, relating to the subject matter hereof.
The terms and provisions of this Subscription Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.

 

(b)          The representations and warranties of the Purchaser made in this
Subscription Agreement shall survive the execution and delivery hereof and
delivery of the Securities.

 

(c)          Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Subscription Agreement and the
transactions contemplated hereby whether or not the transactions contemplated
hereby are consummated.

 

A-15

 

 

(d)          This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.

 

(e)          Each provision of this Subscription Agreement shall be considered
separable and, if for any reason any provision or provisions hereof are
determined to be invalid or contrary to applicable law, such invalidity or
illegality shall not impair the operation of or affect the remaining portions of
this Subscription Agreement.

 

(f)           Paragraph titles are for descriptive purposes only and shall not
control or alter the meaning of this Subscription Agreement as set forth in the
text.

 

(g)          The Purchaser understands and acknowledges that there may be
multiple closings for this Offering.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

A-16

 

 

INVESTOR INFORMATION

 

Investor Name(s):  

(As is will appear on the Securities)

 

Individual Executing Profile or Trustee (If Applicable):  

 

SSN / Federal I.D. #     Marital Status:  

 

Date of Birth:     Joint Party Date of Birth:  

 

Investment Experience (Years):     Joint Party is Spouse?    ¨   yes     ¨   no
 

 

Date of Organization (entities):        

 

Total Assets (for entities, including irrevocable trusts, only):  

 

 

Primary Street Address:  

 

Primary City, State & Zip Code:  

 

Home Phone:     Home Fax:  

 

Mobile Phone:     Email:  

 

 

Employer: 

 

Type of Business:  

 

Business Street Address:  

 

Business City, State & Zip Code:  

 

Business Phone:     Business Fax:  

 

 

SECURITIES DELIVERY INSTRUCTIONS (Check One)

 

¨ Please deliver my securities to the Primary address listed above.

 

¨ Please hold my securities in book-entry form with the Issuer or the Transfer
Agent, if applicable.

 

¨ Please deliver my securities to the following address:  

 

[Signature Page Follows]

 

A-17

 

 

Signature Page

 

SIGNATURE PAGE

 

By execution and delivery of this signature page, you (the “Investor”) hereby
subscribe to purchase the Securities indicated below, for the aggregate purchase
price indicated below, pursuant to the terms and conditions of this Subscription
Agreement (the “Subscription Agreement”). You further (i) acknowledge and agree
that you have read and understand this Subscription Agreement, including the
representations and warranties in the section entitled “Representations and
Warranties of the Purchaser,” (ii) represent and warrant that the statements
contained in this Subscription Agreement are complete and accurate with respect
to you, and (iii) acknowledge and agree that your offer to subscribe to purchase
the Securities indicated below, for the aggregate purchase price indicated
below, is irrevocable and that the Company may decline to accept your offer in
its sole discretion.

 

INVESTOR:   THE COMPANY:       If Investor is an Individual:   Agreed and
accepted as of the _____ day of       Print Name:     ____________________,
2019.

 

Signature:         KULR TECHNOLOGY GROUP, INC.,

 

Social Security # or Fed ID #:     a Delaware corporation

 

Print Name (if joint investment):      

 

      By:  

 

Signature:      

 

      Name: Social Security # or Fed ID #             Title:

 

If Investor is an entity:      

 

Name of Signatory:      

 

Signature:      

 

Title:      

 

Telephone No.      

 

Social Security # or Fed ID #      

 

      Street Address           Street Address – 2nd line           City, State,
Zip    

 

Investment Amount:

 

Number of Units Purchased:      

 

Purchase Price Per Unit: $9,000.00

 

 

Aggregate Purchase Price:      

 

 

Date:      

 

A-18

 

 

EXHIBIT A

 

Accredited investor

 

Certification

 

 

 

 

CERTIFICATE FOR INDIVIDUAL INVESTORS

 

If the investor is an individual, including married couples and IRA accounts of
individual investors, pleased complete, date and sign this Certificate. The
undersigned certifies that the representations and responses below are true and
accurate:

The investor has full power and authority to invest in the Company.

If the investment is to be held jointly, each investor must execute and deliver
the Omnibus Signature Page and initial their individual investor status.

 

¨ Individual ¨ Joint Tenants  

 

¨ IRA ¨ Tenants in Common  

 

¨ Tenants in the Entirety ¨ Community Property  

 

¨ Grantor of a Revocable Trust (Identify each grantor and indicate under what
circumstances the trust is revocable by the grantor.):

 

  ¨ Check if any Grantor is deceased, disabled or legally incompetent.    

 

INDIVIDUAL INVESTOR STATUS

 

In order for the Company to offer and sell the Securities in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as an investor in the Company.

 

Annual Income:   Net Worth: Liquid Net Worth:          

 

 

1

 

(Initial if Applicable)

  I certify that I have a net worth, or joint net worth with my spouse, in
excess of $1 million. For purposes of the foregoing net worth calculation, I
have excluded my/our primary residence, and I have not included any indebtedness
secured by my/our primary residence as a liability, unless the amount of such
indebtedness exceeds the fair market value of my/our primary residence at the
time of purchase, in which event the amount of such indebtedness that exceeds
the fair market value of my/our primary residence is included as a liability in
determining my net worth or my joint net worth with my spouse.        

 

2

 

(Initial if Applicable)

  I certify that I have had an annual gross income for the past two years of at
least $200,000 (or $300,000 jointly with my spouse) and expect my income (or
joint income, as appropriate) to reach the same level in the current year.      
  3

 

(Initial if Applicable)

  I certify that I am a director or executive officer of the Company.

 

 

 

 

ADDITIONAL SUITABILITY CERTIFICATION (INDIVIDUALS)  

(a)  Please describe your current employment, including the company by which you
are employed and its principal business:

 

       

(b)  Please describe any college or graduate degrees held by you:

         

(c)  Please list types of prior investments:

         

(d)  Please state whether you have you participated in other private placements
before:

 

  YES     NO      

(e) If your answer to question 7(d) above was “YES”, please indicate frequency
of such prior participation in private placements of:

 

    Public
Companies   Private
Companies   Public or Private
Financial Services
Companies                 Frequently                           Occasionally    
                      Never                        

 

(f) For individual Investors, do you expect your current level of income to
significantly decrease in the foreseeable future?

    YES     NO        

(g)  For all Investors, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you?

    YES     NO        

(h)  For all Investors, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you seek to
subscribe?

    YES     NO        

(i)  For all Investors, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of losing your
entire investment?

    YES     NO      

 

 

 

 

ADDITIONAL SUITABILITY CERTIFICATION (INDIVIDUALS) (Continued)   (j) Are you
affiliated or associated with a FINRA member firm (please check one)?

 

  YES  ¨   NO  ¨    

 

If Yes, please describe:

 

   

 

*If Investor is a Registered Representative with a FINRA member firm, have the
following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

 

      Name of FINRA Member Firm  

 

By:    Date:     Authorized Officer   

 

INDIVIDUAL CERTIFICATION

 

The undersigned certifies that the representations and responses above are true
and accurate and further certifies that the undersigned has the authority to
execute and deliver this Subscription Agreement and to take other actions with
respect thereto.  

 

The undersigned further certifies under penalty of perjury that:

(a) The undersigned’s correct social security / federal taxpayer identification
number is set forth above, and

(b) The undersigned is not subject to backup withholding.  

 

Investor Name:    Investor Name (if joint investment):  

 

By (Signature) :    By (Signature) :  

 

Date:    Date:  

 

 

 

 

CERTIFICATE FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY, TRUST,
FOUNDATION AND JOINT INVESTORS  

 

If the Investor is a corporation, partnership, limited liability company, trust,
pension plan, foundation, joint Investor (other than a married couple) or other
entity, an authorized officer, partner, or trustee must complete, date and sign
this Certificate.

 

¨ Limited Partnership ¨ General Partnership     ¨ Limited Liability Company ¨
Corporation     ¨ Irrecoverable Trust ¨ Pension, Profit Sharing, Money Purchase,
Keogh or 401(k) Plan; IRA or other employee benefit plan

 

¨ Other form of organization:  

 

Indicate the approximate date the undersigned entity was formed:  

 

 

NOTE: PLEASE PROVIDE A COPY OF THE ORGANIZATIONAL DOCUMENTATION. (i.e., Article
of Incorporation, Partnership Agreement, Operating Agreement, Trust Agreement,
etc.)

 

 

FOR ERISA PLANS ONLY:

 

Is the Investor a “Benefit Plan Investor” or acquiring the Securities on behalf
of any entity which is a “Benefit Plan Investor,” as such term is defined in
Appendix A (for entities only, including IRA investors)?

 

¨             yes ¨               no

 

Investors answering “yes” above, please check each box that accurately describes
the Investor:

 

¨The Investor, or the entity on whose behalf the Investor is acquiring the
Interests, IS a “Benefit Plan Investor” but IS NOT an “ERISA Investor” as such
terms are defined in Appendix A.

 

¨The Investor, or the entity on whose behalf the Investor is acquiring the
Interests, IS an ERISA Investor that is subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the “Code”), but IS NOT subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

 

Please notify the Company immediately if you checked the above box and the ERISA
Investor subsequently becomes subject to Title I of ERISA.

 

¨The Investor, or the entity on whose behalf the Investor is acquiring the
Interests, IS an ERISA Investor that IS subject to Title I of ERISA.

 

If the Investor answered “yes” above, is the Investor obligated to file an
annual return/report on an IRS Form 5500 Series form?

 

¨             yes* ¨               no

 

* Investors answering “yes” please provide the following information:

 

Investor's plan name:     Investor's plan number:     Name of plan sponsor:    
EIN of plan sponsor:    

 

 

 

 

 

ENTITY FORM OF PAYMENT

 

¨ Wire funds will be made from my outside account according to the wiring
instructions contained herein. ¨ Other:___________________ (specify form of
payment).

 

ENTITY INVESTOR STATUS   In order for the Company to offer and sell the
Securities in conformance with state and federal securities laws, the following
information must be obtained regarding your investor status.  Please initial
each category applicable to you as an investor in the Company.

 

1                                            
(Initial if Applicable)   A bank as defined in Section 3(a)(2) of the Securities
Act, or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;           2                                            
(Initial if Applicable)   A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934;           3  
                                         
(Initial if Applicable)   An insurance company as defined in Section 2(13) of
the Securities Act;           4                                            
(Initial if Applicable)   An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that Act;           5                                            
(Initial if Applicable)   A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d)of the Small
Business Investment Act of 1958;           6  
                                         
(Initial if Applicable)   A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000;           7  
                                         
(Initial if Applicable)   An employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment advisor, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors; 8  
                                         
(Initial if Applicable)   A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940; 9  
                                         
(Initial if Applicable)   Any partnership or corporation or any organization
described in Section 501(c)(3) of the Internal Revenue Code or similar business
trust, not formed for the specific purpose of acquiring the Securities, with
total assets in excess of $5,000,000;           10  
                                         
(Initial if Applicable)   A trust (including a revocable trust and an
irrevocable trust) ,with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Securities, whose purchase is directed by
a sophisticated person as described in Rule 506(b)(2)(ii)of the Securities Act;
or           11                                            
(Initial if Applicable)   An entity (other than an irrevocable trust) in which
all of the equity owners* qualify under any of the above subparagraphs described
herein. If the undersigned belongs to this investor category only, list the
equity owners of the undersigned, and have each equity owner complete and
deliver the Certification for Individual Investors (Note: an “equity owner” for
the purposes of this Questionnaire means (1) stockholders in the case of a
corporation, (2) limited partners only in the case of a limited partnership, (3)
general partners in the case of a general partnership, (4) members in the case
of a limited liability company, (5) partners in the case of a limited liability
partnership, (6) grantor(s) in the case of a trust revocable at the sole option
of grantor(s):                    

 

 

 

 

ADDITIONAL SUITABILITY CERTIFICATION (ENTITIES)

 

(a) Please list types of prior investments:

 

 

 

 

(b) Please state whether you have you participated in other private placements
before:

 

 

YES_______ NO_______

 

(c) If your answer to question 12(b) above was “YES”, please indicate frequency
of such prior participation in private placements of:

 

    Public
Companies   Private
Companies   Public or Private Financial
Services Companies               Frequently                     Occasionally    
                Never      

 

(d) For trust, corporate, partnership and other institutional Investors, do you
expect your total assets to significantly decrease in the foreseeable future:

 

YES_______ NO_______

 

(e) For all Investors, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you:

 

YES_______ NO_______

 

(f) For all Investors, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you seek to
subscribe?

 

YES_______ NO_______

 

(g) For all Investors, do you understand that there is no guarantee of financial
return on this investment and that you run the risk of losing your entire
investment?

 

YES_______ NO_______

 

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ADDITIONAL SUITABILITY CERTIFICATION (ENTITIES) (Continued)

 

(h) Are you affiliated or associated with a FINRA member firm (please check
one)?

 

YES ¨ NO ¨

 

If Yes, please describe:      

 

*If Investor is a Registered Representative with a FINRA member firm, have the
following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

 

____________________________________

Name of FINRA Member Firm

 

By: ________________________ Date: ___________

Authorized Officer

 

[Remainder of page intentionally left blank]

 

 

 

 

 

ENTITY CERTIFICATION  

The undersigned certifies that the representations and responses above are true
and accurate:

 

The investor has been duly formed and validly exists and has full power and
authority to invest in the Company. The person signing on behalf of the
undersigned has the authority to execute and deliver this Subscription Agreement
on behalf of the Investor and to take other actions with respect thereto and
certifies further that this Subscription Agreement has been duly and validly
executed on behalf of the undersigned entity and constitutes a legal and binding
obligation of the undersigned entity.

 

The undersigned further certifies under penalty of perjury that:

(a) The undersigned’s correct federal taxpayer identification number is set
forth above, and

(b) The undersigned is not subject to backup withholding.

 

Investor Name:    

 

By (Signature):    

 

Name (Print):    

 

Title:    

 

Date:    

 

 

 

EXHIBIT B

 

Certificate of Designation of

 

SERIES C CONVERTIBLE PREFERRED STOCK OF

 

KULR TECHNOLOGY GROUP, INC.

 

 

 

EXHIBIT C

FORM OF WARRANT