BELMONT, Mass., Feb. 15, 2006 (PRIMEZONE) -- Kronos Advanced Technologies, Inc. (OTCBB:KNOS) President and Chief Executive Officer Daniel R. Dwight announced today that the Company has made significant advances in both the residential and commercial markets during the second quarter ended Dec. 31, 2005. The business highlights include:
-- Achievement of the first production milestone with
Kronos' North American, standalone, consumer retail
partner, HoMedics, including the receipt of $175,000
in additional customer funding;
-- Execution of a licensing agreement with Kronos'
newest strategic partner, EOL, for Russia and other
select Commonwealth of Independent States for
standalone, commercial air purifiers and space heaters;
-- Completion of successful testing and shipment of an
embedded air movement prototype for Kronos' luxury
automotive partner;
-- Collaboration with the Washington Technology Center
and University of Washington to demonstrate a bench
scale device for micro cooling of a MEMS chip;
-- Expansion of Kronos' product claims platform with
additional independent laboratory testing for
disinfection and micron and sub-micron filtration in
the U.S., Ukraine and Russia;
-- Further development of Kronos' intellectual property
platform, including the receipt of additional U.S.
patents; and
-- Increase in market awareness following an article in
the November 28th edition of Business Week that
featured the Kronos technology and its virus
destruction capabilities.
Mr. Dwight provided the following summary of the Company's business highlights for the second quarter:
Standalone Platform
Consumer Products: In October 2005, Kronos received initial shipment of preproduction standalone consumer air purifiers from its low cost, contract manufacturer in Mexico and China and completed internal testing of these units. These products were successfully tested under a testing protocol co-developed by Kronos and HoMedics. In December 2005, HoMedics funded the Company a further $175,000 upon acceptance of the testing results. Subsequently, devices tested at LMS Technologies, Inc. under industry ASHRAE 52.2 protocol showed filtration of up to 100% of 0.3 micron sized particulates and above.
Commercial Products: In December 2005, Kronos executed a non-exclusive License Agreement with EOL, LLC, a Russian Federation corporation. Based in Korolev, Moscow Region, Russia, EOL will leverage the Kronos technology to produce, market, and distribute Kronos commercial air purification products, bacteriological and virus destruction devices and space heaters in select Commonwealth of Independent States. The agreement comes after successful completion of multiple tests in Eastern Europe, which found the Kronos technology capable of decontaminating rooms infected with airborne viruses and bacteria. Under the terms of the five-year agreement, EOL will provide Kronos a fixed percentage royalty on every product sold, as well as upfront licensing and quarterly maintenance fees. EOL expects to have product available by the fall of 2006. EOL plans to assemble the finished products in Russia from components supplied both locally and from contract manufacturers in China. The products will be marketed and distributed in Russia, Ukraine, Kazakhstan, Moldova and Byelorussia.
Embedded Platform
Transportation Products -- Automobile: Kronos extended its work into the transportation industry by signing a Prototype Development and Evaluation Agreement with a leading luxury automotive manufacturer. With assistance from the customer, Kronos completed design and manufacturing of the initial prototype device to meet exacting customer standards for placement inside automobile interiors. Kronos and the automotive manufacturer completed in-house testing of the device and then shipped the prototype to the customer for further testing and evaluation in its U.S. and European facilities.
Other Business Development Activities
Kronos continues to develop additional strategic partner relationships, in part, by leveraging the positive industry press coverage it has received, including an article in the November 28th edition of Business Week article that featured the Kronos technology.
Kronos also expanded and improved its product demonstration capability, enabling the Company to more effectively demonstrate its abilities to various potential customers who have requested specific technical information. Kronos also has improved its sales process by enabling on-site demonstration at the Company's Research and Product Development facility in Redmond, Wash., and at customers' facilities. The improved demonstration process has resulted in the shipment, testing and evaluation of the technology to potential customers in commercial, residential and industrial markets.
Product Claims Platform
Kronos continues to expand its product claims platform. During the quarter, it obtained results of independent testing of Kronos standalone air purification products which were conducted at the Aerosol and Air Quality Research Laboratory and LMS Technologies in the United States, Disinfection Research Institute Sterilization Laboratory in Russia, and Institute for Veterinary Medicine in the Ukraine. The results demonstrated up to 99.8% filtration of 0.02 micron and above size particles, 100% filtration of 0.3 micron and above size particles, 100% decontamination of rooms infected with bacteria Staphylococcus aureus strain 906 (S. aureus) and Bacillus cereus strain 96 (B. cereus), and 100% destruction and sterilization of air streams which had been inseminated with Anthrax and E.coli spores.
Intellectual Property
Kronos further expanded its intellectual property with the receipt of its eighth and ninth U.S. Patents, "Electrostatic Fluid Accelerator -- Advanced Geometries" and "Electrostatic Fluid Accelerator -- Power Management," and its second international patent, entitled "Electrostatic Fluid Accelerator," which was examined and allowed for issuance as a Mexican patent.
Financial
For the first six months of fiscal 2006, the Company's wholly-owned subsidiary Kronos Air Technologies, Inc. continued to make investments in product development across both commercial and consumer standalone product applications and residential and transportation embedded product applications, as well as for business development activities to further expand the Company's base of new potential strategic partners. The increased activity led to an increase in operating expenses to $1,432,000 for the six months ended Dec. 31, 2005, compared with $1,034,000 in the corresponding period the year before. The net loss, however, decreased for the six months ended Dec. 31, 2005, to $1,706,000 compared with $5,138,000 for the corresponding period as the Company incurred a one time loss ($3,857,000) on debt restructuring during the quarter ended Dec. 31, 2004. Revenues were $37,500 compared with $381,500. The decrease in revenue resulted from less of a reliance on military funded projects and an increased focus on residential, consumer and commercial applications.
Details of the Company's results can be found in its quarterly report filed Feb. 14, 2006, on SEC Form 10-QSB, at or 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, 2005, as filed with the Securities and Exchange Commission.