SHARE



MOUNT VERNON, N.Y.–()–Applied UV, Inc. (NasdaqCM: AUVI) (“Applied UV” or the “Company”), a pathogen elimination technology company that applies the power of narrow-range ultraviolet light (“UVC”) for surface areas and catalytic bioconversion technology for air purification to destroy pathogens safely, thoroughly, and automatically, announced its financial results for the fourth quarter and full year 2021.

The Company is also providing key operational metrics on results of operations for the three and 12-month periods ended December 31, 2021.

Recent Business Highlights

  • Expanded distribution capability of Airocide® with three-year distribution agreement with one of Europe’s largest Distributors, Plandent Division, a wholly owned unit of Planmeca Oy, initially targeting 21,000 dental providers in Scandinavia with the potential to expand into Europe
  • Further penetrated high-growth cannabis market with large order from U.S. distributor
  • Entered Prison and Correctional Facilities vertical market with initial and follow-on orders from Tennessee Department of Corrections
  • Bolstered balance sheet with $19.3 million in net proceeds from public offerings in 2021
  • Announced a common share repurchase program through September 2022 to repurchase up to one million shares in open market transactions
  • Subsequent to the end of the first quarter 2022, completed the acquisition of Visionmark, expanding our product offering beyond fine mirrors to include furnishings allowing Munnworks to compete head-to-head in new construction and remodeling in the luxury hospitality market

Strategic Positioning and Market Strategy

  • Improved margins due to air purification products being excluded from 25% China Tariff and improved product mix
  • Backlog and pipeline building across multiple verticals including, Dental, Long-Term Care, Hospital, Wine and Schools (EANS II)
  • Launching targeted sales and marketing initiatives in the second quarter of 2022 to coincide with recent Government “Clean The Air” initiatives aimed at cannabis, schools food preservation and transportation, schools, long-term care (CMS), hospitality and dental verticals. Programs will include digital, radio, a promotional dealer portal, new web, consolidated and targeted social media with the goal of driving sales in the U.S.
  • Exploring joint venture and strategic partnerships offering product placement pilot programs with established companies in long term care, hospitality, logistics food preservation and transportation as well as floral verticals providing a first to market competitive advantage with market leaders (consumer & commercial)
  • Strengthening of the Senior Executive Team with CEO announcement expected.

Max Munn, Applied UV’s President and Interim Chief Executive Officer commented, “2021 was a year of strategic acquisitions that diversified our business and enabled us to quickly build a highly effective air and surface pathogen elimination platform backed by independent clinical research. We have made substantial progress in identifying ways to further leverage the portfolio of assets that we believe will enable us to address the growing global demand for solutions that safely and effectively stop the spread of contagious airborne diseases and are easy to implement. Key wins with high-profile customers that serve large venues such as the Palace of Versailles in France and Uruguayan School Systems, Armed Forces Research Institute, US Army Aberdeen Proving Grounds, which further validate both our strategy as well as provide referenceable installations for new business pursuits validating our air purification technology efficacy, effectiveness, and ease of use.”

Munn added, “Globally, scientists, governments and healthcare experts have been advocating for improving air quality to control the transmission of airborne pathogens. Now, Governments are mandating, and more importantly, funding and, driving, the implementation of solutions that are proven to improve air quality and protect its populations. There were four government initiatives announced in the first quarter of 2022 including CMS’ (Centers for Medicare and Medicaid) $3,000 reimbursement program for long-term care facilities, the $2.5B EANS II grants for non-public schools which provides funds for mobile and installed air purification technology, the EPA’s new Clean Air Guidelines and lastly, the White House’s Clean Air Initiative. Our go-to-market plans include the selective pursuit of opportunities that are benefiting from these market tailwinds. We have a solid balance sheet, a growing pipeline and are on strong footing from an operational perspective to execute our strategy and deliver value for our shareholders.”

Financial Results

Segments

The Company has three reportable segments: the design, manufacture, assembly and distribution of disinfecting systems for use in healthcare, hospitality, and commercial municipal and residential markets (Disinfection segment); the manufacture of fine mirrors specifically for the Hospitality industry (hospitality segment); and the Corporate Segment, which includes expenses primarily related to corporate governance, such as board fees, legal expenses, audit fees, executive management, and listing costs.

Net Sales

Net sales of $11,667,579 represented an increase of $5,934,845, or 103.5% for the year ended December 31, 2021 as compared to net sales of $5,732,734 for the year ended December 31, 2020. This increase was primarily attributable to the addition of the Disinfection segment in 2021 as a result of the strategic acquisitions of Akida, KES, and Scientific Air. The 2021 net sales for Disinfection of $5,723,915 includes close to 11 months of Akida-related sales (acquisition closed February 8, 2021), one quarter of KES-related sales (acquisition closed September 28, 2021), and just over 2 months of Scientific Air-related sales (acquisition closed October 13, 2021). The Hospitality segment began to rebound from the slowdown caused by the pandemic and finished the year ended December 31, 2021 with net sales of $5,943,664, which represented an increase of $210,930, or 3.7% as compared to the year ended December 31, 2020.

Gross Profit

Gross profit increased $3,089,050, or 306%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020, driven by both volume growth and the higher margin contribution from the Disinfection segment. The Disinfection segment’s gross profit for the year ended December 31, 2021 was $2,643,374, or 46.2% as a percentage of net sales. The Hospitality segment’s gross margin for the year ended December 31, 2021 was $1,455,012, or 24.4% as a percentage of net sales, as compared to $1,009,336, or 17.6% as a percentage of net sales for the year ended December 31, 2020. The Hospitality segment’s gross profit was impacted last year by the sales slowdown caused by the pandemic, as well as higher overhead cost absorption as the company kept many of their direct labor employees in compliance with the payroll protection program forgiveness requirements. The company is focused on realizing cost synergies from consolidation and streamlining of manufacturing operations to help offset increases in material and logistics costs.

Operating Expenses

Selling, General, and Administrative – SG&A costs, excluding stock compensation expense of $1,549,787 for the year ended December 31, 2021 and $687,505 for the year ended December 31, 2020, were $9,791,925 for the year ended December 31, 2021, which represented an increase of $6,467,874 as compared to the year ended December 31, 2020. This increase was driven primarily by the expansion of the Disinfection segment. The infrastructure to support this segment was initially implemented in the fourth quarter of 2020, and additional investments were made during 2021 to support the three strategic acquisitions of Akida, KES, and Scientific Air. Payroll costs increased $2.4 million year over year as headcount increased from 33 at December 31, 2020 to 61 at December 31, 2021. Consulting costs increased $0.7 million and legal expense increased $0.4 million, mainly due to acquisition-related expenses. Amortization expense, mostly related to the intangible assets associated with the acquisitions, increased $1.0 million, and depreciation expense increased $0.1 million. Additional increases were due to advertising $0.3 million, product certification and testing $0.3 million, insurance $0.2 million, and rent $0.1 million. We anticipate efficiency gains in the coming year as we fully integrate all 3 acquisitions and leverage synergies where practical. The Corporate segment includes expenses primarily related to corporate governance, such as board fees, legal expenses, audit fees, executive management, and listing costs, allowing for a better reflection of operational measurement of each of the two operating segments.

Net Loss

We recorded a net loss of $7,390,355 for the year ended December 31, 2021, compared to a net loss of $3,368,810 for the year ended December 31, 2020. The increase of $3,807,244 in the net loss was mainly due to the investments made to grow the Disinfection segment and loss on contingent consideration, offset by the increased revenue and gross margin from that segment, as discussed above, plus an increase in corporate governance costs.

The Company had approximately $7.9 million of unrestricted cash available on its consolidated balance sheet as of December 31, 2021.

Conference Call/Webcast Information

Applied UV’s management team will host an investor conference call and live webcast on April 7, 2022, at 9 am ET. Investors can access the live webcast via a link on Applied UV’s web site at AUVI Events and Presentations. For those planning to participate on the call, please dial +1-877-545-0523 (for domestic calls), or +1-973-528-0016 (for international calls), passcode 651204. A replay of the conference call will be available online on the Applied UV web site, and a dial-in replay will be available for one week following the call at +1-877-481-4010 (for domestic calls) or +1-919-882-2331 (for international calls), replay passcode 44897.

About Applied UV

Applied UV is focused on the development and acquisition of technology that address infection control in the healthcare, hospitality, commercial and municipal markets. The Company has two wholly owned subsidiaries – SteriLumen, Inc. (“SteriLumen”) and Munn Works, LLC (“Munn Works”). SteriLumen’s connected platform for Data Driven Disinfection™ applies the power of ultraviolet light (UVC) to destroy pathogens safely, thoroughly, and automatically, addressing the challenge of healthcare-acquired infections (“HAIs”). Targeted for use in facilities that have high customer turnover such as hospitals, hotels, commercial facilities, and other public spaces, the Company’s Lumicide™ platform uses UVC LEDs in several patented designs for infection control in and around high-traffic areas, including sinks and restrooms, killing bacteria, viruses, and other pathogens residing on hard surfaces within devices’ proximity. The Company’s patented in-drain disinfection device, Lumicide Drain, is the only product on the market that addresses this critical pathogen intensive location. SteriLumen’s Airocide® air purification devices are research backed, clinically proven and developed for NASA with assistance from the University of Wisconsin. Airocide® is listed as an FDA Class II Medical device, utilizes a proprietary photo-catalytic (PCO) bioconversion technology that draws air into a reaction chamber that converts damaging molds, microorganisms, dangerous airborne pathogens, destructive VOCs, allergens, odors and biological gasses into harmless water vapor and green carbon dioxide without producing ozone or other harmful byproducts. Airocide® applications include healthcare, hospitality, grocery chains, wine making facilities, commercial real estate, schools, dental offices, post-harvest, grocery, cannabis facilities and homes.

For more information about Applied UV, Inc., and its subsidiaries, please visit the following websites: https://www.applieduvinc.com/; https://sterilumen.com/; https://www.airocide.com https://kesscience.com; https://scientificairmanagement.com and, https://munnworks.com/.

Forward-Looking Statements

The information contained herein may contain “forward‐looking statements.” Forward‐looking statements reflect the current view about future events. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements include, but are not limited to, statements contained in this press release relating to the view of management of Applied UV concerning its business strategy, future operating results and liquidity and capital resources outlook. Forward‐looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Applied UV, Inc. and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2021 and 2020

 

 

2021

 

2020

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,922,906

 

 

$

11,757,930

 

Restricted cash

 

 

845,250

 

 

 

 

Accounts receivable, net of allowance for doubtful accounts

 

 

986,253

 

 

 

232,986

 

Inventory

 

 

1,646,238

 

 

 

156,290

 

Vendor deposits

 

 

992,042

 

 

 

40,800

 

Prepaid expense and other current assets

 

 

419,710

 

 

 

158,498

 

Total Current Assets

 

 

12,812,399

 

 

 

12,346,504

 

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation

 

 

196,611

 

 

 

112,804

 

Goodwill

 

 

4,809,811

 

 

 

 

Other intangible assets, net of accumulated amortization

 

 

18,976,556

 

 

 

178,088

 

Right of use asset

 

 

1,730,615

 

 

 

481,425

 

Total Assets

 

$

38,525,992

 

 

$

13,118,821

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

1,642,108

 

 

$

1,398,073

 

Contingent Consideration

 

 

1,460,000

 

 

 

 

Deferred revenue

 

 

788,776

 

 

 

841,636

 

Income tax payable

 

 

 

 

 

173,716

 

Warrant liability

 

 

68,263

 

 

 

 

Financing lease obligations

 

 

7,671

 

 

 

6,648

 

Lease liability

 

 

389,486

 

 

 

139,908

 

Payroll protection program loan

 

 

 

 

 

69,927

 

Loan payable

 

 

97,500

 

 

 

67,500

 

Total Current Liabilities

 

 

4,453,804

 

 

 

2,697,408

 

Long-term Liabilities

 

 

 

 

 

 

 

 

Financing lease obligations – less current portion

 

 

 

 

 

8,240

 

Note payable-less current portion

 

 

60,000

 

 

 

90,000

 

Lease liability-less current portion

 

 

1,346,428

 

 

 

341,517

 

Payroll protection program loan-less current portion

 

 

 

 

 

226,900

 

Total Long-Term Liabilities

 

 

1,406,428

 

 

 

666,657

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

5,860,232

 

 

 

3,364,065

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock, Series A Cumulative Perpetual, $0.0001 par value, 19,990,000 shares authorized, 552,000 issued and outstanding as of December 31, 2021, and 0 shares issued and outstanding as of December 31, 2020

 

 

55

 

 

 

 

Preferred stock, Series X, $0.0001 par value, 10,000 shares authorized, 2,000 shares issued and outstanding as of both December 31, 2021 and 2020

 

 

1

 

 

 

1

 

Common stock $.0001 par value, 150,000,000 shares authorized; 12,775,674 issued and outstanding as of December 31, 2021, and 7,945,034 shares issued and outstanding as of December 31, 2020

 

 

1,278

 

 

 

795

 

Additional paid-in capital

 

 

42,877,622

 

 

 

11,973,051

 

Accumulated deficit

 

 

(10,213,196

)

 

 

(2,219,091

)

Total Stockholders’ Equity

 

 

32,665,760

 

 

 

9,754,756

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

38,525,992

 

 

$

13,118,821

 

The accompanying notes are an integral part of these consolidated financial statements.

Applied UV, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Years Ended December 31, 2021 and 2020

 

 

2021

 

2020

Net Sales

 

$

11,667,579

 

 

$

5,732,734

 

 

 

 

 

 

 

 

 

 

Cost of Goods Sold

 

 

7,569,193

 

 

 

4,723,398

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

4,098,386

 

 

 

1,009,336

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Research and development

 

 

53,408

 

 

 

310,672

 

Selling, General and Administrative Expenses

 

 

11,341,712

 

 

 

4,011,556

 

Total Operating Expenses

 

 

11,395,120

 

 

 

4,322,228

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

(7,296,734

)

 

 

(3,312,892

)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

Change in Fair Market Value of Warrant Liability

 

 

66,862

 

 

 

 

Forgiveness of paycheck protection program loan

 

 

296,827

 

 

 

 

Loss on contingent consideration

 

 

(574,000

)

 

 

 

Other Income

 

 

24,871

 

 

 

10,936

 

Total Other Income (Expense)

 

 

(185,440

)

 

 

10,936

 

 

 

 

 

 

 

 

 

 

Loss Before Provision (Benefit) for Income Taxes

 

 

(7,482,174

)

 

 

(3,301,956

)

 

 

 

 

 

 

 

 

 

Provision (Benefit) from Income Taxes

 

 

(91,819

)

 

 

66,854

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(7,390,355

)

 

$

(3,368,810

)

 

 

 

 

 

 

 

 

 

Net Loss attributable to common stockholders:

 

 

 

 

 

 

 

 

Dividends to preferred shareholders

 

 

(603,750

 

 

 

 

Net Loss attributable to common stockholders

 

 

(7,994,105

)

 

 

(3,368,810

)

Basic and Diluted Loss Per Common Share

 

$

(0.86

)

 

$

(0.59

)

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – basic and diluted

 

 

9,273,257

 

 

 

5,733,591

 

The accompanying notes are an integral part of these consolidated financial statements.

SHARE

Leave a Reply