Applied UV, Inc. Unaudited Pro Forma Condensed Combined Financial Information
Unaudited Pro Forma Condensed Combined Financial Information
Akida Acquisition
On February 8, 2021, Applied UV, Inc. (the “Company”) completed an Asset Purchase Agreement (“the Akida Agreement”) with Akida Holdings LLC (“Akida”) and its members, Simba Partners, LLC, JJH Holdings, LLC and Fakhruddin Holdings FZC (collectively, the “Sellers”), pursuant to which the Company purchased the Sellers’ air filtration business known as AiroCideTM by acquiring certain assets and liabilities of Akida.
Under the terms of the Akida Agreement, the Company paid $901,275 and issued 1,375,000 common shares of the Company as consideration for the Transaction.
▇▇▇ and JJS Acquisition
On September 28, 2021, the Company and its wholly owned subsidiary SteriLumen, Inc. completed an Asset Purchase Agreement (the “KES Agreement”) with the combined entities consisting of JJS Technologies, LLC (“JJS”), a Georgia limited liability company, and KES Science & Technology, Inc. (“KES”), a Georgia corporation. On September 28, 2021 (the “Closing Date”) the transactions contemplated by the KES Agreement were completed.
As contemplated by the KES Agreement, the Company acquired substantially all of the assets of KES and JJS and assumed certain liabilities and contract obligations. The Company was also assigned contracts related to the supply chain management and sale of 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 UV-C and a proprietary, titanium dioxide-based photocatalyst that has applications in the hospitality, hotel, healthcare, nursing homes, grocer, wine, commercial buildings, post-harvest, and retail sectors.
Pursuant to the KES Agreement, KES and JJS received (i) cash consideration in an amount equal to $4,300,000 and (ii) 300,000 shares of the Company’s common stock.
▇▇▇ Acquisition
On October 13, 2021, the Company completed an Asset Purchase Agreement (the “▇▇▇ Agreement”) with Old ▇▇▇ Partners, LLC (“▇▇▇”), formerly known as Scientific Air Management, LLC, a Florida limited liability company. Pursuant to the ▇▇▇ Agreement, the Company acquired substantially all of the assets of ▇▇▇ and assumed certain liabilities. The consideration paid by the Company pursuant to the ▇▇▇ Agreement consists of (i) cash consideration in an amount equal to $9,500,000, less any prepayments actually received by ▇▇▇ prior to the closing for customer orders that will have to be fulfilled by the Company, plus the aggregate amounts of any prepaid expenses of ▇▇▇ related to the operations existing on the closing date; (ii) 200,000 shares of the Company UV, Inc’s common stock. If the volume weighted average price for the 20 trading days prior to the six-month anniversary of the closing are less than $10.00 per share, the Company shall pay ▇▇▇ an amount in cash equal to the difference; (iii) 200,000 shares of the Company’s common stock which will vest March 31, 2023 if not previously cancelled due to certain EBITDA targets for 2021 and 2022.
Preferred Stock Offering
On July 13, 2021, the Company entered into an underwriting agreement with Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. as representative of the underwriters, related to the offering of 480,000 shares of the Company’s 10.5% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share, at a public offering price of $25.00 per share, which excludes 72,000 shares of Series A Cumulative Perpetual Preferred Stock that may be purchased by the
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Unaudited Pro Forma Condensed Combined Financial Information
Preferred Stock Offering (continued)
Underwriters pursuant to their overallotment option granted to the Underwriters under the terms of the Underwriting Agreement. The Shares were offered and sold by the Company pursuant to the terms of the Underwriting Agreement and registered pursuant to the Company’s registration statement on (i) Form S-1, as amended, which was filed with the Securities and Exchange Commission and declared effective by the Commission on July 12, 2021 and (ii) the Company’s registration statement on Form S-1MEF, which was filed with the Commission on July 13, 2021 and declared effective upon filing. The closing of the offering for the Shares took place on July 16, 2021. The Shares have been approved for listing on Nasdaq under the trading symbol “AUVIP” and trading on Nasdaq began on July 14, 2021. On July 29, 2021, the Company issued a press release announcing that in connection with its previously announced public offering of its 10.5% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share, it had closed the exercise of the underwriter’s overallotment option of 72,000 shares at $25.00 per share. Aggregate gross proceeds including the exercise of the underwriter's overallotment option was $12,272,440 after deducting underwriting discounts and commissions and fees and other estimated offering expenses.
Pro forma Information
The following unaudited pro forma condensed combined balance sheet of the Company as of June 30, 2021 gives effect to the KES Agreement and the ▇▇▇ Agreement as if they had occurred on June 30, 2021. The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 and the six months ended June 30, 2021 give effect to the KES Agreement, the ▇▇▇ Agreement and the Akida Agreement as if they had occurred on January 1, 2020. The historical financial information is based on the Company’s audited and unaudited interim consolidated financial statements, ▇▇▇ and ▇▇▇ audited and unaudited interim combined financial statements, ▇▇▇’s audited and unaudited interim financial statements and ▇▇▇▇▇’s audited and unaudited interim financial statements.
The unaudited pro forma condensed combined financial statements reflect management’s preliminary estimates of fair value of purchase price consideration and the fair values of tangible and intangible assets acquired and liabilities assumed in the acquisitions, with the remaining estimated purchase consideration recorded as goodwill. Independent valuation specialists have conducted analysis to assist management of the Company in determining the fair value of the assets acquired and liabilities assumed. the Company’s management is responsible for these third-party valuations. Since these unaudited pro forma condensed combined financial statements have been prepared based on preliminary estimates of the fair value of purchase consideration and fair values of assets acquired and liabilities assumed, the actual amounts to be reported in future filings may differ materially from the amounts used in the pro forma condensed combined financial statements.
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Unaudited Pro Forma Condensed Combined Financial Information
Pro forma Information (Continued)
The unaudited pro forma condensed combined financial statements are presented for information purposes only, in accordance with Article 11 of Regulation S-X and are not intended to represent or to be indicative of the income or financial position that the Company would have reported had the acquisitions been completed as of the dates set forth in the unaudited pro forma condensed combined financial statements due to various factors. The unaudited pro forma condensed combined balance sheet does not purport to represent the future financial position of the Company and the unaudited pro forma condensed combined statements of operations do not purport to represent the future results of operations of the Company. Given the comparable fiscal periods of Akida, KES, and JJS differ by less than 93 days, as permitted by Regulation S-X, the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 combines ▇▇▇▇▇’s condensed statement of operations for the year ended September 30, 2020 and KES and JJS condensed combined statement of operations for the year ended October 31, 2020 with the consolidated statement of operations of the Company for the year ended December 31, 2020. The unaudited pro forma condensed combined balance sheet as of June 30, 2021 combines KES and JJS condensed balance sheet as of July 31, 2021 with the consolidated condensed balance sheet of the Company as of June 30, 2021.
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Unaudited Pro Forma Condensed Combined Financial Information
These unaudited pro forma condensed financial statements should be read in conjunction with the following:
| · | The accompanying notes to the unaudited pro forma condensed financial statements. |
| · | The historical consolidated financial statements and accompanying notes of the Company included in the annual report on form 10-K for the year ended December 31, 2020. |
| · | The historical consolidated financial statements and accompanying notes of the Company included in the interim report on form 10-Q for the six months ended June 30, 2021. |
| · | The KES and JJS audited and unaudited combined financial statements included as Exhibit 99.1 in this Current Report on Form 8-K/A to which these unaudited pro forma condensed combined financial statements are attached. |
| · | The ▇▇▇ audited and unaudited financial statements included as Exhibit 99.1 in the Current Report on Form 8-K/A filed on November 12, 2021 and related to the Company’s acquisition of ▇▇▇. |
| · | ▇▇▇▇▇’s audited consolidated financial statements and notes thereto for the years ended September 30, 2020 and 2019, included in Exhibit 99.1 to the Current Report on Form 8-K/A, filed with the SEC on February 11, 2021. |
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Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2021
| KES and | Transaction | |||||||||||||||||||||
| Applied | JSS | ▇▇▇ | Accounting | Pro Forma | ||||||||||||||||||
| Historical (1) | Historical | Historical | Adjustments | Notes | Combined | |||||||||||||||||
| Assets | ||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||
| Cash | $ | 7,017,558 | $ | — | $ | 2,048,593 | $ | (3,576,153 | ) | A, B | $ | 5,489,998 | ||||||||||
| Vendor deposit | 1,189,364 | — | — | — | 1,189,364 | |||||||||||||||||
| Accounts receivable, net of allowances | 384,657 | 263,548 | 271,232 | — | 919,437 | |||||||||||||||||
| Inventory | 592,117 | 622,359 | 428,266 | — | 1,642,742 | |||||||||||||||||
| Prepaid expenses and other current assets | 242,451 | 74,178 | — | — | 316,629 | |||||||||||||||||
| Note receivable, related party | 500,000 | — | — | — | 500,000 | |||||||||||||||||
| Total current assets | 9,926,147 | 960,085 | 2,748,091 | (3,576,153 | ) | 10,058,170 | ||||||||||||||||
| Machinery and equipment, net | 198,883 | 347,510 | 1,982 | (312,893 | ) | B | 253,482 | |||||||||||||||
| Right of use asset | 461,580 | — | — | 128,175 | G | 589,755 | ||||||||||||||||
| Other intangible assets, net | 4,938,250 | — | — | 14,430,000 | D | 19,368,250 | ||||||||||||||||
| Goodwill | 2,728,279 | — | — | 1,943,803 | E | 4,672,082 | ||||||||||||||||
| Patents, net | 187,595 | — | — | — | 187,595 | |||||||||||||||||
| Notes receivable, related party | — | 546,429 | — | (546,429 | ) | B | — | |||||||||||||||
| Notes receivable, stockholder | — | 78,421 | — | (78,421 | ) | B | — | |||||||||||||||
| Other non-current assets | — | 2,556 | — | — | 2,556 | |||||||||||||||||
| Total assets | $ | 18,440,734 | $ | 1,935,001 | $ | 2,750,073 | $ | 11,988,082 | $ | 35,113,890 | ||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 1,062,330 | $ | 264,817 | $ | 48,724 | $ | 163,500 | $ | 1,539,371 | ||||||||||||
| Line of credit | — | 111,650 | — | (111,650 | ) | B | — | |||||||||||||||
| Deferred revenue | 1,745,424 | — | — | — | 1,745,424 | |||||||||||||||||
| Warrant liability | 435,577 | — | — | — | 435,577 | |||||||||||||||||
| Capital lease obligations | 6,648 | — | — | — | 6,648 | |||||||||||||||||
| Lease liability | 160,568 | — | — | 32,975 | G | 193,543 | ||||||||||||||||
| Payroll protection program loan | 296,827 | — | — | — | 296,827 | |||||||||||||||||
| Loan payable | 67,500 | 65,657 | — | (65,657 | ) | B | 67,500 | |||||||||||||||
| Total Current Liabilities | 3,774,874 | 442,124 | 48,724 | 19,168 | 4,284,890 | |||||||||||||||||
| Long-term Liabilities | ||||||||||||||||||||||
| Capital lease obligations | 4,982 | — | — | — | 4,982 | |||||||||||||||||
| Loan payable | 90,000 | 458,978 | — | (458,978 | ) | B | 90,000 | |||||||||||||||
| Lease liability | 301,012 | — | — | 107,349 | G | 408,361 | ||||||||||||||||
| Total Liabilities | 4,170,868 | 901,102 | 48,724 | (332,461 | ) | 4,788,233 | ||||||||||||||||
| Stockholders’ Equity/Members’ Deficit | ||||||||||||||||||||||
| Series X preferred stock | 1 | — | — | — | 1 | |||||||||||||||||
| Series A Cumulative Perpetual | — | — | — | 55 | A | 55 | ||||||||||||||||
| Common stock | 942 | 500 | — | -450 | A | 992 | ||||||||||||||||
| Additional paid-in capital | 19,659,197 | — | — | 16,231,335 | A | 35,890,532 | ||||||||||||||||
| Members’ equity | — | — | 2,701,349 | (2,701,349 | ) | C | — | |||||||||||||||
| Treasury stock | — | (200,000 | ) | — | 200,000 | C | — | |||||||||||||||
| Retained earnings (deficit) | (5,390,274 | ) | 1,233,399 | — | (1,409,048 | ) | C, F | (5,565,923 | ) | |||||||||||||
| Total Stockholders’ Equity/Members’ Equity | 14,269,866 | 1,033,899 | 2,701,349 | 12,320,543 | 30,325,657 | |||||||||||||||||
| Total Liabilities and Stockholders’ Equity/Members’ Equity | $ | 18,440,734 | $ | 1,935,001 | 2,750,073 | $ | 11,988,082 | $ | 35,113,890 | |||||||||||||
| (1) | Includes the balance sheet of Akida as the acquisition occurred on February 8, 2021. |
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Unaudited Pro Forma Condensed Combined Statements of Operations
For the Year Ended December 31, 2020
| Transaction | ||||||||||||||||||||||||||||
| Applied | KES and JSS | ▇▇▇ | ▇▇▇▇▇ | Accounting | Pro Forma | |||||||||||||||||||||||
| Historical | Historical | Historical | Historical | Adjustments | Notes | Combined | ||||||||||||||||||||||
| Net Sales | $ | 5,732,734 | $ | 4,524,542 | $ | 9,125,928 | $ | 4,399,295 | $ | — | $ | 23,782,499 | ||||||||||||||||
| Cost of Goods Sold | 4,723,398 | 2,045,800 | 3,286,395 | 2,855,282 | — | 12,910,875 | ||||||||||||||||||||||
| Gross Profit | 1,009,336 | 2,478,742 | 5,839,533 | 1,544,013 | — | 10,871,624 | ||||||||||||||||||||||
| Research and development | 310,672 | — | — | — | 310,672 | |||||||||||||||||||||||
| Stock based compensation | 687,505 | — | — | — | 687,505 | |||||||||||||||||||||||
| Selling, general and administrative expenses | 3,324,051 | 2,475,769 | 1,300,586 | 981,781 | 1,758,048 | AA | 9,840,235 | |||||||||||||||||||||
| Total Operating Expenses | 4,322,228 | 2,475,769 | 1,300,586 | 981,781 | 1,758,048 | 10,838,412 | ||||||||||||||||||||||
| Operating Income (Loss) | (3,312,892 | ) | 2,973 | 4,538,947 | 562,232 | (1,758,048 | ) | 33,212 | ||||||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||||||
| Interest expense | — | (40,701 | ) | — | — | — | (40,701 | ) | ||||||||||||||||||||
| Other income | 10,936 | 33,476 | 8 | — | — | 44,420 | ||||||||||||||||||||||
| Total Other Income (Expense) | 10,936 | (7,225 | ) | 8 | — | — | 3,719 | |||||||||||||||||||||
| Income (Loss) Before Provision of Income Taxes | (3,301,956 | ) | (4,252 | ) | 4,538,955 | 562,232 | (1,758,048 | ) | 36,931 | |||||||||||||||||||
| Provision for Income Taxes | 66,854 | 16,747 | — | — | — | BB | 83,601 | |||||||||||||||||||||
| Net Income (Loss) | $ | (3,368,810 | ) | $ | (20,999 | ) | $ | 4,538,955 | $ | 562,232 | $ | (1,758,048 | ) | $ | (46,670 | ) | ||||||||||||
| Basic and Diluted Loss) Per Common Share | $ | (0.59 | ) | (0.01 | ) | |||||||||||||||||||||||
| Weighted-average number of shares used in computing net income per share | 5,733,591 | 500,000 | CC | 6,233,591 | ||||||||||||||||||||||||
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Unaudited Pro Forma Condensed Combined Statements of Operations
For the Six Months Ended June 30, 2021
| Transaction | ||||||||||||||||||||||||||||
| Applied | KES and JSS | ▇▇▇ | ▇▇▇▇▇ | Accounting | Pro Forma | |||||||||||||||||||||||
| Historical | Historical | Historical | Historical (2) | Adjustments | Notes | Combined | ||||||||||||||||||||||
| Net Sales | $ | 4,196,935 | $ | 2,765,090 | $ | 2,988,132 | $ | 305,524 | $ | 10,255,681 | ||||||||||||||||||
| Cost of Goods Sold | 2,739,440 | 1,173,163 | 1,009,433 | 270,826 | 5,192,862 | |||||||||||||||||||||||
| Gross Profit | 1,457,495 | 1,591,927 | 1,978,699 | 34,698 | 5,062,819 | |||||||||||||||||||||||
| Operating Expenses Research and development | 53,408 | — | — | 53,408 | ||||||||||||||||||||||||
| Stock based compensation | 676,341 | — | 950,000 | — | — | 1,626,341 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 3,623,658 | 1,528,304 | 1,152,958 | 161,527 | 432,511 | DD | 6,898,958 | |||||||||||||||||||||
| Total Operating Expenses | 4,353,407 | 1,528,304 | 2,102,958 | 161,527 | 432,511 | 8,578,707 | ||||||||||||||||||||||
| Operating Income (Loss) | (2,895,912 | ) | 63,623 | (124,259 | ) | (126,829 | ) | (432,511 | ) | (3,515,888 | ) | |||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||||||
| Change in fair market value of warrant liability | (300,452 | ) | — | — | — | — | (300,452 | ) | ||||||||||||||||||||
| Other income | 25,182 | 238,915 | 5 | — | — | 264,102 | ||||||||||||||||||||||
| Total Other Income (Loss) | (275,270 | ) | 238,915 | 5 | — | — | (36,350 | ) | ||||||||||||||||||||
| Income (Loss) Before Provision of Income Taxes | (3,171,182 | ) | 302,538 | (124,259 | ) | (126,829 | ) | (432,511 | ) | (3,552,238 | ) | |||||||||||||||||
| Provision for Income Taxes | — | — | — | — | — | EE | — | |||||||||||||||||||||
| Net Income (Loss) | $ | (3,171,182 | ) | $ | 302,539 | (124,254 | ) | $ | (126,829 | ) | (432,511 | ) | $ | (3,552,238 | ) | |||||||||||||
| Basic and Diluted Earnings Per Common Share | $ | (0.35 | ) | (0.37 | ) | |||||||||||||||||||||||
| Weighted-average number of shares used in computing net income per share | 9,102,677 | 500,000 | FF | 9,602,677 | ||||||||||||||||||||||||
| (2) | Includes the profit and loss activity of Akida from January 1, 2021 through February 8, 2021 (date of acquisition). |
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Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1. Basis of Pro Forma Presentation
The Pro Forma Combined Financial Information has been prepared assuming the Transaction is accounted for using the acquisition method of accounting with the Company as the acquiring entity and Akida, KES, JJS, and ▇▇▇ as the acquirees. Under the acquisition method of accounting, the Company’s assets and liabilities will retain their carrying amounts while the assets acquired, and liabilities assumed of the acquirees will be recorded at their fair values measured as of the acquisition date. The excess of the purchase price over the estimated fair values of net assets acquired will be recorded as goodwill. The transaction accounting adjustments have been prepared as if the Transaction had taken place on June 30, 2021 in the case of the Condensed Combined Balance Sheet, and on January 1, 2020 in the case of the Combined Condensed Statements of Operations for the year ended December 31, 2020 and the six months ended June 30, 2021.
The transaction accounting adjustments represent management’s estimates based on information available as of the date of this filing and are subject to change as additional information becomes available and additional analyses are performed. The Pro Forma Condensed Combined Financial Information does not reflect possible adjustments related to restructuring or integration activities that have yet to be determined.
The accounting policies used in the preparation of the Pro Forma Condensed Combined Financial Information are those set out in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020.
Note 2. Preliminary Estimated Purchase Price Allocation
The following table sets forth a preliminary allocation of the estimated purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of KES and JJS based on KES and JJS’ June 30, 2021 balance sheet, with the excess recorded as goodwill.
| Consideration paid: | ||||
| Fair value of share consideration | $ | 1,959,000 | ||
| Cash consideration | 4,300,000 | |||
| Total estimated consideration | $ | 6,259,000 | ||
| Current assets | $ | 960,085 | ||
| Other non-current assets | 2,556 | |||
| Machinery and equipment | 34,617 | |||
| Intangible assets | 4,570,000 | |||
| Assumed liabilities | (264,817 | ) | ||
| Total net assets acquired | 5,302,441 | |||
| Goodwill | $ | 956,559 | ||
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Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 2. Preliminary Estimated Purchase Price Allocation (continued)
The following table sets forth a preliminary allocation of the estimated purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of ▇▇▇ based on ▇▇▇’s June 30, 2021 balance sheet, with the excess recorded as goodwill.
| Consideration paid: | ||||
| Fair value of share consideration | $ | 2,000,000 | ||
| Cash consideration | 9,500,000 | |||
| Total estimated consideration | $ | 11,500,000 | ||
| Current assets | $ | 699,498 | ||
| Machinery and equipment | 1,982 | |||
| Intangible assets | 9,860,000 | |||
| Assumed liabilities | (48,724 | ) | ||
| Total net assets acquired | 10,512,756 | |||
| Goodwill | $ | 987,244 | ||
The allocation of the estimated purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Akida is included in the Company balance sheet as of June 30, 2021 as the transaction occurred on February 8, 2021.
Note 3. Transaction Adjustments
Transaction adjustments are necessary to reflect the acquisition consideration exchanged and to adjust amounts related to the tangible and intangible assets and liabilities of KES, JJS, and ▇▇▇ to a preliminary estimate of their fair values, and to reflect the impact on the statements of operations as if the Transaction had occurred during those periods.
Balance Sheet Adjustments
| A. | Reflects cash of $13,800,000 paid and the issuance of 500,000 common shares for the acquisitions and cash of $12,272,440 raised and the issuance of 552,000 series a cumulative perpetual preferred shares during the July preferred stock offering. |
| B. | Reflects the elimination of KES, JJS and ▇▇▇’s liabilities not assumed, and assets not acquired by the Company. |
| C. | Reflects the elimination of KES, JJS and ▇▇▇’s members’ equity, treasury stock, and retained earnings. |
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Applied UV, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 4. Transaction Adjustments (continued)
| D. | Reflects the pro forma adjustments to intangible assets to reflect the fair value of identifiable intangible assets, as follows: |
| ▇▇▇ and JJS: | Amortization Expense | |||||||||||||||
| Year | Six Months | |||||||||||||||
| Ended | Ended | |||||||||||||||
| Estimated | Estimated | December 31, | June 30, | |||||||||||||
| Fair Value | Useful Life | 2020 | 2021 | |||||||||||||
| Trade names | $ | 914,000 | 10.0 | $ | 91,400 | $ | 45,700 | |||||||||
| Technology and know-how | 3,656,000 | 10.0 | 365,600 | 182,800 | ||||||||||||
| Total | $ | 4,570,000 | $ | 457,000 | $ | 228,500 |
| ▇▇▇: | Amortization Expense | |||||||||||||||
| Year | Six Months | |||||||||||||||
| Ended | Ended | |||||||||||||||
| Estimated | Estimated | December 31, | June 30, | |||||||||||||
| Fair Value | Useful Life | 2020 | 2021 | |||||||||||||
| Trade names | $ | 326,000 | 5.0 | $ | 65,200 | $ | 32,600 | |||||||||
| Customer relationships | 6,784,000 | 14.0 | 484,571 | 242,286 | ||||||||||||
| Patents | 1,533,000 | 17.0 | 90,176 | 45,088 | ||||||||||||
| Technology and know-how | 1,217,000 | 10.0 | 121,700 | 60,850 | ||||||||||||
| Total | $ | 9,860,000 | $ | 761,648 | $ | 380,824 | ||||||||||
| AKIDA: | Amortization Expense | |||||||||||||||
| Year | For the Period January 1, | |||||||||||||||
| Ended | 2021 through | |||||||||||||||
| Estimated | Estimated | December 31, | February 8, | |||||||||||||
| Fair Value | Useful Life | 2020 | 2021 | |||||||||||||
| Trade names | $ | 1,156,000 | 10.0 | $ | 115,600 | $ | 12,042 | |||||||||
| Customer relationships | 539,000 | 7.0 | 77,000 | 8,021 | ||||||||||||
| Technology and know-how | 3,468,000 | 10.0 | 346,800 | 36,125 | ||||||||||||
| Total | $ | 5,163,000 | $ | 539,400 | $ | 56,188 | ||||||||||
| E. | Reflects the preliminary fair value adjustment related to intangible assets and goodwill acquired. |
| F. | Reflects the accrual of transaction and other acquisition related costs that had been incurred through the closing date but not recorded in the historical financial statements. |
| G. | Reflects the adjustment to account for leases of the acquired entities under Accounting Standards Codification 842, which is consistent with the accounting policies set out in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020 |
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Applied UV, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Statement of Operations for the Year Ended December 31, 2020 Adjustment
AA Reflects amortization expensed based on preliminary fair value estimates for acquired intangible assets.
BB The Company determined that the proforma income tax expense (benefit) adjustment to be immaterial.
CC Reflects the issuance of 500,000 common shares as stock consideration for the acquisitions.
Statement of Operations for the Six Months Ended June 30, 2021 Adjustment
DD Reflects amortization expensed based on preliminary fair value estimates for acquired intangible assets and the reversal of transaction and other acquisition related costs that had been recorded in the historical financial statements in the amount of $233,000.
EE The Company determined that the proforma income tax expense (benefit) adjustment to be immaterial.
FF Reflects the issuance of 500,000 common shares as stock consideration for the acquisitions.
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