BELMONT, Mass., Oct. 1, 2007 (PRIME NEWSWIRE) -- Kronos Advanced Technologies, Inc. (OTCBB:KNOS) President and Chief Executive Officer Daniel R. Dwight reported a business update and financial results for the fiscal year ended June 30, 2007.
Significant Items:
-- Our primary business objective over the prior 12 months was to
secure the funding to support the Company's effort to
commercialize its proprietary technology while continuing to
expand our research into new product applications. In the fiscal
year ended June 30, 2007, the Company received $4,459,000 in
funding from investors with an investor option to fund an
additional $13,900,000. In addition, the Company received
$1,380,000 in funding from Cornell Capital Partners and $160,000
in customer funded product development work and licensing revenue
from the sale of Kronos-based products.
The new funding enabled the Company to restructure its debt by
settling in full $3,082,000 in outstanding debt inclusive of
interest to HoMedics through a $1,000,000 payment under the terms
of the Company and HoMedics' Settlement Agreement and General
Release and repayment in full all amounts owed to Cornell Capital
Partners, including amounts funded during the year. The
restructuring resulted in a $2,341,000 or 91% decrease in long
term liabilities, $1,636,000 or 51% decrease in short term
liabilities and a $1,351,000 or 53% decrease in the working
capital deficit.
-- The Company allowed its license agreement to expire with its
residential, retail consumer products partner, HoMedics USA, Inc.
The expiration of this agreement positioned the Company to
identify and initiate discussion with new strategic partners in
the residential market place who have the willingness and
viability to bring Kronos-based consumer air purification
products to market.
-- The Company provided technical services and electronics to its
Russian partner, EOL LLC, as EOL completed development of a
medical air purifier and began selling the product in the
hospital marketplace. The Company generated $104,000 in revenue
through the sale of Kronos proprietary electronics and from
royalties from EOL sale of Kronos-based air purification devices.
Following successful testing in hospital rooms with patients
present, EOL's Kronos-based Tree(tm) air purification device
received medical approval: The Russian Research Institute of
Medical Equipment approved the Kronos-based device for use in
hospitals and other healthcare facilities and the Ministry of
Health Care and Social Development of the Russian Federation
issued a Registration Certificate that designates the
Kronos-based device for medical use.
-- The Company (i) obtained a Phase III award from the Washington
Technology Center in conjunction with the University of
Washington and Intel Corporation for a research and development
project based on a novel cooling system for microelectronics and
computer chips; (ii) continued to serve as a member and an
industrial partner in the Federal Aviation Administration's (FAA)
Air Transportation Airliner Cabin Environment Research Center of
Excellence; and (iii) pursued new opportunities initiated by two
leading global home appliance manufacturers for the development
of select residential applications of its technology, including
silent kitchen range hoods.
-- The Company increased its patent portfolio to thirteen U.S.
patents and three international patents and continues to have
additional patents pending.
Financial Review
Revenues for the year ended June 30, 2007 were $160,000 compared with $219,000 in the prior year. Current year revenues were primarily from our EOL, Bosch Siemens, DESA and GE agreements. Our net losses for each of the fiscal years ended June 30, 2007 and June 30, 2006 were $2,351,000 and $4,000,000, respectively. The decrease in the net loss for the year ended June 30, 2007, as compared to the prior year, was principally the result of a $2,856,000 increase in other income associated with the settlement of the HoMedics debt and cancellation of 26.5 million warrants issued to HoMedics, and a $121,000 decrease in interest expense to $368,000, partially offset by a $144,000 decrease in gross profit and a $1,176,000 increase in operating costs to $4,907,000. The $1,176,000 increase in operating costs was principally the result of a $924,000 increase on equity compensation as the result of an increase in non cash compensation associated with the expensing of stock options and a $605,000 increase in professional services as the result of the cost of securing new funding and settlement of the HoMedics debt, partially offset by a $170,000 decrease in research and development and a $74,000 decrease in compensation and benefits as the Company prioritized its limited resources on product development.
Details of the Company's results can be found in its annual report filed September 28, 2007 on SEC Form 10-KSB 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, and industrial 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.
Safe Harbor Provision
This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company's views on future financial performance, market growth, capital requirements, new product introductions and acquisitions, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the Company's industry, R&D initiatives, competition and capital requirements. Other factors and uncertainties that could affect the Company's forward-looking statements include, among other things, the following: identification of feasible new product initiatives, management of R&D efforts and the resulting successful development of new products and product platforms; acceptance by customers of the Company's products; substantial expansion of international sales; reliance on key suppliers; the potential need for changes in long-term strategy in response to future developments; competitive factors, including pricing pressures and the introduction by others of new products with similar or better functionality than our products, and ability to obtain additional financing necessary to continue operations. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-KSB for the year ended June 30, 2007. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.