FOR IMMEDIATE RELEASE CONTACT: GARY NICHOLSON
440-357-7794
LICENSOR ACCEPTS DEFENSE OF PATENT INFRINGEMENT CLAIMS AGAINST KFX'S
PEGASUS TECHNOLOGIES SUBSIDIARY
Denver, CO--September 21, 2000--The licensor, from whom Pegasus
Technologies, Inc. ("Pegasus") licenses the platform for its principal
product, has decided to accept the defense of Pegasus in a lawsuit filed by
Pavilion Technologies, Inc., on August 14, 2000, alleging various
unspecified claims of patent infringement. Pegasus, a majority-owned
subsidiary of KFx Inc. (AMEX: KFX) ("KFx"), develops, markets, and installs
optimization software to the power generation industry using, as a
platform, the licensor's neural network software, under a license agreement
that grants to Pegasus exclusive worldwide rights for use in the electric
utilities industry for process monitoring and control applications. The
licensor has accepted the defense of Pegasus pursuant to the
indemnification provisions of the license agreement. Pegasus and KFx
management have reviewed the allegations with counsel and believe the
claims are without merit.
"We look forward to working with licensor in pursuing a vigorous defense
against Pavilion's unfounded claims," said Gary Nicholson, CEO of Pegasus.
"In addition, we are considering, with counsel, filing various
counterclaims against Pavilion."
Pegasus is the industry leader in neural network applications to optimize
utility boiler operations resulting in a reduction in harmful emissions,
reduced power generation costs, and increased efficiency for the power
generation industry. KFx focuses on providing total solutions for the power
industry through its patented clean fuel production process technology and
Pegasus products and services--enhancing the operational efficiency of
power production while preserving the environment. More information about
KFx and Pegasus may be found on the Company's web site at www.kfx.com.
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The discussion above contains, in addition to historical information,
forward-looking statements that include various risks and uncertainties.
Such forward-looking statements include statements regarding the Company's
expectations. The Company's actual results may differ materially from those
anticipated in such statements. Factors that might cause such a difference
include matters discussed in "Business Risk Factors" at item 1 and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" at item 7 of the Company's Annual Report on Form 10-K/A for the
year ended December 31, 1999, and in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" at Part I, Item 2 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
