Applied UV, Inc.

Good morning. My name is Kate, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Q1 2021 Applied UV Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you have any comments or questions, you may press star 1 on your phone at any time to join the queue. If your question has been answered and you no longer wish to ask it, please press star 2 to leave the queue. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Kevin McGrath, Investor Relations for Applied UV. Thank you. You may begin.

Thank you, Kate, and good morning, everyone. On today's call, we have Q Saeed, Chief Executive Officer of Applied UV, Mike Riccio, CFO of Applied UV, Jim Doyle, COO of Applied UV, and Rhonda Wallen, Vice President of Marketing and Corporate Development for Sterilum, a wholly owned subsidiary of Applied UV. During today's call, we will make certain predictive statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. And with that said, I will now turn the call over to Q Saeed, our Chief Executive Officer.

Q? Thank you, Kevin. Good morning, everyone, and thanks for joining us. I'm very pleased with our first quarter, and even more so because it's in line with our expectation. Net sales for the three months ended March 31st, 2021 increased 157.1% to approximately 2.3 million, from approximately 1.5 million in the three months ended 2020. Our net sales and financial results For the current period, reflect the impact of the Akita Holdings asset acquisition that we closed on February 8, 2021. Last year, our net sale for Q1 2020 was generated entirely from the company's Munwork subsidiary, which supplies custom-designed mirrors to global luxury hotel chains like Four Seasons, Marriott, and Hyatt. During the first quarter, we saw an improvement in the hospitality industry as the economy showed signs, of a rebound from the pandemic, and as a result, Unmumwork's business revenues are indicating a return to normal operating levels. A net loss for three months ended March 31st, 2021 with approximately $1 million, compared to a net loss of $78,000 in the three months ended March 31st, 2020. The net loss in this past quarter of 2021 was primarily due to an increase in SG&A costs to invest and improve and ramp up future operations. The liquidity remains strong with a cash balance of $8.9 million on March 31st, 2021. Now, I would like to move on to talk about the growth trends we see developing in our markets and some of the sales and operational highlights of the quarter. Our markets are broadly improving and increasing rate of vaccination along with the easing of social restriction provides further support for the global economic recovery. We expect the continuing improvement trend for the Munwork subsidiary and also continued success leveraged by our investment to further our value with critical innovation at Sarah Lewin. New products like Aeroside will help drive a strong year and a positive year over year comparison against 2020 results. We're continuing investment in our major growth initiatives and growing our domestic and international sales capabilities, setting up new distributors in the US and across the world, plus opening and focusing new channels to leverage our position. Our customers are increasingly seeking solutions to better control pathogen spread in the air and on surfaces. We'll be releasing news of some of these new distribution agreements and sales wins in the coming weeks and months. We expect strong growth in the second quarter driven by improving markets and accelerated underlying growth momentum. We expect these trends to continue to deliver and grow in the second half of the year. Our objective was to start this year from a position of strength with a noticeable year-over-year revenue growth to meet demand, and our Q1 shows we clearly achieved this. For looking beyond the pandemic, a long-term position is better than ever in a world where air quality and infection risk awareness has reached new levels. A differentiated value proposition as a product category leader with proven and tested air surface prevention of infection technologies position us uniquely to capture these accelerating growth trends. For 2021 and beyond, our operational priorities will remain consistent around delivering revenue growth, improving margin, and building a skilled, efficient, and profitable company. Moving to some of the highlights of the first quarter, we announced in early February that Applied UV had acquired the assets of Akita Holdings, manufactured the airside system of patented air, purification technologies, and their suite of products and their IPs. The acquisition has been a success and provided us with an instant presence and significant scale and a world-class product in a critical air purification market, and the integration of the business is on track. In fact, today, I'm heading to Atlanta with our team for our first global sales meeting, and we'll bring together the entire sales team and marketing team to ensure we are executing on our plan to grow. Joining us at the meeting will be the newest member of the executive team, Mike Riccio, who's appointed Chief Financial Officer of the company in early April. He happens to be on the call today as well. Mike is a highly accomplished CFO who brings an extensive array of financial experience to Applied QV, including background with global public companies in corporate finance operations and M&A planning and integration. We welcome him to the team. As I believe I mentioned earlier, We're very pleased to see that the sales momentum in the airside business continues to show positive trends sequentially from the fourth quarter of 2020 coming into 2021 and remain excited about the prospects for growth through the remainder of 2021. Based on our current pipeline of commercial and consumer opportunities, the future looks bright. Confirmation of the trends in demand we're seeing for air purification solutions was delivered with our announcement during the first quarter that we've partnered with the Boston Red Sox to install the airside system in Fenway Park and Jet Blue Park with a project valued at approximately $700,000. The airside units are being installed in all play areas, luxury suites, as well as various points of contact in each facility where fans congregate indoors throughout the course of the game. We're excited about opportunities we have underway or in the pipeline for other large public spaces where air purification solutions can help protect the employees who work at these facilities and their visiting customers. EarthSite is a great addition to our product portfolio, and we firmly believe that there are other complementary and adjacent technologies or companies that would enrich and expand our portfolio of health-promoting solutions and open new markets for us. During the first quarter, we continue to make steady progress with our sterilumine disinfectant system product line, which today includes the lumicide ribbon for placement above hard surfaces like sinks and vanities in restrooms, above desks or under TV in hotels and along countertops.