UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): September 29, 2008
Kronos
Advanced Technologies, Inc.
(
Exact name of registrant as
specified in its charter)
|
Nevada
|
000-30191
|
87-0440410
|
|
(State
or other jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
incorporation)
|
File
Number)
|
Identification
No.)
|
|
464
Common Street, Suite 301, Belmont, Massachusetts
|
02478
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
|
|
|
|
(617)
364-5089
|
|
|
(Registrant’s
telephone number, including area code)
|
|
|
|
|
Not
applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d- 2(b))
|
|
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
Item
2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement.
On
September 29, 2008, Kronos Advanced Technologies, Inc. (the “Company”) received
a notice of event of default from AirWorks Funding LLLP (“AirWorks”) with
respect to the Secured Convertible Promissory Note due June 19, 2010 (the
“Promissory Note”) issued to by the Company to AirWorks. The notice
states that (1) an Event of Default under Section 2.1(a) of the Promissory Note
has occurred due to the failure of the Company to make interest payments on the
Promissory Note and (2) the entire principal amount of, and the interest on, the
Promissory Note is declared immediately due and payable in the amount of
$3,551,735 plus interest.
As
previously disclosed,
in June 2007, the Company
entered into a Funding Agreement with a group of lenders providing for a secured
loan, at the discretion of the lenders, in the aggregate amount of up to
$18,159,000. At the initial closing, the Company received an initial advance of
$4,259,000 from AirWorks, RS Properties I LLC (“RS Properties”) and various
other lenders (the “Other Lenders”). RS Properties assigned to Hilltop Holding
Company, LP, a Delaware limited partnership, (“Hilltop”) its promissory note
together with certain other rights and agreements relating thereto, including,
without limitation, its rights and obligations under the Funding Agreement.
Following the initial closing, the Company received an additional $2,533,000 in
funding from AirWorks and Hilltop under the terms of the Funding Agreement and
related notes, including the Promissory Note.
Interest on the AirWorks and Hilltop notes became
payable quarterly starting January 1, 2008.
On
December 31, 2007, AirWorks and Hilltop converted $731,440 of their promissory
notes into shares of the Company’s common stock. On April 1, 2008,
the Company repaid (1) an aggregate of $628,000 of the principal of the AirWorks
and Hilltop promissory notes and (2) the entire principal amount ($859,000) of
the promissory notes issued to the Other Lenders. As a result of the
foregoing, as of October 1, 2008, (a) the outstanding principal amount of the
AirWorks Promissory Note was $3,526,135 and there was $507,482 of overdue
interest and (b) the outstanding principal amount of the Hilltop promissory
note was $1,047,425 and there was $28,106 of overdue interest. The
Company has not received a notice of event of default with respect to the
Hilltop promissory note.
The
Company has been, and continues to be, in discussions with its secured lenders
regarding the outstanding obligations under the AirWorks and Hilltop promissory
notes, the alleged occurrence of an event of default, and the future operational
plan of the Company. In connection with the foregoing and in light of
the Company’s financial condition (including with respect to certain other
obligations of the Company), the Board of Directors has appointed an independent
committee, consisting of James P. McDermott and M. J. Segal, to investigate the
alleged event of default, analyze the current status of the Company, and propose
a strategy for maximizing the value of the Company’s ongoing operations and
assets.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, the Company has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
Date: October
3, 2008
|
KRONOS
ADVANCED TECHNOLOGIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Richard F. Tusing
|
|
|
|
Name:
|
Richard
F. Tusing
|
|
|
|
Title:
|
President,
Chief Operating Officer, Treasurer and
Secretary
|