Core Viewpoint - Kelso Technologies Inc. reported a 20% decrease in revenue for Q3-2024, resulting in a net loss, but showed improvement in expense management compared to the previous quarter [2][4][5]. Financial Performance - Q3-2024 revenue was $2.52 million, down from $3.14 million in Q3-2023, with a net loss of $361,800, an improvement from a net loss of $544,927 in Q2-2024 [2][3]. - Gross profit margin remained above industry average at 44%, slightly down from 45% in Q3-2023 [2][3]. - Adjusted EBITDA loss for Q3-2024 was $(297,751), compared to $(36,142) in Q3-2023 [3]. Liquidity and Capital Resources - As of September 30, 2024, working capital was $3.13 million, down from $5.03 million at the end of 2023 [4][5]. - Cash on hand decreased to $410,416 from $1.43 million at December 31, 2023 [4][5]. - Total assets were $9.62 million, slightly down from $9.70 million at the end of 2023 [5]. Management and Strategic Focus - New management appointments include Frank Busch as interim CEO and Sameer Uplenchwar as CFO, focusing on cost control and expense reduction [2][3]. - The company is undergoing a strategic reorganization to improve financial outlook while maintaining production capabilities [8]. - A strategic review of the KXI HD system is ongoing to maximize shareholder value [2][8]. Market Outlook - The company anticipates a challenging market for tank car demand, with expected deliveries of approximately 8,400 units in 2024 and 8,000 units in 2025 [9]. - Positive growth is forecasted for 2026 and 2027, with deliveries expected to increase to 9,350 units and 13,000 units respectively [9]. - Full AAR approval of the pressure car package is crucial for new revenue growth, with specialized angle valves nearing completion of the approval process [10][11].

Core Points - Kelso Technologies Inc. announced the retirement of CEO James R. Bond effective July 9, 2024, with Frank Busch appointed as interim CEO [2] - Frank Busch has been a director since February 2020 and has extensive experience in finance and leadership [5] - The company specializes in the design and production of proprietary service equipment for transportation applications, particularly rail tank car valve equipment [3] Group 1 - The company is focused on ensuring a smooth transition in leadership without disrupting existing operations [1] - Frank Busch will engage with stakeholders and review the company's market outlook and strategic planning [1][2] - The Board of Directors expressed gratitude for Mr. Bond's years of service [2] Group 2 - Kelso Technologies is recognized for its high-quality products that enhance safety and reduce environmental risks during the transport of hazardous and non-hazardous commodities [3] - The company aims to provide economic and operational advantages to its customers [3]

Group 1 - Mr. James R. Bond, the CEO and President of Kelso Technologies Inc., has announced his retirement effective July 9, 2024, and Mr. Frank Busch has been appointed as the interim CEO [5] - Mr. Busch has been a director of the Company since February 11, 2020, and is also the Chair of the Audit and Finance Committee [1] - Mr. Busch plans to reach out to stakeholders in the coming weeks to review the company's market outlook and strategic planning [2] Group 2 - Kelso Technologies is a diverse product development company specializing in the design, engineering, production, and distribution of proprietary service equipment for transportation applications [3] - The Company is recognized for its high-quality rail tank car valve equipment, which ensures safe handling and containment of hazardous and non-hazardous commodities during transport [3] - Kelso's products are designed to provide economic and operational advantages while minimizing human error and environmental impact [3]

Core Points - The Annual General and Special Meeting of Kelso Technologies Inc. was held on June 6, 2024, with 49.12% of the common shares voted [5] - The shareholders elected six directors, with James R. Bond receiving only 31.92% support, leading to his resignation tender [6][7][13] - The shareholders approved the reappointment of Smythe, LLP as auditors with 89.30% in favor [2] - Several equity incentive plans were not approved, including the omnibus equity incentive plan (24.54% for), unallocated stock options (25.07% for), and unallocated restricted share units (25.07% for) [8][15] Voting Results - A total of 26,741,861 common shares were voted out of 54,443,422 outstanding shares [1] - The number of directors was set to six, with 82.54% in favor [6] - The voting results for individual directors were as follows: - James R. Bond: 31.92% for, 68.08% withheld - Anthony Andrukaitis: 72.97% for, 27.03% withheld - Paul Cass: 82.89% for, 17.11% withheld - Laura Roach: 75.75% for, 24.25% withheld - Jesse V. Crews: 75.98% for, 24.02% withheld - Frank Busch: 75.98% for, 24.02% withheld [13][14] Company Overview - Kelso Technologies Inc. specializes in the design, engineering, production, and distribution of proprietary service equipment for transportation applications, particularly in rail tank car valve equipment [17]

Core Points - The omnibus equity incentive plan and various stock options were not approved by shareholders, with significant opposition reflected in the voting results [1] - The number of directors to be elected was set at six, receiving strong support from shareholders [2] - A total of 26,741,861 common shares were voted, representing 49.12% of the outstanding shares [4] - James R. Bond, the President and CEO, received less than majority support and has tendered his resignation as a director [11] - The reappointment of Smythe, LLP as auditors was approved with a high level of support [5] Voting Results - The omnibus equity incentive plan received 24.54% For and 75.46% Against [1] - The unallocated stock options plan received 25.07% For and 74.93% Against [1] - The unallocated restricted share units plan received 25.07% For and 74.93% Against [1] - The unallocated deferred share units plan received 25.03% For and 74.97% Against [1] - The election of directors showed James R. Bond with 31.92% For and 68.08% Withheld, while other nominees received higher support [18] Company Overview - Kelso Technologies Inc. specializes in the design, engineering, production, and distribution of proprietary service equipment for transportation applications, particularly in rail tank car valve equipment [14]

Financial Performance - For the three months ended March 31, 2024, the company reported revenues of $2,652,604, an increase from $2,459,958 in the same period of 2023, representing an 8% growth [3] - Gross profit for the same period was $1,109,826, slightly up from $1,086,568, with a gross profit margin of 42%, down from 44% [3] - The company recorded a net loss of $698,759, an improvement from a loss of $786,677 in the prior year [3] - Adjusted EBITDA loss improved to $(158,616) from $(531,618) year-over-year [3] Liquidity and Capital Resources - As of March 31, 2024, the company had cash on deposit of $1,066,089, down from $1,433,838 at the end of 2023 [6] - Accounts receivable decreased to $939,641 from $1,065,411, while inventory increased to $3,824,083 from $3,376,005 [6] - The working capital position was $4,023,140, down from $5,026,580 at the end of 2023 [7] - Total assets increased to $10,207,748 from $9,703,271, while net assets decreased to $8,021,489 from $8,720,248 [8] Industry Outlook - The rail tank car industry is expected to experience slow growth, with deliveries aligning with replacement demand levels [11] - Tank car deliveries are forecasted to range from 7,000 to 10,000 units in 2024, continuing at this level through 2025 [13] - The company aims to secure full AAR approvals for its rail pressure car products in 2024, which is crucial for revenue growth [9][15] - The company is positioned to service the rail tank car market, which consists of approximately 86,000 tank cars, presenting a significant financial growth opportunity [15] Automotive Innovations - The company is developing an Advanced Driver-Assistance System (ADAS) designed for commercial wilderness travel, with a focus on safety and operational efficiency [16][19] - A pilot production facility has been established to convert heavy-duty vehicles using proprietary technologies, expected to generate approximately $25 million in annual revenue starting in early 2025 [21][24] - The company aims to lead in the ADAS market for no-road environments, targeting a global market projected to reach $80 billion by 2030 [20]

Exhibit 99.1 | Meeting Type : | | Annual General and Special Meeting | | | --- | --- | --- | --- | | Record Date for Notice of Meeting : | | April 29, 2024 | | | Record Date for Voting (if applicable) : | | April 29, 2024 | | | Beneficial Ownership Determination Date : | | April 29, 2024 | | | Meeting Date : | | June 06, 2024 | | | Meeting Location (if available) : | | Vancouver, B.C. | | | Issuer sending proxy related materials directly to NOBO: | | Yes | | | Issuer paying for delivery to OBO: | | Yes | | ...

Financial Performance - The Company's unaudited revenues for the quarter ended December 31, 2023, were $3,069,359, showing a decrease from $3,138,137 in the previous quarter[78]. - The Company's revenues for the year ended December 31, 2023, were $10,819,916, a decrease of 1% compared to $10,931,188 in 2022, following a 47% increase in 2022 after a 33% decline in 2021[131][135]. - The Company's net loss for the quarter ended December 31, 2023, was $(165,368), compared to a loss of $(66,174) in the prior quarter[79]. - The net loss for the year ended December 31, 2023 was $2,101,886, or $0.04 per share, compared to a net loss of $1,355,417, or $0.02 per share, in 2022[213]. - Gross profit margin for 2023 was 42%, down from 45% in 2022, attributed to inflationary pressures and higher raw material costs[214]. - Total operational expenses decreased slightly to $5,876,383 in 2023 from $6,126,992 in 2022, aligning with management's expectations[215]. - Cash reserves decreased to $1,433,838 as of December 31, 2023, down from $2,712,446 in 2022[206]. - Total assets decreased to $9,703,271 in 2023 from $12,147,143 in 2022, reflecting ongoing market challenges[206]. Working Capital and Financial Position - The Company had a positive working capital of $5,026,580 as of December 31, 2023, but may face working capital deficits in the future[47]. - The Company's working capital as of December 31, 2023, was $5,026,580, which includes $3,376,005 in inventories for future deliveries[137]. - Kelso's working capital was $5,026,580 as of December 31, 2023, with no interest-bearing long-term debt[117]. - The Company’s working capital was reported at $8,670,165 as of December 31, 2021, indicating a strong financial position[88]. Revenue Growth and Market Demand - The Company reported a 47% increase in sales in 2022 compared to 2021, with a total of 4,609 valves (47% of total production) provided for new tank car production[89]. - Industry analysts project new tank car demand to reach 8,290 tank cars in 2023, with significant re-qualifications planned for 135,000 tank cars delivered between 2012 and 2017[159]. - The K2AV angle valve is expected to generate multi-million-dollar revenues as oil refiners specify more units, with approximately 85,000 pressure tank cars utilizing three K2AV units each[93]. - The average revenue per tank car is projected to increase from $1,500 to over $10,000 following full AAR approval of the pressure car package[107]. Research and Development - The Company invests in R&D for new products in rail/road tank cars and automotive suspension technologies, focusing on long-term growth[43]. - The Company has made significant progress in R&D for new products, although timing for regulatory approvals remains unpredictable[115]. - The ongoing research and development of the KXI Suspension System is a significant focus for future revenue growth[229]. - The KXI HD prototype is expected to enter pilot production in early 2024, targeting a larger commercial market opportunity for heavy-duty vehicles[165]. - The KXI HD project aims to enhance vehicle performance in extreme terrains, focusing on improved traction and balance for commercial wilderness and disaster response operations[166]. - The KXI Wildertec™ Software Division filed a patent application for its Automated Traction Optimization Method, positioning the Company for future growth in the ADAS market[111]. Risks and Challenges - The Company is dependent on three major Original Equipment Manufacturer (OEM) customers for a significant portion of its revenue, which poses a risk if any of these customers are lost[55]. - The Company may face shortages of parts and raw materials, which could negatively impact business development and revenues[57]. - The Company’s products are subject to price fluctuations in raw materials like steel and rubber, which could affect profitability[62]. - The Company has faced supply chain issues due to COVID-19, impacting the completion timeline of its prototype[86]. - The Company has obtained patents for its external constant force spring pressure relief valves and other products, but faces risks related to intellectual property protection[41]. Strategic Initiatives - The Company aims to obtain full AAR approvals for its rail pressure car products in 2024, which is crucial for sustainable financial growth[104]. - The Company aims to diversify its business risks by pursuing non-rail market opportunities, including the development of the KXI™ Wildertec™ Suspension System[141][142]. - The Company is focusing on developing application agreements for KXI Wildertec technologies in sectors such as firefighting, medical operations, and emergency response[178]. - The Company has extended the contracts of its senior executives until June 30, 2024, which is critical for maintaining operational stability[63]. - The Company plans to voluntarily delist from the NYSE American due to low share prices and the costs associated with maintaining a dual listing[72]. Operational Insights - The Company completed a private placement in March 2021, raising gross proceeds of CAD $6,370,000 by issuing 7,000,000 units at CAD $0.91 per unit[82]. - The Company has distributed over 89,000 valves since 2012, generating more than $137 million in revenues[156]. - The Phase-One production facility is expected to generate approximately $25 million in annual revenue starting in late 2024, with potential to scale to over $100 million[122]. - The Company has engaged military and automotive OEM suppliers to support R&D schedules for the KXI HD project, enhancing its technological capabilities[165].

Financial Performance - Revenues for the year ended December 31, 2022, were $10,931,188, an increase of 47.5% compared to $7,425,707 in 2021[38]. - Gross profit for 2022 was $4,908,996, up from $3,196,492 in 2021, reflecting a gross margin improvement[38]. - The net loss for 2022 was $(1,355,417), a reduction in loss compared to $(2,758,567) in 2021[38]. - The Company's unaudited revenues over the last eight quarters ranged from $1,220,487 to $2,963,851, with the latest quarter ending December 31, 2022, reporting $2,389,477[77]. - The Company's unaudited net income (loss) over the last eight quarters showed consistent losses, with the latest quarter ending December 31, 2022, reporting a loss of $(420,316)[78]. - The Company reported a net loss of $1,355,417 ($0.02 per share) for 2022, an improvement from a net loss of $2,758,567 ($0.05 per share) in 2021[200]. - Total operational expenses decreased by 2% to $6,126,992 in 2022, compared to $6,254,981 in 2021, aligning with management's strategic plans[202]. Assets and Equity - As of December 31, 2022, total assets were $12,147,143, down from $13,728,510 in 2021[38]. - Shareholders' equity decreased to $10,781,672 in 2022 from $12,055,113 in 2021[38]. - The Company's working capital was $7,000,568 as of December 31, 2022, which includes $4,144,196 in inventories for future deliveries[134]. - Cash reserves at the end of 2022 were $2,712,446, a decrease from $3,377,464 in 2021, while working capital was $7,000,568[193]. - The Company's working capital position decreased to $7,000,568 as of December 31, 2022, from $8,670,165 as of December 31, 2021, a decline of about 19.2%[227]. - Net assets decreased to $10,781,672 as of December 31, 2022, from $12,055,113 as of December 31, 2021, indicating a reduction of approximately 10.6%[228]. - The Company had no interest-bearing long-term liabilities or debt as of December 31, 2022, consistent with the previous year[228]. Working Capital and Funding - The company has a positive working capital of $7,000,568 as of December 31, 2022, but may face working capital deficits in the future[50]. - The Company plans to generate necessary capital resources through product sales, but faces risks if unable to do so[223]. - The Company has previously raised funds through private placements and the exercise of options, but future success is not guaranteed[225]. - The working capital position in 2021 was bolstered by a private equity placement of 7,000,000 units at CAD $0.91 per unit[227]. Research and Development - The company is engaged in R&D for new products, focusing on rail/road tank cars and automotive suspension technology, with uncertain returns on investment[49]. - The Company has obtained patents for key products, but faces risks related to intellectual property and regulatory qualifications[45][47]. - Research and development costs for new products, including the KXI Suspension System, were $1,068,708 in 2022, down from $1,697,497 in 2021[204]. - The Company has engaged automotive engineers to shift R&D focus towards heavy-duty vehicle platforms, representing a larger commercial market opportunity[163]. Market and Operational Risks - The impact of COVID-19 continues to be monitored, with potential risks to operations and revenue generation in 2023[43]. - There is a risk of parts and raw materials shortages, which could negatively impact business development and revenues[60]. - The Company may face production capacity constraints if market demand exceeds projections, potentially affecting customer retention and revenue generation[61]. - Management acknowledges potential risks that could impact future performance, including product development delays and market adoption challenges[224]. Customer Dependency and Sales - The Company is dependent on three major OEM customers, which represent a significant portion of its revenue, and the loss of any of these customers could materially impact operations[58]. - In 2022, the Company experienced a 47% increase in sales compared to 2021, with total OEM production output of 9,812 rail tank cars, of which the Company provided 4,609 valves (47%) for new tank car production[99]. - The Company provided 4,609 valves (47%) for new tank car production and 2,445 valves for retrofit and repair activity in 2022[152]. - New tank car demand is projected to reach 10,650 tank cars in 2023, with significant retrofits planned for 135,000 tank cars delivered between 2012 and 2017[156]. Product Development and Innovations - The K2AV, a new 2" angle valve, is expected to generate multi-million-dollar revenues as it is specified by oil refiners for use in approximately 85,000 pressure tank cars[102][103]. - The KXI HD prototype vehicle is anticipated to be completed in 2023, utilizing advanced hydraulic mechatronic technologies and proprietary software for enhanced performance in wilderness applications[109][112]. - The KXI HD project aims to create a new suspension control technology to improve vehicle performance in challenging environments, with initial testing expected to begin in 2023[108][117]. - The Company has received approvals for new products, including the KTBV and K2AV valves, which are currently undergoing commercial field service trials[85][86]. - The Company aims to diversify its business risks by accessing non-rail markets to mitigate the impacts of cyclical downturns in the rail industry[137]. - The KXI HD technology aims to improve traction and balance, reducing ecological impact and fuel consumption during operations[166]. Insurance and Liability - The Company maintains commercial general liability insurance for claims up to $4,000,000 in aggregate and $1,000,000 per incident, but there is a risk that coverage may not be sufficient for future claims[63]. Workforce and Management - The Company employs 38 individuals as of December 31, 2022, down from 45 in the previous year, with a focus on retaining skilled personnel in production and management[179]. - Management continues to focus on cost-cutting measures and improving operational efficiency to support future growth initiatives[195].

Financial Performance - Revenues for the year ended December 31, 2022, were $10,931,188, a 47% increase from $7,425,707 in 2021[11] - Gross profit for 2022 was $4,908,996, with a gross profit margin of 45%, up from 43% in 2021[11] - The net loss for 2022 was $1,355,417, an improvement from a net loss of $2,758,567 in 2021[11] - Adjusted EBITDA for 2022 was a loss of $83,575, compared to a loss of $1,436,435 in 2021[11] - Sales performance for the year ended December 31, 2022 improved by 47% compared to the previous year, indicating a recovery in business prospects[58] - The Company reported a net loss of $1,355,417 ($0.02 per share) on revenues of $10,931,188, an improvement from a net loss of $2,758,567 ($0.05 per share) on revenues of $7,425,707 in 2021[61] - Adjusted EBITDA loss for 2022 was $83,575, significantly improved from a loss of $1,436,435 in 2021[65] - Basic and diluted loss per share improved to $0.02 in 2022 from $0.05 in 2021[156] Assets and Liabilities - The total assets as of December 31, 2022, were $12,147,143, down from $13,728,510 in 2021[11] - The Company had cash on deposit of $2,712,446 and working capital of $7,000,568 as of December 31, 2022, compared to $3,377,464 and $8,670,165 respectively in 2021[76][77] - The company’s total liabilities decreased to $1,365,471 in 2022 from $1,673,397 in 2021, a reduction of 18.4%[154] - Cash reserves decreased to $2,712,446 in 2022 from $3,377,464 in 2021, while working capital also declined to $7,000,568 from $8,670,165[81] Operational Highlights - The company has active service field trials for new rail tank car products, including a ceramic ball bottom outlet valve, which are pending AAR approval[21] - The KXI™ Wildertec™ Suspension System is under development to enhance commercial wilderness transportation capabilities[24] - The KXI HD prototype vehicle was completed in late 2022 and is undergoing extensive testing to ensure compliance with Canadian Motor Vehicle Safety Standards (CMVSS) and Federal Motor Vehicle Safety Standards (FMVSS)[29][50] - The anticipated new tank car demand is projected to reach 10,650 units in 2023, alongside significant retrofits for 135,000 tank cars delivered between 2012 and 2017[37] - The company plans to initiate pilot production and sales of the KXI HD in late 2023, following successful compliance testing[30][53] - The company operates two production and R&D facilities totaling 50,000 square feet in Bonham, Texas, and a new facility in West Kelowna, British Columbia, for KXI HD development[52][53] Market and Customer Dependency - The company aims to diversify its market presence beyond rail to mitigate risks associated with reliance on a small number of customers[23] - The Company is dependent on three major customers for a significant portion of its revenue, with no formal long-term agreements in place, posing a risk to revenue stability[117] - The company generated over $137 million in revenues since 2012 from the distribution of more than 89,000 valves, with 9,812 rail tank cars produced in 2022[33] - The Company’s market share in new tank car production is approximately 47%, bolstered by its reputation for reliability during supply chain disruptions[132] Research and Development - The company is engaged in R&D activities focused on new products for rail/road tank cars and automotive suspension technology, with uncertain returns on investment[107] - The company has obtained patents for key products, including external constant force spring pressure relief valves, which are crucial for future product development[105] - The Company’s R&D investments are aimed at developing new products for the rail and automotive industries, with ongoing projects expected to enhance future financial success[134] Challenges and Risks - Management anticipates potential challenges in 2023 due to slow economic rail activity, hyperinflation, and supply chain concerns, despite a cautiously optimistic outlook from OEMs and tank car owners[78] - The Company’s ability to meet production schedules may be impacted by potential shortages of parts and raw materials, which could adversely affect business development plans[119] - The company has been impacted by COVID-19, which has caused material disruption to business globally, affecting financial results[159] Financial Management - Kelso's financial performance reflects its ability to manage capital resources effectively and navigate improved market conditions post-COVID-19[59] - The Company maintains a debt-free financial position, allowing it to execute strategic business plans for 2023[95] - The company recognizes variable lease payments not dependent on an index or rate as an expense in the period incurred[199]