BELMONT, Mass., Sept. 29, 2005 (PRIMEZONE) -- Kronos Advanced Technologies, Inc. (OTCBB:KNOS) today announced its fiscal 2005 financial results for the year ended June 30, 2005.
Revenues from Kronos' wholly owned subsidiary, Kronos Air Technologies, Inc., were $430,000, compared with $533,000 for the prior year. Revenues were generated primarily from contracts with the U.S. Military, as the Company focused on delivery of a viable commercial air handler to the U.S. Navy and development of a dehumidification device for the U.S. Army, and from the development of a consumer product for HoMedics.
"This has been a year of expansion as Kronos added product development resources and developed several high profile strategic partner relationships," stated President and Chief Executive Officer Daniel R. Dwight. "Kronos has expanded production of standalone consumer air purification products beyond the initial prototypes and initiated increased product testing. This effort has resulted in the completion of a modified product design and the production and assembly of a limited number of new devices that incorporate these new features.
"In addition to our partnership with HoMedics, a leading health and wellness provider, we developed new strategic relationships with IKEA, an international leader in home furnishings, Northrop Grumman, a leading aerospace company, and an international manufacturer of luxury automobiles. An initial prototype device has been shipped to IKEA for testing and evaluation and a U.S. Navy product developed under an SBIR Phase II contract has been shipped to Northrop Grumman."
Other accomplishments include:
-- Obtaining additional U.S. and international patents for the
Company's proprietary technology, as well as filing additional
patent filings;
-- Independent verification of Kronos technology's ability to filter
submicron size particles (30 to 100 nanometers), which includes
bacteria and virus size particles;
-- Expansion of our technical, research and product development team;
and
-- Expansion into a larger facility to accommodate our growing
customer driven research and product development needs.
For the year ended June 30, 2005, operating expenses increased 33% to $2,772,000 compared with $2,089,000 for the prior year. This $683,000 increase was primarily the result of a $544,000 increase on cash and non-cash compensation and benefits, as well as a $107,000 increase in research and development as the Company expanded its research and product application capability, partially offset by a $111,000 reduction in professional services.
As a result of debt restructuring with HoMedics, Kronos' standalone consumer products partner, HoMedics agreed in October 2004 to provide Kronos an additional $1 million in debt financing and to extend the quarterly debt payments and the maturity date for $2.4 million in existing debt. Quarterly payments will be due on Kronos' receipt of royalty payments from HoMedics' sale of Kronos-based air purification products, or two years. The maturity date of the debt has been extended to October of 2009. The interest rate will remain at 6%. As part of the restructuring and additional debt financing provided by HoMedics, Kronos has issued warrants to HoMedics to purchase 26.5 million shares of Kronos Common Stock, potentially increasing HoMedics equity position in Kronos to 30% on a fully diluted basis. As a result of this debt restructuring, Kronos reported a $3,857,000 one-time non-cash charge to operations for the year.
As a result, the net operating loss increased during the year ended June 30, 2005 to $2,717,000 as compared with $1,935,000, and the net loss increased to $7,094,000, or $0.10 per share, as compared with a net loss of $2,495,000, or $0.04 per share for the prior year, respectively. Basic and diluted shares outstanding used in computing per share amounts were 67,612,904 and 57,760,785, respectively.
Details of the Company's results can be found in its annual report filed September 28, 2005 on SEC Form 10-KSB, at www.sec.gov and at www.kronosati.com.
About Kronos Advanced Technologies, Inc.
Through its wholly owned subsidiary, Kronos Air Technologies, Inc., Kronos Advanced Technologies has developed a new, proprietary air movement and purification system that utilizes state-of-the-art high voltage electronics and electrodes to silently move and clean air without any moving parts. Kronos is actively commercializing its technology for standalone and embedded products across multiple residential, commercial, industrial and military markets. Kronos' technology is versatile, energy- and cost-efficient and exhibits multiple design attributes, creating a broad range of applications. The Company's business strategy includes a combination of building internal capabilities, establishing strategic alliances and structuring licensing arrangements. Kronos Advanced Technologies is located in Belmont, MA. More information about Kronos Advanced Technologies is available at www.kronosati.com.
With the exception of historical information contained in this press release, this press release includes forward-looking statements and comments. Such statements are necessarily subject to risks and uncertainties, some of which are significant in scope and nature beyond the Company's control. Forward-looking statements, by their nature, involve substantial risks and uncertainties. As a result, actual results may differ materially depending on many factors, including those described above.
The Company cautions that historical results are not necessarily indicative of the Company's future performance. Other risks are summarized under the caption "Certain Business Risk Factors" in the Company's Annual Report on Form 10-KSB for the year ended June 30, 2005 as filed with the Securities and Exchange Commission.
KRONOS ADVANCED TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended June 30,
2005 2004
Sales $ 430,379 $ 533,220
Cost of sales 375,397 379,331
Gross Profit 54,982 153,889
Selling, General and
Administrative expenses
Compensation and benefits 1,384,481 840,205
Research and development 167,500 60,517
Professional services 244,570 355,454
Depreciation and
amortization 475,250 360,955
Facilities 96,882 88,914
Insurance 173,597 125,622
Other selling general and
administrative expenses 229,658 257,287
Total Selling, General and
Administrative expenses 2,771,938 2,088,954
Net Operating Loss (2,716,956) (1,935,065)
Loss on Debt Restructure (3,857,467) --
Other Income 1,414 56,000
Interest Expense (521,104) (615,831)
Net Loss $ (7,094,113) $ (2,494,896)
Basic and Diluted Loss Per
Share: $ (0.10) $ (0.04)
Weighted Average Shares
Outstanding
- Basic and Diluted 67,612,904 57,760,785