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Applied UV (AUVI) Announces Acquisition of the Assets of KES Science & Technology

September 29, 2021 7:02 AM EDT

Transaction significantly scales air purification product portfolio and customer base

  • Developed for NASA as a patented pathogen killing technology; patents were originally obtained by KES
  • Expands access to food distribution, grocery chains, and fast-growing cannabis market
  • Proprietary photocatalytic oxidation process thoroughly destroys viruses (including COVID-19), bacteria, spores, and fungi
  • Accelerates the strategy to grow revenues through complimentary and synergistic acquisitions
  • KES is expected to contribute significantly to revenues in 2022 and be immediately accretive to Applied UV's earnings per share
  • Applied UV to host investor call at 9:00 am EDT on September 29, 2021

Applied UV, Inc. (NASDAQ: AUVI) ("Applied UV" or the "Company"), an infection control technology company that applies the power of narrow-range ultraviolet light ("UVC") for surface areas and catalytic bioconversion technology for air purification to destroy pathogens safely, thoroughly, and automatically, announced it has closed on the acquisition by its wholly-owned subsidiary, SteriLumen, Inc. ("SteriLumen"), of substantially all of the assets of privately-held KES Science & Technology, Inc. ("KES") and JJS Technologies, LLC ("JJS"), each of Kennesaw, Georgia, including all of the rights to manufacture and sell all of its patented, air disinfection and purification technologies, for $4.3 million in cash and 300,000 common shares of Applied UV stock. Neither SteriLumen nor Applied UV will assume any long-term debt or non-operating liabilities of KES. The acquisition of the assets of KES and JJS, together with the acquisition announced on February 9, 2021, of substantially all of the assets of Akida Holdings LLC, including all of the rights to manufacture and sell the Airocide� System of patented, air disinfection and purification technologies, consolidates all of these technologies under the SteriLumen brand and is expected to bolster its presence in major markets including food distribution, cannabis and post-harvest, wineries, and retail sectors. KES is expected to contribute approximately $5-7 million in revenue in 2022 and be immediately accretive to Applied UV's earnings per share. The agreement has been unanimously approved by the Boards of Directors of both companies.

"The KES acquisition is a great opportunity to simultaneously enhance our financial profile, while driving even greater value for customers and shareholders," said Q Saeed, CEO of Applied UV. "We have been very familiar with the quality of the KES product offering and leadership team and impressed by what they have accomplished, notably their successful penetration into the food distribution sector and most recently into the cannabis and post-harvest market. The addition of KES is a major step forward in building out our air purification business, complimenting the excellent progress we have already established with our existing Airocide� business. KES strengthens and expands our product offering and development capabilities and allows for greater opportunities to scale our fast-growing air purification platform. We are excited to have the KES team join Applied UV and look forward to accelerating the commercialization of the Airocide� platform and advance our goal of bringing best-of-breed technology-enabled solutions to businesses and consumers."

KES Airocide� Product Portfolio
KES Airocide� systems are purpose-built for the food processing, storage, and transportation industries. KES uses a powerful NASA-utilized technology to protect employees, products, and facilities from airborne threats like VOCs, ethylene gas, bacteria, viruses, and more. AiroCide� is the only commercial air purification technology that completely mineralizes (turns organics into carbon dioxide and water vapor) airborne bacteria, mold, fungi, mycotoxins, viruses, allergens, Volatile Organic Compounds (VOC's) like ethylene, and odors. KES Airocide� systems can reduce spoilage to ethylene gas which is often a major issue in wine, beer and other beverage and food processing facilities while also reducing the threat of respiratory infections and other diseases for employees. For more information about KES, please visit: https://kesair.com/

Strategic and Financial Benefits
This transaction brings together Applied UV's and all of Airocide's� product franchises to create a stronger global business serving a broader set of customers.

  • Consolidates Airocide� air disinfection technology under the SteriLumen brand
  • Growing need to optimize food safety and product shelf life by removing ethylene gas, mold, bacteria, and other hazardous VOCs.
  • Provides access to the fast-growing cannabis and post-harvest market in North America.
  • KES Airocide� platform brings additional scientific validation and technological advancement.
  • Extensive product offering provides more complete solution to meet customer needs.
  • KES is expected to contribute approximately $5-7 million in revenue in 2022 and be immediately accretive to Applied UV's earnings per share.
  • Complementary geographic footprint expected to allow for synergies

Transaction Details

  • Asset purchase of the KES Airocide� technology, product line and associated intellectual property and know how.
  • Total consideration paid to KES in a combination of cash and stock: $4.3 million in cash and 300,000 shares.
  • 3-year employment agreements for key KES executives.

Conference Call/Webcast Information
Applied UV's management team will host an investor conference call and live webcast on September 29, 2021, beginning at 9:00 am EDT.

Investors can access the webcast via the following link. https://www.webcaster4.com/Webcast/Page/2626/43071

For those planning to participate on the call, please dial +1--888-506-0062 for domestic calls, or +1-973-528-0011for international calls and use entry code 552866. A replay of the conference call will be available online on the Applied UV web site, and a dial-in replay will be available for one week following the call at +1-877-481-4010 (for domestic calls) or +1-919-882-2331 (for international calls), replay passcode 43071.



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