Shares of Kontrol Energy (CSE: KNR) (OTCQB: KNRLF) have risen 18% since we sent our subscribers an exclusive email on KNR on November 26th and was later published the same evening titled “Can Shares of Kontrol Energy Rise Over 300% in 2020”. The recent article highlighted many developments and milestones achieved by Kontrol. Since publication, there have been a few other notable developments which we are going to highlight.
As stated in our previous article, we estimated that Kontrol would post revenues of $11.4 Million on the basis that the company has averaged approximately $3.8M in revenues per quarter. On November 28th 2019, KNR announced that it generated $10.9 Million in revenue, an increase of 65% YoY for the 9-month period and $3.3 Million, up 36% YoY for the 3-month period ending September 30th 2019.
This third quarter of 2019 has marked the fourth consecutive quarter of positive adjusted EBITDA. Our estimations were extremely close as we were slightly off by 500K! Based on performance in previous years and 2019, we believe that the strong growth will continue and even accelerate as the team continues to execute. We remain confident in our 2019 full year revenue estimate of $15.2 Million.
Commenting on a great quarter, the CEO of Kontrol Mr. Paul Ghezzi stated, "We have delivered our fourth consecutive quarter of positive EBITDA and have successfully refinanced our balance sheet to position towards accelerating growth." Investors may want to keep a close eye on the company’s Q4 as this quarter should include many of the recent contracts the company has been awarded. Kontrol also provided guidance for the full year of 2020 and stated that they anticipate revenues to more than double. Management at Kontrol is forecasting that total revenues for 2020 to be in the range of $32 Million - $35 Million and an adjusted EBITDA of $3 Million - $3.7 Million.
There aren’t many days left in 2019 but that doesn’t seem to be stopping KNR. There are a few developments investors should keep an eye on as we close the year. Kontrol is now in final discussions with their previously announced acquisition target and, if the acquisition is finalized before the end of the year, KNR. will be closing the year 2019 with a run rate of approximately $23 Million. The company is waiting for the vendor to provide its financial statements and KNR. expects to close this acquisition before the end of the year.
Another notable development is that on November 26th 2019, Kontrol announced its subsidiary CEM Specialties (“CEMSI”) has successfully completed its pilot test of analytical units with a global leading plant-based meat substitute company.
Since the successful completion of the pilot, the customer has expressed interest in purchasing 2 additional units which would total approximately USD $300,000 in immediate revenues. The unnamed customer operates 6 facilities globally and it has been stated that each facility may require up to 10 units in each location to meet production demands.
If each unit is valued at USD $150,000 and each location would require 10 units, this could result in $1,500,000 in revenue for each facility. This relationship could represent a total sales value of approximately USD $9,000,000. The partnership with this global leader may prove to be very accretive for the KNR and its shareholders.
Investors should keep in mind that KNR has also stated that the customer has indicated that Kontrol Energy will be able to disclose the name of the global leader as both entities will announce a joint press release as the relationship advances. We believe this could have a profound impact on the company’s share price as having another large name attached to Kontrol, this further cements KNR as the go-to name in its industry on the global stage.
Furthermore, KNR has also recently announced that it has signed a (LOU) Letter of Understanding with Zedan Group of Saudi Arabia, a conglomerate that focuses on engineering, procurement and construction in the infrastructure and energy sectors. Although a new relationship for Kontrol as they enter the Saudi Arabian market, we are looking forward to additional large-scale contracts that will deeply impact its financial and operational relevance.
In conclusion, with an anticipated closing of a recent acquisition, the joint press release with a global leading plant based meat company, possible developments or additional orders with its partner Toyota Tsusho, and an expected Q4 earnings in between $15 - $16 Million, Kontrol Energy is certainly one technology company that you won’t want to miss!
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