What you need to know: • Kontrol Technologies reported Q3 financial results yesterday after market close that were softer than expected. Revenue came in at $1.7M vs. our expected $2.0M. • Subsequent to the quarter, KNR signed an LOI to acquire an Ontario-based business doing $525K in EBITDA. • KNR also announced that it is adding bitcoin to its balance sheet. • Given its large cash balance, KNR trades at only 1.3x 2025E EBITDA. Yesterday after market close, Kontrol Technologies (KNR:Cboe, KNRLF:OTC) reported Q3 financial results that were softer than our expectations. While revenue declined more than we envisioned, KNR ended the quarter with a cash position of $11.6M compared to its market cap of $12.4M. We remain excited about the opportunity for KNR to continue rolling up HVAC/building technology companies in North America. We are maintaining our BUY rating and $0.35/share target price on Kontrol Technologies. Key Highlights • Revenue came in at $1.7M compared to our estimate of $2.0M, declining YoY due to the two disposed subsidiaries. We attribute the miss to KNR still finding its footing without its ORTECH and CEMSI, and look forward to improved results in 2025. • Gross margin of 53% compared to our expected 55% and 69% in Q3 last year. • Adjusted EBITDA of ($0.7M) compared to our estimate of ($0.1M). The miss was driven by the dispositions and continued elevated consulting expenses related to the closing of the CEMSI transaction. • Net income of ($0.8M) vs. our estimated ($0.3M). • KNR ended the quarter with $11.6M in cash and equivalents and $0.3M in debt. • Management expects to return to operating profitability in 2025 through cost reductions, streamlining of operations, organic growth, and tuck-in acquisitions. Buybacks & Insider Buying During the 9 months ending September 30th, KNR repurchased $330K worth of stock, decreasing its shares outstanding by 2%. Subsequent to the quarter, Kontrol repurchased an additional 228.5K shares for ~$50K. Furthermore, in late October, CEO Paul Ghezzi purchased $24K worth of stock in the open market; emphasizing his opinion on the disconnected public market valuation.