SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

Subsequent Events

SUBSEQUENT EVENTS

NOTE 14 – PROFORMA FINANCIAL STATEMENTS

Unaudited Supplemental Pro Forma Data

Unaudited pro forma results of operations for the three and nine months ended September 30, 2021 as though the company acquired Akida, Kes/JJS, and SAM (the “Acquired Companies”) on January 1, 2021 is set forth below.

	Three Months Ended September 30, 2021			Nine Months Ended September 30, 2021
Net Sales	$	5,894,136		$	16,149,817
Cost of Goods Sold		3,996,053		9,180,467
Gross Profit		1,898,083		6,969,350
Research and development		—		53,408
Stock based compensation		426,268		2,052,609
Selling, General and Administrative Expenses		3,887,863		10,795,269
Total Operating expenses		4,314,131		12,901,286
Operating Loss		(2,416,048	)	(5,931,936)
Other (Expense) Income
Change in Fair Market Value of Warrant Liability		151,570		(148,882)
Other income		533,787		797,889
Total Other Income		685,357		649,007
Loss Before Provision for Income Taxes		(1,730,691	)	(5,282,929)
Benefit from Income Taxes		(101,354	)	(101,354)
Net Loss	$	(1,629,237	)	$	(5,181,575)

		Three Month Ended September 30, 2020	Nine Month Ended September 30, 2020
Net Sales	$	6,763,331	$	17,038,535
Cost of Goods Sold		3,281,549	9,030,374
Gross Profit		3,481,782	8,008,161
Research and development		65,037	65,037
Stock based compensation		279,707	381,314
Selling, General and Administrative Expenses		2,270,742	5,931,155
Total Operating expenses		2,615,486	6,377,506
Operating Income		866,296	1,630,655
Other (Expense) Income
Change in Fair Market Value of Warrant Liability		—	—
Other income		24,836	18,410
Total Other Income		24,836	18,410
Income Before Provision for Income Taxes		891,132	1,649,065
Provision for Income Taxes		217,845	404,516
Net Income	$	673,287	$	1,244,549

NOTE 15 – SUBSEQUENT EVENTS

Amendment to Certificate of Incorporation  

On October 7, 2021, the Company amended its amended and restated certificate of incorporation to increase the number of authorized preferred stock, par value $0.0001 per share, from 1,000,000 to 20,000,000. Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is currently authorized to designate and issue up to 1,000,000 shares of preferred stock, par value $0.0001 per share, in one or more classes or series and, subject to the limitations prescribed by the Company’s amended and restated certificate of incorporation and Delaware corporate law, with such rights, preferences, privileges and restrictions of each class or series of preferred stock, including dividend rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any class or series as the Company’s board of directors may determine, without any vote or action by the Company’s shareholders.

Asset Purchase Agreement

On October 13, 2021, the Company entered into an asset purchase agreement by and among the Company, SteriLumen, Inc., a New York corporation and wholly-owned subsidiary of the Company (the “Purchaser”) and Old SAM Partners, LLC, a Florida limited liability company (the “Seller”), pursuant to which the Purchaser acquired substantially all of the assets of the Seller, including the assignment of an exclusive distribution agreement. On October 13, 2021 the Seller received, as consideration for the Acquisition, the purchase price consisting of (i) $9,500,000 in cash; and (ii) 200,000 shares of the Company’s common stock and (iii) 200,000 unvested shares of the Company’s common stock, which are subject to cancellation.

The preliminary purchase price and related purchase price allocation (which are still in process and subject to change) are follows:

Purchase Price:
Cash	$	9,500,000
Fair market value of common stock issued		2,076,439
Earn-out		3,345
Total Purchase Price		11,579,784
Assets Acquired:
Accounts receivable		129,845
Inventory		369,970
Machinery and equipment		1,982
Customer relationships		6,784,000
Patents		1,533,000
Technology and know how		1,217,000
Trade names		326,000
Total Assets Acquired:		10,361,797
Excess Purchase Price "Goodwill"	$	1,217,987