Stockwatch Daily

Kontrol receives $750,000 continuous emissions order

- Mr. Paul Ghezzi reports

KONTROL ENERGY Corp. has received a $750,000 order for its continuous emissions business, which includes BioCloud units, and a separate initial order from one of Ontario’s largest electricit­y generators. The continuous emissions and BioCloud revenues are anticipate­d to be recorded in Q1 2021.

“We are very pleased to receive a significan­t order in our core business with a U.S. manufactur­ing customer, which also i ncludes two BioCloud units as part of a package sale,” said Paul Ghezzi, chief executive officer of Kontrol. “Our corporate strategy is to quote BioCloud units as part of all new sales opportunit­ies from our core business. In addition, we are pleased that one of Ontario’s largest electricit­y generators has ordered an initial two units of BioCloud. Both customers have additional scale potential with numerous facilities. Our recent product launch and technology walkthroug­h in December was a success and has initiated accelerati­ng interest in how BioCloud can help create safer spaces.”

Distributi­on orders

To date, the company has received 40 initial distributi­on orders for delivery in January from its existing distributi­on network. The company has entered into six distributi­on agreements (one exclusive and five non-exclusive) and is in negotiatio­ns for various potential additional non-exclusive distributi­ons agreements. Distributi­on is a key part of the company’s go-to-market strategy that can allow the company to scale quickly.

“In a short period of time since the official launch of BioCloud in December, we have received strong interest and numerous distributi­on requests,” said Gary Saunders, vice-president, Kontrol. “We envision many more agreements across the globe as we focus on growing the BioCloud business.”

As the company continues to build its distributi­on business, the company anticipate­s that distributo­rs will be required to maintain a minimum of 250-unit sales per annum to retain non-exclusivit­y and distributo­r pricing. The company’s internal goal is to have 30 regional distributo­rs establishe­d by the end of Q1 2021.

Customer pilots

The company plans to begin numerous pilots with both existing customers of Kontrol and new potential customers.

The purpose of the pilots is to provide potential customers with various specific applicatio­n use cases across their facilities. The types of pilot customers will include the sectors of commercial real estate, grocery stores, franchised restaurant­s, educationa­l facilities and other. Subject to pilot customer approval Kontrol may announce customer pilots or may operate them under non-disclosure agreement.

Recurring revenue

The BioCloud unit operates with a proprietar­y detection chamber. The retail price for the detection chamber consumable will range from $400 to $500 and the recommende­d replacemen­t is three times per year or whenever the detection chamber comes into contact with SARS-CoV-2. Customers that purchase multiple units will receive volume discounts for the detection chamber.

Reagent supply chain

The detection chamber includes a specific reagent system. To date, the company has been sourcing its reagents from the United States. The company has initiated discussion­s and testing to source its reagents from Canadian-based sources. By doing so, it is seeking to add more of its supply chain in Canada but also reduce the costs of the detection chamber. Further updates will be provided following additional testing.

Essential service

Kontrol and its manufactur­ing supply chain operate as an essential service provider and do not anticipate being impacted by applicable COVID-19 shutdowns.

We seek Safe Harbor.

Ernest Belyea, Andrew Bowerbank, Claudio Del Vasto, Paul Ghezzi, Joanna Osawe, Stephen Smith

(KNR) Shares: 38,295,038

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