SMARTCOOL PROVIDES CORPORATE UPDATE
September 10, 2020
Vancouver, B.C. - Smartcool Systems Inc. (TSX.V:SSC; OTC:SSCFF; FSE:R3W) (“Smartcool” or the Company”) provides the following update.
COVID-19 has severely impacted the operations and financial position of the Company. Sales fell to near zero as numerous projects were cancelled or deferred. The lack of revenue was initially met with reductions in operating overheads, including wage reductions. In addition, the company applied for and received government support. Ultimately the lack of revenue led to the inability to compensate employees at even reduced wage levels. Unfortunately, this resulted in the resignations of Sharon Kordysz as COO and Mike Kordysz as VP Business Development and Investor Relations. The Company would like to take this opportunity to thank them both for their years of service and wish them well in their new endeavors.
Events that eventually led the Company to dismiss Damian Smith (as announced on May 26, 2020), have continued to have a negative impact on operation of the Company's subsidiary, Total Energy Concepts Inc.
The Company has retained legal counsel in Minnesota and continues to explore its alternatives. Additional updates on proceedings will be announced as available. The Company now finds itself at a crossroads, without sufficient resources to cover the costs of complying with applicable audit and disclosure requirements. The Company’s failure to file these documents has already resulted in a cease trade order from the British Columbia Securities Commission and, for so long as this order remains in effect, the Company has been unable to raise funds in the capital market to cover the costs of compliance and revocation. As a result, the Company has focused on generating revenue through sales and is considering several strategic alternatives.
With COVID lockdowns being eased, both domestically and internationally, the Company is beginning to see sales pick up again. New activity in the UK office includes the completion of a second installation in Germany at a meat processing plant, a new distributor in Portugal, new sales to distributors in Italy and India and pilot installations in the UK at a large Hotel chain, the NHS (National Health Service) and an international property management group in London. In North America, sales are also starting to flow with activity centered around warehouse installations of a major liquor distribution company and several water treatment service providers. These small steps suggest that the Company will manage to generate some cashflow allowing limited operations to continue until the pandemic abates further.
To be clear, until funding is available to cover accounting, audit and continuous disclosure costs, the Company will remain cease-traded. The Company hopes to generate sufficient cash flow to cover these costs through sales activities or other strategic options. In the interim, the Company looks forward to providing further updates over the next few months and as developments materialize.
About Smartcool
Smartcool Systems Inc. provides cutting edge energy efficient and energy cost reduction solutions for businesses around the world. The ECO3 and ESM are Smartcool’s unique retrofit technologies that reduce the energy consumption of compressors in air conditioning, refrigeration and heat pump systems by up to 40%.
