Mr. Paul Ghezzi reports

KONTROL TECHNOLOGIES PROVIDES CORPORATE UPDATE

Kontrol Technologies Corp. has provided a corporate update for January, 2024.

Completion of high-temperature dry kiln pilot and initial technology sale

Following the press release dated March 23, 2023, the company is pleased to announce that it has completed a successful pilot of its new technology solution for the cement industry and has received an initial order from the pilot customer.

"The addressable market potential for this technology spans thousands of global cement plants and specialized industries. Leveraging government funding, the rapid development and deployment underscore our unwavering commitment to innovation in addressing customer challenges around emissions and optimizing facilities," says Paul Ghezzi, chief executive officer of Kontrol.

The company has received approximately $130,000 in government funding to support development and commercialization of the dry kiln probe. The pilot customer has purchased the first unit and is exploring applications in its multiple facilities. Each dry kiln probe has a sale value of approximately $200,000 (U.S.) and includes hardware, software and continuing monitoring in real-time with rich data analytics. The environmental and process monitoring of emissions is critical in industries, both for production (quality of finished products), reducing green house gases (GHG) and harmful emissions, but also fuel savings which reduce consumption of natural gas, coal and alternative fuels. Cement plants are one of the major contributors to GHG emissions globally. Enhanced monitoring and management may improve operating efficiency and lead to GHG emission reductions.

Continued balance sheet improvement

As of Jan. 24, 2024, the company has reduced its secured debt obligations from approximately $11-million to $5.5-million and has approximately $3.2-million of cash on hand. The company anticipates that it will receive an additional $1.0-million from the sale of its operating subsidiary Ortech Consulting which was completed in December, 2023. The $1.0-million includes customary holdbacks and working capital to be collected in 2024.

"Over the past 12 months we have reduced our secured debt obligations by approximately $10-million, have significantly improved the balance sheet and continue to operate with fiscal discipline," continues Mr. Ghezzi. "The reduction in debt will also have a corresponding benefit of reducing interest expense by approximately $1-million annually."

Forbearance agreement

The company is in compliance with its forbearance agreement and is working closely with its secured lender to transition from the forbearance agreement into a traditional lending agreement. The company anticipates a transition to a traditional lending agreement in Q1 2024.

Global HVAC

Following a voluntary assignment into bankruptcy of its subsidiary Global HVAC, in Q1 2023, the company now anticipates a positive recovery in the approximate range of $300,000 after payment of secured claims.

About Kontrol Technologies Corp.

Kontrol Technologies, a Canadian public company, is a leader in smart buildings and cities through Internet of Things, cloud and software-as-a-service technology. Kontrol provides solutions and services to its customers to improve energy management, monitor continuous emissions and accelerate the sustainability of all buildings.

We seek Safe Harbor.