Kronos receives default notice on promissory note

By Devika Patel

Knoxville, Tenn., Oct. 3 - Kronos Advanced Technologies, Inc. received a notice of default on Sept. 29 from AirWorks Funding LLLP, in regard to the company's secured promissory note due June 19, 2010, according to an 8-K filed Friday with the Securities and Exchange Commission.

The company said in the filing that the notice accuses the company of failing to make interest payments on the note, issued in a June 2007 private placement, and declares the $3.55 million in principal and interest immediately due and payable.

Hilltop Holding Co., LP also invested in the notes.

The company said in the filing that it has not received a notice of default from Hilltop.

Kronos said it is in discussions with its secured lenders regarding its obligations under the notes, the alleged occurrence of an event of default and its future operational plan.

It also said its board of directors has appointed an independent committee, consisting of James P. McDermott and M. J. Segal, to investigate the alleged default, analyze the company's current status and propose a strategy for maximizing the value of the company's ongoing operations and assets.

Located in Belmont, Mass., Kronos develops air movement and purification systems.

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