There were a number of companies that came into sharp focus among investors last Thursday, and one of those was Kontrol Technologies Corp. (OTC: KNRLF). The company is a leading player in the smart buildings and city space. It mainly works through the Internet of Things and SaaS technology. On March 28, the company announced that it had entered into an amended credit agreement with its secured lender and also exited forbearance. The Chief Executive Officer of Kontrol Technologies Corp., Paul Ghezzi, spoke about the development as well. He stated that in 2023, one of the main objectives of the company would be to boost its balance sheet and make it stronger.
On that front, the company had delivered on its aim through the reduction of debt and the associated interest expenses. He went on to note that the de-leveraging move had been a successful one for the company and provided Kontrol Technologies Corp. with the platform from which it could execute the strategies necessary to continue to spark growth. In the news release from the company, it was noted that following the move, Kontrol Technologies Corp. returned to traditional commercial borrowing.
As per the terms of the new agreement signed by the company, interest on the debt would be payable at the Bank Prime rate plus an additional margin. The margin is expected to be in the 1.25%–2% range and would be based on the ratio of the company’s secured debt to its earnings before taxes, depreciation, and interest. The principal payments would be amortized over a period of five years. Kontrol Technologies Corp. had started 2023 with a secured debt load of around $15 million. However, by the end of the first quarter of 2024, the company expected the secured debt balance to be reduced to around $3.7 million.
