BUSINESS ACQUISITION

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

BUSINESS ACQUISITION

NOTE 2 – BUSINESS ACQUISITION

Business acquisitions are accounted for under the purchase method of accounting in accordance with ASC 805. The results of operations of the acquired businesses since the date of acquisition are included in the unaudited condensed consolidated financial statements of the Company for the three months ended March 31, 2021. The total purchase consideration was allocated to the assets acquired and liabilities assumed at their preliminary estimated fair values as of the date of acquisition, as determined by management. The purchase price allocations are preliminary and a final determination of purchase accounting adjustments, which may be material, will be made upon the finalization of the Company’s integration activities, which are expected to be completed during the year ended December 31, 2021. The excess of the purchase price over the amounts allocated to assets acquired and liabilities assumed has been recorded as goodwill. The value of the goodwill from the acquisitions described below can be attributed to several business factors including, but not limited to, cost synergies expected to be realized and a trained technical workforce.

On February 8, 2021 Applied UV, Inc. (the “Company”), entered into an asset purchase agreement (the “APA”) by and among the Company, SteriLumen, Inc., a New York corporation and wholly-owned subsidiary of the Company (the “Purchaser”), on the one hand, and Akida Holdings LLC, a Florida limited liability company (the “Seller”), and the Seller’s members, Simba Partners, LLC, JJH Holdings, LLC and Fakhruddin Holdings FZC on the other pursuant to which the Purchaser acquired substantially all of the assets of the Seller and assumed certain of its current liabilities and contract obligations, as set forth in the APA (the “Acquisition”). In the Acquisition, the Purchaser acquired all of the Seller’s assets and was assigned of its contacts related to the manufacturer and sale of the Airocide™ system of air purification technologies, originally developed by 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, and retail sectors. On February 8, 2021 (the “Closing Date”) the transactions contemplated by the APA were completed. On the Closing Date, the Seller received, as consideration for the Acquisition, the purchase price consisting of (i) $901,275 in cash; and (ii) 1,375,000 shares of the Company’s common stock, par value $0.0001 per share (the “Acquisition Shares”).

The preliminary purchase price and purchase price allocation as of the acquisition completion date follows:

The following sets forth the components of the purchase price:

Purchase Price:
Cash	$	901,275
Fair market value of common stock issued		7,122,500
Total Purchase Price		8,023,775
Assets Acquired:
Cash		140,982
Accounts receivable		233,241
Inventory		211,105
Prepaid expenses		285,490
Machinery and equipment		168,721
Intangible assets		5,163,000
Total Assets Acquired:		6,202,539
Liabilities assumed
Accounts payable		(415,341	)
Deferred revenue		(491,702	)
Total Liabilities Assumed		(907,043	)
Net Assets Acquired		5,295,496
Excess Purchase Price	$	2,728,279

The excess purchase price has been recorded as goodwill in the amount of approximately $2,728,279. The estimated useful life of the identifiable intangible assets is three to seven years. The goodwill is not amortizable for tax purposes.

The following table provides unaudited pro forma results for the three months ended March 31, 2021 and 2020, as if the Asset Purchase Agreement consummated on January 1, 2020. The pro forma results of operations were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the Asset Purchase Agreement been made as of January 1, 2020 or results that may occur in the future.

	2021			2020
Net Sales	$	2,618,139		$	2,303,796
Net income (loss)		(1,159,602	)		(10,818	)
Net income (loss) per common share, basic and diluted		(0.13	)		0.00