UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 001-39480

APPLIED UV, INC.

(Exact name of registrant as specified in its charter)

Delaware		84-4373308
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

150 N. Macquesten Parkway

Mount Vernon, NY 10550

(Address of principal executive offices)

(914) 665-6100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated Filer ☐
Smaller reporting company ☒	Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act):

Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	AUVI	The Nasdaq Stock Market LLC

10.5% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value per share	AUVIP	The Nasdaq Stock Market LLC

As of May 23, 2022, the Company has 12,963,174 shares of common stock issued and outstanding.

APPLIED UV, INC. & SUBSIDIARIES

INDEX TO FORM 10-Q

	Page #
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	3
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	4
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021	5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	33
Item 4. Controls and Procedures	33
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	35
Item 4. Mine Safety Disclosures	35
Item 5. Other Information	35
Item 6. Exhibits	35
Signatures	36

PART I

Item 1. Financial Statements

Applied UV, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

As of March 31, 2022 and December 31, 2021


	2022			2021
Assets
Current Assets
Cash and cash equivalents	$	7,137,582		$	7,922,906
Restricted cash		483,000			845,250
Accounts receivable, net of allowance for doubtful accounts		1,554,512			986,253
Costs and estimated earnings in excess of billings		190,050			—
Inventory, net of reserve		3,447,189			1,646,238
Vendor deposits		372,972			992,042
Prepaid expense and other current assets		602,983			419,710
Total Current Assets		13,788,288			12,812,399
Property and equipment, net of accumulated depreciation		1,286,960			196,611
Goodwill		3,722,077			4,809,811
Other intangible assets, net of accumulated amortization		18,535,244			18,976,556
Right of use asset		1,632,997			1,730,615
Total Assets	$	38,965,566		$	38,525,992

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	2,110,775		$	1,642,108
Contingent Consideration		—			1,460,000
Billings in excess of costs and earnings on uncompleted contracts		1,267,173			—
Deferred revenue		964,556			788,776
Due to landlord (Note 2)		189,862			—
Warrant liability		24,435			68,263
Financing lease obligations		5,933			7,671
Operating lease liability		398,267			389,486
Note Payable		97,500			97,500
Total Current Liabilities		5,058,501			4,453,804
Long-term Liabilities
Due to landlord -less current portion (Note 2)		570,080			—
Note payable- less current portion		60,000			60,000
Operating lease liability-less current portion		1,243,348			1,346,428
Total Long-Term Liabilities		1,873,428			1,406,428
Total Liabilities		6,931,929			5,860,232

Stockholders’ Equity
Preferred stock, Series A Cumulative Perpetual, $0.0001 par value, 19,990,000 shares authorized, 552,000 shares issued and outstanding as of both March 31, 2022 and December 31, 2021		55			55
Preferred stock, Series X, $0.0001 par value, 10,000 shares authorized, 2,000 shares issued and outstanding as of both March 31, 2022 and December 31, 2021		1			1
Common stock $.0001 par value, 150,000,000 shares authorized;12,888,174 shares issued and outstanding as of March 31, 2022, and 12,775,674 shares issued and outstanding as of December 31, 2021		1,289			1,278
Additional paid-in capital		44,257,610			42,877,622
Accumulated deficit		(12,225,318	)		(10,213,196	)
Total Stockholders’ Equity		32,033,637			32,665,760
Total Liabilities and Stockholders’ Equity	$	38,965,566		$	38,525,992

See accompanying notes to the unaudited condensed consolidated financial statements.

Applied UV, Inc. and Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Operations

For the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,
	2022			2021
Net Sales	$	3,356,090		$	2,312,615
Cost of Goods Sold		2,206,991			1,388,349
Gross Profit		1,149,099			924,266

Operating Expenses
Research and development		59,314			43,645
Selling. General and Administrative Expenses		3,101,226			1,601,517
Loss on impairment of goodwill		1,138,203			—
Total Operating Expenses		4,298,743			1,645,162

Operating Loss		(3,149,644	)		(720,896	)

Other Income (Expense)
Change in Fair Market Value of Warrant Liability		43,828			(311,400	)
Interest expense		(4,056	)		—
Loss on change in Fair Market Value of Contingent Consideration (Note 2)		(240,000	)		—
Gain on Settlement of Contingent Consideration (Note 2)		1,700,000			—
Other Expense					(655	)
Total Other Income (Expense)		1,499,772			(312,055	)

Loss Before Provision for Income Taxes		(1,649,872	)		(1,032,951	)

Provision from Income Taxes		—			—

Net Loss	$	(1,649,872	)	$	(1,032,951	)

Net Loss attributable to common stockholders:
Dividends to preferred shareholders		(362,250	)		—
Net Loss attributable to common stockholders		(2,012,122	)		(1,032,951	)
Basic and Diluted Loss Per Common Share	$	(0.16	)	$	(0.12	)
Weighted Average Shares Outstanding - basic and diluted		12,928,174			8,630,811

See accompanying notes to the unaudited condensed consolidated financial statements.

Applied UV, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2022 and 2021


	Preferred Stock				Preferred Stock
	Series A Cumulative				Preferred Stock				Common Stock				Additional Paid-In Capital		Retained Earnings			Total Stockholders Equity
Balance, January 1, 2021		—	$	—		2,000	$	1		7,945,034	$	795	$	11,973,051	$	(2,219,091	)	$	9,754,756
Shares granted to settle previously recorded liability		—		—		—		—

SEC Form 10-Q filed by Applied UV Inc.