UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Kronos Advanced Technologies, Inc.
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(Name of Issuer)
Common Stock, $0.001 Par Value Per Share
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(Title of Class of Securities)
50105X106
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(CUSIP Number)
John Lack
RS Properties I LLC
40 Wall Street
23rd Floor
New York, NY 10005
212-349-3473
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 8, 2007
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_| .
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 50105X106
SCHEDULE 13D
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RS PROPERTIES I LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
------------------------- ---------- -------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ---------- -------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON ---------- -------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON
OO
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CUSIP No. 50105X106
Item 1. Security and Issuer.
The title of the class of equity securities to which this statement relates is
Common Stock, par value $0.001 each ("Common Stock") of Kronos Advanced
Technologies, Inc., a Nevada corporation (the "Issuer"). The principal executive
office of the Issuer is located at 494 Common Street, Suite 301, Belmont, MA
02478.
Item 2. Identity and Background.
(a) This Statement is being filed by RS Properties I LLC (the "Reporting
Person"). John Lack is the sole officer and manager of the Reporting Person.
(b) The address of the Reporting Person is 40 Wall Street, 26th floor, New York,
New York, 10005.
(c) The Reporting Person is an independent investment fund making investments
in, among other things, real estate and securities.
(d) and (e) The Reporting Person has not, during the last five years, been (a)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which he or it is
or was subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Not applicable.
Item 4. Purpose of Transaction.
On August 8, 2007, the Reporting Person entered into a Note Assignment Agreement
(the "Assignment Agreement") with Hilltop Holding Company, LP ("Hilltop").
Pursuant to the terms of the Assignment Agreement, the Reporting Person assigned
(a) the $6,480,000 Secured Convertible Promissory Note due June 19, 2010 (the
"Note") made by the Issuer in favor of the Reporting Person, together with all
of the Reporting Person's rights and obligations under (b) the Funding
Agreement, dated June 19, 2010 (the "Funding Agreement"), by and among the
Issuer, AirWorks Funding LLLP ("AirWorks"), Sands Brothers Venture Capital LLC
("Sands I"), Sands Brothers Venture Capital II LLC, ("Sands II"), Sands Brothers
Venture Capital III LLC ("Sands III"), Sands Brothers Venture Capital IV LLC
("Sands IV"), Critical Capital Growth Fund, L.P. ("CCGF", and together with
Sands I, Sands II, Sands III and Sands IV, the "Sands Entities") and the
Reporting Person (AirWorks, Sands I, Sands II, Sands III, Sands IV, CCGF and the
Reporting Person are collectively referred to herein as, the "Lenders"); (c) the
Security Agreement, dated June 19, 2007 (the "Security Agreement"), by and among
the Issuer, Kronos Air Technologies, Inc. (the "Subsidiary") and the Lenders;
(d) the Patent Security Agreement, dated June 19, 2007 (the "Patent Security
Agreement"), by and among the Issuer, the Subsidiary and the Lenders; (e) the
Voting and Support Agreement, dated June 19, 2007 (the "Voting Agreement"), by
and among the Issuer and the Lenders; (f) the Registration Rights Agreement,
dated June 19, 2007 (the "Registration Rights Agreement"), by and among the
Issuer and the Lenders; (g) the Intercreditor Agreement, dated June 19, 2007
(the "Lenders Intercreditor Agreement"), by and among the Lenders; (h) the
Intercreditor Agreement, dated June 19, 2007 (the "Existing Creditors
Intercreditor Agreement"), by and among the Lenders and certain existing
creditors of the Lenders; and (i) the letter agreement, dated June 19, 2007 (the
"Letter Agreement"), by and between AirWorks and the Reporting Person. Each of
the agreements, instruments and documents listed in clauses (a) through (i)
above are collectively referred to herein as the "Transaction Documents"). The
purchase price of the Note and the other Transaction Documents paid by Hilltop
to the Reporting Person was $920,000.00,which amount represented the amount of
the outstanding principal balance of the Note as of the date of the assignment.
CUSIP No. 50105X106
Item 5. Interest in Securities of the Issuer.
(a) As a result of the assignment of the Note and the other Transaction
Documents, the Reporting Person does not beneficially own any shares of Common
Stock.
(b) Not applicable.
(c) Except as set forth in Items 4, no transactions in the Common Stock were
effected by the Reporting Person since the filing of the Schedule 13D by the
Reporting Person on June 29, 2007.
(d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of Issuer.
Reference is made to the disclosure set forth in Item 4 above, which disclosure
is incorporated by reference.
Item 7. Materials to be Filed as Exhibits.
Exhibit No. Description
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1. Note Assignment Agreement, dated August 8, 2007 between
the Reporting Person and Hilltop
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 10, 2007
RS PROPERTIES I LLC
By: /s/ John Lack
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Name: John Lack
Title: Manager
Exhibit 1
NOTE ASSIGNMENT AGREEMENT
This Note Assignment Agreement (the "Agreement") is entered into as of
August 8, 2007, by and between, RS PROPERTIES I LLC, a Delaware limited
liability company (the "Assignor"), and HILLTOP HOLDING COMPANY, LP, a Delaware
limited partnership (the "Assignee").
RECITALS
WHEREAS, the Assignor desires to sell, transfer and assign to the Assignee
and Assignee desires to purchase and acquire from the Assignor (a) the
$6,480,000 Secured Convertible Promissory Note due June 19, 2010 (the "Note")
made by Kronos Advanced Technologies, Inc., a Nevada corporation (the
"Borrower"), in favor of the Assignor, together with (b) the Funding Agreement,
dated June 19, 2010 (the "Funding Agreement"), by and among the Borrower,
AirWorks Funding LLLP, a Georgia limited liability limited partnership
("AirWorks"), Sands Brothers Venture Capital LLC, a New York limited liability
company ("SBVC I"), Sands Brothers Venture Capital II LLC, a New York limited
liability company ("SBVC II"), Sands Brothers Venture Capital III LLC, a New
York limited liability company ("SBVC III"), Sands Brothers Venture Capital IV
LLC, a New York limited liability company ("SBVC IV"), Critical Capital Growth
Fund, L.P., a Delaware limited partnership ("CCGF", and together with SBVC I,
SBVC II, SBVC III and SBVC IV, the "SBVC Entities") and the Assignor (AirWorks,
SBVC I, SBVC II, SBVC III, SBVC IV, CCGF and the Assignor are individually
referred to herein as, a "Lender" and collectively as, the "Lenders"); (c) the
Security Agreement, dated June 19, 2007 (the "Security Agreement"), by and among
the Borrower, Kronos Air Technologies, Inc., a Nevada corporation (the
"Subsidiary") and the Lenders; (d) the Patent Security Agreement, dated June 19,
2007 (the "Patent Security Agreement"), by and among the Borrower, the
Subsidiary and the Lenders; (e) the Voting and Support Agreement, dated June 19,
2007 (the "Voting Agreement"), by and among the Borrower and the Lenders; (f)
the Registration Rights Agreement, dated June 19, 2007 (the "Registration Rights
Agreement"), by and among the Borrower and the Lenders; (g) the Intercreditor
Agreement, dated June 19, 2007 (the "Lenders Intercreditor Agreement"), by and
among the Lenders; (h) the Intercreditor Agreement, dated June 19, 2007 (the
"Existing Creditors Intercreditor Agreement"), by and among the Lenders and
certain existing creditors of the Borrower identified therein as the Second Lien
Creditors; and (i) the letter agreement, dated June 19, 2007 (the "Letter
Agreement"), by and between AirWorks and the Assignor. Each of the agreements,
instruments and documents listed in clauses (a) through (i) above are referred
to herein as a "Transaction Document" and collectively, as the "Transaction
Documents")
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein the parties agree as follows:
1. Assignment of Note and other Transaction Documents.
(a) Assignment. Assignor hereby sells, transfers, conveys and
assigns to the Assignee, and the Asignee hereby takes, accepts and assumes, all
of the Assignor's rights, obligations and interest in, to and under the Note and
each of the other Transaction Documents, together with the Assignor's rights,
title and interest, if any, in any collateral granted or purported to be granted
to Assignor to secure the obligations of the Company or the Subsidiary as and to
the extent provided in any of the Transaction Documents.
(b) Purchase Price. In consideration of the assignment of the Note
and the Transaction Documents, Assignee shall pay to the Assignors the purchase
price of Nine Hundred Twenty Thousand Dollars ($920,000.00), which amount
represents the presently outstanding principal amount of the Note.
(c) Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Assignee, on
such date as the parties may mutually determine. The Closing may be conducted by
mail, facsimile and delivery service.
2. Representations and Warranties of the Assignor. The Assignor hereby
warrants and represents to the Assignee, as follows:
(a) The Assignor has all the requisite power and authority to
execute, deliver and perform this Agreement. This Agreement constitutes the
legal, valid and binding obligations of the Assignor and is enforceable against
it in accordance with the terms hereof.
(b) The Assignor owns beneficially and of record, the Note free and
clear of all liens, claims and encumbrances. Upon delivery of and payment for
the Note at Closing, as provided for in this Agreement, the Assignee will
acquire good and valid title thereto.
(c) The Assignor has delivered to the Assignee complete and correct
copies of each of the Transaction Documents. Each of the Transaction Documents
is in full force and effect and enforceable against the Assignor and, to the
knowledge of the Assignor, the other parties thereto in accordance with its
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally or is subject to the availability of equitable remedies. The Assignor
has performed the obligations required to be performed by it to date and is not
in material default, or alleged to be in material default, under any of the
Transaction Documents.
3. Representations and Warranties of the Assignee. The Assignee hereby
represents and warrants to the Assignor, as follows:
(a) The Assignee has all the requisite power and authority to
execute, deliver and perform this Agreement. This Agreement constitutes the
legal, valid and binding obligations of the Assignee and is enforceable against
it in accordance with the terms hereof.
(b) The Assignee hereby acknowledges that in connection with the
assignment of the Transaction Documents, the Assignor has not made any
representations to it, and is not relying on any representations to it,
regarding the Borrower or the financial or business prospects of the Borrower.
(c) The Assignee understands that an investment in the Note is
extremely speculative with a high degree of risk of loss, and there are
substantial restrictions on the transferability of such note.
(d) The Assignee is able to (i) bear the economic risk of his
investment, (ii) hold the Note, and (iii) can presently afford a loss of this
investment.
(e) The Assignee confirms that it is acquiring the Note for its own
account and not with a view to distribution within the meaning of Section 2(11)
of the Securities Act of 1933, as amended (the "Securities Act"). The Assignee
hereby acknowledges and confirms that the Note has not been registered under the
Securities Act or any state securities or "blue sky" laws and may not be sold,
transferred or otherwise disposed of except in compliance with the provisions of
the Securities Act and the rules and regulations promulgated thereunder and such
state securities or "blue sky" laws.
(f) The Assignee is an "accredited investor" as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act.
4. Acknowledgement and Consent. This Agreement is subject to the
acknowledgement and consent of the Borrower, the Subsidiary, AirWorks and each
of the SBVC Entities to the terms contemplated hereby. Such acknowledgements and
consents are evidenced by respective signatures of the Borrower, the Subsidiary,
AirWorks and each of the SBVC Entities in the respective spaces provided at the
signature pages to this Agreement. To the extent any of the Transaction
Documents prohibit the assignment thereof, by the execution of this Agreement,
the Borrower, the Subsidiary, AirWorks, each of the SBVC Entities, the Assignor
and the Assignee hereby agree that such Transaction Document is hereby amended
to permit the assignment of such Transaction Document by the Assignor to the
Assignee as contemplated hereby.
5. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. The
representations, warranties, covenants and agreements set forth in this
Agreement constitute all the representations, warranties, covenants and
agreements of the parties hereto and upon which the parties have relied and
except as may be specifically provided herein. No change, modification,
amendment, addition or termination of this Agreement or any part thereof shall
be valid unless it is in writing, and signed by or on behalf of the party to be
charged therewith.
(b) Notices. Any and all notices or other communications or
deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if sent by Federal Express delivery or by certified or registered
mail, return receipt requested and postage prepaid or hand delivered as follows:
If to Assignor:
RS Properties I LLC
40 Wall Street
23rd Floor
New York, NY 10005
Attention: John Lack
If to Assignee:
Hilltop Holding Company LP
c/o SIAR Capital LLC
660 Madison Avenue
New York, NY 10021
Attention: Jack Silver
Telephone: (212) 542-8201
Facsimile: (212) 542-8212
(c) Waiver. No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, either of a similar or different nature, unless
expressly so stated in writing.
(d) Governing Law. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York applicable to
contracts to be performed entirely within that State. Any dispute in any way
related to the subject matter of this Agreement shall be litigated exclusively
within the State of New York and all parties hereto, consent to the jurisdiction
of the State and/or United States Federal District Courts of New York. Should
any clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be affected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
(e) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns or heirs and personal representatives.
(f) Captions. The headings, captions or titles of paragraphs under
sections or subsections of this Agreement are for convenience and reference only
and do not in any way modify, interpret or construe the intent of the parties or
effect any of the provisions of this Agreement.
(g) Counterparts. This Agreement may be executed by fax transmission
and in one or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first above written.
ASSIGNOR:
RS PROPERTIES I LLC
By: /s/ John Lack
----------------------------------
Name: John Lack
Title: Manager
ASSIGNEE:
HILLTOP HOLDING COMPANY, L.P.
By: /s/Jack Silver
----------------------------------
Name: Jack Silver
Title: General Partner
Acknowledged and consented to:
KRONOS ADVANCED TECHNOLOGIES, INC.
By: /s/ Richard F. Tusing
----------------------------------
Name: Richard F. Tusing
Title: Chief Operating Officer
KRONOS AIR TECHNOLOGIES, INC.
By: /s/ Richard F. Tusing
----------------------------------
Name: Richard F. Tusing
Title: Chief Operating Officer
AIRWORKS FUNDING LLLP
By: /s/ Richard E. Perlman
----------------------------------
Name: Richard E. Perlman
Title: President
SANDS BROTHERS VENTURE CAPITAL LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL II LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL III LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
SANDS BROTHERS VENTURE CAPITAL IV LLC
By: /s/ Scott Baily
----------------------------------
Name: Scott Baily
Title: COO
CRITICAL GROWTH FUND, L.P.
By: Critical Capital, L.P., its General Partner
By: Critical Capital Corporation, its General Partner
By: /s/ Charles L. Robinson
----------------------------------
Name: Charles L. Robinson
Title: President
By: /s/ Steven B. Sands
----------------------------------
Name: Steven B. Sands
Title: Chairman