Kontrol Energy Provides Acquisition Update, Enters into Indicative Term Sheet with Institutional Lender and Updates Convertible Debenture Terms

TORONTO, ON / August 9, 2019 / Kontrol Energy Corp. (CSE:KNR) (OTCQB:KNRLF) (FSE:1K8) (“Kontrol” or "Company") a leader in the energy efficiency sector through IoT, Cloud and SaaS technology is updating the timing of its recently announced acquisition (the “Acquisition”) and convertible debenture financing.

On March 14th, 2019 the Company announced that it had entered into a Letter of Intent (the "LOI") to acquire an established and leading provider of electrical retrofit services (the "Target"). The anticipated closing of the Acquisition is on or about the end of August 2019. Closing of the Acquisition is subject to finalizing the SPA and the satisfaction of customary conditions, including the approval of the CSE.

Loan Facility

The Company has agreed to indicative terms with an Institutional Lender (the “Lender”) to provide acquisition funding for the Acquisition in the form of a secured loan. The indicative terms are non-binding and subject to due diligence and the execution of definitive loan documentation. The indicative loan terms include an approximate interest rate of 3-month Banker’s Acceptance plus 8% with a 3-year term with interest only payments for the first 18 months. In addition, on the closing date of the secured loan transaction, the Lender will be granted warrants equal to 3.20% of the outstanding issued shares of the Company, such warrants to have an exercise price of $1.05 per common share and a term of six years.

“We believe the arrangement we have reached with the Lender will provide Kontrol with a less dilutive financing solution to close our next acquisition and allows us to keep our total basic common shares outstanding to less than 30 Million,” says Paul Ghezzi, CEO of Kontrol.

Convertible Debenture

As part of the indicative terms with the Lender, Kontrol has agreed to limit its previously announced convertible debenture offering to a maximum of $2.0 Million. The terms of the convertible debenture have been updated to include a cash commission of 7% (previously 6.5%), a conversion price of 80 cents (previously $1.05), a broker warrant exercise price of 80 cents (previously 90 cents) and an accelerated conversion price of $1.25 (previously $1.40). The other terms of the convertible debentures remain the same.

Closing of the convertible debenture offering is subject to the satisfaction of customary conditions, including the approval of the CSE.

About Kontrol Energy

Kontrol Energy Corp. (CSE: KNR) (OTCQB: KNRLF) (FSE: 1K8) is a leader in the energy efficiency sector through IoT, Cloud and SaaS technology. With a disciplined mergers and acquisition strategy, combined with organic growth, Kontrol Energy Corp. provides market-based energy solutions to our customers designed to reduce their overall cost of energy while providing a corresponding reduction in greenhouse gas (GHG) emissions.

Kontrol Energy Corp. was recently named the 7th fastest growing Startup in Canada by Canadian Business and Maclean’s.

Additional information about Kontrol Energy Corp. can be found on its website at www.kontrolenergy.com and by reviewing its profile on SEDAR at www.sedar.com

For further information, contact us at admin@kontrolenergy.com Kontrol Energy Corp., 180 Jardin Drive, Unit 9, Vaughan, ON L4K 1X8 Tel: 905.766.0400, Toll free: 1.844.566.8123

For further information, contact:

Paul Ghezzi, Chief Executive Officer
paul@kontrolenergy.com
Kontrol Energy Corp.,
180 Jardin Drive, Unit 9, Vaughan, ON L4K 1X8
Tel: 905.766.0400, Toll free: 1.844.566.8123

Neither IIROC nor any stock exchange or other securities regulatory authority accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements regarding the Offering, conversion of the Debentures, possible future trading prices of Kontrol’s shares, possible future acquisitions and/or investments in operating businesses and/or technologies, accelerated organic growth, the provision of solutions to customers and greenhouse gas emissions reductions, proposed financial savings and sustainable energy benefits and energy monitoring. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis. Such assumptions include, without limitation, that the Offering will be successful, that the Debentures will be converted, that Kontrol’s shares will trade at specified prices for specified periods of time, that suitable businesses and technologies for acquisition and/or investment will be available, that such acquisitions and or investment transactions will be concluded, that sufficient capital will be available to the Company, that technology will be as effective as anticipated, that organic growth will occur, and others. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, weak demand for the Offering, Kontrol’s common shares not attaining specified prices or for attaining and remaining at those prices for specified periods, lack of acquisition and investment opportunities or that such opportunities may not be concluded on reasonable terms, or at all, that sufficient capital and financing cannot be obtained on reasonable terms, or at all, that technologies will not prove as effective as expected that customers and potential customers will not be as accepting of the Company's product and service offering as expected, and government and regulatory factors impacting the energy conservation industry. Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable securities law.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.