Market Growth and Trends - The UV Disinfection market is projected to reach $9 billion by 2026, driven by increasing focus on infection control and improving technology [163]. - The global air purifier market is expected to grow from $9.24 billion in 2021 to approximately $22.84 billion by 2030, indicating strong demand for air purification solutions [164]. Company Performance - The Company reported total net sales of $5,907,646 for the three months ended June 30, 2022, compared to $1,884,320 for the same period in 2021, representing a significant increase [178]. - Net sales increased to $5,907,646 for the three months ended June 30, 2022, representing a 213.5% increase compared to $1,884,320 for the same period in 2021 [181]. - For the six months ended June 30, 2022, net sales totaled $9,263,736, compared to $4,196,935 for the same period in 2021 [186]. - Net sales for the six months ended June 30, 2022, were $9,263,736, an increase of $5,066,801 or 120.7% compared to $4,196,935 for the same period in 2021, driven by growth in both the Disinfection and Hospitality segments [188]. Profitability and Loss - Gross profit for the three months ended June 30, 2022, was $1,303,792, up from $533,229 in the same period of 2021 [178]. - Gross profit increased by $770,563 for the three months ended June 30, 2022, but gross profit as a percentage of sales decreased to 22.1% from 28.3% in Q1 2021 [182]. - The net loss for the three months ended June 30, 2022, was $2,888,655, an increase of $750,424 from a net loss of $2,138,231 for the same period in 2021 [184]. - Adjusted EBITDA loss for the three months ended June 30, 2022, was $(2,186,272), which was an increase of $(696,811) compared to the same period in 2021 [186]. - The total operating loss for the six months ended June 30, 2022, was $(5,959,116), compared to $(2,895,912) for the same period in 2021 [186]. - The company recorded a net loss of $4,538,527 for the six months ended June 30, 2022, compared to a net loss of $3,171,182 for the same period in 2021, reflecting increased S,G&A costs associated with business acquisitions [193]. Expenses and Costs - Selling, General, and Administrative (S,G&A) costs rose to $4,031,215 for the three months ended June 30, 2022, an increase of $1,332,733 compared to $2,698,482 in the same period in 2021 [183]. - Selling, General, and Administrative (S,G&A) expenses rose to $7,132,441 for the six months ended June 30, 2022, an increase of $2,832,442 compared to $4,299,999 in the same period in 2021, largely due to expansion and integration costs from recent acquisitions [190]. - Research and development expenses for the six months ended June 30, 2022, were $141,363, compared to $53,408 for the same period in 2021 [186]. - The Company incurred one-time costs of approximately $739,000 related to the integration of VisionMark operations and strategic marketing programs [183]. Cash Flow and Financing - Net cash used in operating activities was ($5,712,231) for the six months ended June 30, 2022, compared to ($3,398,543) in the same period in 2021, primarily due to the increased net loss [195]. - Cash provided by financing activities was $214,321 for the six months ended June 30, 2022, compared to cash used of ($67,101) in the same period in 2021, mainly due to the full exercise of a common stock offering [196]. - The company filed a shelf registration statement on July 1, 2022, to register $50,000,000 of securities, which may include common stock, preferred stock, and debt securities, to support its growth strategy [197]. Product Development and Partnerships - SteriLumen's Lumicide™ platform utilizes UVC LEDs to effectively kill pathogens in high-traffic areas, addressing healthcare-acquired infections [160]. - The Company has expanded its product portfolio to include air purification devices like Airocide™, which is FDA Class II Medical device and has applications across various sectors [161]. - SteriLumen's Scientific Air product has shown significant reductions in airborne pathogens in hospitals, contributing to effective infection prevention [162]. - The Company has signed distribution agreements in multiple regions, including exclusive rights for Airocide™ in the UAE, enhancing its global market presence [169]. - SteriLumen's product portfolio includes partnerships with recognized brands such as Walmart and Whole Foods, indicating strong market acceptance [168]. Future Outlook - The company anticipates efficiency gains in the coming year as it fully integrates its acquisitions and leverages synergies [190]. - The company has no off-balance sheet arrangements that could impact its financial condition or operations [199]. - Total contractual obligations amount to $2,785,911, with significant operating lease obligations of $1,598,343 due in the near term [198].
Applied UV(AUVI) - 2022 Q2 - Quarterly Report