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 June 30, 2023

☐ 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 August 18, 2023, the Company has 8,905,633 shares of common stock 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 June 30, 2023 and December 31, 2022	3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	4
Condensed Consolidated Statements of Redeemable Preferred Stock and Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	44
Item 4. Controls and Procedures	44
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	45
Item 1A. Risk Factors	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3. Defaults Upon Senior Securities	45
Item 4. Mine Safety Disclosures	45
Item 5. Other Information	45
Item 6. Exhibits	45
Signatures	46

PART I

Item 1. Financial Statements

Applied UV, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

As of June 30, 2023 and December 31, 2022


	June 30,		December 31.
	2023		2022
Assets
Current Assets
Cash and cash equivalents	$	3,333,544	$	2,734,485
Accounts receivable, net of allowance for doubtful accounts		5,049,906		1,508,239
Costs and estimated earnings in excess of billings		2,435,960		1,306,762
Inventory, net		8,207,895		5,508,086
Vendor deposits		1,149,385		75,548
Prepaid expense and other current assets		2,011,189		1,187,223
Total Current Assets		22,187,879		12,320,343

Property and equipment, net of accumulated depreciation		1,166,507		1,133,468
Other assets		—		153,000
Goodwill		17,809,235		3,722,077
Other intangible assets, net of accumulated amortization		28,000,601		11,354,430
Right of use assets		3,807,834		4,044,109
Total Assets	$	72,972,056	$	32,727,427
Liabilities, Redeemable Preferred Stock and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses	$	8,862,351	$	2,982,760
Contingent consideration		18,809,672		—
Deferred revenue		5,406,083		4,730,299
Due to landlord (Note 2)		189,182		229,234
Warrant liability		9,069		9,987
Financing lease obligations		41,632		33,712
Operating lease liability		1,689,127		1,437,308
Notes payable, net		4,999,257		2,098,685
Total Current Liabilities		40,006,373		11,521,985
Long-Term Liabilities
Due to landlord - less current portion (Note 2)		325,557		393,230
Notes payable, net - less current portion		5,323,659		765,144
Financing lease obligations - less current portion		155,360		158,070
Operating lease liability - less current portion		2,190,159		2,655,103
Total Long-Term Liabilities		7,994,735		3,971,547
Total Liabilities		48,001,108		15,493,532

Redeemable Preferred Stock
Preferred Stock, Series B Cumulative Perpetual, $0.0001 par value,

SEC Form 10-Q filed by Applied UV Inc.