BELMONT, Mass., May 16 MA-Kronos-2Q-Results
BELMONT, Mass., May 16 /PRNewswire-FirstCall/ -- Kronos Advanced
Technologies, Inc. (OTC Bulletin Board: KNOS) -- President and Chief
Executive Officer, Daniel R. Dwight, reported a financial results and a
business update and for the nine months ended March 31, 2008 for Kronos
Advanced Technologies, Inc.
Financial Results
Kronos recorded a net loss for each of the nine months ended March 31,
2008 and March 31, 2007 of $2,339,000 and $2,501,000, respectively. The
decrease in the net loss for the nine months ended March 31, 2008 compared
with the comparable period of 2007 was principally the result of $3,134,000
increase in gross profit to $3,197,000, partially offset by a $1,696,000 in
accretion of note discount, a $1,039,000 increase in operating costs to
$3,341,000, and a $237,000 increase in interest expense to $499,000.
Revenues for the nine months ended March 31, 2008 were $3,598,000 compared
to $156,000 for the comparable period of 2007. Revenues for the quarter ended
March 31, 2008 consisted of revenues from our agreements with Tessera, a
national retailer, a global consumer products company and our Russian medical
products partner. Selling, General and Administrative expenses for the
quarter ended March 31, 2008 increased $1,039,000 from the corresponding
period of 2007 to $3,341,000. The increase was principally the result of a
$614,000 increase in compensation and benefits, primarily as a result of an
increase in the expense of amortizing stock options that vested during the
2008 period, and a $288,000 increase in professional services as a result of a
new consulting arrangement and legal expenses. Interest expense for the
quarter ended March 31, 2008 was $499,000 compared with $262,000 for the
corresponding period of the prior year. The increase in interest expense was
principally the interest on promissory notes payable to AirWorks, Hilltop,
Sands and Critical Capital.
Kronos' total assets at March 31, 2008 were $5,060,000 compared with
$2,111,000 at June 30, 2007. Total assets at March 31, 2008 and June 30, 2007
were comprised primarily of $3,579,000 and $364,000, respectively, of cash and
$1,450,000 and $1,723,000, respectively, of patents/intellectual property. The
Company had a working capital surplus of $927,000 at March 31, 2008 and a
working capital deficit of $1,208,000 at June 30, 2007. Subsequent to the end
of the quarter, the Company repaid $859,000 plus all of the interest and fees
($59,487) owed on the Critical Capital and Sands Brothers Note and made a
partial principal payment of $628,000 on the AirWorks and Hilltop Notes.
Net cash provided in operating activities for the period ending March 31,
2008 was $1,011,000 compared with $1,560,000 net cash used in operating
activities in the comparable period in 2007.
Business Update
Micro-Cooling License. During the quarter ended March 31, 2008, Kronos
executed the sale and licensing of certain intellectual property (IP) rights
related to Kronos proprietary technologies to Tessera Technologies, Inc., a
leading provider of miniaturization technologies for the electronics industry.
Kronos received a one-time $3.5 million payment from Tessera in exchange for
the transfer of select Kronos patents covering micro-cooling applications and
an exclusive license to the Kronos technology for ionic micro-cooling of
integrated circuit devices or discrete electrical components. Kronos retains
the rights to use these patents for applications outside of the field of
micro-cooling. Tessera has the further right to acquire additional Kronos IP
relating to micro-cooling applications, and the two companies have the option
to continue to jointly develop new technologies in this field.
Consumer Standalone Air Purification Products. During the nine months of
fiscal 2008, Kronos executed a Letter of Intent for the development,
manufacture and sale of air purification devices, based upon Kronos'
proprietary air movement and purification technology, with a leading national
retailer. Under the terms of the Letter of Intent, the retailer has paid
Kronos a portion of the development cost toward the new products and will
contribute resources to assist in the product development process. The intent
of the parties is for Kronos to lead and manage all development, production
and manufacturing activities for the Kronos air purifier and for the retailer
to actively market the Kronos air purifier through their distribution
channels. In December 2007, Kronos completed the design and developed an
Alpha Prototype for the customer. In January 2008, the parties initiated
negotiations of a definitive Product Development and Purchase Agreement. In
February 2008, the retailer filed for bankruptcy, which could negatively
impact the Company's ability to finalize a definitive agreement and receive
additional funds from the retailer. During the nine months ended March 31,
2008, Kronos received $250,000 in product development fees.
Consumer Kitchen Range Hood Products. In addition, during the nine months
of 2008, Kronos continued its development of a silent kitchen range hood
application based on its proprietary technology. In October 2007, under the
terms of a development agreement, Kronos shipped additional range hood
prototypes to a global consumer products customer for testing and evaluation.
During the nine months ended March 31, 2008, Kronos earned $34,000 in product
development fees.
Medical Air Purification Products. During the first nine months of 2008,
Kronos earned $45,000 in revenue from licensing fees from its license
agreement with EOL, Kronos' medical partner for manufacturing and distributing
Kronos air purifiers in Russia and other Commonwealth of Independent States.
Additional details of the Company's results can be found in its quarterly
report on Form 10-QSB filed with the SEC on May 15, 2008 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. Kronos'
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,
Kronos' 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, managements, including management's own knowledge and assessment
of Kronos' industry, R&D initiatives, competition and capital requirements.
Other factors and uncertainties that could affect Kronos' 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 Kronos' 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 Kronos' filings with the Securities and Exchange
Commission, including Kronos' Annual Report on Form 10-KSB for the year ended
June 30, 2007. Kronos undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Contact: Daniel Dwight, +1-617-364-5089
SOURCE Kronos Advanced Technologies, Inc.
