BELMONT, Mass., Nov 15 /PRNewswire-FirstCall/ -- Kronos Advanced Technologies, Inc. (OTC Bulletin Board: KNOS) President and Chief Executive Officer, Daniel R. Dwight, reported a business update and financial results for the three months ended September 30, 2007 on SEC Form 10-QSB.
Commercial and Residential Products.
During the first fiscal quarter of 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. It is expected that Kronos and the retailer would enter into a definitive purchase agreement providing for the exclusive sale of private label residential standalone air purifiers through the retailer's distribution channels. Actual purchases of the products are dependent on the successful development of the product, the negotiation of a definitive purchase agreement incorporating the terms of the letter of intent, other usual and customary terms and the retailer's discretion. Under the terms of the Letter of Intent, the retailer has paid Kronos a portion of the development costs of the new products and will contribute marketing 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 its distribution channels.
In addition during the quarter, 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 quarter, Kronos earned $25,000 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.
In addition, EOL provided further independent technology testing and validation of the Kronos technology. The Russian National Healthcare Institution Vladimir Regional Tuberculosis Prevention and Treatment Center conducted in-patient room testing to assess the effectiveness of Kronos-based air purifiers for use in disinfecting rooms used to treat TB patients. Dr. Volchenkov, Chief Physician for the Regional Tuberculosis Prevention and Treatment Center concluded the Kronos-based air purifier demonstrated "a high reliable decrease in the microorganisms in the room." Dr. Volchenkov further stated that the Kronos-based "device can be used for air cleaning and disinfection in the rooms of tuberculosis prevention and treatment centers having high infection rates."
During the quarter, Kronos obtained two additional foreign patents. This brings Kronos' total patent portfolio to thirteen U.S. patents and five international patents with additional patents pending.
Kronos recorded a net loss for each of the quarters ended September 30, 2007 and September 30, 2006 of $1,463,000 and $843,000, respectively. The increase in the net loss in the quarter ended September 30, 2007 was principally the result of a $301,000 increase in operating costs to $1,054,000, and a $335,000 increase in interest expense to $435,000.
Revenues for the quarter ended September 30, 2007 were $25,000 compared to $19,000 for the comparable period of 2006. Revenues for the quarter ended September 30, 2007 consisted of fees from our license agreement with EOL. Selling, General and Administrative expenses for the quarter ended September 30, 2007 increased $301,000 from the corresponding period of 2006 to $1,054,000. The increase was principally the result of a $207,000 increase in compensation and benefits as a result of an increase in non cash compensation associated with the expensing of stock options and the expansion of Kronos' product development resources, a $79,000 increase in research and development expenses as Kronos invested in further improvements in the performance of its proprietary technology, and a $67,000 increase in professional services, partially offset by a $24,000 decrease in insurance expenses as a result of a reduction in directors and officers and general liability insurance costs. Interest expenses for the quarter ended September 30, 2007 was $435,000 compared to $99,000 for the corresponding period of the prior year. The increase in interest expense was principally the result of the amortization of the beneficial conversion feature of the new convertible debt financing obtained in June 2007.
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 http://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.
|SOURCE Kronos Advanced Technologies, Inc.|
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