Management is serious!! Must have faith that EMS is vital.
KONTROL ENERGY AGREES TO ACQUIRE LOG-ONE LTD.'S ENERGY MANAGEMENT SYSTEM
Kontrol Energy Corp. has agreed to acquire Log-One Ltd.'s Energy Management System (EMS), an intelligent, occupancy-based heating and air conditioning control product, including the hardware, software, intellectual property and patents (combined to be referred to as the EMS technology), with closing of the transaction in escrow expected to occur today. The aggregate purchase price for the EMS Technology is $800,000, of which the Company will pay $200,000 in cash on closing, with an additional $50,000 in cash to be paid on January 31, 2017, subject to any reduction for holdback obligations, and $550,000 by way of issuing 1 million common shares of the Company at a deemed price of $0.55 per share. Further, the Company will enter a 10-year royalty agreement with Log-One Ltd. pursuant to which the Company will pay Log-One Ltd. a graduated royalty of approximately 5% of manufactured cost in respect of sales of EMS units and a 6-month consulting agreement with the principals of Log-One Ltd.
"We are excited about this acquisition and to take the existing robust energy management hardware, software and IP and add Internet of Things (IOT) capability with an integrated mobile application platform," says Paul Ghezzi, CEO of the Company. "Delivering energy savings and making these savings visible in real time brings together all the important stakeholders in the electricity value chain including building owners, tenants, utilities and various levels of Government. As electricity prices continue to escalate across North America, we are experiencing strong demand for our solutions and growing portfolio of technologies."
Following the acquisition, the Log-One EMS Technology will be rebranded as the Kontrol EMS Technology. By adding Internet of Things (IOT) and mobile application capability the Company intends to create a recurring revenue platform through a SaaS model. The Kontrol EMS Technology will provide for pre-programmed heating and cooling automation, smart learning algorithms and more environmental control while delivering best-in-class energy savings.
"The energy retrofit and electricity cost reduction market across North America is a $100 Billion annual market opportunity for the energy efficiency solutions and technology industry," continues Paul Ghezzi. "Our plans for 2017 include expansion into regions of the United States market where electricity costs are the highest. Our expansion is expected to come primarily through the demand of our existing customer base which includes some of the largest REITS in Canada."
The company anticipates that the Kontrol EMS Technology will add $4 Million of revenue in 2017 with an anticipated 50% gross margin. Along with the most recently announced potential acquisition and a growing number of potential acquisitions in various stages of due diligence, the Company continues to execute on its business plans to deliver robust accretive revenue and earnings growth with minimum dilution to the existing common share structure
