Kontrol Energy Corp. (CSE: KNR) (OTCQB: KNRLF) a leader in the energy efficiency sector recently announced a significant deal through its wholly owned subsidiary CEMSI Specialties (“CEMSI”) with a global leader in the plant based meat-substitute space. The goal of the pilot project is for implementation of continuous process improvement.
Kontrol Energy will provide the client with analytical equipment known as “the Analyzer” and associated installation and monitoring services to assist in the rapid evaluation, measurement and validation of organic inputs. The Analyzer will be able to monitor processes and offer the opportunity to improve production quality and production efficiency for the plant-based meat company.
Kontrol will generate approximately USD $150,000 for the installation and service of the Analyzer. Kontrol stated that the facility for the global leading plant-based meat company may also require up to 10 Analyzers which would have a total value of USD $1,500,000. The pilot will operate for approximately 30 to 45 days, and we believe the company will update its shareholders in regards to the progress made with the unnamed plant-based meat substitute company. Mr. Paul Ghezzi was quoted “The plant-based meat substitute industry is a rapidly expanding global growth industry that can benefit greatly from our solutions and technologies,”. Kontrol Energy also stated that for industry competitive purposes the pilot customer will not be names until the completion of the pilot, which should be within, in our opinion in the next 60 days as the pilot will be operational for 30 to 45 days as stated above. The plant-based meat industry has been getting a lot of press recently with the Beyond Meat (NASDAQ: BYND) IPO, Hormel Foods (NYSE:HRL) a global branded food company, launching the Happy Little Plants™ brand, a new plant-forward, protein portfolio and Impossible foods (private) which has raised over USD 600 Million. There is no doubt Kontrol Energy could carve out a dominant position in another up and coming, extremely competitive industry just as they are doing in the cannabis space.
The Company is also in the process of closing a financing which is in the form of a convertible debenture. The size of the offering is capped at $ 2 Million, has a conversion price of $0.80 cents which is a 33.33% premium to the current share price of $0.60. The convertible debenture comes with an acceleration clause of that triggers at $1.25. We expect this financing to close shortly as it has been in the works for quite some time and may be related to the previously announced acquisition of a business that has generated approximately $6.5 Million in revenue and $700,000 in EBITDA over the last three years.
On September 12th 2019, Kontrol was named as 40th on the 2019 Startup 50 in ranking of Canada’s Top New Growth Companies. Kontrol Energy has made the 2019 list by growing its revenues by 468% over a two-year period from 2016 to 2018. CEO of Kontrol Energy Mr. Paul Ghezzi was quoted: “This achievement reflects our continued execution to drive the growth of our energy technology and solutions. This could not be possible without a dedicated team and a great customer base”. This makes the second year in year in a row that KNR has been on Maclean’s Startup 50.
In closing, with a planned financing which is 33% higher to the close on Friday, the closing of its acquisition that will add to KNR already impressive revenue growth and additionally the company’s new relationship with a global leader in the plant-based meat substitute sector, Kontrol is sure to continue to impress shareholders through their planned growth initiatives.
Even with all the positive developments, revenue growth and minimal dilution and stellar management team that keeps executing, the stock is essentially the same price as it was 18 months ago in March 2018! It seems reasonable that the next time KNR over the $0.70 mark, it will stay above it and keep pressing higher.
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