APPLIED UV, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

Certain statements made in this prospectus are "forward-looking statements"
regarding the plans and objectives of management for future operations. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of the "Company" to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the continued expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes its assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate and therefore, there
can be no assurance the forward-looking statements included in this prospectus
will prove to be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved. Our
actual results may differ materially from those anticipated in
these forward-looking statements as a result of various factors, including those
set forth under "Risk Factors" and in other parts of this prospectus. Our fiscal
year ends on December 31.

Overview
Applied UV is focused on the development and acquisition of technology that
addresses infection control in the healthcare, hospitality, government, food and
beverage, education, cannabis, entertainment and consumer markets. The Company
has two wholly owned subsidiaries - SteriLumen, Inc. ("SteriLumen") and
MunnWorks, LLC ("MunnWorks").

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 the 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
photocatalytic (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, food
preservation, wineries, dairy, commercial real estate, education, dental
offices, post-harvest, grocery, food processing, transportation, correctional
facilities, cannabis, and consumer.

SteriLumen's Scientific Air product was developed initially for healthcare
facilities and is helping hospitals across the country address the growing need
for effective and safe airborne infection prevention. Utilizing Scientific Air
systems, hospitals report significant reductions in viable airborne pathogens as
well as significant declines in non-viable particulates including elimination of
odor and VOC's. Scientific Air products produce no harmful by-products, provide
rapid, portable, whole-room disinfection via a patented 3-phase design, are safe
and fast-acting in occupied spaces, and have been proven and tested in
facilities with EPA and FDA guidance compliance.

According to Resource and Markets, the UV Disinfection market is expected to
reach $9 billion by 2026 as technology continues to improve and the focus on
stopping the spread of contagious diseases increases. The Center for Disease
Control states that 1 in 25 patients have at least one Hospital Associated
Infection (HAI) annually and that 3 million serious infections occur every year
in long-term care facilities. Scientists globally have been advocating improving
air quality post pandemic, significantly boosting global adoption to control
airborne pathogen transmission. Governments globally mandating health agencies
to address air quality via grants and mechanisms to ease visitation and protect
facilities against future pathogens (Centers for Medicare and Medicaid Services
- CMS) February 2022 Long-term Care Initiative.

Indoor air quality has become an even more important issue as world economies
start the recovery process. In 2021, 39 scientists reiterated the need for a
"paradigm shift" and called for improvements in, "how we view and address the
transmission of respiratory infections to protect against unnecessary suffering
and economic losses."

In addition to this, the global air purifier market size is set to grow
exponentially. It was valued at $9.24 billion in 2021 and is predicted to grow
to approximately $22.84 billion by 2030. According to Precedence Research, the
immense demand for air purification and sterilization in the US will be driven
by the commercial sector.

SteriLumen's product portfolio is one of the only research-backed, clinically
proven pure-play air and surface disinfection technology companies with
international distribution and globally recognized end users, with product
developed for NASA. In addition to the numerous recognized research institutions
and globally recognized names who published the reports that were completed by
the acquired companies, Airocide™ was independently proven to kill SARS, MRSA
and Anthrax, in addition to removing damaging molds, microorganisms, destructive
VOC's, allergens, odors, and biological gases. Also, SteriLumen's air
purification (Airocide™) and surface disinfection Lumicide™) were independently
tested and proven to kill both Candida Auris (Resinnova Laboratories) and SARS
CoV-2 (COVID-19) (MRIGlobal).

  31




SteriLumen's product portfolio is used by globally recognized names including:
Walmart, Whole Foods, SuperValue, Delmonte, Esmeralda, Joel Gott Wines, Opus
One, Athena Healthcare, NYC Health and Hospitals, Kaiser Permanente, Advent
Health, University Rochester Medical Center and Baptist Health South Florida.
This past year, the SteriLumen product portfolio expanded its reach and deployed
its air purification products into Boston Red Sox Fenway Park and Jet Blue Park,
The Palace Versaille , Uruguayan School Systems, Tennessee Department of
Corrections, Armed Forces Research Institute of Medical Sciences (AFRIMS), US
Army Aberdeen Proving Grounds and Schools throughout South Korea.

The Company works with a global base of distributors to sell both SteriLumen air
purification and disinfection products and the MunnWorks product lines. The past
year, the Company has signed distribution agreements covering Africa
(360BioPharma), US Healthcare (Axis), Lootah Batta Water and Environment Sign
Exclusive Distribution Agreement for Airocide™ Air Purification Systems for the
United Arab Emirates, and Plandent a wholly owned subsidiary of Planmeca Oy
(Scandinavia). SteriLumen plans to continue to expand its global distribution
base of significant breadth and scale to introduce the entire SteriLumen's air
purification product lines to new markets, including building management,
commercial real estate, retail, healthcare, cannabis and environmental health
and safety, leveraging the networks of the recent acquisitions described above.

MunnWorks is a manufacturer of custom designed fine mirrors and furniture
specifically for the hospitality industry with one manufacturing facility in
Mount Vernon, New York and, with the acquisition of the assets of VisionMark,
another manufacturing facility in Brooklyn, New York. Our goal is to contribute
to the creation of what our design industry clients seek: manufacturing better
framed mirrors and customized furniture on budget and on time. As part of our
long-term strategy, the Company has instituted multi-site production for
high-value items, complicated designs and finishes. Our headquarters in Mount
Vernon, NY serves as the center for multi-country manufacturing. The Company
works with a satellite network of artisans and craftsmen, including gilders,
carvers, and old-world finishers.

Acquisitions


In February of 2021, the Company acquired all the assets and assumed certain
liabilities of Akida Holdings, LLC ("Akida"). At the time of the acquisition,
Akida owned the Airocide™ system of air purification technologies, originally
developed for NASA with assistance from the University of Wisconsin at Madison,
that uses a combination of UVC and a proprietary, titanium dioxide based
photocatalyst that may help to accelerate the reopening of the global economy
with applications in the hospitality, hotel, healthcare, nursing homes, grocer,
wine, commercial buildings and retail sectors. The Airocide™ system has been
used by brands and organizations such as NASA, Whole Foods, Dole, Chiquita, Opus
One, Sub-Zero Refrigerators and Robert Mondavi Wines. Akida had contracted KES
Science & Technology, Inc. ("KES") to manufacture, warehouse and distribute the
Airocide™ system and Akida's contractual relationship with KES was assigned to
and assumed by the Company as part of the acquisition.

On September 28, 2021, the Company acquired all the assets and assumed certain
liabilities of KES. At the time of the acquisition, KES was principally engaged
in the manufacturing and distribution of the Airocide™ system of air
purification technologies and misting systems. KES also had the exclusive right
to the sale and distribution of the Airocide™ system in certain markets. This
acquisition consolidates all of manufacturing, sale and distribution of the
Airocide™ system under the SteriLumen brand and expands the Company's market
presence in food distribution, post-harvest produce, wineries, and retail
sectors. The Company sells its products throughout the United States, Canada,
and Europe.

On October 13, 2021, we acquired substantially all of the assets of Old SAM
Partners, LLC F/K/A Scientific Air Management, LLC, which owned a line of air
purification technologies ("Scientific Air'). Scientific Air is a provider of
whole-room, aerosol chamber and laboratory certified air disinfection machines
that use a combination of UVC and a proprietary, patented system to eliminate
airborne bacteria, mold, fungi, viruses, volatile organic compounds, and many
odors without producing any harmful by-products. The units are well suited for
larger spaces within a facility and are mobile with industrial grade casters
allowing for movement throughout a facility to address increased bio burden from
larger meetings or increased human traffic.

On March 25, 2022, the Company acquired the assets and assumed certain
liabilities of VisionMark, LLC, ("Visionmark"). Visionmark is engaged in the
business of manufacturing custom furniture using wood and metal components for
the hospitality and retail industries. This acquisition is synergistic with our
legacy MunnWorks operations, and allows for further market expansion and
business diversification, as well as improvement in cost and onshore
manufacturing efficiencies.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

• our ability to acquire new customers or retain existing customers.

• our ability to offer competitive product pricing.

• our ability to broaden product offerings.

• industry demand and competition; and

• market conditions and our market positions




  32




Results of Operations

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30,
2021

                                                          Three Months Ended                                                   Three Months Ended
                                                             June 30, 2022                                                       June 30, 2021
                                    Hospitality      Disinfection      Corporate          Total          Hospitality      Disinfection      Corporate         Total
Net Sales                          $ 4,169,112      $  1,738,534      $       -       $  5,907,646      $   964,618      $    919,702      $      -       $  1,884,320
Cost of Goods Sold                   3,695,267           908,587              -          4,603,854          746,451           604,640             -          1,351,091
Gross Profit                           473,845           829,947              -          1,303,792          218,167           315,062             -            533,229
Research and development                    -             82,049              -             82,049               -              9,763             -              9,763
Loss on impairment of goodwill              -                 -            
  -                 -                -                 -              -                 -
Selling, General and
Administrative                       1,225,609         2,070,874         734,732         4,031,215          907,359         1,791,123             -          2,698,482
Total Operating expenses             1,225,609         2,152,923         734,732         4,113,264          907,359         1,800,886             -          2,708,245
Operating Loss                        (751,764 )      (1,322,976 )      (734,732 )      (2,809,472 )       (689,192 )      (1,485,824 )           -         (2,175,016 )
Other Income
Change in Fair Market Value of
Warrant Liability                           -                 -          (32,111 )         (32,111 )             -                 -          10,948            10,948
Loss on change in contingent
consideration                               -                 -               -                 -                -                 -              -                 -
Gain on settlement of
contingent consideration                    -                 -               -                 -                -                 -              -                 -
Other income (expense)                 (47,072 )              -               -            (47,072 )             -             25,837             -             25,837
Total Other Income (Expense)           (47,072 )              -          (32,111 )         (79,183 )             -             25,837         10,948            36,785
Loss Before Provision for
Income Taxes                          (798,836 )      (1,322,976 )      

(766,843 ) (2,888,655 ) (689,192 ) (1,459,987 ) 10,948 (2,138,231 )
Provision for Income Taxes

                  -                 -               -                 -                -                 -              -                 -
Net Loss                           $  (798,836 )    $ (1,322,976 )    $ (766,843 )    $ (2,888,655 )    $  (689,192 )    $ (1,459,987 )    $  10,948      $ (2,138,231 )
Non-GAAP Financial Measures
Adjusted EBITDA
Operating Loss                     $  (751,764 )    $ (1,322,976 )    $ (734,732 )    $ (2,809,472 )    $  (689,192 )    $ (1,485,824 )    $      -       $ (2,175,016 )
Depreciation and Amortization           55,173           455,576              -            510,749           15,490           204,465             -     

219,955

Loss on impairment of goodwill              -                 -            
  -                 -                -                 -              -                 -
Stock based compensation                30,149            37,800          44,502           112,451          237,144           228,456             -            465,600
Adjusted EBITDA                    $  (666,442 )    $   (829,600 )    $

(690,230 ) $ (2,186,272 ) $ (436,558 ) $ (1,052,903 ) $ –

$ (1,489,461 )



The Company utilizes Adjusted EBITDA, a non-GAAP financial measure, to assist in
analyzing our segment operating performance by removing the impact of certain
key items that management believes do not directly reflect our underlying
operations. In addition, we consider certain non-GAAP (or "adjusted") measures
to be useful to management and investors evaluating our operating performance
for the periods presented, and provide a tool for evaluating our ongoing
operations, liquidity, and management of assets. This information can assist
investors in assessing our financial performance and measures our ability to
generate capital. These adjusted metrics are consistent with how management
views our business and are used to make financial, operating and planning
decisions. These metrics, however, are not measures of financial performance
under GAAP and should not be considered a substitute for revenues, operating
income, net income (loss), earnings (loss) per share (basic and diluted) or net
cash from operating activities as determined in accordance with GAAP. Adjusted
EBITDA is defined as Operating Profit (Loss), excluding Depreciation and
Amortization, and excluding Stock Based Compensation and Loss on Impairment of
Goodwill. Adjusted EBITDA was a loss of ($2,186,272) for the three months ended
June 30, 2022, which was an increase of ($696,811) as compared to the three
months ended June 30, 2021. Adjusted EBITDA loss by segment: Hospitality
increased ($229,884), Disinfection decreased $223,303 and Corporate increased
($690,230).

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 and custom furniture specifically for the
hospitality and retail industries (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. See NOTE 11 - Segment Reporting.

  33




Net Sales

Net sales of $5,907,646 for the three months ended June 30, 2022 as compared to
net sales of $1,884,320 for the three months ended June 30, 2021 represented an
increase of $4,023,326, or 213.5%. This increase was attributable to both the
Disinfection segment, which increased $818,832, largely as a result of the
strategic acquisitions of KES and Scientific Air in Q3 and Q4 of 2021,
respectively, and the Hospitality segment, which increased $3,204,494, primarily
as a result of the fulfilment of orders that were delayed from Q1 plus the
addition of the orders fulfilled from the VisionMark acquisition.

Gross Profit

Gross profit increased $770,563 for the three months ended June 30, 2022 as
compared to the three months ended June 30, 2021, driven by volume growth from
both the Disinfection segment and the Hospitality segment. However, gross profit
as a percentage of sales decreased (6.2%) from 28.3% in Q1 of 2021 to 22.1% in
Q1 of 2022, driven primarily by the initial costs required to complete projects
in process and to integrate and absorb the VisionMark operations. As the Company
continues to integrate our strategic acquisitions, the focus will be on
realizing cost synergies from the consolidation and streamlining of the
manufacturing and distribution operations.

Operating Expenses


Selling, General, and Administrative - S,G&A costs for the three months ended
June 30, 2022, increased to $4,031,215 as compared to $2,698,482 for the three
months ended June 30, 2021. This increase of $1,332,733 was driven primarily by
the expansion of the Disinfection segment with the additional acquisitions of
KES and SciAir; the expansion of the Hospitality segment with the addition of
the VisionMark acquisition; and Corporate segment expenses due to increased
consulting, legal, accounting, and infrastructure costs related to the initial
integration of the operations of our strategic acquisitions. The Company
incurred one-time costs of approximately $739,000 related primarily to the
integration of VisionMark operations and the establishment of strategic
marketing programs. We anticipate efficiency gains in the coming year as we
fully integrate our acquisitions and leverage synergies where practical.

Net Loss


The Company recorded a net loss of $2,888,655 for the three months ended June
30, 2022, compared to a net loss of $2,138,231 for the three months ended June
30, 2021. The increase of $750,424 in the net loss was mainly due to the
increase is S, G&A costs incurred in support of the business acquisitions and
expansion of the both the Disinfection and Hospitality segments.

  34






                                                              Six Months Ended                                                      Six Months Ended
                                                               June 30, 2022                                                          June 30, 2021
                                     Hospitality       Disinfection       Corporate           Total          Hospitality      Disinfection      Corporate          Total
Net Sales                           $  5,578,362      $  3,685,374      $         -       $  9,263,736      $ 2,532,469      $  1,664,466      $       -       $  4,196,935
Cost of Goods Sold                     4,853,911         1,956,934                -          6,810,845        1,817,775           921,665              -          2,739,440
Gross Profit                             724,451         1,728,440                -          2,452,891          714,694           742,801              -          1,457,495
Research and development                      -            141,363                -            141,363               -             53,408              -             53,408
Stock based compensation                 116,160            60,086           224,204           400,450          343,130           333,211              -            676,341
Loss on impairment of goodwill                -          1,138,203                -          1,138,203               -                 -               -                 -
Selling, General and
Administrative                         1,854,548         3,818,284         1,059,159         6,731,991        1,220,230         2,403,428              -          3,623,658
Total Operating expenses               1,970,708         5,157,936         1,283,363         8,412,007        1,563,360         2,790,047              -          4,353,407
Operating Loss                        (1,246,257 )      (3,429,496 )      (1,283,363 )      (5,959,116 )       (848,666 )      (2,047,246 )            -         (2,895,912 )
Other Income
Change in Fair Market Value of
Warrant Liability                             -                 -             11,717            11,717               -                 -         (300,452 )        (300,452 )
Loss on change in contingent
consideration                                 -           (240,000 )              -           (240,000 )             -                 -               -                 -
Gain on settlement of contingent
consideration                                 -          1,700,000                -          1,700,000               -                 -               -                 -
Other income (expense)                   (51,128 )              -                 -            (51,128 )             -             25,182              -             25,182
Total Other Income (Expense)             (51,128 )       1,460,000            11,717         1,420,589               -             25,182        (300,452 )        (275,270 )
Loss Before Provision for Income
Taxes                                 (1,297,385 )      (1,969,496 )      

(1,271,646 ) (4,538,527 ) (848,666 ) (2,022,064 ) (300,452 ) (3,171,182 )
Provision for Income Taxes

                    -                 -                 -                 -                -                 -               -                 -
Net Loss                            $ (1,297,385 )    $ (1,969,496 )    $ (1,271,646 )    $ (4,538,527 )    $  (848,666 )    $ (2,022,064 )    $ (300,452 )    $ (3,171,182 )
Non-GAAP Financial Measures
Adjusted EBITDA
Operating Loss                      $ (1,246,257 )    $ (3,429,496 )    $ (1,283,363 )    $ (5,959,116 )    $  (848,666 )    $ (2,047,246 )    $       -       $ (2,895,912 )
Depreciation and Amortization             63,148           915,347                -            978,495           23,235           289,084              -            312,319
Loss on impairment of goodwill                -          1,138,203         
      -          1,138,203               -                 -               -                 -
Stock based compensation                 116,160            60,086           224,204           400,450          343,130           333,211              -            676,341
Adjusted EBITDA                     $ (1,066,949 )    $ (1,315,860 )    $

(1,059,159 ) $ (3,441,968 ) $ (482,301 ) $ (1,424,951 ) $

 -       $ (1,907,252 )




The Company utilizes Adjusted EBITDA, a non-GAAP financial measure, to assist in
analyzing our segment operating performance by removing the impact of certain
key items that management believes do not directly reflect our underlying
operations. In addition, we consider certain non-GAAP (or "adjusted") measures
to be useful to management and investors evaluating our operating performance
for the periods presented, and provide a tool for evaluating our ongoing
operations, liquidity, and management of assets. This information can assist
investors in assessing our financial performance and measures our ability to
generate capital. These adjusted metrics are consistent with how management
views our business and are used to make financial, operating and planning
decisions. These metrics, however, are not measures of financial performance
under GAAP and should not be considered a substitute for revenues, operating
income, net income (loss), earnings (loss) per share (basic and diluted) or net
cash from operating activities as determined in accordance with GAAP. Adjusted
EBITDA is defined as Operating Profit (Loss), excluding Depreciation and
Amortization, and excluding Stock Based Compensation and Loss on Impairment of
Goodwill. Adjusted EBITDA was a loss of ($3,441,968) for the six months ended
June 30, 2022, which was an increase of ($1,534,716) as compared to the six
ended June 30, 2021. Adjusted EBITDA loss by segment: Hospitality increased
($584,648), Disinfection decreased $109,091, and Corporate increased
($1,059,159).

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 and custom furniture specifically for the
hospitality and retail industries (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. See NOTE 11 - Segment Reporting.

  35




Net Sales
Net sales of $9,263,736 for the six months ended June 30, 2022 as compared to
net sales of $4,196,935 for the six months ended June 30, 2021 represented an
increase of $5,066,801, or 120.7%. This increase was attributable to both the
Disinfection segment, which increased $2,020,908, largely as a result of the
strategic acquisitions of KES and Scientific Air in Q3 and Q4 of 2021,
respectively, and the Hospitality segment, which increased $3,045,893, primarily
due to orders that were delayed from Q1 and fulfilled in Q2, and from the
fulfillment of orders related to the VisionMark acquisition.

Gross Profit


Gross profit increased $995,396 for the six months ended June 30, 2022 as
compared to the six months ended June 30, 2021, driven by volume growth from
both the Disinfection and Hospitality segments. However, gross profit as a
percentage of sales decreased (8.2%) from  34.7% for the six months ended June
30, 2021 to 26.5% for the six months ended June 30, 2022, driven primarily by
the initial costs necessary to integrate and absorb the VisionMark operations.
As the Company continues to integrate our strategic acquisitions, the focus will
be on realizing cost synergies from the consolidation and streamlining of the
manufacturing and distribution operations.

Operating Expenses

Selling, General, and Administrative - S,G&A costs for the six months ended June
30, 2022, increased to $7,132,441 as compared to $4,299,999 for the six months
ended June 30, 2021. This increase of $2,832,442 was driven primarily by the
expansion of both the Disinfection segment, with the additional acquisitions of
KES and SciAir, and the Hospitality segment, with the addition of the VisionMark
acquisition, and Corporate segment expenses due to increased consulting, legal,
accounting, and infrastructure costs related to the initial integration of the
operations of our strategic acquisitions. We anticipate efficiency gains in the
coming year as we fully integrate our acquisitions and leverage synergies where
practical.

Loss on Impairment of Goodwill - The Company determined that a triggering event
had occurred as a result of a settlement agreement with Scientific Air ("Old SAM
Partners") - see explanation of Other Income/Expense below. A quantitative
impairment test on the goodwill determined that the fair value was below the
carrying value and as a result the Company recorded a full goodwill impairment
charge of $1,138,203 on the Condensed Consolidated Statements of Operations
during the six months ended June 30, 2022.

Other Income/Expense


On March 31, 2022, there was a dispute between the Company and Scientific Air
("Old SAM Partners") regarding certain representations and warranties in the
purchase agreement which resulted in a settlement and mutual release agreement
where Old Sam Partners agreed to relinquish such Partner's right, title, and
interest in the previously issued 400,000 shares that were part of the original
asset acquisition transaction. The Company recorded a loss on change in fair
market value of contingent consideration of $240,000, and as a result of the
settlement, the company recorded a gain on settlement of $1,700,000 during the
six months ended June 30, 2022.

Net Loss

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 six months ended June 30,
2021. The increase of $1,367,345 in the net loss was mainly due to the increase
is S,G&A costs incurred in support of the business acquisitions and expansion of
both the Disinfection and Hospitality segments.

Liquidity and Capital Resources

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021


Net Cash Used in Operating Activities                 $ (5,712,231 )   $ (3,398,543 )
Net Cash Used in Investing Activities                      (26,735 )     (1,274,728 )
Net Cash Provided by (Used In) Financing Activities        214,321          (67,101 )
Net decrease in cash and cash equivalents               (5,524,645 )     (4,740,372 )
Cash and equivalents at beginning of period              8,768,156       

11,757,930

Cash and equivalents at end of period                    3,243,511        

7,017,558



In the six months ended June 30, 2022, net cash used in operating activities was
($5,712,231), as compared to ($3,398,543) in the six months ended June 30, 2021.
The increase in net cash used was due mainly to the increase in net loss to
($4,538,527) for the six months ended June 30, 2022, as compared to a net loss
of ($3,171,182) for the six months ended June 30, 2021.  Working capital was
largely impacted by an increase in inventory for the six months ended June
30,2022 as the Company prepares to launch targeted marketing initiatives  in the
2nd half of 2022 and has secured parts in advance of production to mitigate
supply chain disruptions.

  36




In the six months ended June 30, 2022, net cash used in investing activities
decreased to ($26,735) as compared to ($1,274,728) in the six months ended June
30, 2021, primarily due to net cash paid for the acquisition of Akida on
February 8, 2021 ($760,293), and a loan made to a related party on February 17,
2021 ($500,000) (see Note 10).

In the six months ended June 30, 2022, cash provided by financing activities was
$214,321, as compared to cash used in financing activities of (67,101) in the
six months ended June 30, 2021, primarily due to the full exercise of the common
stock offering over-allotment, which was $1.092,000 net, offset by dividends to
preferred shareholders of ($724,500).

The Company believes our sources of liquidity and capital will be sufficient to
finance our continued operations and growth strategy. On July 1, the Company
filed a shelf registration statement on Form S-3 with the Securities and
Exchange Commission to register and aggregate $50,000,000 of securities which
may be issued in the form of common stock, preferred stock, warrants, debt
securities, rights or units.  Such securities will be offered pursuant to the
base prospectus contained in the shelf registration statement and a prospectus
supplement that will be prepared and filed at the time of any offering.  Also,
included in the registration statement was a second prospectus which provides
for the issuance of $9,000,000 of the Company's common stock in at-the-market
transactions pursuant to an equity distribution agreement dated July 1, 2022
between the Company and Maxim Group  LLC, as sales agent. The shelf registration
statement will expire on July 12, 2025.

Contractual Obligations and Other Commitments


                                                             Payment due by 

period

                                      Total          2022         2023-2025      2026-2027      Thereafter
Financing lease obligations       $     4,178     $   4,178     $        -      $      -      $        -
Operating lease obligations (1)     1,598,343        89,698       1,333,745       174,900              -
Notes payable (2)                     157,500        97,500          60,000            -               -
Assumed lease liability (3)         1,024,890       186,348         838,542
           -               -
Total                             $ 2,785,911     $ 377,724     $ 2,232,287     $ 174,900     $        -


(1) The Company entered into a lease agreement in Mount Vernon, New York for a

term that commenced on April 1, 2019 and expires on the 31st day of March

2024 at a monthly rate of $15,000. On July 1, 2021, the Company obtained

additional lease space and rent expense was increased to $27,500 per month

through July 1, 2024 and $29,150 per month from Jul 1, 2024 through July 1,

2026. On September 28, 2021, the Company entered into a lease agreement in

Kennesaw, Georgia for a term that commenced on September 29, 2021 and will

expire on October 1, 2024, with a monthly rate of $14,729 for this first 12

     months, $15,171 from months 13-24, and $15,626 from months 25-36.

(2) In March 2020, as part of the On-Deck Capital settlement, the Company issued

a promissory note for the principal amount of $157,500 due within the next 5

years. The Company is required to pay $157,500 in five payments in the amount

of $30,000 per year, with an additional $7,500 in year two.

(3) In connection with the VisionMark LLC acquisition, the Company is obligated

to repay $31,057 of prior lease payments per month for the next 36 months

commencing on April 1, 2022.

Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.

© Edgar Online, source Glimpses

Source link