BELMONT, Mass., Feb. 22, 2007 (PRIME NEWSWIRE) -- Kronos Advanced Technologies, Inc. (OTCBB:KNOS) announced it has entered into an agreement to settle its outstanding $3.1 million debt obligation with HoMedics, its former strategic partner in the consumer marketplace, along with the cancellation of a HoMedics warrant to purchase 26.5 million shares of Kronos stock, in exchange for Kronos making a $1 million cash payment within the next 120 days.
"We are pleased to have reached a settlement agreement with HoMedics, which better positions us to aggressively pursue and secure new strategic partners for our stand-alone air purification products in the consumer market place," stated Daniel Dwight, President and Chief Executive Officer of Kronos. "Discussions with potential new partners are currently underway."
Under the terms of the settlement agreement and general release with HoMedics, the license for consumer retail products is returned unencumbered to the Company and the $3.1 million in principal and accrued interest owed to HoMedics has been cancelled contingent upon a cash payment of $1 million to be made within 120 days. Upon receipt of the payment, HoMedics has also agreed to cancel a warrant to purchase 26.5 million shares of Kronos stock, and to modify the terms of their remaining warrants to purchase 13.5 million shares. HoMedics' remaining warrants are exercisable at $0.10 per share with a mandatory exercise at Kronos' discretion should the stock trade at more than $0.20 per share for 20 consecutive trading days. Any Kronos stock that HoMedics acquires upon the exercise of its remaining warrants is subject to volume limitations on sale.
At the same time, the Company said that it does not plan at this time to register any additional shares to Cornell Capital Partners, effectively ending its use of the Cornell Standby Equity Distribution Agreement.
Commenting on the decision to not use the Cornell line of funding at the present time, Mr. Dwight stated, "During the last two years, Cornell played a critical funding role, which enabled Kronos to advance our proprietary technology and to create standalone and embedded product platforms that now allow us to introduce these products to major markets. These further developments of the business have positioned the Company to seek more traditional long term equity and debt financing."
Further details of the settlement can be found in an 8-K filed by the Company February 21, 2007, at www.sec.gov or 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.
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Forward-Looking Statements
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, 2006 as filed with the Securities and Exchange Commission.