1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. đť•Ź Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. đť•Ź Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
AUVI
Event Date
2020-08-31
Sector
Industrials
Subsector
Electrical Equipment
Offer Range
$5.00-$5.00
Shares Offered
1M
$32.0M
Implied Upside vs Midpoint
Description
The Company was formed on February 26, 2019, for the purpose of acquiring all of the equity of SteriLumen and Munn Works. The Company acquired all of the capital stock of SteriLumen in March of 2019 pursuant to two exchange agreements in which the shareholders of SteriLumen exchanged all of their shares in SteriLumen for shares of common stock in the Company. The Company acquired all of the membership interests of Munn Works in July of 2019 pursuant to an exchange agreement in exchange for shares of common stock in the Company. The Company conducts all of its operations through SteriLumen and Munn Works. SteriLumen. SteriLumen was incorporated on December 8, 2016 in New York for the purpose of developing, designing and manufacturing disinfection systems, that eliminate pathogens that may cause healthcare-acquired infections (“HAIs”), for distribution and sale to facilities that have high customer or patient turnover such as hospitals, assisted living facilities, doctors’ offices and walk-in clinics as well as hotels, cruise lines, airplanes, schools, government buildings, commercial offices and other facilities that offer access to the public. SteriLumen has developed, designed and manufactured a unique, patented and automated disinfecting system that will be embedded into certain bathroom fixtures (in each case, a “SteriLumen Disinfecting System”), which we believe will be effective in reducing HAIs caused by viruses, bacteria, fungi, and other pathogens, including SARS-CoV-2, the virus that causes COVID-19 (referred to herein as the “Coronavirus”) and human coronaviruses in general. The SteriLumen Disinfecting System currently has five product lines: (i) disinfecting back-lit mirror that replaces the typical mirror (and wall lighting) found above the sink in a public facility bathroom; (ii) disinfecting drain device; (iii) disinfecting shelf that would be installed above the sink in cases where there is not enough room for a bathroom mirror or beneath an existing bathroom mirror; (iv) disinfecting mirrored medicine cabinet for residential use and (v) retrofit kit. The Company has received confirmation from the U.S. Food & Drug Administration that the SteriLumen Disinfecting System is not a “device” under Section 201(h) of the Federal Food, Drug, and Cosmetic Act (the “FDA Act”) and therefore the Company is not required to comply with the requirements of the FDA Act. The SteriLumen Disinfecting System has previously been submitted to ResInnova Laboratories (“ResInnova”), a laboratory that tests products that reduce pathogens on solid and porous surfaces, for an analysis of its effectiveness in killing certain pathogens such as Clostridium difficile spores (“C diff”), Escherichia coli (“E coli”) and Staphylococcus aureus (“MRSA”). ResInnova provided SteriLumen with their findings in a report dated September 8, 2017, which were updated on May 8, 2020 (the “Initial ResInnova Report”) which found the SteriLumen Disinfecting System to be effective in dramatically reducing pathogens in the bathroom vanity/sink area. In a Report dated June 30, 2020, ResInnova found the SteriLumen Disinfecting System to be effective in killing OC43 human coronavirus (“OC43”), which according to ResInnova is a common surrogate for SARS-CoV-2. The ResInnova study did not test the SteriLumen Disinfecting System against SARS-CoV-2. Furthermore, SteriLumen has an agreement (the “Mount Sinai Agreement”) with Icahn School of Medicine at Mount Sinai (“Mount Sinai”) dated April 20, 2020, in which the Company will sponsor an evaluation by Mount Sinai of the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms in Mount Sinai St. Luke’s Hospital in New York, NY. Mount Sinai has agreed to provide SteriLumen the results of their research in a report by the second quarter of 2021 as well as publishing their results in an academic, peer-reviewed journal. Since its inception, SteriLumen has devoted substantially all of its efforts to research and development, business planning, recruiting management and sales personnel, raising capital, developing relationships with existing and new suppliers and creating its own network of professional consultants. SteriLumen has manufacturing and assembly suppliers in Warwick, Rhode Island, southern China and South Korea, and warehousing and distribution suppliers in California. By outsourcing the manufacturing, assembly, warehousing and distribution of SteriLumen Disinfecting Systems and other related products, we can efficiently focus our resources on the design, marketing and sales of SteriLumen’s products while keeping overhead costs lower. SteriLumen recently sold in Saudi Arabia and is currently in discussions with two major international hotel chains who have expressed interest in reducing pathogen levels in their hotels and restaurants. HAIs. The U.S. Center for Disease Control (“CDC”) defines HAIs as infections patients contract, while receiving treatment in a healthcare facility. HAI is a significant problem in the United States and is the cause of an estimated 99,000 deaths annually. The CDC states that preventing HAI is a national priority. Between 2000 and 2050, the percentage of people aged 85 and over will increase by 350%(1). This estimated increase will result in more HAIs for this age group. While this problem is of great concern to the elderly, it also affects the population at large.(2) Research shows that the most common germs causing HAIs are C diff (12%), MRSA(11%), E coli (9%), and Candida auris (7%).(3) Environmental disinfection is an important method in reducing the risk of HAIs. Evidence shows that traditional cleaning methods still leave persistent contamination of environmental surfaces.(4) Without question, secondary disinfection technologies are needed for reducing the risk of surface contamination. According to the CDC: · approximately 1.7 million people in the United States contract a HAI every year, or 1 out of every 25 hospital patients; · an estimated 99,000 people die from HAI’s annually; · HAI cost to the healthcare system is $45 billion annually; · patients with a HAI spend an average of 6.5 extra days in the hospital; and · patients with a HAI are five times more likely to be readmitted and twice as likely to die. HAI’s are preventable, and the federal government has instituted policies and penalties to ensure this issue is being addressed. In 2009, the Centers for Medicare and Medicaid Services (“CMS”) stopped paying hospital-related reimbursement for patients who acquired a HAI during their hospital stay. In 2011, CMS established fines for facilities with high rates of infection. The effects of reduced reimbursements have seriously impacted healthcare facilities. Some facilities have reported a reduction of up to 40% of their total revenue due to lost reimbursement. (1) American Journal of Infection Control (“AJIC”) (2) AJIC (3) AJIC (4) AJIC Munn Works. Munn Works was formed on November 9, 2012, as a New York limited liability company. It manufactures and supplies custom designed decorative framed mirrors, framed art, and bathroom vanities primarily to the hospitality market. Max Munn, the President of Applied UV, is also the Chief Executive Officer of Munn Works and has been involved in related businesses for over 35 years. Munn Works manufactures its products domestically and overseas. Its domestic manufacturing operations are located in its headquarters in Mount Vernon, New York. Munn Works supplies the major hotel brands in North America with its products. These brands include Hilton Hotels & Resorts, the various Hyatt branded hotels, the various Marriott branded hotels, Four Seasons Hotels and Resorts and the subsidiary hotel brands for each of these major brands. Munn Works has a national sales force and an established distribution network for hotels and restaurants in every major market in the United States and has begun to develop a distribution network for the assisted living market. These distribution networks will also be a significant asset for SteriLumen, as those networks will be utilized for the marketing and sales of the SteriLumen Disinfecting System. Additionally, Munn Works advertises its products in hotel design magazines and participates in major national trade shows. During the last three years, Munn Works has significantly expanded its sales force, including hiring a vice president of sales, increased investments in advertising, including expanding its presence at industry trade shows and full-page advertising in trade magazines such as Boutique Design and Hospitality Design and establishing a presence on social media outlets such as Facebook, Instagram, and Twitter. --- Our principal executive offices are located at 150 N. Macquesten Parkway, Mount Vernon, NY 10550 and our telephone number is (914) 665-6100. Our website address is www.applieduvinc.com.