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<!-- Field: Rule-Page --><DIV STYLE="margin-top: 12pt; margin-bottom: 3pt; width: 100%"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> As filed with the Securities and Exchange
Commission on July 16, 2020 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Registration No. [*]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM S-1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>Applied
UV, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; vertical-align: top; width: 30%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; vertical-align: top; width: 30%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>3648</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; vertical-align: top; width: 30%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>84-4373308</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or Other Jurisdiction of</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Incorporation or Organization)</P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Primary Standard Industrial</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Classification Code Number)</P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>150 N. Macquesten Parkway </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Mount Vernon, NY 10550</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(914) 665-6100</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> (Address, including zip code, and telephone
number, including area code, </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &ldquo;of registrant&rsquo;s principal
executive offices) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Keyoumars Saeed</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Chief Executive Officer</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>150 N. Macquesten Parkway </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Mount Vernon, NY 10550</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(914) 665-6100</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and
telephone number, including area code, of agent for service)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Copies to</U>:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Ross D. Carmel, Esq.</B></FONT></TD>
    <TD STYLE="width: 50%; text-align: center">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Jeffrey P. Wofford, Esq.</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Lawrence Cohen, Esq.</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Carmel, Milazzo &amp; Feil LLP</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Gordon Rees Scully Mansukhani, LLP</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>55 West 39<SUP>th</SUP> Street, 18<SUP>th</SUP> Floor</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Two North Central Avenue, Suite 2200</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>New York, New York 10018</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Phoenix, AZ 85004</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Telephone: (212) 658-0458</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Telephone: (602) 794-2485</B></FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Approximate date of commencement of proposed
sale to the public: <B>As soon as practicable after the effective date of this Registration Statement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box.&nbsp;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Wingdings">&#120;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2
of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%"><FONT STYLE="font-size: 10pt">Large accelerated filer </FONT></TD>
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD STYLE="width: 40%"><FONT STYLE="font-size: 10pt">Accelerated filer </FONT></TD>
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Non-accelerated filer </FONT></TD>
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Smaller reporting company </FONT></TD>
    <TD><FONT STYLE="font-family: Wingdings">&#120;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Emerging growth company</FONT></TD>
    <TD><FONT STYLE="font-family: Wingdings">&#120;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided to Section 7(a)(2)(B) of the Securities Act.&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Title of Each Class of<BR>
    Securities to be Registered</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Amount<BR>
    &nbsp;to be Registered (1)(2)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Proposed Maximum<BR>
    Offering Price<BR>
    Per Unit(3)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Proposed<BR>
    Maximum<BR>
    Aggregate<BR>
    Offering Price(1)(3)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">Amount of<BR>
    Registration Fee (4)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 44%; padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Common Stock, $0.0001 par value per share (1)(4)</FONT></TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 12%; border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 10pt">1,150,000</FONT></TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">5.00</FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">5,750,000</FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">746.35</FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Warrants to purchase Common Stock to be issued to the
    Underwriter (2)(5)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Common Stock issuable upon exercise of Warrants to purchase
    Common Stock to be issued to the Underwriters (2)(4)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 10pt">80,000</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">6.25</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">500,000</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">64.90</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Total</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 10pt">1,230,000</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">--</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">6,250,000</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">811.25</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Includes
150,000 shares that may be purchased by the underwriters pursuant to their over-allotment option that may be exercised over a 45
period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to issue to the representative of the several underwriters, who we refer to as the representative, warrants to purchase
the number of shares of common stock in the aggregate equal to eight percent (8%) of the shares of common stock to be issued and
sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The warrants are exercisable for
a price per share equal to 125% of the public offering price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is no current market for the securities or price at which the shares are being offered. Estimated solely for the purpose of calculating
the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to Rule 416 under the Securities Act of 1933, as amended, there is also being registered hereby such indeterminate number of additional
shares as may be issued or issuable because of stock splits, stock dividends and similar transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
fee required pursuant to Rule 457(g).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file&nbsp;a further
amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting
pursuant to said Section 8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">The information in this prospectus
is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to
buy these securities in any state or other jurisdiction where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><B>Subject to Completion, dated
[*], 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRELIMINARY PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;<FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>Applied
UV, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1,000,000 Shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">This
is an initial public offering of shares of common stock of Applied UV, Inc. We are offering 1,000,000 shares of our common stock.
</FONT>Upon completion of this offering, a single shareholder will own approximately 81% of our outstanding common stock (approximately
79% if the underwriters exercise their over-allotment option in full). For additional information regarding this shareholder,
see &ldquo;Principal Stockholders.&rdquo; Upon completion of this offering, we will be a &ldquo;controlled company&rdquo; within
the meaning of the listing rules of The Nasdaq Stock Market LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Prior to this offering, there has been
no public market for our common stock. We anticipate that the initial public offering price will be $5.00 per share. We have applied
to have our common stock listed on the Nasdaq Capital Market under the symbol &ldquo;AUVI&rdquo; which listing is a condition
to this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the terms and subject to the conditions
in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Network 1 Financial Securities,
Inc. is acting as representative, have severally agreed to purchase, and we have agreed to sell to them, severally, 1,000,000 shares
of common stock and the representative shall have an option, exercisable for 45 days from the date of this prospectus, to purchase
up to an additional 150,000 shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We intend to use the proceeds from
this offering for laboratory testing, expansion of sales staff, and general corporate purposes, including working capital and
sales and marketing activities. See &ldquo;<I>Use of Proceeds</I>.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Investing in our common stock
involves a high degree of risk. See &ldquo;<I>Risk Factors</I>&rdquo; beginning on page 10 of this prospectus for a
discussion of information that should be considered in connection with an investment in our common stock.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Neither the Securities and Exchange
Commission (&ldquo;<U>SEC</U>&rdquo;) nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are an &ldquo;emerging growth company&rdquo; as that term
is used in the Jumpstart Our Business Startups Act of 2012, and we have elected to comply with certain reduced public company reporting
requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Per Share</B></FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 72%"><FONT STYLE="font-size: 10pt">Initial public offering price</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right; width: 10%"><FONT STYLE="font-size: 10pt">5.00</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">5,000,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Underwriting discounts and commissions (1)(2)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0.45</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">450,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Proceeds, before expenses, to us</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">4.55</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">4,550,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Represents underwriting discount and commissions equal to 9% per share (or $0.45 per share), which is the underwriting discount we have agreed to pay on all investors in this offering introduced by the underwriters.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 24px"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Does not include a non-accountable expense allowance equal
    to 2% of the gross proceeds of this offering, payable to Network 1 Financial Securities, Inc., as representative of the underwriters,
    or the reimbursement of certain expenses of the underwriters. See &ldquo;<I>Underwriting</I>&rdquo; beginning on page 64 of
    this prospectus for additional information regarding underwriting compensation.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">In addition to the underwriting discounts listed above and
    the non-accountable expense allowance described in the footnote, we have agreed to issue upon the closing of this offering
    to Network 1 Financial Securities, Inc., as representative of the underwriters, warrants that will expire on the fifth anniversary
    of the effective date of this registration statement entitling the representative to purchase 8% of the number of shares of
    common stock sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The registration
    statement of which this prospectus is a part also covers the underwriters&rsquo; warrants and the common shares issuable upon
    the exercise thereof. For additional information regarding our arrangement with the underwriters, please see &ldquo;<I>Underwriting</I>&rdquo;
    beginning on page 64.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">We have granted the representative an option, exercisable for 45 days from the date of this prospectus, to purchase up to an additional 150,000 shares of common stock on the same terms as the other shares being purchased by the underwriters from us.</FONT></TD></TR>
</TABLE>


<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The underwriters expect to deliver the
shares against payment in New York, New York on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Prospectus dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">N E T W O R K <FONT STYLE="color: #FF9900"><B>1</B></FONT>
F I N A N C I A L</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: white"><FONT STYLE="background-color: black">S
E C U R I T I E S, I N C. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 96%"><A HREF="#a_001"><FONT STYLE="font-size: 10pt">ABOUT THIS PROSPECTUS</FONT></A></TD>
    <TD STYLE="text-align: right; width: 4%"><A HREF="#a_001">2</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_002"><FONT STYLE="font-size: 10pt">MARKET DATA</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_002">3</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_003"><FONT STYLE="font-size: 10pt">PROSPECTUS SUMMARY</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_003">3</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_004"><FONT STYLE="font-size: 10pt">SUMMARY OF THE OFFERING</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_004">8</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_005"><FONT STYLE="font-size: 10pt">RISK FACTORS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_005">10</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_006"><FONT STYLE="font-size: 10pt">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_006">30</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_007"><FONT STYLE="font-size: 10pt">USE OF PROCEEDS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_007">30</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_008"><FONT STYLE="font-size: 10pt">MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_008">31</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_009"><FONT STYLE="font-size: 10pt">CAPITALIZATION</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_009">32</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_010"><FONT STYLE="font-size: 10pt">DILUTION</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_010">33</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_011"><FONT STYLE="font-size: 10pt">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    RESULTS OF OPERATIONS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_011">34</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_012"><FONT STYLE="font-size: 10pt">BUSINESS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_012">41</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_013"><FONT STYLE="font-size: 10pt">MANAGEMENT</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_013">53</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_014"><FONT STYLE="font-size: 10pt">EXECUTIVE COMPENSATION</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_014">58</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><A HREF="#a_015"><FONT STYLE="font-size: 10pt">PRINCIPAL STOCKHOLDERS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_015">59</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><A HREF="#a_016"><FONT STYLE="font-size: 10pt">CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_016">60</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><A HREF="#a_017"><FONT STYLE="font-size: 10pt">DESCRIPTION OF SECURITIES</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_017">60</A></TD></TR>

<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 96%"><A HREF="#a_100"><FONT STYLE="text-transform: uppercase">Shares Eligible for Future Sale</FONT></A></TD>
    <TD STYLE="text-align: right; width: 4%"><A HREF="#a_100">63</A></TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 96%"><A HREF="#a_018"><FONT STYLE="font-size: 10pt">UNDERWRITING</FONT></A></TD>
    <TD STYLE="text-align: right; width: 4%"><A HREF="#a_018">64</A></TD></TR>

<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 96%"><A HREF="#a_019"><FONT STYLE="font-size: 10pt">EXPERTS</FONT></A></TD>
    <TD STYLE="text-align: right; width: 4%"><A HREF="#a_019">68</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><A HREF="#a_020"><FONT STYLE="font-size: 10pt">LEGAL MATTERS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_020">68</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><A HREF="#a_021"><FONT STYLE="font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#a_021">68</A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><A HREF="#aa_007"><FONT STYLE="font-size: 10pt">INDEX TO FINANCIAL STATEMENTS</FONT></A></TD>
    <TD STYLE="text-align: right"><A HREF="#aa_007"><FONT STYLE="font-size: 10pt">F-1</FONT></A></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Through and including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2020 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers&rsquo; obligation to
deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>You should rely only on the information
contained in this prospectus or any prospectus supplement or amendment. Neither we, nor the underwriters, have authorized any other
person to provide you with information that is different from, or adds to, that contained in this prospectus. If anyone provides
you with different or inconsistent information, you should not rely on it. Neither we nor the underwriters take responsibility
for, and can provide no assurance as to the reliability of, any other information that others may give you. You should assume that
the information contained in this prospectus or any free writing prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results
of operations and prospects may have changed since that date. We are not making an offer of any securities in any jurisdiction
in which such offer is unlawful.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>No action is being taken in any jurisdiction
outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in
that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required
to inform themselves about and to observe any restrictions as to this public offering and the distribution of this prospectus
applicable to that jurisdiction.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_001"></A>ABOUT
THIS PROSPECTUS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Throughout this prospectus, unless otherwise
designated or the context suggests otherwise,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: white">
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 4%"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 92%; text-align: justify"><FONT STYLE="font-size: 10pt">all references to the &ldquo;Company,&rdquo; the &ldquo;registrant,&rdquo; &ldquo;we,&rdquo; &ldquo;our,&rdquo; or &ldquo;us&rdquo; in this prospectus mean Applied UV, Inc. and its subsidiaries;</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt">an initial public offering price of our common stock of $5.00 per share;</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;year&rdquo; or &ldquo;fiscal year&rdquo;
    mean the year ending December 31<SUP>st</SUP>;</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>

<TR STYLE="background-color: white">
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 4%"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify; width: 92%"><FONT STYLE="font-size: 10pt">all common share and per common share information in this prospectus gives effect to a 1 for 5 reverse stock split of our common stock, which became effective as of June 17, 2020, and all preferred share and per preferred share information in this prospectus gives effect to a 1 for 5 reverse stock split of our preferred stock, which became effective as of June 23, 2020, and</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt">all dollar or $ references, when used in this prospectus, refer to United States dollars.</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_002"></A>Market
Data</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Market data and certain industry data and
forecasts used throughout this prospectus were obtained from internal company surveys, market research, consultant surveys, publicly
available information, reports of governmental agencies and industry publications and surveys. Industry surveys, publications,
consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed
to be reliable, but the accuracy and completeness of such information is not guaranteed. To our knowledge, certain third-party
industry data that includes projections for future periods does not take into account the effects of the worldwide coronavirus
pandemic. Accordingly, those third-party projections may be overstated and should not be given undue weight. We have not independently
verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein.
Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based on our management&rsquo;s
knowledge of the industry, have not been independently verified. Forecasts are particularly likely to be inaccurate, especially
over long periods of time. In addition, we do not necessarily know what assumptions regarding general economic growth were used
in preparing the forecasts we cite. Statements as to our market position are based on the most currently available data. While
we are not aware of any misstatements regarding the industry data presented in this prospectus, our estimates involve risks and
uncertainties and are subject to change based on various factors, including those discussed under the heading &ldquo;<I>Risk Factors</I>&rdquo;
in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_003"></A>PROSPECTUS
SUMMARY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>This summary provides a brief overview
of the key aspects of our business and our securities. The reader should read the entire prospectus carefully, especially the risks
of investing in our common stock discussed under &ldquo;Risk Factors.&rdquo; Some of the statements contained in this prospectus,
including statements under &ldquo;Summary&rdquo; and &ldquo;Risk Factors&rdquo; as well as those noted in the documents incorporated
herein by reference, are forward-looking statements and may involve a number of risks and uncertainties. Our actual results and
future events may differ significantly based upon a number of factors. The reader should not put undue reliance on the forward-looking
statements in this document, which speak only as of the date on the cover of this prospectus. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As used in this prospectus, all references
to &ldquo;capital stock,&rdquo; &ldquo;common stock,&rdquo; &ldquo;Shares,&rdquo; &ldquo;preferred stock,&rdquo; &ldquo;stockholders,&rdquo;
 &ldquo;shareholders&rdquo; applies only to Applied UV, Inc. and &ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;us,&rdquo; the &ldquo;Company,&rdquo;
the &ldquo;registrant,&rdquo; or &ldquo;Applied UV&rdquo; refer to Applied UV, Inc., a Delaware corporation and its subsidiaries,
which currently consist of SteriLumen, Inc., a New York corporation (&ldquo;SteriLumen&rdquo;) and Munn Works, LLC, a New York
limited liability company (&ldquo;Munn Works&rdquo;).</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>About our Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> 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.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>SteriLumen</I></B>. 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 (&ldquo;HAIs&rdquo;), for distribution and sale to facilities
that have high customer or patient turnover such as hospitals, assisted living facilities, doctors&rsquo; 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 &ldquo;SteriLumen Disinfecting System&rdquo;), which
we believe will be effective in reducing HAIs caused by viruses, bacteria, fungi, and other pathogens, including the virus the
causes COVID-19, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (referred to herein as the &ldquo;Coronavirus&rdquo;)
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 &amp; Drug Administration that the SteriLumen Disinfecting System
is not a &ldquo;device&rdquo; under Section 201(h) of the Federal Food, Drug, and Cosmetic Act (the &ldquo;FDA Act&rdquo;) and
therefore the Company is not required to comply with the requirements of the FDA Act. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The SteriLumen Disinfecting System
has previously been submitted to ResInnova Laboratories (&ldquo;ResInnova&rdquo;), 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 (&ldquo;C diff&rdquo;), Escherichia coli (&ldquo;E coli&rdquo;) and Staphylococcus aureus (&ldquo;MRSA&rdquo;).
ResInnova provided SteriLumen with their findings in a report dated September 8, 2017, which were updated on May 8, 2020 (the
 &ldquo;Initial ResInnova Report&rdquo;) 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, which according to ResInnova is a common surrogate for coronavirus as described
in further detail under &ldquo;Business&mdash;Second ResInnova Report.&rdquo; Furthermore, SteriLumen has an agreement (the &ldquo;Mount
Sinai Agreement&rdquo;) with Icahn School of Medicine at Mount Sinai (&ldquo;Mount Sinai&rdquo;) 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&rsquo;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.
The Initial ResInnova Report and the Mount Sinai Agreement are more fully described in the sections entitled &ldquo;Business&mdash;SteriLumen&mdash;The
Initial ResInnova Report,&rdquo; and &ldquo;&mdash;The Mount Sinai Agreement.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> 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&rsquo;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. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>HAIs</I>. The U.S. Center for Disease
Control (&ldquo;CDC&rdquo;) 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%<SUP>1.
</SUP>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.<SUP>2</SUP> Research shows that the most common germs causing HAIs are C diff (12%),
MRSA(11%), E coli (9%), and Candida auris (7%).<SUP>3</SUP> 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.<SUP>4
</SUP>Without question, secondary disinfection technologies are needed for reducing the risk of surface contamination. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the CDC:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">approximately 1.7 million people in the United States contract a HAI every year, or 1 out of every
25 hospital patients;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">an estimated 99,000 people die from HAI&rsquo;s annually;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">HAI cost to the healthcare system is $45 billion annually;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">patients with a HAI spend an average of 6.5 extra days in the hospital; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">patients with a HAI are five times more likely to be readmitted and twice as likely to die.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">HAI&rsquo;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 (&ldquo;CMS&rdquo;) 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">______________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>1
</SUP></FONT>American Journal of Infection Control (&ldquo;AJIC&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>2
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>3
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>4
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"> <B><I>Munn Works. </I></B>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.&nbsp;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 &amp; 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. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Acquisition of SteriLumen and
Munn Works. </I></B>The Company acquired all of the issued and outstanding common shares of SteriLumen pursuant to an Exchange
Agreement dated March 26, 2019 among the Company, SteriLumen and the shareholders of SteriLumen in which the SteriLumen shareholders
exchanged their SteriLumen common shares for 201,250 shares of Company common stock, of which Laurie Munn, the spouse of Max Munn,
our President and a director of the Company, received 200,000 shares. The Company acquired all of the issued and outstanding preferred
shares of SteriLumen pursuant to an Exchange Agreement dated March 27, 2019 among the Company, SteriLumen and Laurie Munn in which
Ms. Munn exchanged all of her SteriLumen Series A preferred stock for 1,800,000 shares of Company common stock and 2,000 shares
of Company Series A preferred stock. Upon consummation of this exchange the Company owned 100% of the capital shares of SteriLumen.
The Company acquired all of the membership interests in Munn Works pursuant to an Exchange Agreement dated July 1, 2019 among
the Company, Munn Works and Laurie Munn in which Laurie Munn exchange her membership interests in Munn Works for 3,000,000 shares
of Company common stock. All of the equity in the Company owned by Laurie Munn has been transferred to The Munn Family 2020 Irrevocable
Trust, of which the spouse of Max Munn is the trustee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Effects of Coronavirus Outbreak.
</I></B>In December 2019, a novel strain of Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread
to over 150 countries and every state in the United States. On January 30, 2020, the World Health Organization declared the outbreak
of Coronavirus a &ldquo;Public Health Emergency of International Concern.&rdquo; On March 11, 2020, the World Health Organization
declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The spread of the virus in many countries
continues to adversely impact global economic activity and has contributed to significant volatility and negative pressure in financial
markets and supply chains. The pandemic has had, and could have a significantly greater, material adverse effect on the U.S. economy
where we conduct a majority of our business. The pandemic has resulted, and may continue to result for an extended period, in significant
disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect
our liquidity.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Most states and cities have reacted
by instituting quarantines, restrictions on travel, &ldquo;stay at home&rdquo; and &ldquo;social distancing&rdquo; rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020, that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have taken steps to take care of
our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate
social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard
to employee, facility, and office hygiene as well as implementing significant travel restrictions. We are also assessing our business
continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue
to monitor and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent
we are able to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we currently manufacture the majority of our products
in China. The pandemic has impacted and may continue to impact suppliers of materials and the manufacturing locations for our products.
As a result, we have faced and may continue to face delays or difficulty manufacturing certain products, which could negatively
affect our business and financial results. Even if we are able to find alternate sources for materials and manufacturing, they
may cost more, which could adversely impact our profitability and financial condition. Also, because of the disruption to travel
and the decline in the demand for and the closure of hotels, Munn Works has experienced and may continue to experience a decline
in demand for its products which could have a material adverse effect on its operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020. See &ldquo;Risk Factors&mdash;Risks
Related to our Business and Operations&mdash;The Coronavirus pandemic may cause a material adverse effect on our business.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Options</I></B><I>. </I>On February
18, 2020, the Board approved the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of
the Company&rsquo;s common stock at a per share exercise equal to the greater of $2.50 and the market value per share of the Company&rsquo;s
common stock on the date of the grant. Market value will be determined by an independent valuation company engaged by the Company;
provided, however, if on the date of the grant the Company common stock is listed on a national exchange or quoted on an established
quotation system, then the market value shall equal the closing price of the Company common stock listed on such exchange or quoted
on such quotation system on the trading day immediately prior to the date of the grant. On April 1, 2020, we issued options to
purchase 2,000 shares of Company common stock to members the Board, of which 1,250 have been cancelled. The options are subject
to equal quarterly vesting over a one-year period. On July 1, 2020, we issued an additional 1,000 options to certain Board members.
To date 375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of these quarterly options. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Applied UV, Inc. 2020 Omnibus
Incentive Plan. </I></B>On May 4, 2020, we adopted the Applied UV, Inc. 2020 Omnibus Incentive Plan (the &ldquo;Plan&rdquo;).
Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to 600,000 shares of common
stock to Company employees, officers, directors, consultants, and advisors are available under the Plan. The type of grant, vesting
provisions, exercise price and expiration dates are to be established by the Board at the date of grant. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Mount Sinai Agreement</I></B>. On
April 20, 2020, SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke&rsquo;s Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai&rsquo;s research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60-day exclusive option to negotiate a license for Mount Sinai&rsquo;s
resulting patent rights if such patent was obtained at SteriLumen&rsquo;s request and SteriLumen has paid for all the costs in
obtaining the patent. If the results of the study contained in Mount Sinai&rsquo;s final report are used by SteriLumen in a successful
regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Second ResInnova Report. </I></B>In
April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found the SteriLumen mirror and drain to be greater than 97% and 99.99%, respectively, effective in killing
the OC43 human coronavirus in the bathroom sink area. According to ResInnova, it is expected that the Coronavirus, will be killed
in a similar manner to OC43 since they both are in the Beta genre of coronaviruses. See &ldquo;Business&mdash;Second ResInnova
Report&rdquo; and &ldquo;Risk Factors&mdash;Certain ResInnova Testing Limitations.&rdquo; </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Paycheck Protection Program Loan.
</I></B>On May 4, 2020, Munn Works received $296,287 in net proceeds from a loan (the &ldquo;PPP Loan&rdquo;) from JP Morgan Chase
Bank under the Paycheck Protection Program (&ldquo;PPP&rdquo;), which was established under the Coronavirus Aid, Relief, and Economic
Security Act (&ldquo;CARES Act&rdquo;) administered by the U.S. Small Business Administration. The proceeds from the PPP Loan will
be used in accordance with the terms of the CARES Act program, as described further below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The term of the PPP Loan is two years with
an interest rate of 1.00% per annum, which shall be deferred for the first six months of the term of the loan. Pursuant to the
terms of the CARES Act, the proceeds of the PPP Loan may be used for payroll costs, mortgage interest, rent, or utility costs.
Under the terms of the CARES Act, Munn Works can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such
forgiveness will be determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES
Act, as described above, during the 8-week period after loan origination and the maintenance or achievement of certain employee
levels. No assurance is provided that Munn Works will obtain forgiveness under the PPP Loan in whole or in part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>Reverse Stock Splits.</B> On June
17, 2020 and June 23, 2020, the Company effected a 1 for 5 reverse stock split of its issued and outstanding Common Stock and
effected a 1 for 5 reverse stock split of its issued and outstanding preferred stock, respectively (each a &quot;Reverse Stock
Split&quot;) by filing on each date an amendment of the Company&rsquo;s Amended and Restated Certificate of Incorporation with
the Secretary of State of the State of Delaware. No fractional shares were issued as a result of a Reverse Stock Split. Any fractional
shares that would have resulted from a Reverse Stock Split were rounded up to the nearest whole share. The authorized common stock
and preferred stock of the Company was not impacted by the Reverse Stock Splits. Immediately following the Reverse Stock Splits,
the Company had outstanding 5,103,316 shares of Common Stock and 2,000 shares of preferred stock. The Company has retrospectively
adjusted the 2018, 2019 and March 31, 2020 financial statements for profit per share and share amounts as a result of the reverse
stock splits. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Appointment of Executive Officers</I>.
</B>On June 30, 2020 the Company entered into employment agreements and appointed the Company&rsquo;s Chief Executive Officer
and Chief Operations Officer. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Non-Employee Director Compensation</I></B>.
On July 9, 2020 the Board approved a compensation package for non-employee directors of the Board. The compensation for non-employee
directors include; (i) upon of each such director, such director shall be issued 10,000 shares of restricted common stock which
vests evenly on an annual basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares
of restricted common stock to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly
cash payments of $6,250 to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman
of the Board which vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of
restricted common stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate
Governance and Nominating Committees have not yet been established). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risk Factors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business is subject to a number of
risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section
of this prospectus titled &ldquo;<I>Risk Factors,</I>&rdquo; which begins on page 10 of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Information Regarding our Capitalization</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 23, 2020, we have 5,103,316
shares of common stock issued and outstanding, of which Max Munn, our President and a director of the Company has beneficial ownership
of 5,000,000 shares through a trust for which his spouse is the trustee. We also have 2,000 shares of Series A preferred stock
issued and outstanding which provide the holder thereof with 1,000 votes per share (2 million votes in aggregate) and vote as
a single class with common stock on all matters submitted to the shareholders for a vote. Mr. Munn is the beneficial owner of
all of the Series A Preferred Stock through a trust in which his spouse is the trustee. Additional information regarding our issued
and outstanding securities may be found under &ldquo;<I>Market for Common Equity and Related Stockholder Matters</I>&rdquo; and
 &ldquo;<I>Description of Securities</I>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unless otherwise specifically stated, information
throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal executive offices are located
at 150 N. Macquesten Parkway, Mount Vernon, NY 10550. Our website address is www.applieduvinc.com. The information included on
our website is not part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Implications of Being an Emerging Growth
Company </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are an &ldquo;emerging growth company,&rdquo;
as defined in the Jumpstart Our Business Startups Act of 2012 (the &ldquo;JOBS Act&rdquo;). We will remain an emerging growth company
until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common
stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we
have total annual gross revenues of $1.07 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible
debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable
SEC rules. We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging
growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal
year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement
under the Securities Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions
from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These exemptions include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="vertical-align: top; width: 24px">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced &ldquo;<I>Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</I>&rdquo; disclosure;</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="vertical-align: top; width: 24px">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor&rsquo;s report providing additional information about the audit and the financial statements;</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">reduced disclosure obligations regarding executive compensation; and</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have taken advantage of certain reduced reporting requirements
in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other
public companies in which you hold stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An emerging growth company can take advantage
of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would
otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as
a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards
is required for other public reporting companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are also a &ldquo;smaller reporting
company&rdquo; as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the &ldquo;<U>Exchange Act</U>&rdquo;),
and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_004"></A>SUMMARY
OF THE OFFERING</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 35%; padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Common stock offered by us</FONT></TD>
    <TD STYLE="width: 65%; padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-size: 10pt">1,000,000 shares.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt"> <FONT STYLE="font-size: 10pt">Common stock outstanding prior to the offering </FONT> </TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify"> <FONT STYLE="font-size: 10pt">5,013,316 shares common stock.</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt"> <FONT STYLE="font-size: 10pt">Common stock to be outstanding after the offering (1)(2)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">6,186,855 (6,319,494 shares if the underwriters exercise
    their option to purchase additional shares in full).</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Over-allotment option of common stock offered by us</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-size: 10pt">The underwriters have a 45-day option to purchase up to 150,000 additional shares of common stock.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 0.8pt"><FONT STYLE="font-size: 10pt">Use of Proceeds</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify"><FONT STYLE="font-size: 10pt">We currently intend to use the net proceeds to us from this offering to hire additional employees, including executive officers and sales professionals and for general corporate purposes, including working capital and sales and marketing activities. See the section of this prospectus titled &ldquo;<I>Use of Proceeds</I>&rdquo; beginning on page 30.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%"> <FONT STYLE="font-size: 10pt">Proposed Listing</FONT> </TD>
    <TD STYLE="width: 65%; text-align: justify"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> We
                                         have applied to have our common stock listed on the Nasdaq Capital Market under the symbol
                                         &ldquo;AUVI&rdquo; which listing is a condition to this offering. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Underwriters&rsquo; warrants</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Upon the closing of this offering, we have agreed to issue to Network 1 Financial Securities, Inc., as representative of the underwriters, warrants, that will expire on the fifth anniversary of the effective date of this offering, entitling the representative to purchase 8% of the number of shares of common stock sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The registration statement of which this prospectus is a part also covers the underwriters&rsquo; warrants and the common shares issuable upon the exercise thereof. For additional information regarding our arrangement with the underwriters, please see &ldquo;<I>Underwriting</I>.&rdquo;</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%"><FONT STYLE="font-size: 10pt">Lock-up agreements</FONT></TD>
    <TD STYLE="text-align: justify; width: 65%"><FONT STYLE="font-size: 10pt">Our executive officers and directors have agreed with the underwriters not to sell, transfer or dispose of any shares or similar securities for 180 days following the effective date of the registration statement for this offering. For additional information regarding our arrangement with the underwriters, please see &ldquo;<I>Underwriting</I>.&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Risk Factors</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">You should carefully consider the information set forth in this
    prospectus and, in particular, the specific factors set forth in the &ldquo;<I>Risk Factors</I>&rdquo; section beginning on
    page 10 of this prospectus before deciding whether or not to invest in shares of our common stock.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="width: 96%; text-align: justify">As of June 23, 2020. Does not include 51,034 shares of common stock to be issued
    to Carmel, Milazzo &amp; Feil LLP upon the effectiveness of the registration statement related to the offering or 161,000 shares
    of our common stock issuable upon exercise of common stock purchase warrants. For voting purposes only, does not include 2,000
    shares of preferred stock that have been designated as Series A Preferred Stock, all of which are issued and outstanding and
    are entitled to 1,000 votes per share (2,000,000 votes in aggregate) and vote with the common stock as a single class.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Includes
                                    51,034 shares of common stock to be issued to Carmel, Milazzo &amp; Feil LLP upon the effectiveness
                                    of the registration statement related to the offering and 32,506 shares (37,145 shares if
                                    the underwriters exercise their option to purchase additional shares in full) to be issued
                                    to Carmel, Milazzo &amp; Feil LLP on the closing date of this offering.</P>
</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On June 17, 2020 we effected a 1 for
5 reverse stock split of the issued and outstanding shares of our common stock. On June 23, 2020 we effected a 1 for 5 reverse
stock split of the issued and outstanding shares of our preferred stock. Except as otherwise indicated, all of the common stock
and preferred stock information in this prospectus gives effect to the reverse stock splits. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_005"></A>RISK
FACTORS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our business is subject to many risks
and uncertainties, which may affect our future financial performance. If any of the events or circumstances described below occur,
our business and financial performance could be adversely affected, our actual results could differ materially from our expectations,
and the price of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may
be additional risks and uncertainties not currently known to us or that we currently do not believe are material that may adversely
affect our business and financial performance. You should carefully consider the risks described below, together with all other
information included in this prospectus including our financial statements and related notes, before making an investment decision.
The statements contained in this prospectus that are not historic facts are forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.
If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that
case, the trading price of our common stock could decline, and investors in our securities may lose all or part of their investment.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Business and Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>The Company
operates through SteriLumen and Munn Works and its only material assets are its equity interests in those subsidiaries. As a result,
our only current source of revenue is distributions from our subsidiaries and SteriLumen has incurred losses since its inception
and we anticipate it will continue to incur significant losses for the foreseeable future and revenue from Munn Works may not be
sufficient to offset those loses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company is
a holding company for SteriLumen and Munn Works and has no material assets other than its equity interests in those subsidiaries.
Therefore, the only current revenue source is future distributions from its subsidiaries. SteriLumen is an early-stage designer
and marketer of disinfection systems with limited operating history spanning from December 2016. We expect negative cash flows
from SteriLumen&rsquo;s operations for the foreseeable future which may not be off-set by cash flows from Munn Works. Our utilization
of cash has been and will continue to be highly dependent on SteriLumen&rsquo;s product development programs and cash flow from
Munn Works&rsquo; operations. Our cash expenses will be highly dependent on the product development programs SteriLumen chooses
to pursue, the progress of these product development programs, the results of SteriLumen&rsquo;s validation/marketing studies,
the terms and conditions of SteriLumen&rsquo;s contracts with service providers and manufacturing contractors, and the terms of
recruitment of facilities in our validation/marketing studies. In addition, the continuation of SteriLumen&rsquo;s validation/marketing
studies, and quite possibly its entire business, will depend on results of upcoming clinical data analyses and our financial resources
at the time. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial
condition and SteriLumen&rsquo;s ability to develop its product candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SteriLumen has devoted substantially all
of its financial resources to develop its product candidates. SteriLumen has financed its operations primarily through the contributions
of its founders. The amount of SteriLumen&rsquo;s future net losses will depend, in part, on the development of adequate distribution
channels for the SteriLumen Disinfecting System, the demand for the SteriLumen Disinfecting System, the rate of its future expenditures
and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. Disinfection product
development is a highly speculative undertaking and involves a substantial degree of risk. SteriLumen successfully completed the
prototype phase of testing and development for the SteriLumen Disinfecting System, but has not yet commenced pivotal testing in
health care facility settings. Even if SteriLumen obtains positive results from such testing, its future revenue will depend upon
its ability to achieve sufficient market acceptance, pricing, the performance of its independent sales representatives and its
manufacturing and distribution suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We expect SteriLumen to continue to incur
significant losses until it is able to commercialize the SteriLumen Disinfecting System, which it may not be successful in achieving.
We anticipate that SteriLumen&rsquo;s expenses will increase substantially if and as SteriLumen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">continues the research
    and development of the SteriLumen Disinfecting System and other disinfecting products;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">expands the scope
    of its testing for the SteriLumen Disinfecting System and other disinfecting products;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">establishes a sales,
    marketing, and distribution infrastructure to commercialize its product candidates;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">seeks to maintain,
    protect, and expand its intellectual property portfolio;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-size: 10pt">seeks to attract and
    retain skilled personnel; and</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in">&nbsp;<FONT STYLE="font-family: Symbol">&middot;</FONT></TD>
    <TD STYLE="font: normal 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-style: normal; font-weight: normal">creates
    additional infrastructure to support its product candidate development and planned future commercialization efforts.&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Furthermore, any additional fundraising
efforts may divert our management from our subsidiaries&rsquo; day-to-day activities, which may adversely affect our ability to
develop and commercialize their product candidates. In addition, we cannot guarantee that future financing will be available in
sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings
or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility
of such issuance, may cause the market price of our shares to decline. The incurrence of indebtedness could result in increased
fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability
to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating
restrictions that could adversely affect our ability to conduct our business. We could also be required to seek funds through arrangements
with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish
rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a
material adverse effect on our business, operating results, and prospects. Even if we believe that we have sufficient funds for
our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific
strategic considerations.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are unable to obtain funding on a
timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs
or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business
opportunities, as desired, which could materially affect our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>The pandemic caused by the spread
of the Coronavirus could have an adverse impact on our financial condition and results of operations and other aspects of our
business.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> In December 2019, a novel strain of
Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread to over 150 countries and every state in
the United States. On January 30, 2020, the World Health Organization declared the outbreak of Coronavirus a &ldquo;Public Health
Emergency of International Concern.&rdquo; On March 11, 2020, the World Health Organization declared the outbreak a pandemic,
and on March 13, 2020, the United States declared a national emergency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The spread of the virus in many countries
continues to adversely impact global economic activity and has contributed to significant volatility and negative pressure in financial
markets and supply chains. The pandemic has had, and could have a significantly greater, material adverse effect on the U.S. economy
where we conduct a majority of our business. The pandemic has resulted, and may continue to result for an extended period, in significant
disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect
our liquidity</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Most states and cities have reacted
by instituting quarantines, restrictions on travel, &ldquo;stay at home&rdquo; and &ldquo;social distancing&rdquo; rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020 that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have taken steps to take care of
our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate
social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard
to employee, facility, and office hygiene as well as implementing significant travel restrictions. We are also assessing our business
continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue
to monitor and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent
we are able to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we currently manufacture the majority of our products
in China. The pandemic has impacted and may continue to impact suppliers of materials and the manufacturing locations for our products.
As a result, we have faced and may continue to face delays or difficulty manufacturing certain products, which could negatively
affect our business and financial results. Even if we are able to find alternate sources for materials and manufacturing, they
may cost more, which could adversely impact our profitability and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are vulnerable to continued global economic uncertainty
and volatility in financial markets.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business is highly sensitive to changes
in general economic conditions as a seller of goods and services. Financial markets inside the United States and internationally
have experienced extreme disruption in recent times, including, among other things, extreme volatility in security prices, severely
diminished liquidity and credit availability, and declining valuations of investments. We believe these disruptions are likely
to have an ongoing adverse effect on the world economy. A continuing economic downturn and financial market disruptions could have
a material adverse effect on our business, financial condition, and results of operations, including by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">reducing
                                         demand for our products and services, increasing order cancellations and resulting in
                                         longer sales cycles and slower adoption of new technologies;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increasing
                                         the difficulty of collecting accounts receivable and the risk of excess and obsolete
                                         inventories;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increasing
                                         price competition in our served markets; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">resulting
                                         in supply interruptions, which could disrupt our ability to produce our products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We could need to raise additional capital in the future,
and if we are unable to secure adequate funds on terms acceptable to us, we could be unable to execute our business plan.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To remain competitive, we must continue
to make significant investments in the development of our products, the expansion of our sales and marketing activities, and the
expansion of our operating and management infrastructure as we increase sales domestically and internationally. If cash generated
from our operations is insufficient to fund such growth, we could be required to raise additional funds through the issuance of
equity or debt securities in the public or private markets, or through a collaborative arrangement or sale of assets. Additional
financing opportunities may not be available to us, or if available, may not be on favorable terms. The availability of financing
opportunities will depend, in part, on market conditions, and the outlook for our business. Any future issuance of equity securities
or securities convertible into equity securities could result in substantial dilution to our stockholders, and the securities issued
in such a financing could have rights, preferences or privileges senior to those of our common stock. In addition, if we raise
additional funds through debt financing, we could be subject to debt covenants that place limitations on our operations. We could
not be able to raise additional capital on reasonable terms, or at all, or we could use capital more rapidly than anticipated.
If we cannot raise the required capital when needed, we may not be able to satisfy the demands of existing and prospective customers,
we could lose revenue and market share and we may have to curtail our capital expenditures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following factors, among others, could
affect our ability to obtain additional financing on favorable terms, or at all:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our results of operations;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">general economic conditions and conditions in the sanitation and disinfection industries and performance
of sanitation devices as opposed to sanitation and disinfection substances;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the perception of our business in the capital markets;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">making capital improvements to improve our infrastructure;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">hiring qualified management and key employees;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">responding to competitive pressures;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">complying with regulatory requirements, if any;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our ratio of debt to equity;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our financial condition;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our business prospects; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">interest rates.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are unable to obtain sufficient capital
in the future, we could have to curtail our capital expenditures. Any curtailment of our capital expenditures could result in a
reduction in net revenue, reduced quality of our products, increased manufacturing costs for our products, harm to our reputation,
or reduced manufacturing efficiencies and could have a material adverse effect on our business, financial condition, and results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Raising additional capital may cause
dilution to our existing stockholders and restrict our operations or require us to relinquish certain intellectual property rights</I>.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We may seek additional capital through
a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, licensing arrangements,
and grants. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership
interest of our existing stockholders may be diluted, and the terms may include liquidation or other preferences that adversely
affect the rights of our stockholders. Debt and receivables financings may be coupled with an equity component, such as warrants
to purchase shares, which could also result in dilution of our existing stockholders&rsquo; ownership. The incurrence of indebtedness
would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations
on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other
operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic
partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our or
our subsidiaries&rsquo; products or grant licenses on terms that are not favorable to us. A failure to obtain adequate funds may
cause us to curtail certain operational activities, including research and development, validation/marketing studies, sales and
marketing, and manufacturing operations, in order to reduce costs and sustain the business, and would have a material adverse
effect on our business and financial condition. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our success depends, in part, on
our relationships with, and the efforts of, third-party manufacturers, distributors, and other third parties that perform various
tasks for us. If these third parties do not successfully carry out their contractual duties or meet expected, we may not be able
to commercialize our product candidates and our business could be substantially harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">While we internally manufacture all of
Munn Works&rsquo; products that are manufactured domestically, currently approximately 75% of Munn Works&rsquo; products and all
of SteriLumen&rsquo;s products are manufactured overseas in China by third party manufacturers. We do not currently have the infrastructure
or capability internally to manufacture all of the components of our products and systems, and we lack the resources and the capability
to manufacture and distribute the SteriLumen Disinfecting System on a commercial scale. We plan to rely on third parties for such
operations. There are a limited number of manufacturers who have the ability to produce our products, and there may be a need to
identify alternate manufacturers to prevent a possible disruption of our manufacturing and distribution process. Switching manufacturers
or distributors, if necessary, may involve substantial costs and is likely to result in a delay in our desired commercial timelines,
which could harm our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our suppliers may not supply us with
a sufficient amount or adequate quality of materials, which could have a material adverse effect on our business, financial condition,
and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business depends on our ability to
obtain timely deliveries of materials, components, and subassemblies of acceptable quality and in acceptable quantities from third-party
suppliers. We generally purchase components and subassemblies from a limited group of suppliers through purchase orders, rather
than written supply contracts. Consequently, many of our suppliers have no obligation to continue to supply us on a long-term basis.
In addition, our suppliers manufacture products for a range of customers, and fluctuations in demand for the products those suppliers
manufacture for others could affect their ability to deliver components for us in a timely manner. Moreover, our suppliers could
encounter financial hardships, be acquired, or experience other business events unrelated to our demand for components, which could
inhibit or prevent their ability to fulfill our orders and satisfy our requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any of our suppliers cease to provide
us with sufficient quantities of our components in a timely manner or on terms acceptable to us, or ceases to manufacture components
of acceptable quality, we could incur manufacturing delays and sales disruptions while we locate and engage alternative qualified
suppliers, and we might be unable to engage acceptable alternative suppliers on favorable terms. In addition, we could need to
reengineer our components, which could significantly delay production. Any interruption or delay in the supply of components or
materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could
impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive procedures. We
are continually in the process of identifying and qualifying alternate source suppliers for our key components. There can be No
assurance, however, that we will successfully identify and qualify an alternate source supplier for any of our key components or
that we could enter into an agreement with any such alternate source supplier on terms acceptable to us, or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our reliance on third parties requires
us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will
be misappropriated or disclosed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because we rely on third parties to develop
and manufacture our products, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in
part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements,
consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning
research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose
our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties,
the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our
competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor&rsquo;s discovery of our
trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect
on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our near-term success is dependent
in large part upon SteriLumen&rsquo;s ability to commence sales of the SteriLumen Disinfecting System and continued sales and positive
cash flow from Munn Works&rsquo; products</I>.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our success will depend, in part, upon
SteriLumen&rsquo;s ability to create a commercial market for the SteriLumen Disinfecting System. Attracting new customers and distribution
networks requires substantial time and expense. Any failure to commercialize SteriLumen&rsquo;s products would adversely affect
its operating results and adversely affect our business, results of operations and financial condition. Many factors could affect
the market acceptance and commercial success of SteriLumen&rsquo;s products, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SteriLumen&rsquo;s
ability to convince its potential customers of the advantages and economic value of products over competing products and methodologies;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
breadth of its product menu;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
to policies, procedures or currently accepted best practices in the health care industry;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
extent and success of its marketing and sales efforts; and</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">its
ability to manufacture in quantity its products and meet demand in a timely fashion.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Recent U.S.
tax legislation may materially affect our financial condition, results of operations and cash flows.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The recently enacted
Tax Cuts and Jobs Act (the &ldquo;Tax Act&rdquo;) has significantly changed the U.S. federal income taxation of U.S. businesses,
including by reducing the U.S. corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain
capital expenditures, modifying or repealing many business deductions and credits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Coronavirus
Aid, Relief, and Economic Security Act (the &ldquo;CARES Act&rdquo;) modifies certain provisions of the Tax Act, including increasing
the amount of interest expense that may be deducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Tax Act as
modified by the CARES Act is unclear in many respects and could be subject to potential amendments and technical corrections, as
well as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase certain adverse
impacts of the legislation. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation,
which often uses federal taxable income as a starting point for computing state and local tax liabilities. Our analysis and interpretation
of this legislation is preliminary and ongoing and there may be material adverse effects resulting from the legislation that we
have not yet identified. While some of the changes made by the tax legislation may adversely affect us, other changes may be beneficial.
We continue to work with our tax advisors and auditors to determine the full impact that the recent tax legislation as a whole
will have on us. We urge our investors to consult with their legal and tax advisors with respect to such legislation and its potential
effect on an investment in our common stock.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Our operating
results are affected by many factors and may fluctuate significantly on a quarterly basis.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our operating
results may vary substantially from quarter to quarter and may be greater or less than those achieved in the immediately preceding
period or in the comparable period of the prior year. Factors that may cause quarterly results to vary include, but are not limited
to, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the number of new product introductions by our subsidiaries;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">losses related to inventory write-offs;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">marketing exclusivity, if any, which may be obtained on certain new products;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the level of competition in the marketplace for certain products;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our subsidiaries&rsquo; ability to create demand in the marketplace for their products;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">availability of raw materials and finished products from suppliers;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">our subsidiaries&rsquo; ability to contract manufacturers to make their products;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">SteriLumen&rsquo;s dependence on a small number of products for a significant portion of net revenue
or income;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">price erosion and customer consolidation; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">uncertainty of future import tariffs.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The profitability
of our subsidiaries&rsquo; product sales is also dependent upon the prices they are able to charge for their products, the costs
to purchase products from third parties, and their ability to manufacture their products in a cost-effective manner. If their revenues
decline or do not grow as anticipated, they may not be able to reduce their operating expenses to offset such declines. Failure
to achieve anticipated levels of revenues could, therefore, significantly harm our operating results for a particular fiscal period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We could be subject to significant
warranty obligations if our products are defective, which could have a material adverse effect on our business, financial condition,
and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In manufacturing our products, we depend
upon third parties for the supply of various components. Many of these components require a significant degree of technical expertise
to design and produce. If we fail to adequately design, or if our suppliers fail to produce components to specification, or if
the suppliers, or we, use defective materials or workmanship in the manufacturing process, the reliability and performance of our
products will be compromised. Our products could contain defects that cannot be repaired easily and inexpensively that can result
some or all of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">loss
                                         of customer orders and delay in order fulfillment;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">damage
                                         to our brand reputation;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increased
                                         cost of our warranty program due to product repair or replacement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">inability
                                         to attract new customers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">diversion
                                         of resources from our manufacturing and engineering and development departments into
                                         our service department; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">legal
                                         action.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We are increasingly dependent on
information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Significant disruptions to our information
technology systems or breaches of information security could adversely affect our business. In the ordinary course of business,
we collect, store and transmit large amounts of confidential information, and it is critical that we do so in a secure manner to
maintain the confidentiality and integrity of such information. We have also outsourced significant elements of our information
technology infrastructure; as a result, we manage independent vendor relationships with third parties who are responsible for maintaining
significant elements of our information technology systems and infrastructure and who may or could have access to our confidential
information. The size and complexity of our information technology systems, and those of our third-party vendors, make such systems
potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees,
partners or vendors. These systems are also vulnerable to attacks by malicious third parties and may be susceptible to intentional
or accidental physical damage to the infrastructure maintained by us or by third parties. Maintaining the secrecy of confidential,
proprietary, and/or trade secret information is important to our competitive business position. While we have taken steps to protect
such information and have invested in systems and infrastructures to do so, there can be no guarantee that our efforts will prevent
service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential
information that could adversely affect our business operations or result in the loss, dissemination, or misuse of critical or
sensitive information. A breach our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination,
misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of
theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce competing products,
use our proprietary technology or information, and/or adversely affect our business position. Further, any such interruption, security
breach, loss or disclosure of confidential information could result in financial, legal, business, and reputational harm to us
and could have a material adverse effect on our business, financial position, results of operations and/or cash flow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Product liability claims against
us could be costly and could harm our reputation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The sale of our products involves the risk
of product liability claims against us. Claims could exceed our product liability insurance coverage limits. Our insurance policies
are subject to various standard coverage exclusions, including damage to the product itself, losses from recall of our product,
and losses covered by other forms of insurance such as workers compensation. We cannot be certain that we will be able to successfully
defend any claims against us, nor can we be certain that our insurance will cover all liabilities resulting from such claims. In
addition, we cannot provide assurance that we will be able to obtain such insurance in the future on terms acceptable to us, or
at all. Regardless of merit or eventual outcome, any product liability claim brought against us could result in harm to our reputation,
decreased demand for our products, costs related to litigation, product recalls, loss of revenue, an increase in our product liability
insurance rates, or the inability to secure coverage in the future, and could have a material adverse effect on our business by
reducing cash collections from customers and limiting our ability to meet our operating cash flow requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Litigation against us could be costly
and time-consuming to defend and could materially and adversely affect our business, financial condition, and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are from time to time involved in various
claims, litigation matters and regulatory proceedings incidental to our business, including claims for damages arising out of the
use of our products or services and claims relating to intellectual property matters, employment matters, commercial disputes,
competition, sales and trading practices, environmental matters, personal injury, and insurance coverage. Some of these lawsuits
include claims for punitive as well as compensatory damages. The defense of these lawsuits could divert our management&rsquo;s
attention, and we could incur significant expenses in defending these lawsuits. In addition, we could be required to pay damage
awards or settlements or become subject to unfavorable equitable remedies. Moreover, any insurance or indemnification rights that
we could have may be insufficient or unavailable to protect us against potential loss exposures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we lose our key management personnel,
or are unable to attract or retain qualified personnel, it could adversely affect our ability to execute our growth strategy.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our success is dependent, in part, upon
our ability to hire and retain management, engineers, marketing and sales personnel, and technical, research and other personnel
who are in high demand and are often subject to competing employment opportunities. Our success will depend on our ability to retain
our current personnel and to attract and retain qualified like personnel in the future. Competition for senior management, engineers,
marketing and sales personnel, and other specialized technicians is intense and we may not be able to retain our personnel. If
we lose the services of any executive officers or key employees, our ability to achieve our business objectives could be harmed
or delayed, which could have a material adverse effect on our daily operations, operating cash flows, results of operations, and
ultimately share price. In general, our officers could terminate their employment at any time without notice for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Climate change initiatives could
materially and adversely affect our business, financial condition, and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Both domestic and international legislation
to address climate change by reducing greenhouse gas emissions and establishing a price on carbon could create increases in energy
costs and price volatility. Considerable international attention is now focused on development of an international policy framework
to address climate change. Proposed and existing legislative efforts to control or limit greenhouse gas emissions could increase
the cost of raw materials derived from sources that generate greenhouse gas emissions. If our suppliers are unable to obtain energy
at a reasonable cost in the future, the cost of our raw materials could be negatively impacted which could result in increased
manufacturing costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to SteriLumen&rsquo;s Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Certain ResInnova testing limitations.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our claims on the effectiveness of
the SteriLumen Disinfecting System against certain pathogens are supported by the analysis of the SteriLumen Disinfecting System
performed in ResInnova&rsquo;s laboratory. The environment in ResInovva&rsquo;s laboratory is controlled and does not account
for all of the variables that can occur outside of the laboratory such as [<B>get variables from Matthew Hardwick</B>]. If any
one of these un-accounted for variables proves to be significant in the evaluation of the effectiveness of the SteriLumen Disinfecting
System, the laboratory results obtained by ResInnova could be significantly more favorable than the results experienced by our
customers. Furthermore, in accordance with CDC guidelines only laboratories with a biosafety level 3 or 4 may test against SAR-CoV-2,
the virus that causes COVID-19. Since ResInnova is a biosafety level 2 laboratory it cannot test against SAR-CoV-2 and instead
tested against OC43 human coronavirus, which, according to ResInnova is a common surrogate for SAR-CoV-2 as both are of the Beta
genre of coronaviruses. If the results of testing the StertiLumen Disinfecting System against OC43 are different from the results
that would have occurred with SAR-CoV-2, the laboratory results obtained by ResInnova with respect to OC43 could be significantly
more favorable than the results experienced by our customers with respect to SAR-CoV-2. If the results contained in ResInnova&rsquo;s
reports are materially more favorable than the results experienced by our customers, this could have a material adverse effect
on the sales of the SteriLumen Disinfecting System, which would have a material adverse effect on our business and financial condition. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If SteriLumen is unable to develop a successful marketing
approach, our business will suffer.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If SteriLumen
fails to develop a successful marketing approach or to manage its growth effectively, our business and financial results will be
materially harmed. Healthcare facilities operate in a highly regulated and dynamic market with changing regulations, codes, standards
and guidelines and as a result are very loyal to vendors they trust. Achieving market acceptance will require extensive customer
education and product validation. Some of the ways in which SteriLumen intends on achieving market acceptance is through working
with professional trade organizations, having articles published in industry trade publications, conducting validation/marketing
studies at well-known hospitals and lab testing. However, there is no assurance that SteriLumen will be successful in organizing
these efforts or if the results from them will be positive. SteriLumen may also seek to expand its business through complementary
or strategic acquisitions of other businesses, products or assets, or through joint ventures, strategic partnerships or other arrangements
with established and trusted disinfection companies. Any such acquisitions, joint ventures or other business combinations may involve
significant integration challenges, operational complexities and time consumption and require substantial resources and effort.
It may also disrupt SteriLumen&rsquo;s ongoing businesses, which may adversely affect its relationships with customers, employees
and others with whom it has business or other dealings. Further, if SteriLumen is unable to realize synergies or other benefits
expected to result from any acquisitions, joint ventures or other business combinations, or to generate additional revenue to offset
any unanticipated inability to realize these expected synergies or benefits, its growth and ability to compete may be impaired,
which would require it and us to focus additional resources on the integration of operations rather than other profitable areas
of its business, and may otherwise cause a material adverse effect on our business, results of operations and financial condition.
However, failure to acquire or partner with established and trusted disinfection companies would prevent SteriLumen&rsquo;s products
from being part of a bundle of disinfection products that could be sold all at once, which could have a material adverse effect
on the financial results of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>SteriLumen&rsquo;s success depends,
in part, on its relationships with healthcare providers and hotel developers and the success of the Mount Sinai study.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To date, SteriLumen has invested substantially
all of its efforts and financial resources to design, develop and market the SteriLumen Disinfecting System, including conducting
laboratory studies and providing general and administrative support for these operations. SteriLumen&rsquo;s future success is
dependent on its ability to successfully commercialize the SteriLumen Disinfecting System.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mount Sinai has agreed to conduct a study
on the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms in Mount Sinai St. Luke&rsquo;s Hospital in
New York, NY, however a final report with their findings will not be completed until the second quarter of 2021. The Mount Sinai
study will be the first time the SteriLumen Disinfecting System is tested in an actual healthcare facility setting. There is no
guarantee that the results of this study will be positive or even completed. Resolution of any issues raised in the study could
require capital that we have not budgeted for and require us to seek additional funding at less than favorable terms, which could
have a material adverse effect on our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, we may be limited in publications
and applications of the Mount Sinai study due to the intellectual property and confidentiality provisions of said agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>SteriLumen&rsquo;s
business is highly dependent on its suppliers&rsquo; and any disruption in their operations could have a material adverse effect
on our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">SteriLumen&rsquo;s
operations will be dependent upon the continued ability of its suppliers to deliver systems, components, raw materials, and finished
disinfection products. Its UVC LEDs are manufactured in South Korea and then shipped to China or the United States for assembly
with all other components, which if manufactured in China, the finished products are shipped to Long Beach, California for warehousing
and distribution, otherwise the units are shipped from Mount Vernon. Any number of factors, including labor disruptions, catastrophic
weather events, contractual or other disputes with suppliers, and supplier financial difficulties or solvency problems could disrupt
its suppliers' operations and lead to uncertainty in its supply chain or cause supply disruptions, which could, in turn, disrupt
its operations. If SteriLumen experiences supply disruptions, it may not be able to develop alternate sourcing quickly. Any disruption
of its production schedule caused by an unexpected shortage of systems, components, raw materials or parts even for a relatively
short period of time could cause it to alter production schedules or suspend production entirely. If any such disruptions occur
it could have a material adverse effect on our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>SteriLumen&rsquo;s business is highly
dependent on market perceptions of it and the safety and quality of its products. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Market perceptions of SteriLumen&rsquo;s
business are very important to us, especially market perceptions of the safety and quality of SteriLumen&rsquo;s products. If any
of its products or similar products that other companies distribute are subject to market withdrawal or recall or are proven to
be, or are claimed to be, harmful to end users, then this could have a material adverse effect on our business, results of operations
and financial condition. Also, because SteriLumen&rsquo;s business is dependent on market perceptions, negative publicity associated
or perceived to be associated with its business, products or product pricing could have a material adverse impact on our business,
results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>SteriLumen is working in a highly
competitive market</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our disinfection system has not yet
been manufactured at a commercial scale for use as a partial substitute of chemical disinfectants and this process has significant
risks. Additionally, while our patented technology does not require approval by any regulatory authority in the United States,
including the Food and Drug Administration (&ldquo;FDA&rdquo;) or to our knowledge any foreign regulatory authority, if such approval
is required in the future, it may cause significant delays in the commercialization process of the SteriLumen Disinfecting System.
Danish company UVD Robots and Texas based Xenex Disinfection Services, believe that they are effective at killing pathogens, including
Coronavirus and have sent shipments of the disinfecting devices to Italy and East Asia in an effort to stop further spread in
hotels and hospitals. In addition, Boeing has designed a prototype for a self-cleaning airplane bathroom that uses UV light to
disinfect after each use. Outside of those industrial uses, there are a number of consumer-oriented portable UV sanitizing boxes,
wands, and water bottles that claim to kill 99.9% of bacteria and viruses on phones, toothbrushes, pacifiers, and a number of
other surfaces. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Customers may be hesitant in adopting
UV light-based technologies, and our inability to overcome this hesitation could limit the market acceptance of our products and
our market share.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our UV light disinfection systems represent
relatively new technologies in the market. Only a small percentage of professional medical institutions or hospitality providers
are immediately willing to conduct sanitation using our systems. Our future success will depend on our ability to increase demand
for our products by demonstrating to a broad spectrum of medical professional, dentists, hospitality industry, their patients and
customers, the potential performance advantages of our UV light systems over traditional methods of disinfection over competitive
UV light systems, and our inability to do so could have a material adverse effect on our business, financial condition, and results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Conventional germicidal UV light was
historically considered as a human health hazard if improperly used and can lead to skin cancer and cataracts. We may experience
long sales cycles because healthcare facilities and hotels and other facilities may be slow to adopt new technologies on a widespread
basis and admit that such technologies can sanitize public space without damaging public health. As a result, we generally are
required to invest a significant amount of time and resources to educate general public about the benefits of our products in
comparison to competing products and technologies before completing a sale, if any. Factors that could inhibit adoption of UV
technologies by healthcare facilities or hospitality companies include the initial cost and concerns about the safety, efficacy,
and reliability of our UV systems. In addition, economic pressure, caused, for example, by an economic slowdown as a result of
Coronavirus, changes in health care reimbursement or by competitive factors in a specific market, could make businesses reluctant
to purchase substantial capital equipment or invest in new technologies. Customer acceptance will depend on the recommendations
of governmental authorities, as well as other factors, including the relative effectiveness, safety, reliability, and comfort
of our systems as compared to other instruments and methods for performing disinfecting procedures. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If future data proves to be inconsistent
with our research results or if competitors&rsquo; products present more favorable results our revenues could decline and our business,
financial condition, and results of operations could be materially and adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Even though our disinfecting devices are
protected with patents, if new studies or comparative studies generate results that are not as favorable as our research results,
our revenues could decline. Additionally, if future studies indicate that our competitors&rsquo; products are more effective or
safer than ours, our revenues could decline. Furthermore, hospitals and businesses could choose not to purchase our UV light sanitation
systems until they receive additional published long-term clinical evidence and recommendations from prominent hospitals and businesses
that indicate our UV light sanitation systems are effective for disinfecting applications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may face competition from other
companies, many of which have substantially greater resources than we do. If we do not successfully develop and commercialize enhanced
or new products that remain competitive with products or alternative technologies developed by others, we could lose revenue opportunities
and customers and our ability to grow our business would be impaired.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A number of competitors have substantially
greater capital resources, larger customer bases, larger technical, sales and marketing forces and stronger reputations with target
customers than ours. We compete with a number of domestic and foreign companies that market traditional chemical sanitation products,
as well as companies that market UV technologies. The marketplace is highly fragmented and very competitive. We expect that the
rapid technological changes occurring in the health care industry could lead to the entry of new competitors, particularly if UV
disinfecting increases market acceptance. If we do not compete successfully, our revenue and market share could decline, which
would impact our ability to meet our operating cash flow requirements and our business, financial condition, and results of operations
could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our long-term success depends upon our
ability to (i) distinguish our products through improving our product performance and pricing, protecting our intellectual property,
improving our customer support, accurately timing the introduction of new products, and developing sustainable distribution channels
worldwide; and (ii) develop and successfully commercialize new products, new or improved technologies, and additional applications
for our UV light sanitation systems. We may not be able to distinguish our products and commercialize any new products, new or
improved technologies, or additional applications for our UV light disinfecting systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We could incur problems in manufacturing
our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In order to grow our business, we must
expand our manufacturing capabilities to produce the systems and accessories necessary to meet any demand we may experience. We
could encounter difficulties in increasing the production of our products, including problems involving production capacity and
yields, quality control and assurance, component supply, and shortages of qualified personnel. In addition, before we can begin
commercial manufacture of our products, we must ensure our manufacturing facilities, processes, and quality systems, and the manufacture
of our UV light sanitation systems, quality control, and documentation policies and procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, we could expend significant
resources in obtaining, maintaining, and addressing our compliance with various federal and requirements that may be subject to
changes. Our success will depend in part upon our ability to manufacture our products without FDA approval or compliance with and
other regulatory requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not experienced significant quality
issues with components of our products supplied by third parties, however, we could in the future. Our future success depends on
our ability to manufacture our products on a timely basis with acceptable manufacturing costs, while at the same time maintaining
good quality control and complying with applicable regulatory requirements, and an inability to do so could have a material adverse
effect on our product sales, cash collections from customers, and our ability to meet operating cash flow requirements, which could
have a material adverse effect on our business, financial condition, and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Adverse publicity regarding our technology
or products could negatively impact us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Adverse publicity regarding any of our
products or similar products marketed or sold by others could negatively affect us. If any studies raise or substantiate concerns
regarding the efficacy or safety of our products or other concerns, our reputation could be harmed and demand for our products
could diminish, which could have a material adverse effect on growth in new customers and sales of our products, leading to a decline
in revenues, cash collections, and ultimately our ability to meet operating cash flow requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Rapidly changing standards and competing
technologies could harm demand for our products, result in significant additional costs, and have a material adverse effect on
our business, financial condition, and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The markets in which our products compete
are subject to rapid technological change, evolving industry standards, changes in the regulatory environment, and frequent introductions
of new devices and evolving sanitizing solutions and practices, specifically catalyzed by the impact of the Coronavirus pandemic.
Competing products could emerge that render our products uncompetitive or obsolete. We cannot guarantee that we will successfully
identify new product opportunities, identify new and innovative applications of our technology, or be financially or otherwise
capable of completing the research and development required to bring new products to market in a timely manner. An inability to
expand our product offerings or the application of our technology could limit our growth. In addition, we could incur higher manufacturing
costs if manufacturing processes or standards change, and we could need to replace, modify, design, or build and install equipment,
all of which would require additional capital expenditures. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We could be unable to effectively
manage and implement our growth strategies, which could have a material adverse effect on our business, financial condition, and
results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our growth strategy includes expanding
our product line and applications by developing enhancements and transformational innovations, including new solutions for various
fields and industries. Expansion of our existing product line and entry into new applications divert the use of our resources and
systems, require additional resources that might not be available (or available on acceptable terms), may require regulatory approvals,
result in new or increasing competition, could require longer implementation times or greater start-up expenditures than anticipated,
and could otherwise fail to achieve the desired results in a timely fashion, if at all. These efforts could also require that we
successfully commercialize new technologies in a timely manner, price them competitively and cost-effectively, and manufacture
and deliver sufficient volumes of new products of appropriate quality on time. We could be unable to increase our sales and earnings
by expanding our product offerings in a cost-effective manner, and we could fail to accurately predict future customer needs and
preferences or to produce viable technologies. In addition, we could invest heavily in research and development of products that
do not lead to significant revenue. Even if we successfully innovate and develop new products and product enhancements, we could
incur substantial costs in doing so. In addition, promising new products could fail to reach the market or realize only limited
commercial success because of efficacy or safety concerns, failure to achieve positive clinical outcomes, or uncertainty over third-party
reimbursement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>International sales may comprise
a significant portion of SteriLumen&rsquo;s revenues and will be subject to risks associated with operating in domestic and international
markets.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">International sales may comprise a significant
portion of SteriLumen&rsquo;s revenue, and we intend to continue to pursue and expand our international business activities. Political
and economic conditions outside the United States could make it difficult for us to increase our international revenue or to operate
abroad. International operations are subject to many inherent risks, which could have a material adverse effect on our revenues
and operating cash flow, including among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>adverse changes in tariffs and trade restrictions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>political, social, and economic instability and increased security concerns;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>fluctuations in foreign currency exchange rates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>longer collection periods and difficulties in collecting receivables from foreign entities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>exposure to different legal standards;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>transportation delays and difficulties of managing international distribution channels;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>reduced protection for our intellectual property in some countries;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>difficulties in obtaining domestic and foreign export, import, and other governmental approvals, permits, and licenses, and
compliance with foreign laws;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>the imposition of governmental controls;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>unexpected changes in regulatory or certification requirements;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>difficulties in staffing and managing foreign operations; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>potentially adverse tax consequences and the complexities of foreign value-added tax systems.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that international sales may
represent a significant portion of SteriLumen&rsquo;s revenue, and we intend to expand its international operations. In international
markets where our sales are denominated in U.S. dollars, an increase in the relative value of the dollar against the currency in
such markets could indirectly increase the price of our products in those markets and result in a decrease in sales. We do not
currently engage in any transactions as a hedge against risks of loss due to foreign currency fluctuations. However, we could do
so in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>SteriLumen&rsquo;s collaborations
with outside scientists and consultants may be subject to restriction and change.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">SteriLumen works
with scientists at academic and other institutions, and consultants who assist it in its research, development, and design efforts.
These scientists and consultants have provided, and we expect that they will continue to provide, valuable advice on SteriLumen&rsquo;s
programs. These scientists and consultants are not our or SteriLumen&rsquo;s employees, may have other commitments that would limit
their future availability to SteriLumen and typically will not enter into non-compete agreements with SteriLumen. If a conflict
of interest arises between their work for SteriLumen and their work for another entity, SteriLumen may lose their services. In
addition, SteriLumen will be unable to prevent them from establishing competing businesses or developing competing products. For
example, if a key scientist acting as a principal investigator in any of SteriLumen&rsquo;s clinical trials identifies a potential
product or compound that is more scientifically interesting to his or her professional interests, his or her availability to remain
involved in its clinical trials could be restricted or eliminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">SteriLumen has
entered into or intends to enter into non-competition agreements with certain of SteriLumen&rsquo;s employees. These agreements
prohibit its employees, if they cease working for it, from competing directly against it or working for its competitors for a limited
period. However, under current law, SteriLumen may be unable to enforce these agreements against certain of its employees and it
may be difficult for it to restrict their competitors from gaining the expertise its former employees gained while working for
it. If SteriLumen cannot enforce its employees&rsquo; non-compete agreements, it may be unable to prevent its competitors from
benefiting from the expertise of its former employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Munn Works&rsquo; Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The custom design decorative framed
mirror supply market is highly competitive, and we may not be able to compete successfully. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Munn Works operates within the highly competitive
custom design decorative framed mirror supply market, which is characterized by competition from a number of other manufacturers.
Competition is further intensified during economic downturns. Munn Works competes with numerous large national and regional companies
for, among other things, customers, raw materials and skilled management and labor resources. Purchase volumes have fluctuated
substantially from time to time in the past, and we expect such fluctuations to occur from time to time in the future. Some of
its competitors have greater financial, marketing and other resources than it does and, therefore, may be able to adapt to changes
in customer preferences more quickly, devote more resources to the marketing and sale of their products, generate greater national
brand recognition or adopt more aggressive pricing policies than Munn Works can.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, some of our competitors may
resort to price competition to sustain or gain market share and manufacturing capacity utilization, and Munn Works may have to
adjust the prices on some of its products to stay competitive, which could reduce its revenues. Munn Works may not ultimately succeed
in competing with other manufacturers and distributors in its market, which may have a material adverse effect on our business,
financial condition or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Munn Works&rsquo; possible failure
to develop new products or respond to changing consumer preferences and purchasing practices could have a material adverse effect
on our business, financial condition or results of operations. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The custom design decorative framed mirror
supply market is subject to changing consumer trends, demands and preferences. The uncertainties associated with developing and
introducing new products, such as gauging changing consumer preferences and successfully developing, manufacturing, marketing and
selling new products, could lead to, among other things, rejection of a new product line, reduced demand and price reductions for
our products. If Munn Works&rsquo; products do not keep up with consumer trends, demands and preference, it could lose market share,
which could have a material adverse effect on our business, financial condition or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Changes to the buying strategies of Munn
Works&rsquo; customer&rsquo;s could also affect its ability to compete. Further, the volatile and challenging economic environment
of recent years has caused shifts in trends, demands, preferences and purchasing practices and changes in the business models and
strategies of its customers. Shifts in consumer preferences, which may or may not be long-term, have altered the quantity, type
and prices of products demanded by the end-consumer and Munn Works&rsquo; customers. If it does not timely and effectively identify
and respond to these changing consumer preferences and purchasing practices, its relationships with our customers could be harmed,
the demand for its products could be reduced and its market share could be negatively affected.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Munn Works&rsquo;
independent sales force may not be effective.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Munn Works hires
independent sales representatives who have primary responsibility for contacting existing and potential customers and are paid
on a commission basis. While this sales model has proven successful in the past, to continue to be effective, sales representatives
will need to continue to be extremely knowledgeable about Munn Works&rsquo; products. However, these independent sales representatives
may be selling products from different non-competitive sellers, which could prevent them from focusing on Munn Works&rsquo; products
and providing the required information to the customers, which could have a material adverse effect on our business, results of
operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Munn Works&rsquo;
business is highly dependent on its suppliers&rsquo; and any disruption in their operations could have a material adverse effect
on our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Munn Works&rsquo;
operations will be dependent upon the continued ability of its suppliers to deliver components, raw materials, and finished products.
Although many of its products are manufactured at our corporate headquarters in New York, many of its products are manufactured
overseas. Any number of factors, including labor disruptions, catastrophic weather events, contractual or other disputes with suppliers,
and supplier financial difficulties or solvency problems could disrupt its suppliers' operations and lead to uncertainty in its
supply chain or cause supply disruptions, which could, in turn, disrupt its operations. If Munn Works experiences supply disruptions,
it may not be able to develop alternate sourcing quickly. Any disruption of its production schedule caused by an unexpected shortage
of systems, components, raw materials or parts even for a relatively short period of time could cause it to alter production schedules
or suspend production entirely. If any such disruptions occur it could have a material adverse effect on our business, results
of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Munn Works&rsquo; business is highly
dependent on market perceptions of it and the quality of its products. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Market perceptions
of Munn Works&rsquo; business are very important to us, especially market perceptions of the quality of Munn Works&rsquo; products.
Because Munn Works&rsquo; business is dependent on market perceptions, negative publicity associated or perceived to be associated
with its business, products or product pricing could have a material adverse impact on our business, results of operations and
financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If the patents that we own or license,
or our other intellectual property rights, do not adequately protect our technologies, we could lose market share to our competitors
and be unable to operate our business profitably.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our future success depends, in part, on
our ability to obtain and maintain patent protection for our products and technology, to preserve our trade secrets and to operate
without infringing the intellectual property of others. We rely on patents to establish and maintain proprietary rights in our
technology and products. We currently possess a number of issued patents and patent applications with respect to our products and
technology. However, we cannot ensure that any additional patents will be issued, that the scope of any patent protection will
be effective in helping us address our competition, or that any of our patents will be held valid if subsequently challenged. It
is also possible that our competitors could independently develop similar or more desirable products, duplicate our products, or
design products that circumvent our patents. The laws of foreign countries may not protect our products or intellectual property
rights to the same extent as the laws of the United States. In addition, there have been recent changes in the patent laws and
rules of the U.S. Patent and Trademark Office (&ldquo;USPTO&rdquo;), and there could be future proposed changes that, if enacted,
have a significant impact on our ability to protect our technology and enforce our intellectual property rights. If we fail to
protect our intellectual property rights adequately, our competitive position could be adversely affected, and there could be a
material adverse effect on sales, cash collections, and our ability to meet operating cash flow requirements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If third parties claim that we infringe
their intellectual property rights, we could incur liabilities and costs and have to redesign or discontinue selling certain products,
which could have a material adverse effect on our business, financial condition, and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We face substantial uncertainty regarding
the impact that other parties&rsquo; intellectual property positions will have on UV light applications. From time to time, we
expect to continue to receive, notices of claims of infringement, misappropriation, or misuse of other parties&rsquo; proprietary
rights. Some of these claims could lead to litigation. We may not prevail in any future intellectual property infringement litigation
given the complex technical issues and inherent uncertainties in litigation. Any claims, with or without merit, could be time-consuming
and distracting to management, result in costly litigation, or cause product shipment delays. Adverse determinations in litigation
could subject us to significant liability and could result in the loss of proprietary rights. A successful lawsuit against us could
also force us to cease selling or redesign products that incorporate the infringed intellectual property. Additionally, we could
be required to seek a license from the holder of the intellectual property to use the infringed technology, and we may not be able
to obtain a license on acceptable terms, or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Patent terms are limited and we may
not be able to effectively protect our products and business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Patents have a limited lifespan. In the
U.S., the natural expiration of a patent is generally 20 years after it is filed. Although various extensions may be available,
the life of a patent, and the protection it affords, is limited. In addition, upon issuance in the U.S., the patent term may be
extended based on certain delays caused by the applicant(s) or the USPTO. Even if we obtain effective patent rights for all our
current patent applications, we may not have sufficient patent terms or regulatory exclusivity to protect our products, and our
business and results of operations would be adversely affected.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may be subject to claims challenging
the inventorship of our patents and other intellectual property.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may be subject to claims that former
employees, collaborators or other third parties have an interest in or right to compensation with respect to our patents or other
intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations
of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these
and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition
to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use,
valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful
in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
To the extent that our employees have not effectively waived the right to compensation with respect to inventions that they helped
create, they may be able to assert claims for compensation with respect to our future revenue may be successful. As a result, we
may receive less revenue from future products if such claims are successful which in turn could impact our future profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Changes in U.S. patent law could
diminish the value of patents in general, thereby impairing our ability to protect our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As is the case with other equipment
manufacturing companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing
patents in the biotechnology industry involves both technological and legal complexity. Therefore, obtaining and enforcing patents
is costly, time-consuming, and inherently uncertain. In addition, the U.S. has recently enacted and is currently implementing
wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available
in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty
with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to
the value of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts and the USPTO, the laws
and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to
enforce our existing patents and patents that we might obtain in the future. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may not be able to protect our
intellectual property rights throughout the world.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Filing, prosecuting and defending patents
on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights
in some countries outside the U.S. can be less extensive than those in the U.S. In addition, the laws of some foreign countries
do not protect intellectual property rights to the same extent as federal and state laws in the U.S. Competitors may use our technologies
in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing
products to territories where we have patent protection, but enforcement is not as strong as that in the U.S. These products may
compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them
from competing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Many companies have encountered significant
problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries,
particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property
protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement
of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our
patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and
attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our
patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any
lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our
efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage
from the intellectual property that we develop or license.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to this Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our management will have broad discretion
over the use of any net proceeds from this offering and you may not agree with how we use the proceeds, and the proceeds may not
be invested successfully.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management will have broad discretion
as to the use of any net proceeds from this offering and could use them for purposes other than those contemplated at the time
of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of any proceeds from
the exercise of warrants on a cash basis in this offering and you will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does
not yield a favorable, or any, return for you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Investors in this offering may experience
future dilution as a result of this and future equity offerings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In order to raise additional capital, we
may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common
stock. Investors purchasing our shares or other securities in the future could have rights superior to existing common stockholders,
and the price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable
for our common stock in future transactions may be higher or lower than the price per share in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Sales of a significant number of
shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price
of our common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sales of a substantial number of shares
of our common stock in the public markets could depress the market price of our common stock and impair our ability to raise capital
through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock would have
on the market price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If securities or industry analysts
do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could
decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The trading market for our common stock
will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several
analysts cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about
our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish
reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Relating to Ownership of Our Securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>There is no active public trading
market for our common stock and we cannot assure you that an active trading market will develop in the near future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our common stock is not quoted in the
over-the-counter markets and is not listed on any stock exchange and there is currently no active trading in our securities. We
have applied to have our common stock listed on the Nasdaq Capital Market under the symbol &ldquo;AUVI&rdquo; which listing is
a condition to this offering. We cannot assure you that an active trading market for our common stock will develop in the future
due to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock
brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even
if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company
such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. We cannot
give you any assurance that an active public trading market for our common stock will develop or be sustained. You may not be
able to liquidate your shares quickly or at the market price if trading in our common stock is not active. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The public price of our common stock
may be volatile, and could, following a sale decline significantly and rapidly.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The initial public
offering price for the shares will be determined by negotiations between us and the underwriters and may not be indicative of prices
that will prevail in the open market following this offering. The market price of our common stock may decline below the initial
offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in the offering,
or at all. Following this Offering, the public price of our common stock in the secondary market will be determined by private
buy and sell transaction orders collected from broker-dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We may not be able to satisfy listing
requirements of Nasdaq to maintain a listing of our common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If our common stock is listed on Nasdaq,
we must meet certain financial and liquidity criteria to maintain such listing. If we violate the maintenance requirements for
continued listing of our common stock, our common stock may be delisted. In addition, our board may determine that the cost of
maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock
from Nasdaq may materially impair our stockholders&rsquo; ability to buy and sell our common stock and could have an adverse effect
on the market price of, and the efficiency of the trading market for, our common stock. In addition, the delisting of our common
stock could significantly impair our ability to raise capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>This offering has not been reviewed
by independent professionals.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not retained any independent professionals
to review or comment on this prospectus or otherwise protect the interest of the investors hereunder. Although we have retained
our own counsel, neither such counsel nor any other counsel has made, on behalf of the investors, any independent examination of
any factual matters represented by management herein. Therefore, for purposes of making a decision to purchase our common stock,
you should not rely on our counsel with respect to any matters herein described. Prospective investors are strongly urged to rely
on the advice of their own legal counsel and advisors in making a determination to purchase our shares of common stock.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>There has been no public market for
our common stock prior to this offering, and an active market in which investors can resell their shares may not develop.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to this offering, there has been
no public market for our common stock. All investments in securities involve the risk of loss of capital. No guarantee or representation
is made that an investor will receive a return of its capital. The value of our common stock can be adversely affected by a variety
of factors, including development problems, regulatory issues, technical issues, commercial challenges, competition, legislation,
government intervention, industry developments and trends, and general business and economic conditions. We cannot predict the
extent to which an active market for our common stock will develop or be sustained after this Offering, or how the development
of such a market might affect the market price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Max Munn, our President and a
director of the Company indirectly owns or controls approximately 97% of our common stock and will be able to exert a controlling
influence over our business affairs and matters submitted to stockholders for approval.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Max Munn, our President and a director
of the Company beneficially owns approximately 97% of our common stock through a trust in which his spouse is the trustee. After
this offering, it is anticipated that Mr. Munn will beneficially own or control 5,000,000 shares of our common stock (excluding
80,000 shares underlying a warrant issued to Mr. Munn), which will represent approximately81% of the outstanding shares of our
common stock after the closing of the offering (excluding any over-allotment shares). Additionally, Mr. Munn beneficially owns
2,000 shares of the Company&rsquo;s Series A Preferred Stock through a trust in which his spouse is the trustee, which is entitled
to 1,000 votes per share and votes with the common stock as a single class. As a result, Mr. Munn will have control over all matters
submitted to our stockholders for approval, including the election and removal of directors, amendments to our certificate of
incorporation and bylaws, the approval of any business combination and any other significant corporate transaction. These actions
may be taken even if they are opposed by other stockholders. This concentration of ownership may also have the effect of delaying
or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could
prevent our stockholders from receiving a premium for their shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, Mr. Munn has been assessed
responsible person tax penalties of approximately (i) $516,000 imposed by the United States Internal Revenue Service and (ii)
$185,000, in aggregate amount, imposed by the New York State Department of Taxation and Finance, in each case which arose out
of Mr. Munn&rsquo;s position as an executive officer and principal of APF Group, Inc. in 2008 and 2009. Although Mr. Munn and
his tax counsel believe that Mr. Munn will either be able to successfully challenge the federal and state tax assessments or settle
for an amount that will be well within Mr. Munn&rsquo;s economic reach, no assurances can be given that Mr. Munn will succeed
in his attempt to challenge or settle these claims. If Mr. Munn is not successful with respect to these claims, the economic consequences
could become a significant distraction to Mr. Munn in the performance of his duties as President and a director of the Company,
which could have a material adverse effect on the operations and financial condition of the Company.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Munn may have interests different from
yours.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our failure to maintain effective
internal controls over financial reporting could have an adverse impact on us</I></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are required to establish and maintain
appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once
established, could adversely impact our public disclosures regarding our business, financial condition or results of operations.
In addition, management&rsquo;s assessment of internal controls over financial reporting may identify weaknesses and conditions
that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure
of management&rsquo;s assessment of our internal controls over financial reporting or disclosure of our public accounting firm&rsquo;s
attestation to or report on management&rsquo;s assessment of our internal controls over financial reporting may have an adverse
impact on the price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition,
the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative
to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management
override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with
policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and may not be detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">At present, we
believe that we have effective internal controls in place. However, our management, including our Chief Executive Officer, cannot
guarantee that our internal controls and disclosure controls that we have in place will prevent all possible errors, mistakes or
all fraud.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Our financial
controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a public
company, could materially harm our stock price.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We require significant
financial resources to maintain our public reporting status. We cannot assure you we will be able to maintain adequate resources
to ensure that we will not have any future material weakness in our system of internal controls. The effectiveness of our controls
and procedures may in the future be limited by a variety of factors including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">faulty human judgment and simple errors,
omissions or mistakes;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">fraudulent action of an individual or
collusion of two or more people;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">inappropriate management override of procedures;
and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the possibility that any enhancements to controls
and procedures may still not be adequate to assure timely and accurate financial information.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in
the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company&rsquo;s assets that could
have a material effect on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Despite these
controls, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Furthermore, smaller reporting companies like us face additional limitations. Smaller reporting companies employ fewer individuals
and can find it difficult to employ resources for complicated transactions and effective risk management. Additionally, smaller
reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="background-color: white">If
we fail to have effective controls and procedures for financial reporting in place, we could be unable to provide timely and accurate
financial information and be subject to investigation by the Securities and Exchange Commission and civil or criminal sanctions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>We must
implement additional and expensive procedures and controls in order to grow our business and organization and to satisfy new reporting
requirements, which will increase our costs and require additional management resources.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon becoming
a fully public reporting company, we will be required to comply with the Sarbanes-Oxley Act of 2002 (the &ldquo;<U>Sarbanes-Oxley
Act</U>&rdquo;) and the related rules and regulations of the SEC, including the requirements that we maintain disclosure controls
and procedures and adequate internal control over financial reporting. In the future, if our securities are listed on a national
exchange, we may also be required to comply with marketplace rules and heightened corporate governance standards. Compliance with
the Sarbanes-Oxley Act and other SEC and national exchange requirements will increase our costs and require additional management
resources. We recently have begun upgrading our procedures and controls and will need to continue to implement additional procedures
and controls as we grow our business and organization and to satisfy new reporting requirements. If we are unable to complete the
required assessment as to the adequacy of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley
Act or if we fail to maintain internal control over financial reporting, our ability to produce timely, accurate and reliable periodic
financial statements could be impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we do not maintain
adequate internal control over financial reporting, investors could lose confidence in the accuracy of our periodic reports filed
under the Securities Exchange Act of 1934, as amended (the &ldquo;<U>Exchange Act</U>&rdquo;). Additionally, our ability to obtain
additional financing could be impaired or a lack of investor confidence in the reliability and accuracy of our public reporting
could cause our stock price to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>We are an
 &ldquo;emerging growth company&rdquo; under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are an &ldquo;emerging
growth company,&rdquo; as defined in the Jumpstart Our Business Startups Act of 2012 (the &ldquo;JOBS Act&rdquo;), and we may take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
 &ldquo;emerging growth companies&rdquo; including, but not limited to, not being required to comply with the auditor attestation
requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our
common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as
a result, there may be a less active trading market for our common stock and our stock price may be more volatile.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, Section
107 of the JOBS Act also provides that an &ldquo;emerging growth company&rdquo; can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the &ldquo;Securities Act&rdquo;) for complying with new or revised
accounting standards. In other words, an &ldquo;emerging growth company&rdquo; can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition
period for complying with new or revised accounting standards.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;We will
remain an &ldquo;emerging growth company&rdquo; until the last day of the fiscal year following the fifth anniversary of the date
of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will
lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three
year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day
of our most recently completed second fiscal quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Our status
as an &ldquo;emerging growth company&rdquo; under the JOBS Act may make it more difficult to raise capital as and when we need
it.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Because of the
exemptions from various reporting requirements provided to us as an &ldquo;emerging growth company&rdquo; and because we will have
an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors
and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business
with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in
our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations
may be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>We have
not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have never paid cash dividends on our
common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future. We currently intend to
retain any future earnings to support the development of our business and do not anticipate paying cash dividends in the foreseeable
future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various
factors, including, but not limited to, our financial condition, operating results, cash needs, growth plans and the terms of any
credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited
by Delaware state law. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never
occur, as the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our common
stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The elimination of personal liability
against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers
and employees may result in substantial expenses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Amended and Restated Certificate of
Incorporation and our Bylaws eliminate the personal liability of our directors and officers to us and our stockholders for damages
for breach of fiduciary duty as a director or officer to the extent permissible under Delaware law. Further, our amended and restated
certificate of incorporation and our Bylaws and individual indemnification agreements we have entered with each of our directors
and executive officers provide that we are obligated to indemnify each of our directors or officers to the fullest extent authorized
by the Delaware law and, subject to certain conditions, advance the expenses incurred by any director or officer in defending any
action, suit or proceeding prior to its final disposition. Those indemnification obligations could expose us to substantial expenditures
to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to afford. Further,
those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or
former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Our certificate of incorporation
will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated
by our stockholders, which could limit our stockholders&rsquo; ability to obtain a favorable judicial forum for disputes with
us.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our amended and restated certificate
of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery
of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of
the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of
the Company to the Company or the Company&rsquo;s stockholders, (c) any action asserting a claim arising pursuant to any provision
of the Delaware General Corporation Law, the Company&rsquo;s Certificate of Incorporation or the Bylaws, or (d) any action asserting
a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest
in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated
certificate of incorporation described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe these provisions benefit us
by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate
disputes and in the application of the Securities Act by federal judges, as applicable, efficient administration of cases on a
more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, the provision
may have the effect of discouraging lawsuits against our directors, officers, employees and agents as it may limit any stockholder&rsquo;s
ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with us or our directors, officers,
employees or agents. The enforceability of similar choice of forum provisions in other companies&rsquo; certificates of incorporation
has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us,
a court could find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or
unenforceable in such action. If a court were to find the choice of forum provision contained in our restated certificate of incorporation
to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other
jurisdictions, which could adversely affect our business, financial condition or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>You should consult your own independent
tax advisor regarding any tax matters arising with respect to the securities offered in connection with this offering.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Participation in this offering could result
in various tax-related consequences for investors. All prospective purchasers of the resold securities are advised to consult their
own independent tax advisors regarding the U.S. federal, state, local and non-U.S. tax consequences relevant to the purchase, ownership
and disposition of the resold securities in their particular situations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>IRS CIRCULAR 230 DISCLOSURE: TO ENSURE
COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, WE INFORM YOU THAT ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING
ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE INTERNAL
REVENUE CODE. IN ADDITION, ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS WRITTEN TO SUPPORT THE &ldquo;PROMOTION
OR MARKETING&rdquo; OF THE MATTER(S) ADDRESSED HEREIN. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM YOUR
OWN INDEPENDENT TAX ADVISOR.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>IN ADDITION TO THE ABOVE RISKS, BUSINESSES
ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS FILING, POTENTIAL INVESTORS SHOULD
KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT THE COMPANY&rsquo;S BUSINESS OPERATIONS AND THE VALUE OF THE COMPANY&rsquo;S
SECURITIES.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_006"></A>SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This prospectus contains &ldquo;forward-looking
statements.&rdquo; Forward-looking statements reflect the current view about future events. When used in this prospectus, the words
 &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;estimate,&rdquo; &ldquo;expect,&rdquo; &ldquo;future,&rdquo; &ldquo;intend,&rdquo;
 &ldquo;plan,&rdquo; or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking
statements. Such statements, include, but are not limited to, statements contained in this prospectus relating to our business
strategy, our future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our
current expectations and assumptions regarding our business, the economy and other future conditions. Because forward&ndash;looking
statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult
to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither
statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any
of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking
statements include, without limitation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to effectively operate our business segments;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to manage our research, development, expansion, growth and operating expenses;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to evaluate and measure our business, prospects and performance metrics;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to compete, directly and indirectly, and succeed in the highly competitive and evolving ridesharing industry;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to respond and adapt to changes in technology and customer behavior;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">6.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">7.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">other factors (including the risks contained in the section of this prospectus entitled &ldquo;<I>Risk Factors</I>&rdquo;) relating to our industry, our operations and results of operations.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated,
believed, estimated, expected, intended or planned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Factors or events that could cause our
actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee
future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual
results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_007"></A>USE
OF PROCEEDS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We estimate that we will receive net proceeds
of approximately $4,550,000 (or approximately $5,232,500 if the underwriters&rsquo; option to purchase additional shares is exercised
in full) from the sale of the common stock offered by us in this offering, based on public offering price of $5.00 per share, and
after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal purposes of this offering
are to increase our capitalization and financial flexibility, increase our visibility in the marketplace and create a public market
for our common stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net
proceeds to us from this offering. However, we currently intend to use the net proceeds to us from this offering to hire additional
employees, including executive officers and sales professionals and for general corporate purposes, including working capital and
sales and marketing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We will retain broad discretion in the
allocation of the net proceeds from this offering and could utilize the proceeds in ways that do not necessarily improve our results
of operations or enhance the value of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The table below sets forth the manner in
which we expect to use the net proceeds we receive from this offering. All amounts included in the table below are estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">Description</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left">Research and Development</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">250,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Hiring Staff</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">800,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Sales and Marketing</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">500,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Working Capital and General Corporate Purposes</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,000,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">Total</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,550,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing information is an estimate
based on our current business plan. We may find it necessary or advisable to re-allocate portions of the net proceeds reserved
for one category to another, and we will have broad discretion in doing so. Pending these uses, we intend to invest the net proceeds
of this offering in a money market or other interest-bearing account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_008"></A>MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our common stock is not listed on any
stock exchange or over-the-counter market or quotation system. There is currently no active trading market in our common stock.
We have applied to have our common stock listed on the Nasdaq Capital Market under the symbol &ldquo;AUVI&rdquo; which listing
is a condition to this offering. For more information see the section &ldquo;<I>Risk Factors</I>.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of July [*], 2020, we have 5,013,316
shares of our common stock issued and outstanding and held by 7 stockholders of record. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We also have outstanding:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 24px; font-size: 10pt"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: justify"> A warrant issued to Max Munn, our President and a director of the Company
    to purchase up to 80,000 shares of our common stock at an exercise price equal to the greater of $5.00 per share and
    the market value of our common stock on the date of issuance, subject to adjustment in certain circumstances as provided therein; </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"> &nbsp; </TD>
    <TD STYLE="width: 24px"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="text-align: justify"> Warrants to purchase 1,000 shares of our common stock in the aggregate, each at an exercise
    price of $5.00 per share, subject to adjustment in certain circumstances provided therein; </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 24px; font-size: 10pt"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 10pt">Options granted to members of the Board
    of Directors to purchase up to 1,375 shares of our common stock at an exercise price equal to the greater of $2.50 per share
    and the per share market value of the Company&rsquo;s common stock on the date of the grant, subject to quarterly equal vesting
    over a one year period and adjustment in certain circumstances as provided therein (375 of which are vested);</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"> &nbsp; </TD>
    <TD STYLE="width: 24px"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">40,000 unvested shares of our common stock in aggregate issued
    to four (4) members of our Board of Directors which vest evenly over a period of four years, with the first vesting to occur
    on January 1, 2021;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"> &nbsp; </TD>
    <TD STYLE="width: 24px"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">89,308 unvested shares of our common stock, issued to our
    Chief Executive Officer pursuant to his employment agreement with the Company. The shares vest quarterly on an equal basis
    over a period of 18 months, with the first vesting to occur on September 30, 2020;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"> &nbsp; </TD>
    <TD STYLE="width: 24px"> <FONT STYLE="font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">38,275 unvested shares of our common stock, issued to our
    Chief Operations Officer pursuant to his employment agreement with the Company. The shares vest quarterly on an equal basis
    over a period of 18 months, with the first vesting to occur on September 30, 2020;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify">2,000 shares of preferred stock have been designated as Series A Preferred Stock all of
    which are beneficially owned by Max Munn through a trust in which his spouse is the trustee.&nbsp;&nbsp;The Series A Preferred
    Stock entitles the holder thereof to 1,000 votes per share and vote with the Company&rsquo;s common stock as a single class
    and provides the trust with 2,000,000 votes on all matters submitted to the stockholders for a vote.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Dividends</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not declared any cash dividends
since inception and we do not anticipate paying any dividends in the foreseeable future. Instead, we anticipate that all of our
earnings will be used to provide working capital, to support our operations, and to finance the growth and development of our business,
including potentially the acquisition of, or investment in, businesses, technologies or products that complement our existing business.
The payment of dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements,
financial condition, prospects, applicable Delaware law, which provides that dividends are only payable out of surplus or current
net profits, and other factors our board might deem relevant. There are no restrictions that currently limit our ability to pay
dividends on our common stock other than those generally imposed by applicable state law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Securities Authorized for Issuance under
Equity Compensation Plan</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 4, 2020, the Board of Directors
of&nbsp;the Company adopted the Plan. The Plan governs equity awards to our employees, directors, officers, consultants, and other
eligible participants. Under the 2020 Plan there are 600,000 shares of common stock reserved for issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The types of awards permitted under the
Plan include nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock
units, performance shares, performance units, and other awards. Each option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors has the power to
amend, suspend or terminate the Plan without stockholder approval or ratification at any time or from time to time. No change may
be made that increases the total number of shares of our common stock reserved for issuance pursuant to incentive awards or reduces
the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our
stockholders within one year.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has not granted any awards
under the plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_009"></A>CAPITALIZATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth our
consolidated cash and capitalization, as of March 31, 2020. Such information is set forth on the following basis:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: justify">actual
                                         basis (giving effect, on a retroactive basis, to a 1 for 5 reverse stock splits for both
                                         common stock and preferred stock which were consummated in June of 2020; and</TD></TR>                                                                                                                                                                                                                                                                  <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: justify">on a pro forma basis
                                         giving effect to the sale of 1,000,000 shares of common stock by us in this offering
                                         at a public offering price of $5.00 per share after deducting the underwriting discounts
                                         and commissions and estimated offering expenses payable by us.</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You should read the following table
in conjunction with &ldquo;<I>Use of Proceeds</I>,&rdquo; &ldquo;<I>Management&rsquo;s Discussion and Analysis of Financial Condition
and Results of Operations</I>&rdquo; and our financial statements and related notes included in this prospectus. The following
table sets forth our cash and cash equivalents and capitalization as of March 31, 2020:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Actual</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Pro Forma (1)(2)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt">Cash</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,712,387</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">6,012,391</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Short term liabilities, including
    deferred revenue due within one year</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,836,706</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,836,706</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total liabilities including lease
    obligations - net of current portion</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">583,573</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">583,573</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Stockholders&rsquo; equity:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Common stock, $0.0001 par value, 150,000,000 shares authorized, 5,001,250 shares outstanding
    actual, 6,186,856 shares outstanding as adjusted</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">619</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Preferred stock, $0.0001 par value, 1,000,000 shares authorized; 2,000 shares
    of Series A Preferred Stock outstanding</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,299,881</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Accumulated deficit</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,362,678</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,362,678</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Total stockholders&rsquo; equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,363,179</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,663,179</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total capitalization</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,697,058</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">9,083,458</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) Does not include: (a) shares issuable
upon the exercise of the underwriter&rsquo;s option to purchase up to 150,000 additional shares of common stock; (b) 80,000 shares
of our common stock issuable up exercise of the underwriter&rsquo;s warrant and (c) 80,000 shares of our common stock issuable
upon exercise of the warrant issued to Max Munn.</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">(2) Includes 102,066 shares issued subsequent to March 31,
2020, but prior to the effective date of the registration statement and 51,034 shares to be issued to Carmel, Milazzo &amp; Feil
LLP on the effective date of the registration statement for this offering and 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) to be issued to Carmel, Milazzo &amp; Feil LLP on the closing date
of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_010"></A>DILUTION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Purchasers of our common stock in this
offering will experience an immediate and substantial dilution in the as adjusted net tangible book value of their shares of common
stock. Dilution in as adjusted net tangible book value represents the difference between the public offering price per share and
the as adjusted net tangible book value per share of our common stock immediately after the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The historical net tangible book value
of our common stock as of March 31, 2020, was $1,247,142 or $0.25 per share. Historical net tangible book value per share of our
common stock represents our total tangible assets (total assets less intangible assets) less total liabilities divided by the
number of shares of common stock outstanding as of that date. After giving effect to the sale of 1,000,000 shares in this offering
at an initial public offering price of $5.00 per share for net proceeds of approximately $4.55 million, as if such offering had
occurred at the end of March 31, 2020, our pro forma net tangible book value as of March 31, 2020 would have been approximately
$5,663,176, or approximately $0.92 per share of our common stock. This represents an immediate increase in as adjusted pro forma,
net tangible book value per share of $0.67 to the existing stockholders and an immediate dilution in as adjusted pro forma net
tangible book value per share of $4.08 to new investors who purchase shares of common stock in the offering. The following table
illustrates this per share dilution to new investors: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 86%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Public
    offering price per share</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.00</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 11.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Historical
    net tangible book value per share as of March 31, 2020</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.25</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; padding-left: 11.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increase
    in as adjusted pro forma net tangible book value per share attributable to the offering</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.67</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 11.25pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pro
    forma net tangible book value (deficit) per share as of March 31, 2020</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.92</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dilution
    in net tangible book value per share to new investors</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.08</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After completion of this offering,
our existing stockholders would own approximately 84% and our new investors would own approximately 16% of the total number of
shares of our common stock outstanding after this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent that outstanding options
or warrants are exercised, you will experience further dilution. In addition, we may choose to raise additional capital due to
market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating
plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance
of these securities may result in further dilution to our stockholders.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Capitalization Table</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Shares Purchased </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total Consideration </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Number </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Percent </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Amount </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Percent </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Per Share </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-size: 10pt; text-align: left"> Existing stockholders </TD><TD STYLE="width: 2%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 5,186,855 </TD><TD STYLE="width: 3%; font-size: 10pt; text-align: left"> (1) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 83.8 </TD><TD STYLE="width: 2%; font-size: 10pt; text-align: left"> % </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> $ </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 22,629,805 </TD><TD STYLE="width: 3%; font-size: 10pt; text-align: left"> (2) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 81.9 </TD><TD STYLE="width: 2%; font-size: 10pt; text-align: left"> % </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> $ </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 4.36 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt"> New Investors </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,000,000 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 16.2 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> % </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 5,000,000 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 18.1 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> % </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 5.00 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 6,186,855 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 100.00 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> % </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 27,629,805 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 100.00 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> % </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> -- </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (1)Includes 51,034 shares to be issued to Carmel, Milazzo
 &amp; Feil LLP on the effective date of the registration statement for this offering and 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) to be issued to Carmel, Milazzo &amp; Feil LLP on the closing date
of the offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> (2) Includes (i) the combined appraised
value of Munn Works and SteriLumen (the combined equity of which was exchanged for 5,000,000 shares of Company common stock held
by an existing shareholder) of $22,122,000 as of December 31, 2019, set forth in an appraisal report prepared on May 13, 2020
by an independent appraisal firm and (ii) a liability for legal services in the amount of $507,805 that the Company has accrued
and which will be satisfied with the payment of shares of the Company&rsquo;s common stock </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white"><B><A NAME="a_011"></A>MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Certain statements made in this prospectus
are &ldquo;forward-looking statements&rdquo; regarding the plans and objectives of management for future operations. Such statements
involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of
the &ldquo;Company&rdquo; to be materially different from any future results, performance or achievements expressed or implied
by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company&rsquo;s plans and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately
and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and therefore, there can be no assurance the forward-looking
statements included in this prospectus will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved. <FONT STYLE="background-color: white">Our actual results
may differ materially from those anticipated in these&nbsp;forward-looking&nbsp;statements as a result of various factors, including
those set forth under &ldquo;Risk Factors&rdquo; and in other parts of this prospectus. Our fiscal year ends on December&nbsp;31.</FONT></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 all of the stockholders of SteriLumen exchanged their
shares in SteriLumen for shares of common stock in the Company. The Company acquired all of the equity 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sterilumen was formed to engage in the
design, manufacture, assembly and distribution of the SteriLumen Disinfecting System for use in hospitals and other healthcare
facilities. The Company has received several patent approvals for the SteriLumen Disinfecting System from the United States and
the European Union and is in the process of receiving approval from various countries including China, Japan, Taiwan, South Korea
and the Gulf Cooperation Council. The technology of the SteriLumen Disinfecting System uses UVC LED embedded in various bathroom
fixtures as an infection prevention apparatus for use in inhabited facilities for killing airborne bacteria and other pathogens
as well as killing bacteria and other pathogens residing on hard surfaces in proximity to the apparatus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Munn Works is a manufacturer of custom
designed fine mirrors specifically for the hospitality industry with one manufacturing facility in Mount Vernon, New York. Our
goal is to contribute to the creation of what our design industry clients seek: manufacturing better framed mirrors on budget and
on time. As part of our long-term strategy, we have instituted multi-site production for high-value items, complicated designs
and finishes. Our headquarters in Mount Vernon, NY serves as the center for multi-country manufacturing. We work with a satellite
network of artisans and craftsmen, including gilders, carvers, and old-world finishers. In addition to our domestic partners, we
maintain overseas production capability with on-site Munn Works employees. Moreover, as company policy, we conduct on-site factory
visits for all in-process and outgoing orders, which are observed and checked by a project manager from our home office in Mount
Vernon, NY before they leave our overseas partners&rsquo; facilities. The combination of quality, innovative, stylish merchandise,
and value pricing has led us to develop a loyal customer base.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Principal Factors Affecting Our Financial Performance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our operating results are primarily affected by the following
factors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull; our ability to acquire new customers or retain existing
customers;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull; our ability to offer competitive product pricing;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull; our ability to broaden product offerings;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull; industry demand and competition; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull; market conditions and our market positions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Three Months Ended March 31, 2020 Compared to the
Three Months Ended March 31, 2019</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">2020</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">2019</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 44%"><FONT STYLE="font-size: 10pt">Net Sales</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">1,528,400</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">1,460,737</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Cost of Goods Sold</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,161,813</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">76.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,138,252</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">77.9</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Gross Profit</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">366,587</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">24.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">322,485</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">22.1</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Selling. General and Administrative Expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">388,198</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">25.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">327,879</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">22.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Operating Loss</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(21,611</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-1.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(5,394</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-0.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Other Income (Expense)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Interest income (expense)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">465</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Total Other Expense</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">465</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Loss Before Provision for Income Taxes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(21,611</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-1.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(4,929</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-0.3</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Provision for Income Taxes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Net Loss</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">(21,611</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">-1.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">(4,929</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">-0.3</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Net sales and gross profit are the
most significant drivers of our operating performance. Net sales consist of all sales to customers, net of returns. Our net sales
for the three months ended 2020 increased by 4.4% to $1,528,400 from $1,460,737 in the three months ended 2019. All net sales
for all periods presented were generated entirely from our Munn Works subsidiary. Historically, first quarter revenues are typically
the lowest for the Company as the third party facilities in China are closed for three weeks to celebrate the Chinese New Year.
The net sales increase in 2020 resulted primarily from an increase in domestic manufacturing capabilities. An increase in our
domestic manufacturing capabilities has resulted in less lead time from when a project is initiated to its completion. The Company
plans to expand its manufacturing facility which will result in an increase in revenues generated from our domestic manufacturing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Accordingly, gross profit expressed
as a percentage of net sales can be influenced by many factors including overall sales performance. For three months ended 2020,
gross profit increased to $366,587 from $322,485 for three month ended 2019. Gross profit as a percentage of net sales increased
to 24.0% for three months ended 2020 from 22.1% in three months ended 2019, primarily driven by an increase in percentage of sales
generated from our third party warehouses in China which is historically more profitable for our business. Margins from period
to period and can vary based on the profitability of each individual job. In 2020, the Company worked on several large contracts
that were slightly more profitable than the previous year. Major components and cost drivers of our cost of sales is influenced
by the cost of materials, shipping, overhead, and labor costs. Historically, first quarter profits are typically the lowest for
the Company as the third-party facilities in China are closed for three weeks to celebrate the Chinese New Year. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling, General and Administrative
expenses, including the costs of operating our corporate office, are also an important component of our operating performance.
Compensation and benefits comprise the majority of our operating expenses. Selling, General and Administrative expenses contain
fixed and variable costs and managing the operating expense ratio (operating expenses expressed as a percentage of net sales)
is an important focus of management as we seek to increase our overall profitability. Operating expenses include cash costs as
well as non-cash costs, such as depreciation and amortization associated with corporate and property and equipment and impairment
of long-lived assets. Operating expenses can also include certain costs that are of a one-time or non-recurring nature. For three
months ended 2020, Selling, General and Administrative expenses increased to $388,198 from $327,879 in three months ended 2019.
The increase was attributable to an increase in professional and consulting fees to assist the Company in financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling, General and Administrative
expenses expressed as a percentage of net sales can be influenced by many factors including overall sales performance. For three
months ended 2020, selling, general and administrative expenses as a percentage of net sales increased 3.0% from 25.4% in three
months ended 2020 and 22.4% in three months ended 2019. The company was able to maintain its fixed operating costs from year to
year and generate slightly more revenues, however, the increase in professional fees caused the percentage to increase over the
prior period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We recorded net loss of $21,611 in
the three months ended 2020, compared to net loss of $4,929 in the three months ended 2019, an increase of net loss of $16,682
from the three months ended 2019. The increase in net loss compared to 2019 was primarily attributable to an increase in professional
fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Year Ended December 31, 2019 Compared to the Year
Ended December 31, 2018</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">2019</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">2018</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 44%"><FONT STYLE="font-size: 10pt">Net Sales</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">9,329,720</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">7,556,444</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Cost of Goods Sold</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">6,009,730</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">64.4</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">4,890,012</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">64.7</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Gross Profit</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,319,990</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">35.6</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,666,432</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">35.3</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Selling. General and Administrative Expenses</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,916,386</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">20.5</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,913,101</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">25.3</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Operating Income</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,403,604</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">15.0</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">753,331</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">10.0</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Other Income (Expense)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Gain on settlement (See Note 10)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,520,399</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">16.3</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Other income</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,552</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Interest Expense</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-15,736</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-0.2</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-35,640</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-0.5</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Total Other Income (Expense)</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,504,663</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">16.1</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-33,088</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-0.4</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Income Before Provision for Income Taxes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,908,267</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">31.2</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">720,243</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">9.5</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">Provision for Income Taxes</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">106,861</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1.1</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">0.0</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">Net Income</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">2,801,406</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">30.0</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">720,243</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">9.5</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net sales and gross profit are the
most significant drivers of our operating performance. Net sales consist of all sales to customers, net of returns. Our net sales
for year ended 2019 increased by 19% to $9,329,720 from $7,556,444 in year ended 2018. All net sales for all periods presented
were generated entirely from our Munn Works subsidiary. The net sales increase in fiscal 2019 resulted primarily from an increase
in domestic manufacturing capabilities. An increase in our domestic manufacturing capabilities has resulted in less lead time
from when a project is initiated to its completion. The Company plans to expand its manufacturing facility which will result in
an increase in revenues generated from our domestic manufacturing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Accordingly, gross profit expressed as a percentage of net
sales can be influenced by many factors including overall sales performance. For year ended 2019, gross profit increased 19.7%
to $3,319,990 from $2,666,432 for year ended 2018. Gross profit as a percentage of net sales increased to 35.6% for year ended
2019 from 35.3% in year ended 2018, primarily driven by an increase in sales generated from our domestic manufacturing. Margins
remained consistent from year to year and can vary based on the profitability of each individual job. In 2019, the Company worked
on several large contracts that were slightly more profitable than the previous year. Major components and cost drivers of our
cost of sales is influenced by the cost of materials, freight, overhead, and labor costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling, General and Administrative expenses,
including the costs of operating our corporate office, are also an important component of our operating performance. Compensation
and benefits comprise the majority of our operating expenses. Selling, General and Administrative expenses contain fixed and variable
costs and managing the operating expense ratio (operating expenses expressed as a percentage of net sales) is an important focus
of management as we seek to increase our overall profitability. Operating expenses include cash costs as well as non-cash costs,
such as depreciation and amortization associated with corporate and property and equipment and impairment of long-lived assets.
Operating expenses can also include certain costs that are of a one-time or non-recurring nature. For year ended 2019, Selling,
General and Administrative expenses increased 0.2% to $1,916,386 from $1,913,101 in year ended 2018. The change was primarily driven
from an increase in sales commissions, professional fees, and office salaries, however, the increase was offset by a decrease in
Officer Salaries in the amount of $400,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling, General and Administrative expenses
expressed as a percentage of net sales can be influenced by many factors including overall sales performance. For year 2019, selling,
general and administrative expenses as a percentage of net sales decreased 5% from 20.3% in year ended 2019 and 25.3% in year ended
2018. The decrease was primarily driven from a decrease in officer salaries of $400,000. The company was also able to maintain
its fixed operating costs from year to year.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net other income was $1,504,663 in year
ended 2019, compared to net other expense of $33,088 in year ended 2018, representing an increase of $1,537,671. The increase
from 2018 was primarily due to a gain on settlement of $1,520,399 from the Chapter 11 Bankruptcy Case. As a result of settlement
in the bankruptcy case, the Company was able to settle certain liabilities at a significantly reduced amount. The difference between
the carrying amount of the liability and the settled amount was recorded as a gain on settlement as other income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Income tax expense was $106,801 in
year ended 2019, compared to income tax expense of $- in year ended 2018, representing an increase of $106,801. Prior to the share
exchange in 2019, Munn Works, LLC was taxed as a single member Limited Liability Company for federal and state income tax purposes.
As such, the Company will not pay income taxes for earnings prior to the share exchange, as any income or loss will be included
in the tax returns of the individual member. Accordingly, no provision is made for income taxes in the financial statements prior
to the share exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We recorded net income of $2,801,466
in the year ended 2019, compared to net income of $720,243 in the year ended 2018, an increase of net income of $2,081,223 from
the year ended 2018. The increase in net income compared to 2018 was primarily attributable to the increased revenues, gross profit
and gain on settlement from the Chapter 11 Bankruptcy case.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Three Months Ended March 31, 2020 Compared to the
Three Months Ended March 31, 2019</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Net cash provided by
    operating activities</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">813,429</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">423,908</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Net cash used in investing activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">(98,244</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Net cash used in provided by financing
    activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">(32,734</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Net increase in cash and cash equivalents
    and restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">682,451</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">423,908</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Cash and cash equivalents at beginning
    of year</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">1,029,936</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">793,766</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">Cash and cash equivalents at end
    of year</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">1,712,387</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: right">1,217,674</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #333333; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In three months ended 2020, cash provided
by operating activities was $813,429, as compared to cash provided in operating activities was $423,908 in three months ended
2019. Our operating cash inflows include cash received primarily from sales of our product. These cash inflows are offset largely
by cash paid primarily to our suppliers for production materials and parts used in our manufacturing process, operation expenses,
and employee compensation. The major operating activities that reduced cash in the three months ended 2020 was a decrease of accounts
payable and accrued expenses of $78,103, increase in vendor deposits of $126,350, and an increase of prepaid expenses of $52,351.
The major operating activity that provided cash for the three months ended March 31, 2020 was from a decrease of accounts receivable
$965,883 and an increase of deferred revenue of $145,240.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In three months ended 2020, net cash
used in investing activities was $98,244, as compared to cash used from investing activities of $0 in three months ended 2019.
The increase in cash used was from purchases of machinery and equipment to improve our domestic facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In three months 2020, cash used in
financing activities was $32,734, as compared to cash provided by financing activities of $0 in three months ended 2019. The major
financing activities that used cash in year ended 2020 were loans to our officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Working
Capital. </I></B></FONT>We had a working capital of $600,511 at March 31, 2020, a decrease of $298,070 from a working capital
of $898,581 as of March 31, 2019. The decrease in working capital is attributable from an increase in cash of $494,714 a decrease
of deferred revenue of $1,190,242 offset by a decrease in accounts receivable of $1,377,900, an increase in lease liability-current
of $134,706, a decrease of vendor payments of $230,867, an increase of accounts payable and accrued expenses of $58,797, an increase
of current notes payable of $37,500, and an increase in income tax payable of $106,861.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Year Ended December 31, 2019 Compared to the Year
Ended December 31, 2018</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; font-size: 10pt; color: #333333; text-align: left">Net cash provided by operating activities</TD><TD STYLE="width: 1%; font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: #333333; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; color: #333333; text-align: right">770,260</TD><TD STYLE="width: 1%; font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: #333333; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; color: #333333; text-align: right">528,561</TD><TD STYLE="width: 1%; font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">Net cash used in investing activities</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">(12,999</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">(3,865</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">Net cash (used in) provided by financing activities</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">(521,091</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">142,797</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">Net increase in cash and cash equivalents and restricted cash</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">236,170</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">667,493</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">Cash and cash equivalents at beginning of year</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">793,766</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">126,273</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">Cash and cash equivalents at end of year</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">1,029,936</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: right">793,766</TD><TD STYLE="font-size: 10pt; color: #333333; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In year ended 2019, cash provided by
operating activities was $770,260, as compared to cash provided in operating activities was $528,561 in year ended 2018. Our operating
cash inflows include cash received primarily from sales of our product. These cash inflows are offset largely by cash paid primarily
to our suppliers for production materials and parts used in our manufacturing process, operation expenses, employee compensation,
and interest expenses of our financings. The major operating activities that reduced cash in the year ended 2019 was a decrease
of accounts payable and accrued expenses of $382,343, increase in accounts receivable of $250,459, and an increase prepaid expenses
of $146,676. The major operating activity that provided cash for year ended December 31, 2019 was income from operations of $1,403,604.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In year ended 2019, net cash used in investing
activities was $12,999, as compared to cash used from investing activities of $3,865 in year ended 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In year ended 2019, cash used in financing
activities was $521,091, as compared to cash provided by financing activities of $142,797 in year ended 2018. The major financing
activities that used cash in year ended 2019 were repayments for loans of $83,000 and cash paid to settle liabilities subject
to compromise of $531,511. The major financing activity that provided cash for year ended December 31, 2019 was cash received
from an officer of $99,496.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Working
Capital. </I></B></FONT>We had a working capital of $728,692 at December 31, 2019, a decrease of $183,700 from a working capital
of $912,392 as of December 31, 2018. The decrease in working capital is attributable from an increase in cash of $236,170, an
increase of accounts receivable of $250,459 offset by a decrease in loan to shareholder of $99,496, an increase in deferred revenue
of $65,141, an increase in income tax payable of $106,861, an increase of accounts payable and accrued expenses of $254,960 and
an increase of lease liability-current of $133,097</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contractual Obligations and Other
Commitments</B></P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: #252525">summarizes the obligations as of March&nbsp;31,
2020, as derived from the unaudited consolidated financial statements of Applied UV, Inc. as of that date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">Payment
    due by period</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">2020</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">2021-2023</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">2024-2025</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; color: #252525; text-align: center; border-bottom: Black 1pt solid">Thereafter</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">Capital lease obligations
    (1)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">23,329</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">7,280</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">7,280</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">7,280</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">1,489</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">Operating lease obligations</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">644,400</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">162,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left; padding-bottom: 1pt">Notes payable
    (2)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">157,500</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">37,500</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">825,229</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">205,580</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">198,080</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">198,080</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; color: #252525; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; color: #252525; text-align: right">223,489</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; color: #252525; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; padding: 2.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding: 2.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (1) The Company entered into
                               a lease agreement in Mount Vernon, New York for a term that commenced on April 1, 2019 and expires
                               on the 31st day of March 2024 at a monthly rate of $13,400. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2) In March 2020, as part of the On-Deck Capital
        settlement, the Company issued a promissory note for the principal amount of $157,500 due within the next 5 years. The
        Company is required to pay $157,500 in five payments in the amount of $30,000 per year, with an additional $7,500 in year
        two.</P></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Off-Balance Sheet Arrangements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Critical Accounting Policies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following discussion relates to critical
accounting policies for our company. The preparation of financial statements in conformity with GAAP requires our management to
make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures
of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation
of our financial statements. These accounting policies are important for an understanding of our financial condition and results
of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results
of operations and require management&rsquo;s difficult, subjective, or complex judgment, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates
are particularly sensitive because of their significance to financial statements and because of the possibility that future events
affecting the estimate may differ significantly from management&rsquo;s current judgments. We believe the following critical accounting
policies involve the most significant estimates and judgments used in the preparation of our financial statements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Revenue and Cost Recognition. </I></B>On
January 1, 2018, the Company adopted accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments
using the modified retrospective method for all customer contracts not yet completed as of the adoption date. The adoption of ASC
606 did not have a significant impact on our Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue when the
performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1)<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Identify
the contract with a customer. </I>A contract with a customer exists when (i) the Company enters into an enforceable contract with
a customer that defines each party's rights regarding the services to be transferred and identifies the payment terms related to
these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all
consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration.
The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors
including the customer's historical payment experience or, in the case of a new customer, published credit and financial information
pertaining to the customer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2)<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Identify
the performance obligations in the contract. </I>Performance obligations promised in a contract are identified based on the services
that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service
either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct
in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract.
To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services
are capable of being distinct in the context of the contract. If these criteria are not met the promised services are accounted
for as a combined performance obligation. The Company promises to design, manufacture and sell custom mirrors through contractual
arrangements. It was determined that most services within a contract are substantially the same and have the same pattern of transfer
to the customer over the term of the agreement and are therefore highly interdependent upon each other. As such, the Company determined
that the services within a contract are not separately identifiable in the context of the contract and should therefore be bundled
into a single performance obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3)<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Determine
the transaction price. </I>The transaction price is determined based on the consideration to which the Company will be entitled
in exchange for transferring services to the customer. We evaluate whether a significant financing component exists when we recognize
revenue in advance of customer payments that occur over time. We do not adjust the transaction price for the effects of financing
if, at contract inception, the period between the transfer of control to a customer and final payment is expected to be one year
or less. The Company establishes pricing for contracts with customers based on a fixed price for a fixed fee. Contracts do not
provide for a discount or refund to customers and historically, no discounts or refunds have been given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Allocate
the transaction price to performance obligations in the contract. </I>If the contract contains a single performance obligation,
the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that
are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company
must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts
that contain multiple performance obligations require an allocation of the transaction price based on management's judgment. The
identified promises are considered to be bundled in arriving at the overall promise within the contract. This promise therefore
results in one performance obligation, to design, manufacture and sell custom mirrors to our customer, therefore, allocation of
the transaction price is not necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Recognize
revenue when or as the Company satisfies a performance obligation. </I>Revenue is comprised of projects that are completed within
our own facility or from a third-party vendor (Direct Sales). For projects that are completed within our own facility, the Company
satisfies performance obligations at over time. For projects that are completed from a third-party vendor, the performance obligation
is recognized at a point in time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> For projects that are completed within
our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals through contractual agreements. These
sales require us to deliver our products within three to six months from commencement of order acceptance. We recognize revenue
over time by using the input method based on costs incurred as it depicts our progress toward satisfaction of the performance
obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio
of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs include all
direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools,
repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased
or moved to work in process as required by the project&rsquo;s engineering design. Cost based input methods of revenue recognition
require us to make estimates of costs to complete the projects. In making such estimates, significant judgment is required to
evaluate assumptions related to the costs to complete the projects, including materials, labor and other system costs. If the
estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated loss in the
period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts billed in excess of revenues
and profits recognized. Revenues and profits recognized in excess of amounts billed typically does not occur as we will not perform
any work in excess of the amount we bill to our customers. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each product or service delivered to
a third-party customer that is manufactured by a third-party vendor is considered to satisfy a performance obligation. Performance
obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. These sales
are shipped from the manufacturer to the customer without our taking physical inventory possession. We report direct sales on
a gross basis, that is, the amounts billed to our customers are recorded as &quot;Sales,&quot; and inventory purchased from manufacturers
are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory before it is transferred
to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise to our customers, taking
on inventory risk of returned product, and having discretion in establishing pricing. We typically pay our vendors a portion of
the total cost up front and the remaining balance is accrued for and paid within 30-90 days of when the products are shipped from
the third-party warehouse. Vendor payments are capitalized until completion of the project and are recorded as vendor deposits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Accounts Receivable. </I></B>Accounts
receivables are non-collateralized customer obligations due under normal trade terms generally requiring payment within 30-90
days from the invoice date. The carrying amounts of accounts receivable is reduced by an allowance for doubtful accounts that
reflects management&rsquo;s best estimate of the amounts that will not be collected. The Company includes any accounts receivable
balances that are determined to be uncollectible, along with a general reserve, in its overall allowance for doubtful accounts.
Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical
bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. After all attempts to collect
a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company
believes an allowance for doubtful accounts of $50,000 as of March 31, 2020 and December 31, 2019 is adequate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><B><I>Inventory. </I></B>Inventories are valued at the lower
of cost or net realizable value using the first-in, first-out method. Inventory is comprised of raw materials that are purchased
on the initial start date of a specific project and are capitalized using the percentage of completion method of accounting. We
amortize these costs to the associated contract proportion with our percentage of completion on the contract, calculated using
a cost-based input method. Capitalized costs are considered impaired when the net contract cost asset plus future costs to complete
the contract are less than the remaining revenue to be recognized under the contract. When capitalized costs are impaired, we
record a charge to the impairment, impairment charges cannot be reversed. As of March 31, 2020 and December 31, 2019 no impairment
charges were recorded and management has determined that an excess and obsolete reserve is not required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Property and Equipment. </I></B>Property
and equipment are recorded at cost. Depreciation of furniture and fixtures is provided using the straight-line method, generally
over the terms of the lease. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets,
are expensed as incurred. Depreciation of machinery and equipment is based on the estimated useful lives of the assets. Machinery
and equipment have an estimated useful life of the lesser of term of lease or useful life. Furnitures and fixtures are based the
estimated useful life of 7 years. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An asset is disposed of or retired when
no future economic benefits are expected to arise from continued use of the asset. The gain or loss arising on the disposal or
retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Fair Value of Financial Instruments.
</I></B>The Company records the fair value of assets and liabilities in accordance with Financial Accounting Standards Board (&quot;FASB&quot;)
Accounting Standards Codification (&quot;ASC&quot;) 820, <I>Fair Value Measurement</I>. FASB ASC 820 establishes a framework for
measuring fair value under accounting principles generally accepted in the United States. That framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. the three levels of the fair value hierarchy
under FASB ASC 820 are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">-&#9;Level 1 - Valuations based on unadjusted
quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">-&#9;Level 2 - Valuations based generally
on observable inputs for similar assets and liabilities, or identical or similar assets and liabilities in inactive markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">-&#9;Level 3 - Valuations based on inputs
that are unobservable and significant to the overall fair value measurement. Valuation techniques could include the use of discounted
cash flow models and other similar techniques</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying amounts reported in the consolidated
balance sheets as of December 31, 2019 and 2018 for cash and cash equivalents, accounts receivable, prepaid expenses and other
current assets, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these
financial instruments. The fair value of capital lease obligations approximates their carrying value because these financial instruments
bear interest at rates that approximate current market rates for loans with similar maturities and credit quality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Accounting Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Recently Adopted. </I></B>In
February 2016, FASB, issued in Accounting Standards Update (&ldquo;ASU&rdquo;) No. 2016-02, Leases (Topic 842), which requires
lessees to recognize right-of-use, or ROU, assets and related lease liabilities on the balance sheet for all leases greater than
one year in duration. We adopted ASC 842 on January 1, 2019 using a modified retrospective transition approach for leases existing
at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified
retrospective approach did not require any transition accounting for leases that expired before the earliest comparative period
presented. The adoption of this standard resulted in the recording of ROU assets and lease liabilities for all our lease agreements
with original terms of greater than one year. The adoption of ASC 842 did not have a significant impact on our statements of income
or cash flows. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting
for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation &mdash; Stock Compensation,
to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of
the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted
to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not have a material
impact on our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2018, the FASB issued ASU
2018-13, Fair Value Measurement (Topic 820): Disclosure Framework &mdash; Changes to the Disclosure Requirements for Fair Value
Measurement, which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related
to transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses
for the period and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes.
ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted.
The adoption of this standard did not have a material impact on our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> In June 2016, the FASB issued ASU 2016-13,
Financial Instruments &mdash; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces
the current incurred loss impairment methodology for financial assets with a methodology that reflects expected credit losses.
The new credit losses model must be applied to loans, accounts receivable, and other financial assets. ASU 2016-13 is effective
for annual periods beginning after December 15, 2019, including interim periods within those annual periods. The adoption of this
standard did not have a material impact on our financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently believe that all other issued
and not yet effective accounting standards are not relevant to our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Acquisition of SteriLumen and
Munn Works. </I></B>The Company acquired all of the issued and outstanding common shares of SteriLumen pursuant to an Exchange
Agreement dated March 26, 2019 among the Company, SteriLumen and the shareholders of SteriLumen in which the SteriLumen shareholders
exchanged their SteriLumen common shares for 201,250 shares of Company common stock, of which Laurie Munn, the spouse of our President
and a director of the Company received 200,000 shares. The Company acquired all of the issued and outstanding preferred shares
of SteriLumen pursuant to an Exchange Agreement dated March 27, 2019 among the Company, SteriLumen and Laurie Munn in which Ms.
Munn exchanged all of her SteriLumen Series A preferred shares for 1,800,000 shares of Company common stock and 2,000 shares of
Company Series A preferred stock. Upon consummation of this exchange the Company owned 100% of the capital shares of SteriLumen.
The Company acquired all of the membership interests in Munn Works pursuant to an Exchange Agreement dated July 1, 2019 among
the Company, Munn Works and Laurie Munn in which Laurie Munn exchange her membership interests in Munn Works for 600,000 shares
of Company common stock. All of the equity in the Company owned by Laurie Munn has been transferred to The Munn Family 2020 Irrevocable
Trust, of which Laurie Munn is the trustee.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Effects of Coronavirus Outbreak.
</I></B>In December 2019, a novel strain of Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread
to over 150 countries and every state in the United States. On January 30, 2020, the World Health Organization declared the outbreak
of COVID-19 a &ldquo;Public Health Emergency of International Concern.&rdquo; On March 11, 2020, the World Health Organization
declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Most states and cities have reacted
by instituting quarantines, restrictions on travel, &ldquo;stay at home&rdquo; and &ldquo;social distancing&rdquo; rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020 that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have taken steps to take care of our
employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate social
distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard to employee,
facility and office hygiene as well as implementing significant travel restrictions. We are also assessing our business continuity
plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue to monitor
and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent we are able
to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we are currently dependent on out-sourced manufactures
in China to manufacture the SteriLumen Disinfecting System. The pandemic has impacted and may continue to impact suppliers of materials
for and manufacturers of certain of our products. As a result, we have faced and may continue to face delays or difficulty manufacturing
certain products, which could negatively affect our business and financial results. Even if we are able to find alternate sources
for materials and manufacturing, they may cost more, which could adversely impact our profitability and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020. See &ldquo;Risk Factors&mdash;Our Business
and Operations&mdash;Effect of the Coronavirus pandemic.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Applied UV, Inc. 2020 Omnibus
Incentive Plan. </I></B>On May 4, 2020, we adopted the Plan. Under the Plan, the Company may grant nonqualified stock options,
incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance
units, and other awards. Awards of up to 600,000 shares of common stock to Company employees, officers, directors, consultants
and advisors are available under the Plan. The type of grant, vesting provisions, exercise price and expiration dates are to be
established by the Board at the date of grant.</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Options.</I></B> On February
18, 2020 the Board approved the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of
the Company&rsquo;s common stock at an exercise price equal to the greater of $2.50 and the market value per share of the Company&rsquo;s
common stock on the date of the grant. Market value will be determined by an independent valuation company engaged by the Company;
provided, however if on the date of grant the Company common stock is listed on a national exchange or quoted on an established
quotation system, then market value shall equal the closing price of the Company common stock listed on such exchange or quoted
on such quotation system on the trading day immediately prior to the date of the grant. On April 1, 2020, we issued options to
purchase 2,000 shares of Company common stock to the Board, of which 1,250 have been cancelled. The options are subject to equal
quarterly vesting over a one-year period. On July 1, 2020 we issued an additional 1,000 options to certain Board members. To date
375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of these quarterly options.. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Mount Sinai Agreement</I></B>. On
April 20, 2020, SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke&rsquo;s Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai&rsquo;s research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60-day exclusive option to negotiate a license for Mount Sinai&rsquo;s
resulting patent rights if such patent was obtained at SteriLumen&rsquo;s request and SteriLumen has paid for all the costs in
obtaining the patent. If the results of the study contained in Mount Sinai&rsquo;s final report are used by SteriLumen in a successful
regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Second ResInnova Report</I>.
</B>In April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found the SteriLumen mirror and drain to be greater than 97% and 99.99%, respectively, effective in killing
the OC43 human coronavirus in the bathroom sink area. According to ResInnova, it is expected that the Coronavirus will be killed
in a similar manner to OC43 since they both are in the Beta genre of coronaviruses. See &ldquo;Business&mdash;Second ResInnova
Report&rdquo; and &ldquo;Risk Factors&mdash;Certain ResInnova Testing Limitations.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Paycheck Protection Program Loan.
</I></B>On May 4, 2020, Munn Works received $296,287 in net proceeds from a PPP Loan from JP Morgan Chase Bank under the PPP, which
was established under the CARES Act and administered by the U.S. Small Business Administration. The proceeds from the PPP Loan
will be used in accordance with the terms of the CARES Act program, as described further below.</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The term of the PPP Loan is two years with
an interest rate of 1.00% per annum, which shall be deferred for the first six months of the term of the loan. Pursuant to the
terms of the CARES Act, the proceeds of the PPP Loan may be used for payroll costs, mortgage interest, rent or utility costs for
up to an 8-week period after loan origination. Under the terms of the CARES Act, Munn Works can apply for and be granted forgiveness
for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds
in accordance with the terms of the CARES Act, as described above, during the 8-week period after loan origination and the maintenance
or achievement of certain employee levels. No assurance is provided that Munn Works will obtain forgiveness under the PPP Loan
in whole or in part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Reverse Stock Splits.</B> On June
17, 2020 and June 23, 2020, the Company effected a 1 for 5 reverse stock split of its issued and outstanding Common Stock and
effected a 1 for 5 reverse stock split of its issued and outstanding preferred stock, respectively (each a "Reverse Stock Split")
by filing on each date an amendment of the Company&rsquo;s Amended and Restated Certificate of Incorporation with the Secretary
of State of the State of Delaware. No fractional shares were issued as a result of a Reverse Stock Split. Any fractional shares
that would have resulted from a Reverse Stock Split were rounded up to the nearest whole share. The authorized common stock and
preferred stock of the Company was not impacted by the Reverse Stock Splits. Immediately following the Reverse Stock Splits, the
Company had outstanding 5,103,316 shares of Common Stock and 2,000 shares of preferred stock. The Company has retrospectively
adjusted the 2018, 2019 and March 31, 2020 financial statements for profit per share and share amounts as a result of the reverse
stock splits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Appointment of Executive Officers</I>.
</B>On June 30, 2020 the Company entered into employment agreements and appointed the Company&rsquo;s Chief Executive Officer
and Chief Operations Officer. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Non-Employee Director Compensation</I></B>.
On July 9, 2020 the Board approved a compensation package for non-employee directors of the Board. The compensation for non-employee
directors include; (i) upon of each such director, such director shall be issued 10,000 shares of restricted common stock which
vests evenly on an annual basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares
of restricted common stock to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly
cash payments of $6,250 to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman
of the Board which vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of
restricted common stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate
Governance and Nominating Committees have not yet been established). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_012"></A>BUSINESS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Corporate History</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company was incorporated in Delaware
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 stockholders 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
in Munn Works in July of 2019 pursuant to an exchange agreement in exchange for shares of common stock of the Company. The Company
conducts all of its operations through SteriLumen and Munn Works.&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal executive offices are
located at 150 N. Macquesten Parkway, Mount Vernon, NY 10550 and our telephone number is (914) 665-6100. The Company currently
has 26 employees, including executive officers, all of which are fulltime. Our website address is www.applieduvinc.com. The information
contained therein or accessible thereby shall not be deemed to be incorporated into this Prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>SteriLumen</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Business Overview</I></B>. SteriLumen
was incorporated on December 8, 2016 in New York. SteriLumen develops and may acquire medical devices that eliminate pathogens
that may cause HAIs for distribution primarily to facilities that have high customer turnover such as hospitals, assisted living
facilities, doctors&rsquo; offices and walk-in clinics as well as hotels, cruise lines, schools, airplanes and other public spaces.
SteriLumen has developed and designed a unique, patented and automated disinfecting system that relies on UVC LED that will be
embedded into certain bathroom fixtures (in each case, a &ldquo;SteriLumen Disinfecting System&rdquo;), which we believe will
be effective in reducing HAIs caused by a virus, bacteria, fungus and other pathogens, including, Coronavirus and human coronaviruses
in general in the bathroom sink area. The SteriLumen Disinfecting System was initially developed by Max Munn while working with
NBBJ<SUP>5</SUP>, a global architectural firm whose clients include Cambridge University, Cleveland Clinic, Massachusetts General
Hospital and Stanford University, and Healthcare Surface Consultants (&ldquo;HSC&rdquo;)<SUP>6</SUP>. However, SteriLumen owns
all of the patents and other intellectual property with respect to the SteriLumen Disinfecting System and NBBJ and HSC have waived
any claims they may have to any interest in the SteriLumen Disinfecting System. 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) mirrored medicine cabinet
for residential use and (v) retrofit kit. The Company has received confirmation from the U.S. Food &amp; Drug Administration that
the SteriLumen Disinfecting System is not a &ldquo;device&rdquo; under Section 201(h) of the FDA Act and therefore the Company
is not required to comply with the requirements of the FDA Act. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> During the last three years SteriLumen
has focused on research and development, manufacturing and design and marketing and sales of the SteriLumen Disinfecting System.
The SteriLumen Disinfecting System was initially submitted to ResInnova for an analysis of its effectiveness in killing certain
pathogens such as C diff, MRSA and E coli. ResInnova provided SteriLumen with their findings in the Initial ResInnova Report which
found the SteriLumen Disinfecting System to be effective in dramatically reducing pathogens in the bathroom vanity/sink area as
described in greater detail below under &ldquo;&mdash;Initial ResInnova Report.&rdquo; SteriLumen also submitted the SteriLumen
Disinfecting System to ResInnova for testing its effectiveness in killing the Coronavirus. On June 30 ResInovva issued a report
on the effectiveness of the SteriLumen mirror and SteriLumen drain against OC43 human coronavirus as further described under &ldquo;&mdash;Second
ResInnova Report.&rdquo; Furthermore, pursuant to the Mount Sinai Agreement SteriLumen will sponsor a study by Mount Sinai on
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms in Mount Sinai St. Luke&rsquo;s Hospital in New
York, NY. Mount Sinai has agreed to provide SteriLumen the results of their study in a report to be issued in the second quarter
of 2021 as well as publishing their results in an academic, peer reviewed, journal. The study performed under the Mount Sinai
Agreement will be the first test of the SteriLumen Disinfecting System in an actual healthcare facility setting. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 potential suppliers and creating its own network of professional consultants. SteriLumen
has manufacturing and assembly suppliers in 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&rsquo;s products while keeping
overhead costs lower. SteriLumen recently sold units 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 and a cruise line that may
have an interest in reducing its pathogen levels in its cruise ships. We intend to target international markets in Gulf Cooperation
Council countries, China and Japan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The Initial ResInnova Report</I></B><I>.
</I>In 2017 SteriLumen submitted two wall mounted mirror prototypes of the SteriLumen Disinfecting System to ResInnova for testing
of their effectiveness to kill three healthcare-relevant bacteria: C diff, E coli and MRSA. The production version of the SteriLumen
Disinfecting System was submitted to ResInnova in 2020 for testing of its effectiveness to kill MRSA.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">_____________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>5
</SUP></FONT>NBBJ was founded in 1943 and is highly regarded as an international leader in architecture for healthcare facilities.
NBBJ have over 50 hospitals as clients. A few of their domestic healthcare clients are NYU Langone Health, Cleveland Clinic, Stanford
University and Massachusetts General Hospital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>6
</SUP></FONT>HSC was founded in 2012 with a mission to mitigate the spread of infection within the healthcare environment by addressing
the critical issue of surfaces. HSC focuses on the science of surfaces and how they contribute to the spread of infection. HSC
works with healthcare facilities and manufacturers to develop effective infection remediation procedures.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Initial ResInnova Report concluded
that a prototype of the SteriLumen Disinfecting System caused the following reductions in pathogens in the following sink areas:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Faucet Handles</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>C diff </I>spores: greater than 4 logs (99.99%) reduction after
one hour exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>E coli</I>: greater than 4 logs (99.99%) reduction after 30 minute
exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">MRSA: greater than 4 logs (99.99%) reduction after 30 minute exposure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt">Drain</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>C diff </I>spores: greater than 3 logs (99.9%) reduction after
two hour exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>E coli</I>: greater than 4 logs (99.99%) reduction after 30 minute
exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">MRSA: greater than 4 logs (99.99%) reduction after 30 minute exposure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt">Side Edges</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>C diff </I>spores: almost 3 logs (99.9%) reduction after two hour
exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>E coli</I>: almost 2 logs (99%) reduction after 1 hour exposure;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">MRSA: almost 2 logs (99%) reduction after 1 hour
exposure.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Initial Report concluded that the production version caused
the following reductions in MRSA:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Faucet Handles</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">greater than 6 logs (99.9999%) reduction after two hour exposure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Drain</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">greater than 4 logs (99.99%) reduction after two hour exposure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Side Edges</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Greater than 6 logs (99.9999%) reduction after two hour exposure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Backsplash</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Greater than 6 logs (99.9999%) reduction after two
hour exposure.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Initial ResInnova Report also concluded
that &ldquo;a 2 hour non-stop operation of the UV-emitting mirror should have a dramatic antimicrobial effect on the bathroom vanity/sink
area.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>The Second ResInnova Report</I></B><I>.
</I>In April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found that the SteriLumen drain demonstrated a greater than 97% kill after 15 minutes of exposure and
the SteriLumen Mirror demonstarated a greater than 99.99% kill after a 2-hour exposure. According to ResInnova, it is expected
that SAR-CoV-2, the virus that causes COVID19, will be killed in a similar manner to OC43 since they are both in the Beta genre
of coronaviruses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="image_001.jpg" ALT="cid:295A9464-8D5A-4EF5-A01C-B5E9057BA77F@fios-router.home" STYLE="height: 370px; width: 299px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>SteriLumen Disinfection System. </I></B>The
SteriLumen Disinfecting System consists of four product lines: (i) the SteriLumen Disinfecting Mirror; the SteriLumen Disinfecting
Drain; the SteriLumen Disinfecting Shelf; and the SteriLumen Disinfecting Medicine Cabinet. Each product in the SteriLumen Disinfection
System product line has the following attributes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Focus on the sink area and drain.
</U></I>Focuses on pathogens that accumulate on the sink area, including handles, faucets and backsplash and in the drain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I><U>UVC LED infection destruction</U>.
</I>Destroys 4 logs (99.99%) of common pathogens, including, we believe, the Coronavirus in the bathroom vanity/sink area with
at least two hours of continuous use. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Automatic operation</U>. </I>Has
a built-in programmable controller that ensures operation for the full required daily and is not dependent on manual operation.
Its functionality is expandable and may become a source for recurring income through additional data reporting, leasing and maintenance
of add-on elements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I><U>Continuous operation</U>. </I>Works
in cycles of two hour on and four hours off, except for the disinfecting drain which is on 15 minutes every hour. The timing protocol
is managed by a programmable controller and a motion detector enclosed within each device and works while the patient room is
still occupied and while the bathroom is not in use, therefore, continuously disinfecting an area of ongoing high contamination.
Research has shown that microbes can rebound to pre-disinfection levels within two hours following manual terminal cleaning and
disinfection. UVC products generally used for terminal cleaning in patient rooms have helped to reduce infections. Unfortunately,
these can only be used after a patient is transferred/discharged and the patient room is vacant. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Safety</U>. </I>Built-in motion detector
and sensor automatically shuts off the UVC light when anyone enters the room eliminating any concern over UV safety. Once there
is no movement in the room for 10 minutes the UVC light comes back on to restart and continue its cycle.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Removable UVC LED panel</U>. </I>The
UVC LEDs are installed via a removable panel, leading to ease of replacement or upgrade. The UVC LEDs are expected to become more
powerful over time and users may want to replace the earlier generation UVC LEDs (at an interval and cost not yet determined) with
more powerful models as the microbial world continues to change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Ease of Installation</U></I>. The
unit is easy to install and uses standard electrical wiring.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>IOT connectivity</U>. </I>IOT connectivity
uses Wi-Fi and RF technology that will enable continuous transmission of use and functionality data over the internet for collection
and analysis. This could include data on the length of time the UVC light was on as well as the length of time, frequency and interval
length concerning the bathroom use and its cleaning by the hospital staff. A companion software platform enables the administrator
to view and analyze the use and functionality data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>SteriLumen Disinfecting Mirror. </I>SteriLumen
has embedded its disinfection system into a mirror with electrified built-in &ldquo;white day-light&rdquo; LED lighting (typically
found in better hotel bathrooms) that replaces the typical mirror (and also replaces the wall lighting) found above the sink in
a hospital bathroom. As a mirror, the SteriLumen Disinfecting System meets all design and lighting requirements for healthcare
facilities and provides disinfection for the backsplash, sink, drain and surrounding countertops. Underneath the mirror are eight
UVC LEDs focused on high-risk bathroom sink surfaces, faucets and drains. This effectively reduces the bioburden of dangerous pathogens
that are easily acquired and transmitted throughout the healthcare setting. It is safe, effective, patented and unique in the market.
This mirror type without any disinfecting function is common in the hospitality industry which has an annual market size in excess
of $100 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_011.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>SteriLumen Disinfecting Drain. </I>Consists
of a stainless-steel pipe that is easily substituted for the ordinary pipe that fits between the bathroom sink drain cover and
the C-trap. A UVC LED sits in a one-half inch perforation in the pipe and is covered with a waterproof sapphire lens which is
in the plane of the interior of the pipe in order not to disrupt water flow. The UVC light destroys 6 logs (99.9999%) of the most
common pathogens, thereby disinfecting the aerosol plume that rises out of the drain when the faucet is turned on. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><IMG SRC="image_002.jpg" ALT="A picture containing indoor, appliance, dryer, white&#10;&#10;Description automatically generated" STYLE="height: 204px; width: 194px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>SteriLumen Disinfecting Shelf</I>.
To be installed over the hospital sinks that do not have or require a mirror above them and incorporating the attributes of the
SteriLumen Disinfecting Mirror, <I>i.e.</I>, back-lit side lighting and UVC LEDs to disinfect the countertop and sink area. Additionally,
the shelf could be installed under a simple ordinary mirror. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in; text-align: left"><IMG SRC="image_003.jpg" ALT="A picture containing indoor, sitting, computer, white&#10;&#10;Description automatically generated" STYLE="height: 143px; width: 359px"></TD><TD STYLE="text-align: justify"><IMG SRC="image_004.jpg" ALT="A close up of a door&#10;&#10;Description automatically generated" STYLE="height: 142px; width: 210px">&nbsp;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>SteriLumen Disinfecting Medicine Cabinet.
</I>A traditional medicine cabinet incorporating the attributes of the SteriLumen Disinfecting Mirror, i.e., back-lit side lighting
and UVC LEDs to disinfect the countertop or sink in a residential bathroom.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><IMG SRC="image_005.jpg" ALT="A picture containing window, front, sitting, black&#10;&#10;Description automatically generated" STYLE="height: 253px; width: 209px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>HAIs</I></B>. The Center for
Disease Control 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%<SUP>7</SUP>. 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<SUP>8</SUP>. Research shows that the most common germs causing HAIs are C. difficile (12%), Staphylococcus
aureus (MRSA, 11%), E. coli (9%) and Candida auris (7%)<SUP>9</SUP>. 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.<SUP>10
</SUP>Without question, secondary disinfection technologies are needed for reducing the risk of surface contamination. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the CDC:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approximately 1.7 million people in the
United States contract a HAI every year, or 1 out of every 25 hospital patients;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">an estimated 99,000 people die from HAI&rsquo;s
annually;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">HAI cost to the healthcare system is $45
billion annually;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">patients with a HAI spend an average of
6.5 extra days in the hospital; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">patients with a HAI are five times more
likely to be readmitted and twice as likely to die.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> HAI&rsquo;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 (&ldquo;CMS&rdquo;) 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. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">_____________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>7
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>8
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>9
</SUP></FONT>AJIC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>10
</SUP></FONT>AJIC</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Many healthcare facilities have seen success
with temporarily reducing their HAI rates, but may not have been able to sustain these reductions. A big part of the challenge
is controlling the presence of infectious agents in the patient room.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Complications with disinfection</I>.
There are many issues that complicate effective disinfection including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Current Hospital Designs</U><B>: </B>The
bathroom is an area of high contamination. Toilets are located close to the sink and countertops. When flushed, they release a
plume of microbial contamination into the air, ultimately landing on surfaces. Healthcare workers, the patient and visitors frequently
use this room with many opportunities for acquisition and transmission of microbes throughout the patient care environment. Despite
this, during a patient&rsquo;s stay this room is typically cleaned only once a day.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Materials</U><B>: </B>Multiple surface
materials and textiles cannot all be cleaned and disinfected effectively the same way. Surfaces that are not smooth can leave protective
reservoirs for microbes to proliferate in and not be reached by the biocides used to destroy them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <U>Lack of Time</U><B>: </B>The average
daily patient room disinfection time is 10 minutes (approximately 7 minutes for the main room and 3 minutes for the bathroom). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Standard Cleaning and Disinfection Protocol.
</I>Current infection control protocol focuses on manual cleaning, <I>i.e.</I> wiping hospital room and bathroom surfaces with
a disinfecting system. The standard cleaning and disinfecting protocol address three types of cleaning and disinfection:</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Daily</U>: 10 minutes per room of manual
wipe down using disinfecting fluids may not allow enough time to effectively disinfect areas of high contamination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Outbreak</U>: requiring different cleaning
products and processes based on the type of microbe and where the outbreak is. Often disinfectant products require a 10-minute
dwell time which is rarely followed. Pathogens are left on surfaces to proliferate and rebound to pre-disinfection levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U></U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <U>Terminal</U>: This is done following
patient discharge. Typically, a process that takes 45 minutes to 1 &frac12; hours. First, a deep manual cleaning performed by
the environmental services staff possibly followed by &quot;no touch&quot; disinfection technology. No touch disinfection includes
UV disinfection robots or hydrogen peroxide mist or vapor machine. In either case, the rooms cannot be occupied. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> All three processes require manual
cleaning/disinfection and proper use of disinfectant products. Effective human behavior determines the success or failure of each
process. Despite best cleaning/disinfecting efforts, microbes can continue to thrive on surfaces for days, weeks, and even months. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Facilities understand the limitations
of their current approach and are increasingly open to bundled or system-based solutions utilizing a variety of products and processes
including &ldquo;no touch&rdquo; technology. No-touch systems are gaining acceptance by providing additional disinfection to the
standard and required manual disinfection protocol described above. Many of these have been successful in addressing areas that
may not have been disinfected effectively before. Examples of no-touch products include: (a) Hydrogen peroxide vapor or mist to
get disinfectant into areas not always reached in the regular wipe-down, and (b) robotic systems that shine UVC light to kill
bacteria. Each of these systems has significant limitations: </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Room occupation</U>:</B> Both systems
require that the room be unoccupied. As a result, they can only be used for &ldquo;terminal&rdquo; disinfection following patient
discharge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><U>Line of sight</U>:</B> UVC systems
require &ldquo;line-of-sight&rdquo; to the affected areas. Microbes on surfaces outside the line of sight of the light source
are not affected. When used in a patient bathroom, for example, UVC robots cannot reach areas such as the inside of the sink bowl,
drain, and areas behind the faucet. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The SteriLumen Disinfecting System can
operate while the patient room occupied and does not need human intervention.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Effective disinfection in a healthcare
facility requires attention to detail. In a hospital bathroom, bacteria thrive in sink drains, splashing out when the faucet is
turned on, contaminating the bowl, countertop, faucets, and backsplash. In 2011-2012 the Clinical Center of the National Institutes
of Health faced an infection outbreak that originated from a sink drain, resulting in the deaths of 11 patients. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>UV Science</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Ultraviolet light.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"><IMG SRC="image_006.jpg" ALT="http:||sterilumen.com|wp-content|uploads|2017|12|WHAT_IS_UVC_TEMORARY.png" STYLE="height: 205px; width: 441px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Ultraviolet (&ldquo;UV&rdquo;) light
is one form of electromagnetic energy produced primarily by the sun, although it can also come from made-made sources such as
tanning beds and welding torches. As shown above, UV light is a designated band of light (or electromagnetic energy) with wavelength
from 100 to 400 nanometers (nm), which is shorter than visible light but longer than x-rays. UV light has enough energy to break
chemical bonds. Due to their higher energies, UV photons can cause <U>ionization</U>, a process in which electrons break away
from atoms. The resulting vacancy affects the chemical properties of the atoms and causes them to form or break chemical bonds
that they otherwise would not. This can be useful for chemical processing, or it can be damaging to materials and living tissues.
This damage can be beneficial, for instance, in disinfecting surfaces, but it can also be harmful, particularly to skin and eyes.
UV is generally divided into three sub-bands: UVA, UVB, and UVC. Of the three, UVC has the shortest wavelength, the highest energy,
and is most easily absorbed by most organic material. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>UVC Disinfection. </I>Using UV light
to disinfect is a fast, effective, and safe technique that utilizes UVC. When exposed to UVC light, microorganisms such as bacteria,
viruses, fungi, cysts, and mold are affected in a way such that they can no longer multiply, rendering them harmless. UV disinfection
can be used on surfaces, in air, and in water. Disinfection performance is a function of the UVC dose applied to the microorganism.
While all micro-organisms respond to UVC light in different ways, if given the appropriate dose, which is the product of UVC power
multiplied by time, 99.99% of micro-organisms can be killed. Microorganisms such as bacteria, viruses, fungi, cysts, and mold
are simple life forms that reproduce by subdivision, budding, or by producing spores. Reproduction of these organisms is vital
to their life cycle: loss of their ability to grow and multiply is classified as cellular death, and renders them harmless and
no longer pathogenic. When exposing microorganisms to UVC light, the energy generated from UVC light is absorbed into the microbes&rsquo;
cellular RNA and DNA, damaging nucleic acids and preventing microorganisms from infecting and reproducing. The absorption of UVC
energy forms new bonds between nucleotides, creating double bonds or &ldquo;dimers.&rdquo; Demineralization of molecules, particularly
thymine, is the most common type of damage done to microorganisms by UVC. Formation of thymine dimers in the DNA of bacteria,
fungi and viruses prevents replication and the ability to infect. Because UVC disinfection does not rely on chemicals or filtration
materials, it can be used effectively and safely in many applications including in drinking water, in air. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>LEDs</I>. The traditional approach to
generating UV light for disinfection applications has been the mercury discharge lamp, which is a fluorescent bulb without the
phosphor coating. Mercury lamps come in two main types: a low-pressure lamp that produces a single wavelength at 254nm; and a medium
pressure lamp that emits a multiple wavelength output. Unlike traditional mercury lamps, whose output wavelength is fixed, UV LEDs
can be manufactured to operate at the optimum wavelength for the application. UV LEDs also switch on and off instantly and can
actually be pulsed without any detriment to lifetime, making them more user-friendly and safer for the operator. Miniature, robust,
and operating with a low electrical power, UV LEDs can be manufactured with a highly stable output, operating at the optimum wavelength
for the application, making them ideal for compact and portable systems. The design rules for UV LEDs open new opportunities of
what can be disinfected as, unlike the long tube shape of mercury lamps, LEDs can be mounted in flat panels; on flexible circuit
boards; on the outside of cylinders and elsewhere.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Developing and maintaining a strong
intellectual property position is an important element of our business. We maintain the intellectual property through a combination
of patent protection, trademarks, and trade secrets. We have sought, and will continue to seek, patent protection for our technology,
for improvements to our technology, as well as for any of our other technologies where we believe such protection will be advantageous. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of July [*], 2020, SteriLumen owned
five issued patents and two pending patent applications in the United States; owned one issued patent in the European Union and
has 6 pending patent applications, which are in China, the Gulf Cooperation Council (GCC), Hong Kong, Japan, South Korea, and
Taiwan.&nbsp; The U.S. patent numbers are 9,724,442, 10,039,853, 10,307,504, 10,456,496 and 10,463,759 issued on August 8, 2017,
August 7, 2018 and June 4, 2019, October 29, 2019 and November 5, 2019, respectively.&nbsp; Two of the three pending U.S. patent
applications have been allowed and these will be issued in due course. The issued patents and pending patent applications cover
various aspects of the SteriLumen Disinfecting System including, the disinfection system; disinfection system embedded into a
fixture generally, and a vanity mirror specifically, and the mechanical components of any such mirror, including hinge mount and
programmable controller for regulating UV light. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On December 3, 2019, SteriLumen received
a trademark registration of its trademark or brand name &ldquo;SteriLumen.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SteriLumen will be protecting and enforcing
its issued patents, trade secrets, know-how, copyrights, and trademarks, as well as continuing to pursue technological innovation
and licensing opportunities, and developing and maintaining its competitive position in the vanity mirror and disinfecting product
markets for hospitality, hospital and healthcare facilities. Our success depends in part on SteriLumen obtaining and enforcing
patent protection for its products and processes, preserving and maintaining trade secrets, issued patents, copyrights and trademarks,
and operating with state of the art technologies while respecting the proprietary rights of third parties, and acquiring licenses
for technology or products as may be beneficial to the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Strategy for SteriLumen</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We believe that SteriLumen has developed
a safe, effective, unique and patented disinfecting system that may significantly reduce the number of pathogens found in healthcare
facilities. Our goal is to build a successful disinfecting system development and design company that contributes to a national
decreased rate of HAIs through the commercialization of innovative, efficacious and cost-effective disinfection system products
that address compelling market opportunities in the infection prevention industry. We will seek to achieve this goal by having
SteriLumen actively involved in the following activities: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Focus on healthcare facilities</U>:</B>
(i) Target infection prevention professionals&rsquo; at large hospitals and healthcare networks; (ii) Identify and target healthcare
networks that have been fined for high infection rates; and (iii) Leverage key teaching hospitals to facilitate both scientific
evidence as well as return on investment components.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Educate and work with healthcare
professionals</U>: </B>Educate and work with healthcare professionals to address the gaps they face in existing disinfection processes
and provide additional systems that can be used in conjunction with required disinfection protocol.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Leverage two routes to
market</U>:</B> (i) Architects and contractors specializing in healthcare construction<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>11</SUP></FONT>;
and (ii) Direct sales to healthcare facilities and contracted facility management companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Continue scientific validation</U>:
</B>through lab testing and in situation research then publishing in peer review journals case studies and supporting data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Establish a validation
study</U>:</B> Establish a validation/marketing study to demonstrate the effectiveness of the SteriLumen Disinfecting System, which
we have commissioned pursuant to the Mount Sinai Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><B><U>Leverage an outsourced
supply chain</U>:</B> Leverage an outsourced supply chain for production and warehousing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">______________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>11
</SUP></FONT>Architects are usually involved in major renovations and construction projects that are large. They specify products
such as bathroom fixtures including the mirror. Healthcare-oriented architects such as NBBJ are also often seeking systems to
support infection control. These firms serve as primary business development targets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The supply chain and production strategy
are illustrated below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="image_007.jpg" ALT="cid:1029ECFE-A3E5-445E-A4F2-C2CFB559F3A5@fios-router.home" STYLE="height: 324px; width: 445px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Hotels and Other Relevant Non-Healthcare Facilities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Beyond healthcare facilities, we focus
our marketing efforts in the following additional market segments:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Hotels</I></B><I>. </I>Hotels, including
those attached to hospitals or primarily serving patients traveling for medical care; hotels catering to an elderly clientele;
and hotels wishing to make disinfection, safety, cleanliness, <I>etc</I>. part of their branded experience could all be potential
targets in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Airplane
and Cruise Line Bathrooms</I></B></FONT><I>. </I>Because of the close quarters inside most airplane cabins, pathogens can easily
be spread among passengers, especially on long flights where airplane bathrooms have more use and may not be cleaned before flight&rsquo;s
end. The SteriLumen Disinfecting could provide an important means for disinfecting airplane bathrooms and decrease the spread
of germs in the airplane cabin.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Schools</I></B><I>. </I>Schools and
education authorities pay very close attention to disinfection to prevent the spread of influenza as well as other contagious threats.
The CDC maintains guidelines for disinfection of schools and many other organizations also advise schools on proper disinfection
protocol. SteriLumen&rsquo;s disinfection systems could find a receptive audience among school facilities managers looking for
new solutions to this issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Restaurants</I></B><I>. </I>Given
the need to prevent foodborne illness, restaurants are constantly urging staff to wash their hands and are required by public health
authorities to keep their premises as clean and germ-free as possible. SteriLumen could become part of upscale restaurants&rsquo;
strategy to demonstrate dedication and commitment to customers and health department to reduce the spread of infections within
their establishment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Homes</I></B><I>. </I>The general
consumer market could become important, especially for patients receiving care at home, people with compromised immune systems
or in homes with young children or elderly residents that are looking to reduce the chances of catching an infectious disease.
SteriLumen has designed (and has a patent pending) a disinfecting medicine cabinet, in addition to its standard SteriLumen Disinfecting
System, as a potential entry into this market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Given the uniqueness of the SteriLumen
Disinfecting System, we are not aware of any direct competition, including other manufacturers of mirrors and surface disinfection
systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Competitive mirrors</I></B><I>. </I>Hospitals
have been frequent buyers of mirrors not only in-patient bathrooms, but also other areas, none of which currently have disinfection
capabilities. The same architects that specify other kinds of mirrors will specify the SteriLumen Disinfecting System. We believe
that other mirror manufacturers will not be the most significant competition for SteriLumen, as most decision makers will view
SteriLumen&rsquo;s products as disinfection systems and overlook the current cost of buying a plain mirror, which in a hospital
bathroom are priced in the $100-$300 range. For backlit (electrified) mirrors the range is wider, from $300-$700. Backlit mirrors
are often sold to enhance design and create a healing environment. They are not common in hospitals, although that is rapidly changing.
We anticipate that the unit price of the SteriLumen Disinfecting System will be more than these backlit mirrors, but initially
less than $1,000. Because of this price differential, the SteriLumen Disinfecting System will be positioned in the market as an
essential disinfecting tool, but as a mirror with supplemental lighting that also provides disinfection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Disinfecting Systems.</I></B> While
we are not aware of any disinfecting systems that are directly comparable to the SteriLumen Disinfecting System, no-touch disinfecting
systems and Systems</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>No-touch Systems</I>. No-touch systems
have increased in popularity in recent years as complimentary and add on systems for addressing infection prevention issues following
required cleaning and disinfection protocols. These have proven to be effective with a few major drawbacks. They are used only
following patient transfer or discharge and cannot be used while the patient room is occupied. Due to the high cost for no touch
systems, healthcare facilities generally choose one of several no-touch options, either UVC robots or peroxide vapor. An additional
issue exists based on the available time for terminal disinfection if patients are waiting for a room or if staff is simply too
busy to move this technology into the room and turn it on and off. Depending on the technology, the disinfecting system may need
to be moved into the bathroom (additional cycle time) due to the constraints of the technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> This system requires approximately
2 hours&rsquo; time. The applicable room is completely closed and sealed off. All vents are sealed, doors with the equipment inside
to be run. Following the running of the machine, there is a specified time for the air to clear before anyone can go back into
the room and remove all of the seals put in place. There is concern about potential residual effects and potential patient safety
as well. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>UVC systems</I>. UVC disinfection
is fast and very effective on surfaces in line of sight. Products on the market include but are not limited to ceiling mounted,
wall-mounted, upper air UV disinfection units as well as UVC robots. Larger robot units recommend that their units be moved periodically
to address critical areas that may be limited by shadowing or areas outside of the direct line of sight. Typically, the larger
robots are used for terminal cleaning when the patient is discharged as a room must be empty to run these units. There are several
manufacturers currently developing other products including smaller portable units that could be put in a patient room while the
patient is receiving treatment elsewhere in the hospital. The competitive advantage of the SteriLumen system is its use of UVC
LEDs. All of the below systems which generate UV light use mercury or xenon bulbs which are inherently dangerous if mishandled. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Peroxide vapor systems</I>. Hydrogen
peroxide vapor systems use machines to disperse a concentrated hydrogen peroxide vapor throughout a room. The micro condensation
of the system on all surfaces deactivates harmful pathogens. The peroxide condensate breaks down to oxygen and water vapor, which
means there is no harmful residue. Like UVC robot systems, peroxide vapor systems cannot be run when a patient is in the room.
Furthermore, there is a need to seal the room and for personnel to wear hazmat suits during the disinfection process.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Munn Works</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Munn Works was formed on November 9,
2012, as a New York limited liability company. manufactures and supplies fine decorative framed mirrors, framed art, and vanities
to primarily to the hospitality market.&nbsp;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 has 37 fulltime employees and 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 &amp;
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. Munn Works currently manufactures approximately 20%
to 25% of its products domestically, but expects this to increase to 35% due to increasing lead times, production costs and tariffs
associated with manufacturing goods in China. We consider Munn Works to be a leader in the custom design decorative framed mirror
market. Our main competitors are Majestic Mirror located in Miami Florida and Mirror Image located in Los Angeles who make decorative
mirrors for hotels and Electric Mirror located in Seattle Washington who make backlit mirrors that are placed over vanities in
the bathroom. None of these competitors have any meaning domestic manufacturing capability. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On June 25, 2018, Munn Works filed
a voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code in order to (i) pursue its appeal of a $1.4
million New York State court judgment arising out of an employment and business dispute with a former employer of Mr. Munn (of
which Mr. Munn&rsquo;s family-owned 50% of the equity) and (ii) preserve its ongoing operations from collection efforts with respect
to such judgment. Munn Works settled the dispute by making a $400,000 cash payment and on June 28, 2019, concluded its Chapter
11 proceedings. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 30%; text-align: left"><IMG SRC="image_008.jpg" ALT="A picture containing sitting, small, table, items&#10;&#10;Description automatically generated" STYLE="height: 374px; width: 267px"></TD><TD STYLE="text-align: justify; width: 70%"><IMG SRC="image_009.jpg" ALT="A picture containing indoor, black, table, blue&#10;&#10;Description automatically generated" STYLE="height: 370px; width: 264px">&nbsp;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Litigation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">From
time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We may in the future receive
claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation
may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of&nbsp;third-party&nbsp;proprietary
rights, or to establish our proprietary rights. The results of any future litigation cannot be predicted with certainty, and regardless
of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources,
and other factors.</FONT> To date, we have not been made aware of any actual, pending or threatened litigation against the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We lease and maintain our primary offices
and manufacturing facility at 150 N. Macquesten Parkway, Mount Vernon, NY 10550. We do not currently own any real estate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_013"></A>MANAGEMENT</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The following are our executive officers
and directors and their respective ages and positions as of July 15, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 29%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding-right: 3pt; padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt"><B>Name</B></FONT> </TD>
    <TD STYLE="white-space: nowrap; width: 1%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="width: 9%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Age</B></FONT> </TD>
    <TD STYLE="white-space: nowrap; width: 1%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="width: 60%; border-top: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Position</B></FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Keyoumars Saeed</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">56</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Chief Executive Officer and Director</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Max Munn</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">75</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">President and Director</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">James L. Doyle, III</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">52</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Chief Operations Officer</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Joseph Himy</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">51</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Joel Kanter</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">63</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Chairman of the Board</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Dr. Eugene A. Bauer, M.D.</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">78</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Dr. Alastair Clemow, Ph.D.</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">69</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Dallas C. Hack, M.D</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">67</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Eugene E. Burleson</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: center"> <FONT STYLE="font-size: 10pt">79</FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 2.25pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.25pt"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>Keyoumars Saeed </B> is our Chief
Executive Officer. Mr. Saeed has over 25 years of proven experience in strategic planning, operations, sales and executive management
of advanced technologies. A seasoned CEO and senior executive, under his leadership, record of achievement in sales, marketing
and operations development, strategic planning, and business development. Mr. Saeed recently was CEO of Ubiquity LLC and advised
the National Mental Health Innovation Center (NMHIC) and worked with CU Innovations on business partnerships and co development
with their technology innovation network (TIN) on virtual and augmented reality to conduct interventions and training protocols
and at the University of Colorado Anschutz Medical Center. Previously, in 2016 he was founder and CEO of Vital Neuro, Inc. which
has converged machine learning, cloud technologies in a closed feedback system. Vital Neuro is an evidence based, proven service
relieving employee stress with a personalized 15 minute daily session to a headphone through an app to company subscriber base.
Prior to that and until the end of 2015 Mr. Saeed spent three and a half years at Kymeta Corporation, a Bill Gates company, as
the EVP of Strategy and development creating a market approach to the connected car strategy, sourcing and securing unique raw
materials and industry relations and partnerships. Among several smaller startups, Mr. Saeed Co-founded Open Range Communications
in 2004 to deliver broadband to rural and underserved communities in the US. In 2001 Mr. Saeed was instrumental in the launch
of the first cellular Blackberry at T-Mobile USA where he was part of the pioneering team introducing the first device converging
voice and data to the market in 2001. He spent the worked at AT&amp;T wireless advanced services organization introducing CDPD
and converged wireless data through 1999. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Max Munn</I></B> is the President
and a director of the Company and is also CEO of Munn Works. Mr. Munn has held this position at Munn Works for over 20 years.
Mr. Munn is also Co-chairman of Dieu Donne Inc., a not-for-profit and&nbsp;a leading, world recognized atelier wherein dimensional,
handmade&nbsp;paper is utilized in the making of art. Mr. Munn attended MIT from 1961-1966, majored in chemistry and architecture;
and received a Bachelors of Architecture degree. Mr. Munn also attended Columbia University for post graduate studies from 1966-1968,
working toward a Ph.D. in architectural history. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>James L. Doyle, III</B> is our Chief
Operations Officer. Mr. Doyle has over 28 years&rsquo; experience in general management, operations, marketing, sales and consulting.
Most recently, Mr. Doyle was the President of Panasonic Enterprise Solutions company, a $450 million solution and engineering
company focused primarily on North America, but with limited clients in Asia and Europe. This company built complex solutions
for Panasonic&rsquo;s global customers in sports and entertainment, energy, and smart city industries. His clients ranged from
the Philadelphia Eagles to MGM to the US Government. Before joining Panasonic, Mr. Doyle was a Consulting Partner with IBM Global
Business Services leading its North American Electronics industry solutions unit, the final role in a thirteen-year span with
IBM. Mr. Doyle currently serves on the board of Mobilitynext, a nonprofit organization that brings public and private entities
together to solve the world&rsquo;s most challenging transportation and mobility challenges. Mr. Doyle also served as an Officer
in the US Marine Corps, participating in Operation Restore Hope in Somalia. Mr. Doyle has an MBA in Marketing and Decision &amp;
Information Systems from Indiana University and a BS in Marketing from Syracuse University. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Joseph N. Himy</I></B> is our
Chief Financial Officer. Mr. Himy is a Director of The CFO Squad, a financial and business advisory firm providing outsourced
CFO advisory and regulatory consulting services primarily for public companies, since August 2011. From May 2009 until August
2011, Mr. Himy was Chief Financial Officer of Vyteris, Inc., manufacturer of the first active transdermal patch approved by the
U.S. Food and Drug Administration for the pain associated with blood draws, intravenous cannulations and laser ablation of superficial
skin lesions. Prior to May 2009 and from October 2004, Mr. Himy held various other positions at Vyteris, including Corporate Controller
and VP of Finance. Mr. Himy received a B.S. degree in Accounting from Brooklyn College of the City University of New York and
is a certified public accountant. Mr. Himy&rsquo;s accounting and financial and corporate governance experience background enhances
the breadth of experience of the board of directors.&nbsp; Mr. Himy is also Independent Director of Tofutti Brands Inc. and a
member of its Audit Committee since October 30, 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Joel Kanter</I></B> is the Chairman
of the Board of the Company. Mr. Kanter serves as President of Windy City, Inc., a privately held investment firm, since July 1986.
From 1989 to November 1999, Mr. Kanter served as the President, and subsequently as the President and Chief Executive Officer of
Walnut Financial Services, Inc., a publicly traded company (Nasdaq: WNUT). Walnut Financial&rsquo;s primary business focus was
the provision of various forms of financing to small business including equity financing to start-up and early stage development
companies, bridge financing to small and medium-sized companies, and later stage institutional financing to mature enterprises.
Tower Hill Capital bought the Company in 1999 in a transaction valued at approximately $400 million. From 1978 - 1980, Mr. Kanter
served as a Legislative Assistant to former Congressman Abner J. Mikva (D-Ill.).&nbsp; In that position, Mr. Kanter provided support
to Congressman Mikva with respect to activities related to his position on the House Judiciary Committee.&nbsp; In particular,
Mr. Kanter was intimately involved in efforts to reform the Federal Criminal Code.&nbsp; Mikva subsequently became the Chief Judge
of the U.S. Court of Appeals for the District of Columbia Circuit, and then served as White House Counsel to President Clinton.
From 1980 - 1983, Mr. Kanter served as Special Assistant to the National Association of Attorneys General.&nbsp; In that position,
he represented the interests of the State Attorneys General in Washington, D.C. in the criminal justice and environmental arenas.&nbsp;
Mr. Kanter serves on the Board of Directors of one currently public company, Magna-Labs, Inc., which was formerly involved in the
development of a cardiac MRI device. Mr. Kanter also serves on the boards of several private biotechnology companies. Mr. Kanter
is a National Association of Corporate Directors &ldquo;Governance Fellow.&rdquo; Mr. Kanter is a current Trustee Emeritus and
past President of the Board of Trustees of The Langley School in McLean, Virginia, a former Trustee at the Georgetown Day School
in Washington, D.C., and a former Trustee of the Union Institute &amp; University, the Country&rsquo;s first Online University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that Mr. Kanter is qualified
to serve as a member of our board of directors because of his experience as a public company executive, his extensive finance background,
his service as a current director of public and private companies, and his knowledge of the industry in which we operate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Dr. Eugene A. Bauer, M.D. </I></B>is
a Director of the Company. In 2010, Dr. Bauer co-founded Dermira, a publicly traded specialty biopharmaceutical company acquired
by Eli Lilly and Company in 2020. Dr. Bauer served as Chief Medical Officer of Dermira, a wholly-owned subsidiary of Lilly, through
March 2020. Prior to founding Dermira, Dr. Bauer served as Director, President and Chief Medical Officer of Pelpin, Inc., a publicly
traded specialty pharmaceutical company, from 2008 to 2010. Dr. Bauer served as Chief Executive Officer of Neosil, Inc., a specialty
pharmaceutical company, from 2004 to 2008, and he co-founded and served as a member of the board of directors at Connetics, a
publicly traded specialty pharmaceutical company, from 1990 to 2006. Prior to initiating his career in industry, Dr. Bauer served
as Dean of Stanford University School of Medicine from 1995 to 2001 and as Chair of the Department of Dermatology at Stanford
University School of Medicine from 1988 to 1995. Dr. Bauer is Professor Emeritus at Stanford University School of Medicine, a
position he has held since 2002. Dr. Bauer was a U.S. National Institutes of Health (&ldquo;NIH&rdquo;)-funded investigator for
25 years and has served on review groups and Councils for the NIH. Dr. Bauer has served on the boards of directors of a number
of public and private companies, including Aevi Genomic Medicine, Inc. (formerly Medgenics, Inc.), First Wave Technologies, Inc.,
and Kadmon Holdings, Inc. He is member of numerous honorific societies, including the National Academy of Medicine. Dr. Bauer
received his B.S. in medicine from Northwestern University and his M.D. from Northwestern University Medical School. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We believe that Dr. Bauer&rsquo;s background
of service on the boards of directors of numerous public pharmaceutical companies and his vast industry experience provides him
with the qualifications and skills to serve on our Board. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Alastair J. Clemow, Ph.D.</I></B>
is a Director of the Company. Dr. Clemow currently serves as Chairman of Ensemble Orthopedics, an early-stage company developing
an innovative pyrocarbon finger joint for the treatment for early state osteoarthritis. From 2010 to 2019, Dr. Clemow served as
President and Chief Executive Officer of Regentis Biomaterials, a private company developing an innovative material for cartilage
repair. He also held positions of president and chief executive officer in a number of companies that he helped found, including
Nexgen Spine, Inc., which developed an artificial spinal disc; Gelifex, Inc., which developed an innovative spinal nucleus replacement
implant and which was acquired in 2004 by Synthes Spine, Inc.; and Minimally Invasive Surgical Technologies, Inc., which developed
a novel series of implants for minimally invasive total knee replacement and which was acquired in 2005 by MAKO Surgical Corp.
From 2000 to 2004, Dr. Clemow served as Principal of Tanton Technologies, Inc., an organization that provided strategic and technical
assessment of new medical device opportunities for large, mid-cap, and early-stage development companies. From 1981 to 2000, Dr.
Clemow held numerous positions with Johnson &amp; Johnson, including Vice President of Worldwide Business Development for Ethicon
Endo-Surgery, Inc.; Vice President of New Business Development for Johnson &amp; Johnson Professional, Inc.; and Director of Research
and Development of Johnson &amp; Johnson Orthopedics. In those capacities, Dr. Clemow was responsible for acquiring or developing
what today represents billions of dollars of Johnson &amp; Johnson revenue. Dr. Clemow serves or has served on the boards of numerous
private and public companies including Aevi Genomics; Encore Medical; Echo Healthcare Acquisition Corp.; BioMedical Enterprises,
Inc.; and Kinetic Muscles, Inc. He graduated from the University of Surrey with a Bachelor of Science Degree in metallurgy and
Ph.D. in metallurgy and earned his MBA degree from Columbia University in New York. </P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> With extensive senior management experience
within healthcare companies, including Johnson &amp; Johnson, as well as a member of the boards of numerous public and private
companies, we believe that Dr. Clemow is qualified to serve as a member of our Board. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Dallas C. Hack, M.D., M.P.H.
</I></B>is a Director of the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> He is board certified in General Preventive
Medicine and Public Health and a Fellow in the American College of Military Public Health. He directed trauma research for the
military from 2008 to 2014, with responsibility for more than $2 billion in grant funding. He served as Command Surgeon at the
strategic level during Operations Enduring Freedom and Iraqi Freedom. He held numerous military medical leadership positions including
Commander of the NATO Headquarters Healthcare Facility, and Command Surgeon at the strategic level during Operations Enduring
Freedom and Iraqi Freedom. COL(R) Hack received numerous military awards including the Bronze Star, two Legion of Merit awards,
and was inducted as a Distinguished Member of the Military Order of Medical Merit. He has a BA from Andrews University (1972),
an MPH from Johns Hopkins University (1995), a MD from Loma Linda University (1976), an MSS from the US Army War College (2004),
and a CPE from the Certifying Commission in Medical Management (1997). He was recognized as the Distinguished Alumnus of the Year
by Loma Linda University in May 2015. Dr. Hack has an appointment from the School of Medicine, University of Pittsburgh as Adjunct
Professor of Neurosurgery and from Virginia Commonwealth University as an Associate Clinical Professor, Department of Physical
Medicine and Rehabilitation. After retiring from 28 years of military service in 2015, Dr. Hack has worked with numerous biotechs
and non-profits to advance medical research and transition the progress to improved clinical practice. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We believe that Dr. Hack is qualified
to serve as a member of our Board because of his extensive knowledge of the industry in which we operate. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Eugene E. Burleson</I></B> is
a Director of the Company. He is a private investor and was Chairman of PET DRx Corporation from June 2005 to July&nbsp;1, 2010,
and its Chief Executive Officer from October 2008 until its acquisition by VCA Antech in July 2010. Mr.&nbsp;Burleson was a director
of HealthMont Inc. from September 2000 until its acquisition by SunLink in October 2003. Mr.&nbsp;Burleson served as Chairman
of the Board of Directors of Mariner Post-Acute Network, Inc. from January 2000 to June 2002. Mr. Burleson also served as Chairman
of the Board of Directors of Alterra Healthcare Inc. a developer and operator of assisted living facilities and is on the Board
of Deckers Outdoor Corporation Inc. Mr. Burleson served as Chairman of the Board of GranCare Inc. from October 1989 to November
1997. Additionally, Mr. Burleson served as President and Chief Executive Officer of GranCare Inc. from December 1990 to February
1997. Upon completion of the merger of GranCare&rsquo;s pharmacy operations with Vitalink Pharmacy Services Inc. in February 1997,
he became Chief Executive Officer and a Director of Vitalink Pharmacy Services Inc. Mr. Burleson resigned as Chief Executive Officer
and Director of Vitalink Pharmacy Services in August 1997. From June 1986 to March 1989, Mr. Burleson served as President, Chief
Operating Officer and a Director of American Medical International Inc. (&ldquo;AMI&rdquo;), an owner and operator of acute care
hospitals. Based in London from May 1981 to June 1986, Mr. Burleson served as Managing Director of AMI&rsquo;s international operations.
Mr. Burleson received his early management training at Eastman Kodak from 1963 to 1974. He graduated from East Tennessee State
University with a Bachelor of Science Degree in accounting and earned an MBA degree in 1972. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> We believe Mr. Burleson vast business experience provides
him with the qualifications and skills to serve on our Board. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Code of Ethics</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board plans to adopt a written code
of business conduct and ethics (&ldquo;<U>Code</U>&rdquo;) that applies to our directors, officers and employees, including our
principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing
similar functions. We intend to post on our website a current copy of the Code and all disclosures that are required by law in
regard to any amendments to, or waivers from, any provision of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Leadership Structure and Risk
Oversight</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board oversees our business and considers
the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a
whole. Each of the Board committees, as set forth below, will also provide risk oversight in respect of its areas of concentration
and reports material risks to the board for further consideration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> Our business
and affairs are managed under the direction of our Board. Our Board consists of seven directors, five of whom qualify as &ldquo;independent&rdquo;
under the listing standards of Nasdaq. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Directors serve until the next annual meeting
and until their successors are elected and qualified. Officers are appointed to serve for one year until the meeting of the Board
following the annual meeting of shareholders and until their successors have been elected and qualified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Director Independence</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">Our
</FONT>board of directors are composed of a majority of &ldquo;independent directors&rdquo; as defined under the rules of Nasdaq.
We use the definition of &ldquo;<I>independence</I>&rdquo; applied by Nasdaq to make this determination. Nasdaq Listing Rule 5605(a)(2)
provides that an &ldquo;<I>independent director</I>&rdquo; is a person other than an officer or employee of the company or any
other individual having a relationship which, in the opinion of the Company&rsquo;s Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot
be considered independent if:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">the director is, or at any time during the past three (3) years was, an employee of the company;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve (12) consecutive months within the three (3) years preceding the independence determination (subject to certain exemptions, including, among other things, compensation for board or board committee service);</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient&rsquo;s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exemptions);</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three (3) years, any of the executive officers of the company served on the compensation committee of such other entity; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the director or a family member of the director is a current partner of the company&rsquo;s outside auditor, or at any time during the past three (3) years was a partner or employee of the company&rsquo;s outside auditor, and who worked on the company&rsquo;s audit.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Under such definitions, <FONT STYLE="background-color: white">our
Board has undertaken a review of the independence of each director. Based on information provided by each director concerning
his or her background, employment and affiliations, our Board has determined that Joel Kanter, Dr. Eugene A. Bauer, Dr. Alastair
Clemow, Dr. Dallas Hack and Eugene Burleson</FONT> are all independent directors of the Company. However, our common stock is
not currently quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of
our Board be independent and, therefore, the Company is not subject to any director independence requirements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Committees
of the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board has established an audit committee
and a compensation committee. Our Board has not yet adopted procedures by which stockholders may recommend nominees to the Board
of Directors. The composition and responsibilities of each of the committees of our Board is described below. Members serve on
these committees until their resignation or until as otherwise determined by our board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Audit Committee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have established an audit committee
consisting of Eugene Burleson, Alastair Clemow and Dallas Hack. Eugene Burleson is the Chairman of the audit Committee. <FONT STYLE="background-color: white">In
addition, our Board has determined that Eugene Burleson is an audit committee financial expert within the meaning of Item&nbsp;407(d)
of&nbsp;Regulation&nbsp;S-K&nbsp;under the Securities Act of 1933, as amended, or the Securities Act.</FONT> The audit committee&rsquo;s
duties, which are specified in our Audit Committee Charter, include, but are not limited to: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our annual disclosure report;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">discussing with management major risk assessment and risk management policies;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">monitoring the independence of the independent auditor;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">reviewing and approving all related-party transactions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">inquiring and discussing with management our compliance with applicable laws and regulations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">appointing or replacing the independent auditor;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 14px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">approving reimbursement of expenses incurred by our management team in identifying potential target businesses.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The audit committee is composed exclusively
of &ldquo;independent directors&rdquo; who are &ldquo;financially literate&rdquo; as defined under the Nasdaq listing standards.
The Nasdaq listing standards define &ldquo;financially literate&rdquo; as being able to read and understand fundamental financial
statements, including a company&rsquo;s balance sheet, income statement and cash flow statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the Company intends to certify
to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance
or accounting, requisite professional certification in accounting, or other comparable experience or background that results in
the individual&rsquo;s financial sophistication.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compensation Committee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have established a compensation
committee of the board of directors to consist of Alastair Clemow, Eugene Bauer and Eugene Burleson, each of whom is an independent
director. <FONT STYLE="background-color: white">Each member of our compensation committee is also a&nbsp;non-employee&nbsp;director,
as defined pursuant to&nbsp;Rule&nbsp;16b-3&nbsp;promulgated under the Exchange Act, or&nbsp;Rule&nbsp;16b-3,&nbsp;and an outside
director, as defined pursuant to Section&nbsp;162(m) of the Code, or Section&nbsp;162(m).&nbsp;</FONT>Alastair Clemow is the chairman
of the compensation committee. The compensation committee&rsquo;s duties, which are specified in our Compensation Committee Charter,
include, but are not limited to: </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">reviews, approves and determines, or makes recommendations to our board of directors regarding, the compensation of our executive officers;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">administers our equity compensation plans;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviews and approves, or makes recommendations to our board of directors, regarding incentive compensation and equity compensation plans; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">establishes and reviews general policies relating to compensation and benefits of our employees.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white"><B>Director
Compensation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 18, 2020, the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company&rsquo;s common stock
at an exercise price equal to the greater of $2.50 per share and the per share market value of the Company&rsquo;s common stock
on the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to members of the
Board, of which 1,250 have been cancelled. On July 1, 2020, we issued an additional 1,000 options in aggregate to two members
of the Board. The options are subject to quarterly equal vesting over a one-year period. To date 375 of these options have vested.
On July 9, 2020, the Board cancelled any further issuance of these quarterly options. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On July 9, 2020 the Board approved
a compensation package for non-employee directors of the Board. The compensation for non-employee directors include; (i) upon
of each such director, such director shall be issued 10,000 shares of restricted common stock which vests evenly on an annual
basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares of restricted common stock
to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly cash payments of $6,250
to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman of the Board which
vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of restricted common
stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate Governance and Nominating
Committees have not yet been established). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Family Relationships</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no family relationships among
any of our officers or directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Involvement in Certain Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as disclosed below, to our knowledge,
none of our current directors or executive officers has, during the past ten (10) years:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 5, 2011, Max Munn filed for bankruptcy
pursuant to Chapter 7 of the Bankruptcy Code. Mr. Munn filed for bankruptcy as a result of guarantees made by Mr. Munn of construction
loans made by APF Group that were defaulted on in 2008 and 2009 during the financial crisis. Mr. Munn was a principal of APF Group.
On January 30, 2012, the Chapter 7 proceedings were concluded.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2018, Munn Works, all of the
equity of which was beneficially owned by Max Munn as of such date, filed a voluntary petition for reorganization pursuant to Chapter
11 of the Bankruptcy Code as further described in the section entitled &ldquo;Business&mdash;Munn Works.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>Medical Advisory Board</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company has established a Medical Advisory Board (the &ldquo;MAB&rdquo;), the purpose of which is to </FONT>provide non-binding
medical advice to the Board and the Company&rsquo;s management relating to the development, manufacture, and sale of the Company&rsquo;s
disinfection devices and related products. The MAB shall meet at least twice annually with the Board and each member shall receive
on an annual basis an option to purchase 5,000 shares of the Company&rsquo;s common stock at initially $5.00 per share and the
Chairman of the MAB shall receive on an annual basis an option to purchase 10,000 shares of the Company&rsquo;s common stock at
initially $5.00 per share. All of the options vest quarterly. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Currently, the MAB consists of the
following two members and no chairman: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Dr.
Nawar M. Shara, Ph.D. </I></B></FONT>is a Director of the Company and is currently an Associate Professor of Medicine at Georgetown
University Medical Center; Director, Biostatistics, Epidemiology and Research Design at Georgetown-Howard Universities Center
for Clinical and Translational Science; and Director, Department of Biostatistics and Bioinformatics, MedStar Health Research
Institute. Dr. Nawar has more than a decade of experience in grant proposal development, statistical consulting, clinical trials,
statistical analysis, and data management; and teaching specialized courses to medical students and healthcare providers, including
nurses and physicians. Dr. Nawar has more than seven years of experience in serving as a scientific reviewer on study sections
for Veterans Affairs, Department of Defense (&ldquo;DOD&rdquo;), and National Institutes of Health (&ldquo;NIH&rdquo;). Dr Nawar
has Developed biostatistics modular courses for professionals in health sciences, biostatistics, and regulatory science; served
as statistical reviewer for peer-reviewed journals (e.g., <I>American Journal of Cardiology</I>, <I>Diabetes</I>, <I>Diabetes
Care</I>, and <I>Journal of Community Hospital Internal Medicine Perspectives</I>). Dr Shara&rsquo;s research focus includes Big
Data solutions, Artificial Intelligence, Machine Learning, data visualization, Predictive Analytics, Adaptive Designs and Optimization
schemes in clinical trials. Dr. Shara She is a member of American Statistical Association, the Royal Statistical Society, the
American Society of Nephrology, the Women in Statistics Caucus, ASA Scientific and Public Affairs Advisory Committee. She is the
President of the National Arab American Medical Association (NAAMA DC Chapter) as well as the chair of the Science and Research
Committee for NAAMA. Dr. Shara has served as a peer reviewer for the following journals: Diabetes, American Journal of Cardiology
and Journal of Community Hospital Internal Medicine Perspectives and has authored over 50 peer-reviewed journal publications.
Dr. Shara served as Principal Investigator of several NIH-funded studies, National Kidney Foundation, Robert Wood Johnson Foundation.
Her earlier work aimed at examining correlated of kidney and cardiovascular disease including oxidative Stress and surrogates
of kidney function. She is currently the principal investigator of a NIH NCATS supplements looking to leverage voice activated
technology (Alexa) to help patients with Heart Failure to better manage their disease. Dr. Shara conducts, supports and oversees
clinical and translational research across MedStar hospitals and is involved in teaching and education at Georgetown she is also
course Director for many offerings at Georgetown University including, Biostatistics in Medical Research, Research methodology
and Analytic approaches in Regulatory Science, a course offered as part of the Master of Science in Regulatory Science program
at Georgetown University (CERSI) and the Chair for a session on AI in medicine at the First International Conference in Systems
and Network Medicine at Georgetown University, Washington DC, September 2019. Dr. Nawar received a Ph.D. in Applied Sciences from
American University in 2002 and an M.S. in Applied Statistics from American University in 1996. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Dr.
Adam Auerbach, M.D. </I></B></FONT>is a Director of the Company and is currently serving as the Medical Director of the Sandra
Atlas Bass Heart Hospital at North Shore Hospital as well as the Associate Medical Director of North Shore University Hospital.
Dr. Auerbach has been in these roles for two&nbsp;years. He is also currently serving as the head of quality for the department
of cardiology. Dr. Auerbach has been in this role since 2014 and served as the Director of Inpatient Cardiac Services at North
Shore University Hospital from 2012-2017.&nbsp;Dr. Auerbach graduated from Rutgers University in 1998 with a degree in Molecular
Biology and Biochemistry, he then attended Albert Einstein College of Medicine of Yeshiva University from 1998 to 2002. Dr. Auerbach
completed a residency in internal medicine at Long Island Jewish Medical&nbsp;Center from 2002 to 2005 and completed a fellowship
in Cardiovascular Diseases at North Shore University Hospital and Long Island Jewish Medical Center from 2005 to 2008. Dr. Auerbach
was briefly in a private cardiology practice until he joined the faculty of North Shore University Hospital in 2010.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_014"></A>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table illustrates the compensation
paid by the Company to its executive officers. The disclosure is provided for the years ended December 31, 2019 and <FONT STYLE="background-color: white">December
31, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 38%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name
    and Principal Position</FONT> </TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 15%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Year</FONT> </TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 15%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Salary($)(1)</FONT> </TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 28%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total($)</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Keyoumars Saeed(2) </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Chief Executive Officer and </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Director&nbsp; </P></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2019</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2018</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Max Munn, </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> President and </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Director </P></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2019</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$400,000(3)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$400,000</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2018</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$400,000(4)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$400,000</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">James L. Doyle, III(5)</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Operations Officer</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2019</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2018</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joseph N. Himy(6)</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2019</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2018</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0in"></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We periodically
    review, and may increase, base salaries in accordance with the Company&rsquo;s normal annual compensation review for each
    of our named executive officers.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Saeed was
    hired as the Company&rsquo;s Chief Executive Officer on June 30, 2020.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The cash salary
    of $400,000 was forgone by Mr. Munn and on April 1, 2020, he was issued a five-year warrant to purchase 80,000 shares of the
    Company&rsquo;s common stock at an exercise price equal to the greater of $5.00 per share and market value per share of the
    Company&rsquo;s common stock on the date of issuance in lieu of cash salary.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents amounts
    paid by Munn Works prior to the Company&rsquo;s formation.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Doyle was
    hired as the Company&rsquo;s Chief Operations Officer on June 20, 2020.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joseph N. Himy
    was hired as the Company&rsquo;s Chief Financial Officer on July, 15, 2020</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Equity Awards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019, and 2018, the Company did not have any
outstanding equity awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Employment Agreements</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2019, and 2018, the Company
had no employment agreements with any of its named executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif">However,
on June 30, 2020, the Company entered into employment agreements with its Chief Executive Officer and Chief Operations Officer</FONT><FONT STYLE="background-color: white">.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white"><B><A NAME="a_015"></A>PRINCIPAL
STOCKHOLDERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The following table sets forth certain
information, as of July 15, 2020, with respect to the holdings of (1) each person who is the beneficial owner of more than 5%
of Company voting stock, (2) each of our directors, (3) each executive officer, and (4) all of our current directors and executive
officers as a group. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Beneficial
ownership of the voting stock is determined in accordance with the rules of the SEC and includes any shares of Company voting
stock over which a person exercises sole or shared voting or investment power, or of which a person has a right to acquire ownership
at any time within 60 days of July 15, 2020. Except as otherwise indicated, we believe that the persons named in this table have
sole voting and investment power with respect to all shares of voting stock held by them. Applicable percentage ownership in the
following table is based on 5,103,316 shares of common stock issued and outstanding on July 15, 2020, and 6,186,856 after the
offering assuming a common stock offering of 1,000,000 shares&nbsp;(excluding 150,000 shares which may be sold upon exercise of
the underwriters&rsquo; over-allotment option and including 51,034 </FONT>shares of common stock to be issued upon the effectiveness
of the registration statement related to the offering and 32,506 shares to be issued by the closing date of this offering), plus,
for each individual, any securities that individual has the right to acquire within 60 days of June 23, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the best of our knowledge, except as
otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of
our common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge,
none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is
no arrangement, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date
result in a change in control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; vertical-align: top; font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid; text-align: left"> Name
    and Address<BR> of Beneficial Owner </TD><TD STYLE="white-space: nowrap; font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="white-space: nowrap; border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: left"> Title </TD><TD STYLE="white-space: nowrap; font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="white-space: nowrap; border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: left"> Title
    of Class </TD><TD STYLE="white-space: nowrap; font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid"> Beneficially<BR>
    owned </TD><TD STYLE="white-space: nowrap; padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="white-space: nowrap; font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid"> Percent
    of Class<BR> Before Offering </TD><TD STYLE="white-space: nowrap; padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="white-space: nowrap; font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; text-align: center; font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid"> Percent
    of Class<BR> After Offering </TD><TD STYLE="white-space: nowrap; padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: bold 10pt Times New Roman, Times, Serif; text-align: left"> Officers and Directors </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Keyoumars Saeed </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Chief Executive Officer and
    Director </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: left"> Max Munn </TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 20%; font: 10pt Times New Roman, Times, Serif; text-align: left"> President </TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,080,000 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 99.5 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 82.1 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 2,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> James L. Doyle III </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Chief Operations Officer </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Joseph N. Himy </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Chief Financial Officer </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Joel Kanter </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Chairman of the Board </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Dr. Eugene A. Bauer, M.D. </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Director </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Dr. Alastair Clemow, Ph.D </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Director </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Dr. Dallas C. Hack, M.D. </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Director </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Eugene E. Burleson </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Director </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> -- </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: bold 10pt Times New Roman, Times, Serif; text-align: left"> Officers and Directors
    as a Group (total of 9 persons) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,100,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 99.5 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 82.1 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 2,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; font: bold 10pt Times New Roman, Times, Serif; text-align: left"> 5% Stockholders </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Common Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,000,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 98 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 80.8 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font: 10pt Times New Roman, Times, Serif; text-align: left"> Series A Preferred Stock </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 2,000 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 100 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> % </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) Unless otherwise indicated, the principal
address of the named directors and directors and 5% stockholders of the Company is c/o Applied UV, Inc., 150 N. Macquesten Parkway,
Mount Vernon, NY 10550.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) Includes 5,000,000 shares which
are held in the name of The Munn Family 2020 Irrevocable Trust, for which the spouse of Max Munn is the trustee and 80,000 shares
underlying a warrant issued to Mr. Munn.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3) Held in the name of The Munn Family
2020 Irrevocable Trust, for which the spouse of Max Munn is the trustee. Each share of Series A Preferred Stock is entitled to
1,000 votes (2,000,000 votes in aggregate) and votes with the Company&rsquo;s common stock as a single class.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a_016"></A>CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
February of 2019, the Company engaged Carmel, Milazzo &amp; Feil LLP to represent and assist the company with all general corporate
legal matters including this offering of the Company&rsquo;s common stock. Ross Carmel, a former board member of Applied UV, is
a partner at Carmel, Milazzo &amp; Feil LLP. As partial compensation for its legal services, Carmel, Milazzo &amp; Feil LLP will
receive three percent of the outstanding shares of the Company&rsquo;s common stock, including the shares issued in this offering
and the shares issued to Carmel, Milazzo &amp; Feil LLP. As of June 19, 2020, Carmel, Milazzo &amp; Feil LLP, has been issued
102,066 shares of the Company&rsquo;s common stock. Carmel, Milazzo &amp; Feil LLP will receive an additional 51,034 upon the
effectiveness of the registration statement for this offering and an additional 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) on the closing date of the offering. As of March 31, 2020, the Company
has recorded a liability to be settled in stock for an amount of $507,</FONT>805, which does not include the shares to be issued
at the closing of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_017"></A>DESCRIPTION
OF SECURITIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following description of our securities is only a summary
and is qualified in its entirety by reference to the actual terms and provisions of the capital stock contained in our certificate
of incorporation and our bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is authorized to issue
two classes of stock. The total number of shares of stock which the Company is authorized to issue is 151,000,000 shares of capital
stock, consisting of 150,000,000 shares of common stock, $0.0001 par value per share, and 1,000,000 shares of preferred stock,
$0.0001 par value per share. On June 17, 2020 we effected a 1 for 5 reverse stock split of the issued and outstanding shares of
our common stock. The number of authorized shares of common stock remained at 150,000,000. On June 23, 2020 we effected a 1 for
5 reverse stock split of the issued and outstanding shares of preferred stock. The number of authorized shares of preferred stock
remained at 1,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of our common stock are entitled
to the following rights:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting Rights</I></B>. Each share
of our common stock entitles its holder to one vote per share on all matters to be voted or consented upon by the stockholders.
Holders of our common stock are not entitled to cumulative voting rights with respect to the election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividend Rights</I></B>. Subject
to limitations under Delaware law and preferences that may apply to any shares of preferred stock that we may decide to issue in
the future, holders of our common stock are entitled to receive ratably such dividends or other distributions, if any, as may be
declared by our Board out of funds legally available therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Liquidation Rights</I></B>. In the
event of the liquidation, dissolution or winding up of our business, the holders of our common stock are entitled to share ratably
in the assets available for distribution after the payment of all of our debts and other liabilities, subject to the prior rights
of the holders of our preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Other Matters</I></B>. The holders
of our common stock have no subscription, redemption or conversion privileges. Our common stock does not entitle its holders to
preemptive rights. All of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences
and privileges of the holders of our common stock are subject to the rights of the holders of shares of any series of preferred
stock which we may issue in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of July 15, 2020, 2,000 shares of
preferred stock have been designated as Series A Preferred Stock, all of which are beneficially owned by a trust, the trustee
of which is the spouse of our President, Max Munn. The holders of our Series A Preferred Stock are entitled to the following rights: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting Rights</I></B>. Each share
of our Series A Preferred Stock entitles its holder to 1,000 votes per share and votes with our common stock as a single class
on all matters to be voted or consented upon by the stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividend Rights. </I></B>The holders
of our Series A Preferred Stock are not entitled to any dividend rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Liquidation Rights. </I></B>The holders
of the Series A Preferred Stock are not entitled to any liquidation preference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other Matters</I></B>. The holders of our Series A Preferred
Stock have no subscription, redemption or conversion privileges and are not subject to redemption. Our Series A Preferred Stock
does not entitle its holders to preemptive rights. All of the outstanding shares of our Series A Preferred Stock are fully paid
and non-assessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Additional Preferred Stock. </I></B>Our
Board has the authority to issue additional preferred stock in one or more classes or series and to fix the designations, powers,
preferences, and rights, and the qualifications, limitations or restrictions thereof including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting
any class or series, without further vote or action by the stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">While we do not currently have any plans
for the issuance of any additional preferred stock, the issuance of additional preferred stock could adversely affect the rights
of the holders of common stock and, therefore, reduce the value of the common stock. It is not possible to state the actual effect
of the issuance of any shares of preferred stock on the rights of holders of the common stock until the Board of Directors determines
the specific rights of the holders of the preferred stock; however, these effects may include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Restricting dividends on the common stock;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Diluting the voting power of the common stock;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Impairing the liquidation rights of the common stock; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Delaying or preventing a change in control of the Company without further action by the stockholders.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Warrants</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 1, 2020, the Company
issued to Max Munn, the Company&rsquo;s President and a director of the Company, in lieu of paying his salary for 2019,
warrants to purchase a total of 80,000 shares of Company common stock at the exercise equal to the greater of $5.00 and the
market value per share of the Company&rsquo;s common stock on the date of issuance. Market value will be determined by an
independent valuation company engaged by the Company; provided, however, if on the date of the issuance of the warrant the
Company common stock is listed on a national exchange or quoted on an established quotation system, then market value shall
equal the closing price of the Company common stock listed on such exchange or quoted on such quotation system on the trading
day immediately prior to the date of the grant. The warrant expires five years from the date of issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On July 1, 2020, the Company issued
two warrants to purchase 5,000 shares in aggregate, each at a $5.00 per share exercise price in exchange for consulting services. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Options</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 18, 2020, the Board approved
the quarterly issuance of options to the Board as described above in the section entitled &ldquo;Management&mdash;Director Compensation.&rdquo;
Currently, such options to purchase 1,750 shares issued to the Board are outstanding, 375 of which are vested. No further issuances
no further issuances of these options will be made. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On July 9, 2020, the Board approved
the annual issuance of options to purchase 5,000 shares of restricted Common Stock to each member of the MAB and the annual issuance
of an option to purchase 10,000 shares of restricted Company common stock to the Chairman of the MAB. The options have an exercise
price of $5.00 per share and vest evenly on a quarterly basis over a period of one year. The Company has issued options to purchase
10,000 shares of Company common stock to members of the MAB, none of which are vested. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Restricted Shares Subject to
Vesting</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On June 30, 2020 we entered into employment
agreements with our Chief Executive Officer and our Chief Operating Officer, pursuant to which 89,308 unvested restricted shares
of our common stock and 38,275 unvested shares of our common stock were issued to our Chief Executive Officer and our Chief Operations
Officer, respectively. In each case, the shares will evenly vest on a quarterly basis over a period of 18 months, with the first
vesting to occur on September 30, 2020 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Only July 9, 2020, the Board approved
the issuance of 10,000 unvested shares of restricted stock to each of four newly elected directors. In each case, the shares will
evenly vest on an annual basis over a period of four (4) years, with the first vesting to occur on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On July 9, 2020, the Board approved
the annual issuance of 7,500 unvested shares of restricted common stock to our non-employee directors. The shares will be issued
on the first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 7,500
shares to a director will be issued immediately and vest on January 1 of the next calendar year. 37,500 shares were issued to
our non-employee directors on July 9, 2020, which vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On July 9, 2020, the Board approved
the annual issuance of 10,000 unvested shares of restricted common stock to the Board chairman. The shares will be issued on the
first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 10,000 shares
to a Board chairman will be issued immediately and vest on January 1 of the next calendar year. 10,000 shares were issued to our
Chairman on July 9, 2020, which vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On July 9, 2020, the Board approved the annual issuance
of 5,000 unvested shares of restricted common stock to the chairman of the Audit, Compensation, Nomination and Corporate Governance
Committees (the Nominating and Corporate Governance Committees have not yet been established). The shares will be issued on the
first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 5,000 shares
to a committee chairman will be issued immediately and vest on January 1 of the next calendar year. 10,000 shares were issued
to our committee chairman on July 9, 2020, which vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>S-8 Registration Statement </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 4, 2020, we adopted the Plan.
Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to 600,000 shares of common
stock to Company employees, officers, directors, consultants and advisors are available under the Plan. The type of grant, vesting
provisions, exercise price and expiration dates are to be established by the Board at the date of grant. Currently, no awards
have been granted under the Plan. We may file one or more registration statements on Form S-8 under the Securities Act to register
the shares of common stock issued or issuable under our Plan. Any such&nbsp;Form&nbsp;S-8&nbsp;registration statement will become
effective automatically upon filing. Once these shares are registered, they can be sold in the public market upon issuance, subject
to Rule&nbsp;144 limitations applicable to affiliates and vesting restrictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exclusive Forum </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our Certificate of Incorporation, as
amended provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State
of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company,
(b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Company
to the Company or the Company&rsquo;s stockholders, (c) any action asserting a claim arising pursuant to any provision of the
Delaware General Corporation Law, the Company&rsquo;s Certificate of Incorporation or the Bylaws, or (d) any action asserting
a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. This exclusive forum provision may limit the ability of our stockholders
to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers,
which may discourage lawsuits against us or our directors or officers. Our Certificate of Incorporation also provides that this
choice of forum provision does not apply to claims arising under federal securities laws. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>Section 203 of the Delaware General
Corporation Law</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to the provisions of Section
203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances,
from engaging in a &ldquo;business combination&rdquo; with:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an &ldquo;interested stockholder&rdquo;);</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">an affiliate of an interested stockholder; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A &ldquo;business combination&rdquo; includes
a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">our board of directors approves the transaction that made the stockholder an &ldquo;interested stockholder,&rdquo; prior to the date of the transaction;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Transfer Agent and Registrar</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The transfer agent and registrar for our common stock will be
VStock Transfer, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Listing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have applied to have our common
stock listed on the Nasdaq Capital Market under the symbol &ldquo;AUVI&rdquo; which listing is a condition to this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_100"></A>SHARES
ELIGIBLE FOR FUTURE SALE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is not currently an established U.S.
trading market for our common stock. We cannot predict the effect, if any, that market sales of shares of our common stock or the
availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time.
Sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding warrants, in the public
market after this offering, could adversely affect market prices prevailing from time to time and could impair our ability to raise
capital through the sale of our equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Upon completion of the sale of 1,000,000
shares of common stock pursuant to this offering, we will have 6,196,856 shares of common stock issued and outstanding. In the
event the underwriters exercise the over-allotment option in full, we will have 6,351,495 shares of common stock issued and outstanding.
The common stock sold in this offering will be freely tradable without restriction or further registration or qualification under
the Securities Act. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All previously issued shares of common
stock that were not offered and sold in this offering, as well as shares issuable upon the exercise of warrants and subject to
employee stock options, are or will be upon issuance, &ldquo;restricted securities,&rdquo; as that term is defined in Rule 144
under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under
the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 under the Securities Act, which
are summarized below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In general, a person who has beneficially
owned restricted shares of our common stock for at least six months in the event we have been a reporting company under the Exchange
Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not
deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days
preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such
person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the
following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1% of the number of shares of our common stock then outstanding;
or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1% of the average weekly trading volume
of our common stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to
the sale;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">provided that, in each case, we are subject to the periodic
reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner
of sale, notice and other provisions of Rule 144, to the extent applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Lock-Up Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our officers and directors have agreed,
subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise
dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our
common stock for a period of 180 days after the effective date of the registration statement for this offering without the prior
written consent of the representative (as defined herein).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_018"></A>UNDERWRITING</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Prior to this offering, there has been
no public market for our common stock. We have applied for approval of our common stock for listing on The Nasdaq Capital Market
under the symbol &ldquo;AUVI.&rdquo; Trading of our common stock on Nasdaq is expected to begin following this prospectus being
declared effective by the SEC. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Underwriting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the terms and subject to the conditions
in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Network 1 Financial Securities,
Inc. is acting as the representative, have severally agreed to purchase, and we have agreed to sell to them, severally, the number
of shares indicated below:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">Name</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-bottom: 1pt">Network 1 Financial Securities, Inc.</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">Total:</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The underwriters and the representative
are collectively referred to as the &ldquo;underwriters&rdquo; and the &ldquo;representative,&rdquo; respectively. The underwriters
are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock
offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions.
The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares
are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters&rsquo; over-allotment
option described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The underwriters initially propose to offer
part of the shares of common stock directly to the public at the offering price listed on the cover page of this prospectus and
part to certain dealers. After the initial offering of the shares of common stock, the offering price and other selling terms may
from time to time be varied by the representative.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Over-Allotment Option</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have granted to the underwriters an
option, exercisable for 45 days from the date of this prospectus, to purchase up to 150,000 additional shares of common stock at
the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters
may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the
shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated,
subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed
next to the underwriter&rsquo;s name in the preceding table bears to the total number of shares of common stock listed next to
the names of all underwriters in the preceding table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Discounts and Commissions and Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have agreed to pay the underwriters
a cash fee equal to 9.0% of the aggregate gross proceeds.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The representative has advised us that
the underwriters propose to offer the shares directly to the public at the public offering price set forth on the cover of this
prospectus. In addition, the representative may offer some of the shares to other securities dealers at such price less a concession
of up to $[ ] per share. After the offering to the public, the offering price and other selling terms may be changed by the representative
without changing the Company's proceeds from the underwriters&rsquo; purchase of the shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table shows the public offering
price, underwriting discounts and proceeds, before expenses, to us. The information assumes either no exercise or full exercise
by the underwriters of their over-allotment option. The underwriting discounts are equal to the public offering price per share
less the amount per share the underwriters pay us for the shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Per
                                         Share of</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common
                                         Stock</B></P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font-size: 10pt; font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Total without
    Over-allotment Option</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">Total with<BR> Over-allotment
    Option</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 58%; font-size: 10pt; text-align: justify">Public offering price</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">5,000,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">5,750,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Underwriting discounts</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">450,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">517,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Proceeds, before expenses, to us</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">4,550,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">5,232,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have agreed to pay the representative
a non-accountable expense allowance of 2% of the gross proceeds of the offering. We estimate that the total expenses, but excluding
underwriting discounts and commissions and the 2% non-accountable expense allowances, will be approximately $[*], all of which
are payable by us. This figure includes expense reimbursements we have agreed to pay the representative for reimbursement of its
expenses related to the offering up to a maximum aggregate expense allowance of $75,000, for which we have paid a $35,000 advance,
which will be returned to us to the extent not offset by actual expenses in accordance with FINRA Rule 5110(f)(2)(C).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Underwriters&rsquo; Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As additional compensation to the underwriters,
upon consummation of this offering, we will issue to the underwriters or their designees warrants to purchase an aggregate number
of shares of our common stock equal to 8% of the number of shares of common stock issued in this offering (excluding shares of
common stock sold to cover over-allotments, if any), at an exercise price per share equal to 125% of the initial public offering
price (the &ldquo;<U>Underwriters&rsquo; Warrants</U>&rdquo;). The Underwriters&rsquo; Warrants and the underlying shares of common
stock shall not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities
by any person for a period of 180 days immediately following the date of the public offering in accordance with FINRA Rule 5110(g)(1).
The Underwriters&rsquo; Warrants will be exercisable, in whole or in part, commencing 180 days from the closing date of the offering
and will expire on the fifth anniversary of the effective date of the registration statement related to the offering in accordance
with FINRA Rule 5110(f)(2)(G)(i). In addition, we have granted the underwriters a one-time demand registration right at our expense,
an additional demand registration at the holder&rsquo;s expense and unlimited &ldquo;piggyback&rdquo; registration rights with
respect to the underlying shares. The demand registration rights will not be greater than five years from the effective date of
the registration statement related to the offering in compliance with FINRA Rule 5110(f)(2)(G)(iv).The piggyback registration
right will not be greater than five years from the effective date of the registration statement related to the offering in compliance
with FINRA Rule 5110(f)(2)(G)(v).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Determination
of Offering Price</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Before this offering,
there has been no public market for our common stock. Accordingly, the public offering price will be negotiated between us and
the Representative. Among the factors to be considered in these negotiations are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="width: 94%; text-align: justify"><FONT STYLE="font-size: 10pt">the information set forth in this prospectus and otherwise available to the underwriters;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the prospects for our Company and the industry in which we operate;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">An assessment of our management;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">our past and present financial and operating performance;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">our prospects for future earnings;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">financial and operating information and market valuations of publicly traded companies engaged in activities similar to ours;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the prevailing conditions of United States securities markets at the time of this offering; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">other factors deemed relevant.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Neither we nor the underwriters can assure investors that an
active trading market will develop for shares of our common stock, or that the shares will trade in the public market at or above
the initial public offering price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lock-Up Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We and each of our officers, directors
affiliates and certain existing stockholders have agreed, for a period of 180 days after the effective date of the registration
statement for this offering, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option
for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable
for shares of our common stock without the prior written consent of the representative.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The representative may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period. When determining whether or not to release shares from the lock-up agreements, the representative will consider, among
other factors, the security holder's reasons for requesting the release, the number of shares for which the release is being requested
and market conditions at the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the underwriting agreement,
we have also agreed, for a period of 180 days from the closing date of the offering, that we will not, subject to specified exempt
issuances, offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common
stock; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in clause&nbsp;(i) or (ii) above is to be settled by delivery
of common stock or such other securities, in cash or otherwise; or (iii) file any registration statement with the SEC relating
to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Right of First
Negotiation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the terms of the underwriting
agreement, the representative shall have the right of first negotiation for a period of twelve months after the closing of this
offering to act as co-manager for all future public or private securities offerings by us, or any successor to or subsidiary of
our company, during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Finder&rsquo;s Fee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event that at any time prior to
the second anniversary of the closing date of the offering , the Company enters into any transaction with a party introduced directly
or indirectly to the Company by the representative, the Company shall pay the representative a transaction fee equal to a percentage
of the consideration received by the Company in such transaction as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">5% of the first $1,000,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">4% of the next $1,000,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">3% of the next $1,000,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">2% of the next $1,000,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">1% of all amounts in excess
of $4,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Indemnification</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have agreed to indemnify the underwriters
against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may
be required to make in respect thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Electronic
Offer, Sale and Distribution of Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A prospectus in
electronic format may be made available on a website maintained by the representative and may also be made available on a website
maintained by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online
brokerage account holders. Internet distributions will be allocated by the Representative to underwriters that may make Internet
distributions on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may
distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe&reg;
PDF will be used in connection with this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The underwriters
have informed us that they do not expect to confirm sales of shares offered by this prospectus to accounts over which they exercise
discretionary authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than the prospectus in electronic
format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter
is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or
endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Price Stabilization, Short Positions
and Penalty Bids</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection
with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common
stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares than are set forth
on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock
over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment
option. In a naked short position, the number of shares of common stock involved is greater than the number of shares of common
stock in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment
option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for,
and purchasing, common stock in the open market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The underwriters
may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for
distributing a security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Finally, the underwriters
may bid for, and purchase, shares of our common stock in market making transactions, including &ldquo;passive&rdquo; market making
transactions as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These activities
may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist
in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection
with this offering, the underwriters and selling group members, if any, or their affiliates may engage in passive market making
transactions in our common stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of
Regulation M under the Exchange Act. Rule 103 generally provides that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">a passive market maker may not effect transactions
or display bids for our common stock in excess of the highest independent bid price by persons who are not passive market makers:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker's average daily trading volume in our common stock during a specified two-month prior period or 200 shares, whichever is greater, and must be discontinued when that limit is reached; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">passive market making bids must be identified as such.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Certain Relationships</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Certain of the
underwriters and their affiliates have provided and may in the future provide various investment banking, commercial banking and
other financial services for us and our affiliates for which they have or may in the future receive customary fees, however, except
for the right of first refusal and the finder&rsquo;s fee disclosed in this prospectus, we have no present arrangements with any
of the underwriters for any further services.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Offer Restrictions
Outside the United States</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than in the United States, no action
has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any
jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of
any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance
with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised
to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This
prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus
in any jurisdiction in which such an offer or a solicitation is unlawful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_019"></A>EXPERTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Adeptus Partners LLC, an independent certified public accounting
firm, audited our financial statements for the years ended December 31, 2019 and 2018. We have included our financial statements
in this prospectus and elsewhere in the registration statement in reliance on the reports of Adeptus Partners LLC, given on their
authority as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_020"></A>LEGAL
MATTERS </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Certain legal matters with respect
to the validity of the securities being offered by this prospectus will be passed upon by Carmel, Milazzo &amp; Feil LLP, New
York, New York. Gordon Rees Scully Mansukhani, LLP, New York, New York, is acting as counsel for the representative of the underwriters
with respect to the offering. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><A NAME="a_021"></A>WHERE
YOU CAN FIND MORE INFORMATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have filed
with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered
by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information
set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the
rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration
statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning
the contents of any contract or any other document is not necessarily complete. If a contract or document has been filed as an
exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this
prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. You may obtain
copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.
20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us,
that file electronically with the SEC. The address of that website is <I>www.sec.gov</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are subject
to the information and reporting requirements of the Exchange Act and, in accordance with this law, are required to file periodic
reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are
available for inspection and copying at the SEC&rsquo;s public reference facilities and the website of the SEC referred to above.
We also maintain a website at <I>www.applieduvinc.com</I>. You may access these materials free of charge as soon as reasonably
practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part
of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_007"></A>Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Index to the Consolidated Financial
Statements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 89%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">Page</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_001"><FONT STYLE="font-size: 10pt">Independent Auditors
    Report&nbsp;&nbsp;</FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_001"><FONT STYLE="font-size: 10pt">F-3</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-size: 10pt">Financial Statements</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-indent: 0.25in; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_002"><FONT STYLE="font-size: 10pt">Consolidated
    Balance Sheets </FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_002"><FONT STYLE="font-size: 10pt">F-4</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-indent: 0.25in; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_003"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Income </FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_003">F-5</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-indent: 0.25in; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_004"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Changes in Stockholders' Equity (Deficit)</FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_004">F-6</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-indent: 0.25in; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_005"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Cash Flows</FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_005">F-7</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-indent: 0.25in; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><A HREF="#aa_006"><FONT STYLE="font-size: 10pt">Notes
    to the Consolidated Financial Statements </FONT></A></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><A HREF="#aa_006"><FONT STYLE="font-size: 10pt">F-8 - F-25</FONT></A></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_001"></A>Report of Independent Registered
Public Accounting Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stockholders of Applied UV, Inc. and
Subsidiaries</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Applied UV, Inc. and Subsidiaries (the Company) as of December 31, 2019 and 2018, and the related consolidated
statements of income, stockholders&rsquo; equity (deficit), and cash flows for each of the years in the two-year period ended
December 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and
the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity
with accounting principles generally accepted in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Basis for Opinion</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the
responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we
are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an
opinion on the effectiveness of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such
opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide
a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Critical Audit Matters</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Critical audit matters are matters
arising from the current period audit of the financial statements that were communicated or required to be communicated to the
audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Adeptus Partners, LLC</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have served as the Company&rsquo;s
auditor since 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ocean, New Jersey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">June 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_002"></A>Consolidated Balance
Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: center">Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Current Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 72%; font-size: 10pt; padding-left: 0.25in">Cash</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1,029,936</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">793,766</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Vendor deposit</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">104,517</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">95,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Accounts receivable, net of allowance for doubtful
    accounts</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,227,792</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,977,333</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.25in">Inventory</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">99,543</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">112,113</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Loan to shareholder</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,225</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">103,721</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Prepaid expense and other current
    assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">30,639</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.5in">Total Current Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,496,652</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,082,489</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Machinery and equipment, net of accumulated depreciation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">34,371</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,493</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Right of use asset</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">614,522</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Other assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">623,842</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.5in">Total Assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,769,387</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,111,982</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 0.05in">Liabilities and Stockholders' Equity (Deficit)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Current Liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,238,822</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">983,862</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Income tax payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">106,861</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Capital lease obligations-current portion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,380</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,076</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Lease liability-current</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">133,097</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Notes payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">37,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Deferred revenue</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,245,300</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,180,159</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Total Current Liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,767,960</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,170,097</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Long-term Liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Capital lease obligations - less current portion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15,212</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,592</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Note payable-less current portion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">120,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Lease liability-less current portion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">481,425</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Liabilities subject to compromise</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,336,909</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Total Long-Term Liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">616,637</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,358,501</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Total Liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,384,597</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,528,598</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Stockholders' Equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -0.25in; text-align: left; padding-left: 0.5in">Common
    stock $.0001 par value, 150,000,000 shares authorized; <BR>5,001,250 shares issued and outstanding, respectively</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">500</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">500</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -0.25in; text-align: left; padding-left: 0.5in">Series
    A voting preferred stock $.0001 par value, 1,000,000 shares <BR>authorized; 10,000 shares issued and outstanding</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Retained earnings (Deficit)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,384,289</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,417,117</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Total Stockholders' Equity (Deficit)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,384,790</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,416,616</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.5in">Total Liabilities and Stockholders'
    Equity (Deficit)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,769,387</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,111,982</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">See accompanying
notes to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_003"></A>Consolidated Statements
of Income</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Years Ended December 31, 2019
and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-left: 0.05in">Net Sales</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">9,329,720</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">7,556,444</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Cost of Goods Sold</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,009,730</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,890,012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Gross Profit</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,319,990</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,666,432</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Selling. General and Administrative
    Expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,916,386</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,913,101</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Operating Income</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,403,604</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">753,331</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Other Income (Expense)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Gain on settlement (See Note 12)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,520,399</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Other Income</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,552</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Interest Expense</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(15,736</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(35,640</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Other Income (Expense)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,504,663</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(33,088</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Income Before Provision for Income Taxes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,908,267</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">720,243</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Provision for Income Taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">106,861</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Net Income</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,801,406</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">720,243</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Basic and Diluted Earnings Per
    Common Share</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">0.56</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">0.14</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">See accompanying
notes to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_004"></A>Consolidated Statements
of Changes in Stockholders' Equity (Deficit)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Years Ended December 31, 2019
and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Preferred Stock</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Common Stock</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Total</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Series A Voting</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Retained</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Stockholders</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Earnings</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Equity</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-size: 10pt; padding-bottom: 1pt; padding-left: 0.05in">Balance, January 1, 2018</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,137,360</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,136,859</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Net income</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">720,243</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">720,243</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">Balance, December 31, 2018</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,417,117</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,416,616</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Net Income</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,801,406</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,801,406</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">Balance, December 31, 2019</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">10,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">500</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,384,289</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,384,790</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">See accompanying
notes to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_005"></A>Consolidated Statements
of Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Years Ended December 31, 2019
and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Cash flows from Operating Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Net Income</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,801,406</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">720,243</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Adjustments to Reconcile Net Income to Net Cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Provided by Operating Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Stock based compensation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">85,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Bad debt expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">50,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Amortization of debt discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,291</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Gain on settlement</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,520,399</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.25in">Depreciation and amortization</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,121</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,250</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Changes in Assets and Liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Increase in accounts receivable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(250,459</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(855,576</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Decrease (increase) in inventories</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,570</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(41,868</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Increase in vendor deposits</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(8,961</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,661</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">(Increase) in prepaid expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(146,676</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Increase in income taxes payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">106,861</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Increase (decrease) in accounts payable and accrued
    expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(382,343</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">208,851</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.125in">Increase (decrease) in deferred
    revenue</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">65,140</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">428,031</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Total Adjustments</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,031,146</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(191,682</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Net Cash Provided by Operating
    Activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">770,260</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">528,561</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Cash Flows From Investing Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.125in">Purchase of machinery and equipment</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(12,999</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,865</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Net Cash Used in Investing Activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(12,999</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,865</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Cash Flows From Financing Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Payments on capital leases</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,076</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,511</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Increase (decrease) in liabilities subject to compromise</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(531,511</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">234,746</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Loan from (to) officer</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">99,496</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(133,303</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Payments on loans payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(83,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(101,260</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.125in">Proceeds from loans payable</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">148,125</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.5in">Net Cash (Used In) Provided by
    Financing Activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(521,091</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">142,797</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Net Increase in Cash and equivalents</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">236,170</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">667,493</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Cash and equivalents at January
    1,</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">793,766</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">126,273</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Cash and equivalents at December
    31,</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,029,936</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">793,766</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Supplemental Disclosures of Cash Flow Information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.125in">Cash paid during the year for:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.25in">Interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">18,291</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Supplemental Non-Cash Items Not Included above resulting
    from the adoption of ASC 842</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Initial recognition of operating
    lease asset</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">710,075</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Initial recognition of operating
    lease liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">710,075</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Supplemental Non-Cash Items</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Capitalized stock based compensation
    for initial public offering costs</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">507,805</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">See accompanying
notes to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="aa_006"></A>Notes to Consolidated
Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Nature of Business</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2019, Applied UV, Inc. (the &quot;Company&quot;)
was formed and incorporated in the State of Delaware for the intended purpose of creating a legal holding company structure for
SteriLumen, Inc. and Munn Works, LLC and any future potential mergers or acquisitions. The then-existing shareholders and members
of SteriLumen, Inc. and Munn Works, LLC exchanged all of their interest for shares of Applied UV, Inc. with substantially similar
economic voting interests for each shareholder immediately before and after the share exchange. As a result of the share exchange,
SteriLumen, Inc. and Munn Works, LLC became wholly-owned subsidiaries of Applied UV, Inc and, collectively referred to as (the
 &quot;Company&quot;). The combination met the criteria outlined in ASC 850 to be accounted for as a transaction between entities
under common control and therefore the financial statements are being presented as if the transfer happened at the beginning of
the period and prior year financial information has been retrospectively adjusted to furnish comparative information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SteriLumen, Inc. is engaged in the design,
manufacture, assembly and distribution of automated disinfecting mirror systems for use in hospitals and other healthcare facilities.
The Company was incorporated in the State of New York in November of 2012 and is headquartered in Mount Vernon, New York. Munn
Works, LLC is engaged in the manufacture of fine mirrors specifically for the hospitality industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Basis of Presentation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&quot;US
GAAP&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Principles of Consolidation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements
include the accounts of Applied UV, Inc., Munn Works, LLC and SteriLumen, Inc. All significant intercompany transactions and balances
are eliminated in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Concentration of Credit and Business Risk</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At times throughout the year, the Company
maintains cash balances at various institutions, which may exceed the Federal Deposit Insurance Corporation limit. As of December
31, 2019 and 2018, amounts of $37,029 and $459,543, respectively were in excess of FDIC insured limits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company provides credit in the normal
course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts
based on factors surrounding the credit risk of specific customers, historical trends and other information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2019,
the Company had four major suppliers that accounted for approximately 78% of supplies and materials used by the Company and for
the year ended December 31, 2018, the Company had three major suppliers that accounted for approximately 76% of supplies and materials
used by the Company. The amounts have been recorded as costs of sales in the consolidated statements of income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Cash and Cash Equivalents</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all time deposits,
certificates of deposit and all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.
The Company does not have any cash equivalents at December 31, 2019 and 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Use of Estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of consolidated financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Accounts Receivable</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable are non-collateralized
customer obligations due under normal trade terms generally requiring payment within 30-60 days from the invoice date. The carrying
amounts of accounts receivable is reduced by a an allowance for doubtful accounts that reflects management&rsquo;s best estimate
of the amounts that will not be collected. The Company includes any accounts receivable balances that are determined to be uncollectible,
along with a general reserve, in its overall allowance for doubtful accounts. Management reviews accounts receivable on a monthly
basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are
used in evaluating the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable
is written off against the allowance. Based on the information available, the Company believes an allowance for doubtful accounts
of $50,000 as of December 31, 2019 and 2018 is adequate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Inventory</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are valued at the lower of
cost or net realizable value using the first-in, first-out method. Inventory is comprised of raw materials that are purchased
on the initial start date of a specific project and are capitalized using the percentage of completion method of accounting. We
amortize these costs to the associated contract proportion with our percentage of completion on the contract, calculated using
a cost-based input method. Capitalized costs are considered impaired when the net contract cost asset plus future costs to complete
the contract are less than the remaining revenue to be recognized under the contract. When capitalized costs are impaired, we
record a charge to the impairment, impairment charges cannot be reversed. As of December 31, 2019 and 2018 no impairment charges
were recorded and management has determined that an excess and obsolete reserve is not required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Property and Equipment</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are recorded at
cost. Depreciation of furniture and fixtures is provided using the straight-line method, generally over the terms of the lease.
Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred. Depreciation
of machinery and equipment is based on the estimated useful lives of the assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 54%; padding-right: 0.05in; padding-left: 0.05in">&nbsp;</TD>
    <TD STYLE="width: 46%; border-bottom: black 1pt solid; padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Years</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in"><FONT STYLE="font-size: 10pt">Machinery and equipment</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Lesser of term of
    lease or useful life</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in"><FONT STYLE="font-size: 10pt">Furniture and fixtures</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">7</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An asset is disposed of or retired when
no future economic benefits are expected to arise from continued use of the asset. The gain or loss arising on the disposal or
retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 1, 2018, the Company adopted
accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments using the modified retrospective
method for all customer contracts not yet completed as of the adoption date. The adoption of ASC 606 did not have a significant
impact on our Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition</U> (continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue when the
performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">1)</TD><TD><I>Identify the contract with a customer</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">A contract
with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights
regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial
substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred
is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining
the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment
experience or, in the case of a new customer, published credit and financial information pertaining to the customer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">2)</TD><TD><I>Identify the performance obligations in the contract</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">Performance
obligations promised in a contract are identified based on the services that will be transferred to the customer that are both
capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources
that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the
transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple
promised services, the Company must apply judgment to determine whether promised services are capable of being distinct in the
context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.
The Company promises to design, manufacture and sell custom mirrors through contractual arrangements. It was determined that most
services within a contract are substantially the same and have the same pattern of transfer to the customer over the term of the
agreement and are therefore highly interdependent upon each other. As such, the Company determined that the services within a
contract are not separately identifiable in the context of the contract and should therefore be bundled into a single performance
obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">3)</TD><TD><I>Determine the transaction price</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">The transaction
price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to
the customer. We evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments
that occur over time. We do not adjust the transaction price for the effects of financing if, at contract inception, the period
between the transfer of control to a customer and final payment is expected to be one year or less. The Company establishes pricing
for contracts with customers based on a fixed price for a fixed fee. Contracts do not provide for a discount or refund to customers
and historically, no discounts or refunds have been given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition </U>(continued)</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">4)</TD><TD><I>Allocate the transaction price to performance obligations
                                         in the contract</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">If the contract
contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However,
if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with
variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to
a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction
price based on management's judgment. The identified promises are considered to be bundled in arriving at the overall promise
within the contract. This promise therefore results in one performance obligation, to design, manufacture and sell custom mirrors
to our customer, therefore, allocation of the transaction price is not necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">5)</TD><TD><I>Recognize revenue when or as the Company satisfies a performance
                                         obligation</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">Revenue is
comprised of projects that are completed within our own facility or from a third-party vendor (direct sales). For projects that
are completed within our own facility, the Company satisfies performance obligations at over time. For projects that are completed
from a third-party vendor, the performance obligation is recognized at a point in time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"> As of December 31, 2019 and
2018, total deferred revenue was $1,245,300 and $1,180,159. As of December 31, 2019, deferred revenue was comprised of work generated
from our own Mount Vernon facility of $844,331, work performed at the third-party manufacturer of $363,942 and billings made upfront
of $37,029. As of December 31, 2018, deferred revenue was comprised of work generated from our own Mount Vernon facility of $514,280,
work performed at the third-party manufacturer of $206,337 and billings made upfront of $459,542. Deferred revenue balances at
the beginning of the 2019 and 2018 reporting periods was recognized in full during the years ended December 31, 2019 and 2018,
respectively. Each component of deferred revenue is further explained below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">For projects,
that are completed within our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals through contractual
agreements. These sales require us to deliver our products within three to six months from commencement of order acceptance. We
recognize revenue over time by using the input method based on costs incurred as it depicts our progress toward satisfaction of
the performance obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based
on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs
include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor,
supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials
have been purchased or moved to work in process as required by the project&rsquo;s engineering design. Cost based input methods
of revenue recognition require us to make estimates of costs to complete the projects. In making such estimates, significant judgment
is required to evaluate assumptions related to the costs to complete the projects, including materials, labor and other system
costs. If the estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated
loss in the period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts billed in excess
of revenues and profits recognized. Total deferred revenue from the input method of accounting was $844,331 and $514,280 as of
December 31, 2019 and 2018, respectively. Revenues and profits recognized in excess of amounts billed typically does not occur
as we will not perform any work in excess of the amount we bill to our customers. On January 1, 2019, total deferred revenue from
the input method of accounting was $204,880.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">Each product
or service delivered to a third-party customer that is manufactured by a third-party vendor is considered to satisfy a performance
obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the
customer. These sales are shipped from the manufacturer to the customer without our taking physical inventory possession. We report
direct sales on a gross basis, that is, the amounts billed to our customers are recorded as &quot;Sales,&quot; and inventory purchased
from manufacturers are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory before
it is transferred to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise to our
customers, taking on inventory risk of returned product, and having discretion in establishing pricing. We typically pay our vendors
a portion of the total cost up front and the remaining balance is accrued for and paid within 30 to 60 days of when the products
are shipped from the third-party warehouse. Vendor payments are capitalized until completion of the project and are recorded as
vendor deposits. As of December 31, 2019 and 2018, the vendor deposit balance was $104,517 and $95,556, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition </U>(continued)</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">5)</TD><TD><I>Recognize revenue when or as the Company satisfies a performance
                                         obligation (continued)</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">Losses
expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Deferred
revenue from these projects as of December 31, 2019 and 2018 was $363,942 and $206,337, respectively. On January 1, 2019, total
deferred revenue from these projects were $255,875. At December 31, 2019 and 2018, there were no losses charged to expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in"> There are
times that we bill upfront where no work is performed until 30 to 60 days after the deposit is received from our customer. Accordingly,
no revenue is recognized and the amounts are deferred. As of December 31, 2019 and 2018, deferred revenue balances related to
these invoices were $37,029 and $459,542, respectively. On January 1, 2019, total deferred revenue related to these billings were
$291,372. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2019,
the Company generated revenues of $6,628,792 at a point in time and $2,700,928 over time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2018,
the Company generated revenues of $5,815,970 at a point in time and $1,740,474 over time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Shipping and Handling Charges</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reports shipping and handling
fees charged to customers as part of net sales and the associated expense as part of cost of sales. Shipping charges amounted
to $1,664,950 and $938,111 for the years ended December 31, 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Advertising</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Advertising costs are charged to operations
when incurred. Advertising expense for the years ended December 31, 2019 and 2018 was $218,724 and $265,637, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Research and Development</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for research and
development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (&ldquo;ASC 730-10&rdquo;).
Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and
development costs are expensed as incurred. The Company did not incur any research and development expenses during the years ended
December 31, 2019 and 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Income Taxes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company files income tax returns using
the accrual basis of accounting. Income taxes are accounted for under the asset and liability method. Current income taxes are
based on the year's income taxable for federal and state tax reporting purposes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences
are expected to affect taxable income. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extend that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset
to be recovered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Per FASB ASC 740-10, disclosure is not
required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not
possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2019 and 2018, the Company has no uncertain
tax positions that qualify for either recognition or disclosure in the financial statements. The Company's 2018, 2017 and 2016
Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company's Federal
or State tax returns are currently under examination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Fair Value of Financial Instruments</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The Company records the fair value
of assets and liabilities in accordance with Financial Accounting Standards Board (&quot;FASB&quot;) Accounting Standards Codification
(&quot;ASC&quot;) 820, <I>Fair Value Measurement</I>. FASB ASC 820 establishes a framework for measuring fair value under accounting
principles generally accepted in the United States. That framework provides a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The three levels of the fair value hierarchy
under FASB ASC 820 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.2in">-</TD><TD STYLE="text-align: justify">Level 1 - Valuations based on
                                         unadjusted quoted prices in active markets for identical assets or liabilities that the
                                         Company has the ability to access.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.2in">-</TD><TD STYLE="text-align: justify">Level 2 - Valuations based generally
                                         on observable inputs for similar assets and liabilities, or identical or similar assets
                                         and liabilities in inactive markets.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.2in">-</TD><TD STYLE="text-align: justify">Level 3 - Valuations based on
                                         inputs that are unobservable and significant to the overall fair value measurement. Valuation
                                         techniques could include the use of discounted cash flow models and other similar techniques.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying amounts reported in the consolidated
balance sheets as of December 31, 2019 and 2018 for cash and cash equivalents, accounts receivable, prepaid expenses and other
current assets, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these
financial instruments. The fair value of capital lease obligations approximate their carrying value because these financial instruments
bear interest at rates that approximate current market rates for loans with similar maturities and credit quality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Stock- Based Compensation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for its stock-based
compensation awards in accordance with Financial Accounting Standards Board (&quot;FASB&quot;) Accounting Standards Codification
Topic 718 (&quot;ASC&quot;), Compensation-Stock Compensation (&quot;ASC 718&quot;). ASC 718 requires all stock-based payments
to employees, including grants of employee stock options and restricted stock and modifications to existing stock options, to
be recognized in the statements of operations based on their fair values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Patent Costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We capitalize costs consisting principally
of outside legal costs and filing fees related to obtaining patents. We amortize patent costs over the useful life of the patent,
beginning with the date the U.S. Patent and Trademark Office, or foreign equivalent, issues the patent. As of December 31, 2019
and 2018, we capitalized $60,092 and $0 of patent costs. As of December 31, 2019 and 2018, we have not recorded any amortization
expense for these patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Warranty Costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company typically provides warranty
on its products. The Company accrues for the estimated warranty costs at the time when revenue is recognized. The warranty accruals
are regularly monitored by management based upon historical experience and any specifically identified failures. While the Company
engages in extensive product quality assessment, actual product failure rates, material usage or service delivery costs could
differ from estimates and revisions to the estimated warranty liability would be required. There was no warranty accrual as of
December 31, 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Subsequent Events Evaluation Date</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company evaluated the events and
transactions subsequent to the December 31, 2019 balance sheet date, in accordance with ASC 855-10-50, &quot;Subsequent Events&quot;,
through June 23, 2020, which is the date the consolidated financial statements were available to be issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Recent Accounting Pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Recently Adopted</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the Financial Accounting
Standards Board, or the FASB, issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use, or
ROU, assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC
842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require
any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard
resulted in the recording of ROU assets and lease liabilities for all our lease agreements with original terms of greater than
one year. The adoption of ASC 842 did not have a significant impact on our statements of income or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the
accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation &mdash; Stock
Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard,
most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments
granted to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not
have a material impact on our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Not Yet Adopted</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2018, the FASB issued ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure Framework &mdash; Changes to the Disclosure Requirements for Fair Value Measurement,
which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related to transfers
between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period
and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes. ASU 2018-13 is
effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We will
modify our disclosures beginning in the first quarter of 2020 to conform to this guidance. We do not expect the adoption of this
standard and the associated changes to our disclosures to have a material impact to our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2016, the FASB issued ASU 2016-13,
Financial Instruments &mdash; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces
the current incurred loss impairment methodology for financial assets with a methodology that reflects expected credit losses.
The new credit losses model must be applied to loans, accounts receivable, and other financial assets. ASU 2016-13 is effective
for annual periods beginning after December 15, 2019, including interim periods within those annual periods. We plan to adopt
the new standard in the first quarter of 2020 using a modified retrospective approach with a cumulative-effect adjustment to retained
earnings as of the beginning of the year of adoption. We do not believe this guidance will have a material impact on our statements
of operations or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently believe that all other issued
and not yet effective accounting standards are not relevant to our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 - INVENTORY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventory consists of raw materials of
$99,543 and $112,113 at December 31, 2019 and 2018, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 - PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are summarized
by major classifications as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">December 31,</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-left: 0.05in">Machinery and Equipment</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">39,583</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">39,583</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Furniture and Fixtures</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">16,864</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,865</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">56,447</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">43,448</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Less: Accumulated Depreciation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(22,076</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(13,955</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">34,371</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">29,493</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation expense, including amortization
of assets under capital leases, for the years ended December 31, 2019 and 2018 was $8,121 and $6,250, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 4 - DUE TO AND FROM SHAREHOLDER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2019 and 2018 the Company
loaned its majority shareholder noninterest-bearing advances, which are due upon demand. As of December 31, 2019 and 2018, amounts
owed from the Company's majority shareholder was $4,225 and $103,721, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 - CAPITAL LEASE OBLIGATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's machinery under a capital
lease, which is included in machinery and equipment is summarized as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-left: 0.05in">Machinery and Equipment</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">39,583</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Less: Accumulated Depreciation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(20,205</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">19,378</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Future minimum principal and interest
payments under the capital lease agreements as of December 31, 2019, are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-left: 0.2in">2020</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">7,280</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2021</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,280</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2022</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,280</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2023</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,489</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.2in">Less: Amount representing interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,737</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">Present value of future minimum lease payments</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,592</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.2in">Less: current portion</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(6,380</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">15,212</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 - LOANS PAYABLE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December of 2012, the Company received
$260,000 from Seagrace Partners that accrued interest at 5% annually with no maturity date and no stated terms of repayment. As
of December 31, 2019 and 2018, the note had an outstanding principal balance of $0 and $131,336, respectively. Interest expense
related to this note for the year ended December 31, 2019 and 2018 was $5,902 and $7,656, respectively. The outstanding principal
balance of $132,390 was reclassed to liabilities subject to compromise (note payable- pre-petition). In 2019, the Company entered
into a settlement agreement in relation to the Company's Chapter 11 Bankruptcy (as further described in Note 10 of the financial
statements) with the note holder where the Company would pay $80,000 over the next 90 days, in four equal installments of $20,000.
The entire $80,000 was repaid prior to December 31, 2019. In addition, the Company will provide the third party lender 8,000 shares
of common stock in the Company (subject to certain transfer restrictions), in an amount which will have a public trading value
within 24 months of at least $85,000. If the value of the stock does not reach $85,000 at the end of 24 months, the shareholders
of the Company will provide the third party lender make-up stock to reach the value of $85,000 with a maximum amount of shares
to be issued of 17,000 shares. This repayment would constitute as full and final payment of any and all obligations to the lender.
On the date of the settlement, the Company recorded a loss on extinguishments in the amount of $34,610.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June of 2018 and June of 2016, the
Company received advances from On Deck Capital in the amounts of $150,000 and $100,000, respectively. The June 2016 note matured
in one year from the date of issuance and required 52 weekly payments of $2,346. As of December 31, 2019 and 2018, the balance
of this note was $0 and interest expense of $3,981 was recorded during the year ended December 31, 2018. The June 2018 note matured
in one year from the date of issuance and required 52 weekly payments of $3,605. As of December 31, 2018, the company made no
repayments on this note and has an outstanding principal balance of $150,000. As part of the Chapter 11 Bankruptcy, the outstanding
principal balance of $150,000 was reclassed to liabilities subject to compromise (note payable- pre-petition) as further described
in Note 10 of the financial statements. Accrued interest on this note as of December 31, 2018 was $17,360 and an additional $20,140
was accrued for based on the proof of claim submitted by the note holder. These amounts were also reclassed to liabilities subject
to compromise (accounts payable and accrued expenses- pre-petition) as further described in Note 10 of the financial statements.
In 2019, the Company paid $18,750, which was 10% of the allowed proof of claim in the Chapter 11 Bankruptcy of $187,500. In addition,
the Company was required to pay $157,500 in a five payments in the amount of $30,000 per year, with an additional $7,500 in year
two. The Company recognized a gain on extinguishments of $11,250 in relation to the settlement in the year ended December 31,
2019. As of December 31, 2019, the company has an outstanding balance of $157,500.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">Minimum obligations under this
loan agreement is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify; text-indent: -0.05in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font-size: 10pt; padding-left: 0.05in">For the year Ending December 31,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-left: 0.05in">2020</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">37,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">2021</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">2022</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">2023</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">2024</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">157,500</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 - LOANS PAYABLE (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October of 2017, June of 2017, and
September of 2016, the Company received advances from LG Funding, LLC in the amounts of $150,971, $150,990, and $125,990, respectively,
in exchange for notes in the amounts of $182,679, $187,228, and $156,228, respectively. On the initial date of the note, the Company
accounted for the notes at face value less a discount for the difference between the face value and advances received. The discounts
were amortized to interest expense in proportion to the repayments over the total amount loaned. For the years ended December
31, 2019 and 2018, the Company recorded $0 and $48,837 in interest expense in relation to these notes. As of December 31, 2019
and 2018, the loans from this third party consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">December 31,</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; padding-left: 0.05in">October 2017 Note</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">87,828</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">June 2017 Note</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">39,628</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">September 2016 Note</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Less: Unamortized Discount</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(22,914</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Current Portion of Long-Term Debt</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">104,542</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Less: Notes payable- pre-petition
    (Liabilities Subject to Compromise)*</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(104,542</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Current Portion of Long-Term Debt</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognized a gain of $81,000
in 2019 as a result of the Chapter 11 Bankruptcy Case and all remaining outstanding balances were settled in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7 - STOCKHOLDERS' EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Series A Preferred Stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Liquidation Preference</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of shares of Series A Preferred Stock shall not be entitled
to any liquidation preference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Voting</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On any matters presented to the stockholders
of the corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent
of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred Stock shall be entitled to vote in
an amount equal to <B>1,000 v</B>otes per share. Series A Preferred Stock shall vote as a single class and such voting rights
shall be identical in all respects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Conversion</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of the shares of Series A
Preferred Stock shall not have any rights hereunder to convert such shares into, or exchange such shares for, shares of any other
series or class of capital stock of the Corporation or of any other person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Common stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of our common stock are entitled
to the following rights:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Voting</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each share of our common stock entitles
its holder to one vote per share on all matters to be voted or consented upon by the stockholders. Holders of our common stock
are not entitled to cumulative voting rights with respect to the election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7 - STOCKHOLDERS' EQUITY (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Common stock (continued)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Dividend</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subject to limitations under Delaware
law and preferences that may apply to any shares of preferred stock that we may decide to issue in the future, holders of our
common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out
of funds legally available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Liquidation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event of the liquidation, dissolution,
or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution
after the payment of all of our debts and other liabilities, subject to the prior rights of the holders of our preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Other Matters</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of our common stock have
no subscription, redemption, or conversion privileges. Our common stock does not entitle its holders to preemptive rights. All
of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences and privileges of the
holders of our common stock are subject to the rights of the holders of shares of any series of preferred stock which we may issue
in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 8 - RELATED PARTY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">In February of 2019,
the Company engaged Carmel, Milazzo &amp; Feil LLP (the &quot;Firm&quot;) to represent and assist the company with all general
corporate legal matters including the preparation and filing with the Securities and Exchange Commission of a registration statement
on Form S-1 through the Company's intended initial public offering. Ross Carmel, a former board member of Applied UV, is a partner
at the firm. The firm will perform services in exchange for three percent of the outstanding shares of the Company's common stock,
issued as follows: 1.) One percent due upon execution of the agreement 2.) One percent due up the filing of the Form S-1; and
3.) One percent due upon the SEC declaring the Form S-1 effective. As of December 31, 2019, the company was liable to issue 102,066
shares of common stock to the firm. These shares have not been issued to date and have been recorded as a liability to be settled
in stock for an amount of $507,805. Because these legal fees are directly related to the initial public offering, the amount has
been capitalized and is included in other assets.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 - LEASING ARRANGEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted ASU
2016-02 prospectively as of January 1, 2019, the date of initial application, and therefore prior comparative periods were not
adjusted. As part of the&nbsp;adoption, the Company elected&nbsp;the &ldquo;package of expedients&rdquo;, which permits the Company
not to reassess under the new standard the Company&rsquo;s prior conclusions about lease identification and initial direct costs.
The Company did not elect the use-of hindsight or the practical expedient pertaining to land easements, the latter not being applicable
to the Company.&nbsp;The Company has lease arrangements which are classified as short-term in nature. The Company has elected
the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company
will not recognize&nbsp;Right of Use (&quot;ROU&quot;)&nbsp;assets&nbsp;or lease liabilities.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company determines
whether an arrangement is a lease at inception. The Company has operating leases for office space and office equipment. The Company&rsquo;s
leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to
five years. The Company considered these options to extend in determining the lease term used to establish the Company&rsquo;s
right-of use assets and lease liabilities once reasonably certain of exercise. The Company&rsquo;s lease agreements do not contain
any material residual value guarantees or material restrictive covenants.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 - LEASING ARRANGEMENTS (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ROU&nbsp;assets&nbsp;represent
the Company&rsquo;s right to use an underlying asset for the lease term and lease liabilities represent the Company&rsquo;s obligation
to make lease payments arising from the lease. Operating lease&nbsp;ROU&nbsp;assets&nbsp;and operating lease liabilities are recognized
at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease&nbsp;ROU&nbsp;asset&nbsp;also
includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations
of the operating&nbsp;ROU&nbsp;assets&nbsp;and operating lease liabilities include options to extend or terminate the lease when
the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line
basis over the lease term.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As the Company&rsquo;s
leases do not provide an implicit rate, the Company uses an incremental borrowing rate of 5% based on the information available
at commencement date in determining the present value of lease payments. On the date of adoption the company recorded a ROU asset
and a corresponding lease liability in the amount of $710,075.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 7, 2014, the Company entered
into a lease agreement in Mount Vernon, New York on a month to month basis. The monthly rent under this arrangement from January
1, 2018 through November 30, 2018 was $10,000 per month, from December 2018 through February 2019 was $11,150 per month. The Company
then amended the lease for a term that commenced on April 1, 2019 and expire on the 31st day of March 2024 at a monthly rate of
$13,400. Rent expense for the year ended December 31, 2019 and 2018 was $156,300 and $121,150, respectively. The lease can be
cancelled by either party with 150 days of written notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Schedule maturities of operating lease
liabilities outstanding as of December 31, 2019 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-left: 0.2in">2020</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">160,800</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2021</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">160,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2022</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">160,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">2023</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">160,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.2in">2024</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">40,200</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.2in">Total lease payments</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">683,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.2in">Less: Imputed Interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(68,878</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.2in">Present value of future minimum
    lease payments</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">614,522</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Consistent with ASC 842-20-50-4, the
Company calculated its total lease cost based solely on its monthly rent obligation. The Company had no cash flows arising from
its lease, no finance lease cost, short term lease cost, or variable lease costs. Our lease does not produce any sublease income,
or any net gain or loss recognized from sale and leaseback transactions. As a result, the Company did not need to segregate amounts
between finance and operating leases for cash paid for amounts included in the measurement of lease liabilities, segregated between
operating and financing cash flows; supplemental non-cash information on lease liabilities arising from obtaining right-of-use
assets; weighted-average calculations for the remaining lease term; or the weighted-average discount rate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>NOTE 10 - COSTS AND ESTIMATED
EARNINGS ON CONTRACTS IN PROGRESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Costs and estimated earnings on contracts
in progress, net of progress billings, are as follows as of December 31, 2019 and 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-left: 0.05in">Costs incurred on contracts in progress</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">240,732</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">255,870</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Estimated net earnings thereon</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">42,403</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">300,402</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Total costs and estimated earnings</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">283,135</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">556,272</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Billings to date</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,232,925</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,070,552</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Net overbilled</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(514,280</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Contract Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Contract Liabilities (Deferred
    Revenue)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(514,280</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(514,280</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Contract assets represent amounts earned
under contracts in progress but not yet billed under the terms of those contracts. These amounts become billable according to
the contract terms, which usually consider passage of time, achievement of certain milestones or completion of the project. Substantially
all costs and estimated earnings in excess of billings on contracts in progress are expected to be billed and collected in the
following year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Contract liabilities represent billings
to customers in excess of costs and earnings on contracts in progress. Substantially all such amounts are expected to be earned
in the following year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 11 - SHARE EXCHANGE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 26, 2019, March 27, 2019 and
July 31, 2019, we and the shareholder of SteriLumen, Inc. and the sole member of Munn Works, LLC, completed the transactions contemplated
by three Share Exchange Agreements. Pursuant to the applicable Share Exchange Agreements, SteriLumen, Inc. and Munn Works, LLC
transferred to us all assets and liabilities. The shareholders of SteriLumen, Inc. exchanged all of their shares in SteriLumen
for 10,000 preferred and 2,001,250 common shares of Applied UV, Inc. The sole member of Munn Works, LLC exchanged all of its membership
interest in Munn Works, LLC for 3,000,000 common shares of Applied UV, Inc. As the Share Exchanges were transactions between entities
that are under common control, accounting rules require that our Consolidated Financial Statements include the results of the
Transferred Businesses for all periods presented, including periods prior to the completion of the Share Exchanges.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 - LEGAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">APF Management filed and served a complaint
in 2013 New York state court against Munn Works, LLC, Max Munn and various other parties seeking recovery of damages and was awarded
various damages on behalf of APF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2018, Munn Works, LLC.
entered Chapter 11 bankruptcy in order to facilitate an appeal and a resolution to this matter. As part of the Chapter 11 bankruptcy,
APF management filed a claim in the amount of $1,474,505. All of the parties agreed to resolve the disputes whereby, APF would
receive $400,000 payable by the Company. The amount was settled and paid in full in 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 - LEGAL (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Administration of Chapter 11 Case</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June of 2018, Munn Works, LLC received
Bankruptcy court approval of certain &quot;first-day&quot; motions, which preserved the Company's ability to continue operations
without interruption in Chapter 11. As part of the &quot;first-day&quot; motions, the Company received approval to pay or otherwise
honor certain pre-petition obligations generally designed to support the Company's operations. Additionally, the Bankruptcy Court
confirmed the Company's authority to pay for goods and services received post-petition in the ordinary course of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As part of the chapter 11 case, the Company
has retained, pursuant to Bankruptcy Court authorization, legal and other professionals to advise the Company in connection with
the administration of its chapter 11 case and its litigation with APF management, and certain other professionals to provide services
and advice in the ordinary course business. As a result of the chapter 11 filing, the payment of pre-petition liabilities is generally
subject to compromise pursuant to a plan of reorganization. Generally, under the Bankruptcy Code, actions to enforce or otherwise
effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted,
the Bankruptcy Court granted the Company authority to pay certain pre-petition claims in designated categories and subject to
certain terms and conditions. Among other things, the Bankruptcy Court has authorized the Company to pay certain pre-petition
claims relating to employees and critical vendors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2018. the Company filed schedules
of assets and liabilities and statement of financial affairs (the &quot;Schedules&quot;) with the Bankruptcy Court. The Bankruptcy
Court has entered an order setting October 26, 2018 as the deadline for filing proofs of claim (the &quot;Bar Date&quot;). The
Bar Date is the date by which claims against the Company relating to the period prior to the commencement of the Company's chapter
11 case must be filed if such claims are not listed in liquidated, non-contingent and undisputed amounts in the Schedules, or
if the claimant disagrees with the amount, characterization or classification of its claim as reflected in the Schedules. Claims
that are subject to the Bar Date and which are not filed on or prior to the Bar Date, may be barred from participating in any
distribution that may be made under a plan of reorganization in the Company's chapter 11 case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company applied Financial Accounting
Standards Board (&quot;FASB&quot;) Accounting Standards Codification (&quot;ASC&quot;) 852, Reorganizations, which is applicable
to companies under bankruptcy protection, and requires amendments to the presentation of key financial statement line items. It
requires that the financial statements for periods subsequent to the chapter 11 filing distinguish transactions and events that
are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains
and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business
must be reported separately as reorganization items in the consolidated statements of operations. The balance sheet must distinguish
pre-petition liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and
from post-petition liabilities. Liabilities that may be subject to a plan of reorganization must be reported at the amounts expected
to be allowed in the Company's chapter 11 case, even if they may be settled for lesser amounts as a result of the plan of reorganization
or negotiations with creditors. In addition, cash used by reorganization items are disclosed separately in the consolidated statements
of cash flow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Liabilities Subject to Compromise</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pre-petition liabilities that are subject
to compromise are required to be reported at the amounts expected to be allowed in the Company's chapter 11 case, even if they
may be settled for lesser amounts. The amounts classified as Liabilities Subject to Compromise as of December 31, 2018 may be
subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events. The Company
cannot reasonably estimate the value of the claims that will ultimately be allowed in its chapter 11 case until its evaluation,
investigation and reconciliation of all filed claims has been completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 - LEGAL (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Liabilities Subject to Compromise
(Continued)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amount of liabilities subject to compromise
represents the Company's estimate, where an estimate is determinable, of known or potential pre-petition claims to be addressed
in connection with its chapter 11 case. Such liabilities are reported at the Company's current estimate, where an estimate is
determinable, of the allowed claim amount, even though they may be settled for lesser amounts. These claims remain subject to
future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2018, Liabilities subject to Compromise
consist of the following (note: all liabilities were settled in 2019, therefore no balances remain as of December 31, 2019):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left; padding-left: 0.05in">Accounts payable and accrued expenses- pre-petition</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">492,014</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Notes payable- pre-petition</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">370,390</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Expectation damages accrual- APF
    Management</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,474,505</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">Total</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,336,909</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to Bankruptcy Court Order
dated May 31, 2019, the Debtor&rsquo;s Second Amended Chapter 11 Plan dated April 29, 2019 (the &ldquo;Plan&rdquo;) was approved
and confirmed. The Plan provided treatment for five (5) classes of claims, with the general unsecured claims composing Class 4
Claimants. Under the Plan, Class 4 Claimants, would receive 10% of their Allowed Claim on the Effective Date. As a result of the
bankruptcy claim, APF received and settled for $400,000 where a gain on settlement of $1,074,505 was recorded. As described in
Note 6 of the financial statements, the Company recorded a total net gain from settlement of debt and gains from its Chapter 11
Bankruptcy case in the amount of $57,640. Other various pre-petition creditors received and settled for a total of $103,761, resulting
in a gain on settlement in the amount of $388,253. The entire amount was escrowed on or before May 23, 2019 and paid within 15
days of the effective date of the stipulation. As a result of the transaction, the Company recorded a total gain on settlement
of $1,520,398.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13 - INCOME TAXES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The provision for federal and state income taxes for the years
ended is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Current provision:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 72%; font-size: 10pt; padding-left: 0.05in">Federal</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">113,786</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">State</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,671</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Deferred provision (benefit):</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">Federal</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(12,110</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 0.05in">State</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(486</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Total Deferred</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(12,596</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Total provision for income taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">106,861</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13 - INCOME TAXES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The income tax provision differs from
the expense that would result from applying federal statutory rates to income before income taxes because the Company is subject
to state income taxes, deferred income taxes are based on average tax rates and a portion of gifts and meals and entertainment
are not tax deductible. A valuation allowance has been provided to reduce deferred tax assets to an amount that is more likely
than not to be realized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 22, 2017, the U.S. federal
government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act
makes broad and complex changes to the U.S. federal tax code, including, but not limited to reducing the U.S. federal corporate
tax rate from 35 percent to 21 percent, effective January 1, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to the share exchange, Munn Works,
LLC was taxed as a single member Limited Liability Company for federal and state income tax purposes. As such, the Company will
not pay income taxes for earnings prior to the share exchange, as any income or loss will be included in the tax returns of the
individual member. Accordingly, no provision is made for income taxes in the financial statements prior to the share exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Effective tax rates differ from the federal
statutory rate of 21% applied to income before provision for income taxes due to the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-left: 0.05in">Federal statutory rate times financial
    statement income</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">610,746</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">151,251</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Less: Tax Rate applied to pre share exchange earnings</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(501,233</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(151,251</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Permanent tax basis differences</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,838</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">State taxable income</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,186</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 0.05in">Total provision for income taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">106,861</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 14 - SEGMENT REPORTING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">FASB Codification Topic 280, Segment
Reporting, establishes standards for reporting financial and descriptive information about an enterprise&rsquo;s reportable segments.
The Company has two reportable segments: the design, manufacture, assembly and distribution of automated disinfecting mirror systems
for use in hospitals and other healthcare facilities (disinfectant mirror segment) and the manufacture of fine mirrors specifically
for the hospitality industry (hospitality segment). The segments are determined based on several factors, including the nature
of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An operating segment&rsquo;s performance
is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost
of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based
compensation, other charges (income), net and interest and other, net.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All net sales, cost of goods sold,
and other income (expense) was generated or incurred from the hospitality segment of our business. For the years ended December
31, 2019 and 2018, the hospitality segment of our business incurred $1,860,422 and $1,857,240, respectively, of selling, general
and administrative expenses. For the years ended December 31, 2019 and 2018, the disinfectant mirror segment of our business incurred
$55,963 and $55,861, respectively, of selling, general and administrative expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 14 - SEGMENT REPORTING (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2019 and 2018, total
assets from the hospitality segment of our business amounted to $4,706,535and $3,090,548, respectively. As of December 31, 2019
and 2018, total assets from the disinfectant mirror segment of our business amounted to $62,852 and $21,434, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2019 and 2018, total
liabilities from the hospitality segment of our business amounted to $3,347,120 and $4,471,181, respectively. As of December 31,
2019 and 2018, total liabilities from the disinfectant mirror segment of our business amounted to $37,477 and $57,417, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 15 - SUBSEQUENT EVENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Management has evaluated subsequent
events through June 23, 2020, the date the financial statements were available to be issued. As a result of the spread of the
COVID-19 Coronavirus and the resulting stay-at-home orders issued by the state and local municipalities in which the Company operates,
the Company is experiencing reduced sales. The duration of the reduction in sales may be only temporary. However, the related
financial impact and duration cannot be reasonably estimated at this time. On April 3, 2020, the Company submitted a Paycheck
Protection Program application to Chase Bank for a loan amount equal to $296,287. The amount was approved and the Company has
received the funds. The amount will be used to cover payroll costs, rent, and utilities. Employee and compensation levels are
expected to be maintained, however, it is not certain at this time whether or not the loan will be forgiven. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 20, 2020 SteriLumen entered into
the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of the effectiveness of the SteriLumen Disinfecting
System in 17 patient bathrooms at Mount Sinai St. Luke&rsquo;s Hospital in New York, NY. SteriLumen will be responsible for funding
the direct and indirect costs of Mount Sinai&rsquo;s research in the amount of $160,000 plus all of the cost of microbiological
testing. To the extent any intellectual property resulting from the research is conceived by Mount Sinai it will be the intellectual
property of Mount Sinai and to the extent it is conceived by SteriLumen it will be the intellectual property of SteriLumen. SteriLumen
has a 60-day exclusive option to negotiate a license for Mount Sinai&rsquo;s resulting patent rights if such patent was obtained
at SteriLumen&rsquo;s request and SteriLumen has paid for all the costs in obtaining the patent. If the results of the study contained
in Mount Sinai&rsquo;s final report are used by SteriLumen in a successful regulatory filing or a successful fundraising effort,
the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Max Munn, Chief Executive Officer of
the Company is entitled to a five-year warrant to purchase 80,000 shares of the Company&rsquo;s common stock at an exercise price
equal to the greater of $5.00 per share and the per share market value of the Company's common stock at the date of the grant
in lieu of cash salary. The issuance of the warrants is contingent upon an initial public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May of 2020, we adopted the Applied
UV, Inc. 2020 Omnibus Incentive Plan (the &ldquo;Plan&rdquo;), which is effective as of March 31, 2020. Under the Plan, the Company
may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units,
performance shares, performance units, and other awards. Awards of up to 600,000 shares of common stock to Company employees,
officers, directors, consultants and advisors are available under the Plan. The type of grant, vesting provisions, exercise price
and expiration dates are to be established by the Board at the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31, 2019 and 2018</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 15 - SUBSEQUENT EVENT (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 18, 2020 the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company&rsquo;s common stock
at an exercise price of equal to the greater of $2.50 per share and the per share market value of the Company's common stock on
the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to the Board, of which
1,250 have been cancelled. The options are subject to equal quarterly vesting over a one-year period. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June of 2020, we effected a 5:1
reverse stock split (the &ldquo;Reverse Stock Split&rdquo;) by filing an amendment to the Company&rsquo;s Amended and Restated
Certificate Incorporation with the Delaware Secretary of State. The Reverse Stock Split combined every five shares of Common Stock
issued and outstanding immediately prior to effecting the Reverse Stock Split into one share of Common Stock. As a result, the
number of issued and outstanding shares of Common Stock was retroactively adjusted in the consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020 and 2019</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Index to the
Consolidated Financial Statements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020 and 2019</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Page</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
    Statements</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left"><A HREF="#a_01"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Condensed
    Consolidated Balance Sheets at March 31, 2020 (unaudited) and December 31, 2019</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1in; text-align: right"><A HREF="#a_01"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-28</FONT></A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_02"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Condensed
    Consolidated Statements of Operations for the Three Months Ended</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
    31, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><A HREF="#a_02"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-29</FONT></A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><A HREF="#a_03"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Condensed
    Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Three
    Months Ended March 31, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><A HREF="#a_03"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-30</FONT></A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left"><A HREF="#a_04"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Condensed
    Consolidated Statements of Cash Flows for the Three Months Ended March 31,</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2020
    and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><A HREF="#a_04"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-31</FONT></A></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left"><A HREF="#a_05"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
    to the Unaudited Interim Condensed Consolidated Financial Statements</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><A HREF="#a_05"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-32
    - F-47</FONT></A></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Applied
UV, Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_01"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Condensed
Consolidated Balance Sheets</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">March 31,</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">2020</P></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31,</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">2019</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Unaudited)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Current Assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 74%; padding-left: 9pt"><FONT STYLE="font-size: 10pt">Cash</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">1,712,387</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">1,029,936</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Vendor deposit</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">230,867</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">104,517</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Accounts receivable, net of allowance for doubtful accounts</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,261,909</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,227,792</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Inventory</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">120,995</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">99,543</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Loan to shareholder</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">36,959</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">4,225</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Prepaid expense and other current assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">74,100</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">30,639</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.25in"><FONT STYLE="font-size: 10pt">Total Current Assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3,437,217</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3,496,652</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Machinery and equipment, net of accumulated depreciation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">130,442</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">34,371</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Right of use asset</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">583,067</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">614,522</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Other assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">632,732</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">623,842</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.25in"><FONT STYLE="font-size: 10pt">Total Assets</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">4,783,458</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">4,769,387</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Liabilities and Stockholders' Equity (Deficit)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Current Liabilities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Accounts payable and accrued expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,160,719</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,238,822</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Income tax payable</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">106,861</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">106,861</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Capital lease obligations-current portion</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">6,380</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">6,380</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Lease liability-current</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">134,706</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">133,097</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Notes payable</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">37,500</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">37,500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Deferred revenue</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,390,540</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,245,300</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.25in"><FONT STYLE="font-size: 10pt">Total Current Liabilities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,836,706</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,767,960</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Long-term Liabilities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Capital lease obligations - less current portion</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">15,212</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">15,212</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Note payable-less current portion</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">120,000</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">120,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Lease liability-less current portion</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">448,361</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">481,425</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.25in"><FONT STYLE="font-size: 10pt">Total Long-Term Liabilities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">583,573</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">616,637</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Total Liabilities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,420,279</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,384,597</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Stockholders' Equity</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.25in; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Common stock $.0001 par value, 150,000,000
    shares authorized; 5,001,250 shares issued and outstanding, respectively</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">500</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Series A voting preferred stock $.0001 par value, 1,000,000
    shares authorized; 2,000 shares issued and outstanding</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Retained earnings</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,362,678</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,384,289</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Total Stockholders' Equity</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,363,179</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,384,790</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.25in"><FONT STYLE="font-size: 10pt">Total Liabilities and Stockholders' Equity</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">4,783,458</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">4,769,387</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B></B></FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>The accompanying notes are an integral
part of these condensed consolidated financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Applied
UV, Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_02"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Condensed
Interim Consolidated Statements of Operations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(Unaudited)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Three
    Months Ended <BR>March 31,</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 74%; text-align: left">Net Sales</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right">1,528,400</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right">1,460,737</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cost of Goods Sold</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,161,813</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,138,252</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Gross Profit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">366,587</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">322,485</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Selling. General and Administrative Expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">388,198</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">327,879</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating Loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(21,611</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(5,394</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Other Income (Expense)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Other Income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">465</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.25in; text-align: left">Total Other Income (Expense)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">465</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Loss Before Provision for Income Taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(21,611</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(4,929</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Provision for Income Taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(21,611</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(4,929</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Basic and Diluted Earnings Per Common Share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The accompanying notes are an integral
part of these condensed consolidated financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Applied
UV, Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_03"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Condensed
Consolidated Statements of Changes in Stockholders' Equity (Deficit)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(Unaudited)</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Preferred Stock</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Common Stock</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Total</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">Series A Voting</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Retained</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: center">Stockholders</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">Shares</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">Earnings</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center">Equity</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 34%; font-size: 10pt; padding-bottom: 1pt">Balance, January 1, 2019</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,417,117</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,416,616</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,929</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,929</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Balance, March 31, 2019</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;$</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(1,422,046</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(1,421,545</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Balance, January 1, 2020</P></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,384,289</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,384,790</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(21,611</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(21,611</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">Balance, March 31, 2020</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">5,001,250</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">500</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,362,678</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,363,179</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>The accompanying notes are an integral
part of these condensed consolidated financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Applied
UV, Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_04"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Consolidated
Interim Consolidated Statements of Cash Flows</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(Unaudited)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">For
    the Three Months Ended <BR>March 31,</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2020</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2019</TD><TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash flows from Operating Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 74%; text-align: left">Net Loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">(21,611</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">(4,929</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjustments to Reconcile Net Loss to Net Cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Provided by Operating Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Depreciation and amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,173</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,173</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Changes in Assets and Liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Decrease (Increase) in accounts receivable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">965,883</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(662,476</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">(Increase) in inventories</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(21,452</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(532</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">(Increase) in vendor deposits</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(126,350</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(417,957</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">(Increase) in prepaid expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(52,351</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(11,055</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">(Decrease) increase in accounts payable and accrued
    expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(78,103</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">118,061</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Increase in deferred revenue</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">145,240</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,400,623</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.375in; text-align: left">Total Adjustments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">835,040</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">428,837</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.375in; text-align: left">Net Cash Provided by Operating Activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">813,429</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">423,908</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash Flows From Investing Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Purchase of machinery and equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(98,244</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.375in; text-align: left">Net Cash Used in Investing Activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(98,244</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash Flows From Financing Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Loan from (to) officer</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(32,734</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.375in; text-align: left">Net Cash Used In Financing Activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(32,734</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Increase in Cash and equivalents</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">682,451</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">423,908</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash and equivalents at January 1,</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,029,936</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">793,766</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash and equivalents at March 31,</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,712,387</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,217,674</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplemental Disclosures of Cash Flow Information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left">Cash paid during the period for:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.25in">Interest</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,573</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>The accompanying notes are an integral
part of these condensed consolidated financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a_05"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
1 </B></FONT><B>- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Nature of Business</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2019, Applied UV, Inc. (the
 &quot;Company&quot;) was formed and incorporated in the State of Delaware for the intended purpose of creating a legal holding
company structure for SteriLumen, Inc. and Munn Works, LLC and any future potential mergers or acquisitions. The then-existing
shareholders and members of SteriLumen, Inc. and Munn Works, LLC exchanged all of their interest for shares of Applied UV, Inc.
with substantially similar economic voting interests for each shareholder immediately before and after the share exchange. As
a result of the share exchange, SteriLumen, Inc. and Munn Works, LLC became wholly-owned subsidiaries of Applied UV, Inc and,
collectively referred to as (the &quot;Company&quot;). The combination met the criteria outlined in ASC 850 to be accounted for
as a transaction between entities under common control and therefore the financial statements are being presented as if the transfer
happened at the beginning of the period and prior year financial information has been retrospectively adjusted to furnish comparative
information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SteriLumen, Inc. is engaged in the
design, manufacture, assembly and distribution of automated disinfecting mirror systems for use in hospitals and other healthcare
facilities. The Company was incorporated in the State of New York in November of 2012 and is headquartered in Mount Vernon, New
York. Munn Works, LLC is engaged in the manufacture of fine mirrors specifically for the hospitality industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Basis of Presentation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
accompanying </FONT>unaudited condensed consolidated financial statements and related notes have been prepared in accordance with
accounting principles generally accepted in the United States of America (&ldquo;U.S. GAAP&rdquo;) for interim financial information,
and with the rules and regulations of the United States Securities and Exchange Commission (the &ldquo;SEC&rdquo;) set forth in
Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete
financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.
Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should
be read along with the Annual Report filed of the Company for the annual period ended December 31, 2019. The consolidated balance
sheet as of December 31, 2019 was derived from the audited consolidated financial statements as of and for the year then ended.
The consolidated financial statements include the accounts of Applied UV, Inc., Munn Works, LLC and SteriLumen, Inc. All significant
intercompany transactions and balances are eliminated in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition</U></P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On January 1, 2018, the Company adopted
accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments using the modified retrospective
method for all customer contracts not yet completed as of the adoption date. The adoption of ASC 606 did not have a significant
impact on our Consolidated Financial Statements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition</U> (continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue when
the performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">1)</TD><TD><I>Identify the contract with a customer</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">A contract with
a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding
the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance
and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable
based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the
customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience
or, in the case of a new customer, published credit and financial information pertaining to the customer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">2)</TD><TD><I>Identify the performance obligations in the contract</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">Performance obligations
promised in a contract are identified based on the services that will be transferred to the customer that are both capable of
being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are
readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer
of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised
services, the Company must apply judgment to determine whether promised services are capable of being distinct in the context
of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. The
Company promises to design, manufacture and sell custom mirrors through contractual arrangements. It was determined that most
services within a contract are substantially the same and have the same pattern of transfer to the customer over the term of the
agreement and are therefore highly interdependent upon each other. As such, the Company determined that the services within a
contract are not separately identifiable in the context of the contract and should therefore be bundled into a single performance
obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">3)</TD><TD><I>Determine the transaction price</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">The transaction
price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to
the customer. We evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments
that occur over time. We do not adjust the transaction price for the effects of financing if, at contract inception, the period
between the transfer of control to a customer and final payment is expected to be one year or less. The Company establishes pricing
for contracts with customers based on a fixed price for a fixed fee. Contracts do not provide for a discount or refund to customers
and historically, no discounts or refunds have been given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition (continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">4)</TD><TD><I>Allocate the transaction price to performance obligations
                                         in the contract</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">If the contract
contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However,
if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with
variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to
a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction
price based on management's judgment. The identified promises are considered to be bundled in arriving at the overall promise
within the contract. This promise therefore results in one performance obligation, to design, manufacture and sell custom mirrors
to our customer, therefore, allocation of the transaction price is not necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">5)</TD><TD><I>Recognize revenue when or as the Company satisfies a performance
                                         obligation</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">Revenue is comprised
of projects that are completed within our own facility or from a third-party vendor (direct sales). For projects that are completed
within our own facility, the Company satisfies performance obligations at over time. For projects that are completed from a third-party
vendor, the performance obligation is recognized at a point in time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"> As of March 31,
2020 and December 31, 2019, total deferred revenue was $1,390,540 and $1,245,300. As of March 31, 2020, deferred revenue was comprised
of work generated from our own Mount Vernon facility of $558,973 and work performed at the third-party manufacturer of $831,568.
At January 1, 2020, deferred revenue was $1,245,300 which $1,000,177 was recognized as revenue during the three months ended March
31, 2020. As of December 31, 2019, deferred revenue was comprised of work generated from our own Mount Vernon facility of $844,331,
work performed at the third-party manufacturer of $363,942 and billings made upfront of $37,029. At January 1, 2019, deferred
revenue consisted of $1,180,159 which $1,098,337 was recognized as revenue during the three months ended March 31, 2019. Each
component of deferred revenue is further explained below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
projects, that are completed within our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals
through contractual agreements. These sales require us to deliver our products within three to six months from commencement of
order acceptance. We recognize revenue over time by using the input method based on costs incurred as it depicts our progress
toward satisfaction of the performance obligation. Under this method, revenue arising from fixed price contracts is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance
obligations. Incurred costs include all direct material and labor costs and those indirect costs related to contract performance,
such as indirect labor, supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs
when the project materials have been purchased or moved to work in process as required by the project&rsquo;s engineering design.
Cost based input methods of revenue recognition require us to make estimates of costs to complete the projects. In making such
estimates, significant judgment is required to evaluate assumptions related to the costs to complete the projects, including materials,
labor and other system costs. If the estimated total costs on any contract are greater than the net contract revenues, we recognize
the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts
billed in excess of revenues and profits recognized. Total deferred revenue from the input method of accounting was $</FONT>558,973
and $844,331 as of March 31, 2020 and December 31, 2019, respectively. Revenues and profits recognized in excess of amounts billed
typically does not occur as we will not perform any work in excess of the amount we bill to our customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Each
product or service delivered to a third</FONT>-party customer that is manufactured by a third-party vendor is considered to satisfy
a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods
passes to the customer. These sales are shipped from the manufacturer to the customer without our taking physical inventory possession.
We report direct sales on a gross basis, that is, the amounts billed to our customers are recorded as &quot;Sales,&quot; and inventory
purchased from manufacturers are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory
before it is transferred to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise
to our customers, taking on inventory risk of returned product, and having discretion in establishing pricing. We typically pay
our vendors a portion of the total cost up front and the remaining balance is accrued for and paid within 30 to 60 days of when
the products are shipped from the third-party warehouse. Vendor payments are capitalized until completion of the project and are
recorded as vendor deposits. As of Mrch 31, 2020 and December 31, 2019, the vendor deposit balance was $230,867 and $104,517,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenue and Cost Recognition (continued)</U></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">5)</TD><TD><I>Recognize revenue when or as the Company satisfies a performance
                                         obligation (continued)</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Losses
expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Deferred
revenue from these projects as of </FONT>March 31, 2020 and December 31, 2019 was $831,568 and $363,942, respectively. At March
31, 2020 and December 31, 2019, there were no losses charged to expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif">There
are times that we bill upfront where no work is performed until 30 to 60 days after the deposit is received from our customer.
Accordingly, no revenue is recognized and the amounts are deferred. As of </FONT>March 31, 2020 and December 31, 2019, deferred
revenue balances related to these invoices were $- and $37,029, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">For the three months
ended March 31, 2020, the Company generated revenues of $892,236 at a point in time and $636,164 over time. For the three months
ended March 31, 2019, the Company generated revenues of $542,812 at a point in time and $917,925 over time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Recent Accounting Pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Recently Adopted</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the Financial Accounting
Standards Board, or the FASB, issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use, or
ROU, assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC
842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require
any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard
resulted in the recording of ROU assets and lease liabilities for all our lease agreements with original terms of greater than
one year. The adoption of ASC 842 did not have a significant impact on our statements of income or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the
accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation &mdash; Stock
Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard,
most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments
granted to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not
have a material impact on our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
August 2018, the FASB issued ASU 2018</FONT>-13, Fair Value Measurement (Topic 820): Disclosure Framework &mdash; Changes to the
Disclosure Requirements for Fair Value Measurement, which removes, modifies and adds various disclosure requirements related to
fair value disclosures. Disclosures related to transfers between fair value hierarchy levels will be removed and further detail
around changes in unrealized gains and losses for the period and unobservable inputs used in determining level 3 fair value measurements
will be added, among other changes. ASU 2018-13 is effective for interim and annual reporting periods beginning after December
15, 2019, and early adoption is permitted. The adoption of this standard did not have a material impact on our financial statements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Applied UV,
Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to the
Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>March 31, 2020<BR>
(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Recent Accounting Pronouncements (Continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
June 2016, the FASB issued ASU 2016</FONT>-13, Financial Instruments &mdash; Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments, which replaces the current incurred loss impairment methodology for financial assets with a methodology
that reflects expected credit losses. The new credit losses model must be applied to loans, accounts receivable, and other financial
assets. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those
annual periods. The adoption of this standard did not have a material impact on our financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently believe that all other
issued and not yet effective accounting standards are not relevant to our financial statements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
2 &ndash; </B></FONT><B> INVENTORY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Inventory
consists of raw materials of $</FONT>120,995 and $99,543 at March 31, 2020 and December 31, 2019, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 &ndash; PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are summarized
by major classifications as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">March 31,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">December 31,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2020</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="text-align: center; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt; border-bottom: Black 1pt solid">2019</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; padding-left: 0.05in">Machinery and Equipment</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">61,083</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">39,583</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Furniture and Fixtures</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">33,385</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,864</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Leasehold improvements</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">60,223</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">154,691</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">56,447</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Less: Accumulated Depreciation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(24,249</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(22,076</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.05in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">130,442</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">34,371</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciation
expense, including amortization of assets under capital leases, for the </FONT>three months ended March 31, 2020 and 2019 was
$2,173 and $2,173, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 4 &ndash; DUE TO AND FROM SHAREHOLDER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of </FONT>March 31, 2020 and December 31, 2019 the Company loaned its majority shareholder noninterest-bearing advances, which
are due upon demand. As of March 31, 2020 and December 31, 2019, amounts owed from the Company's majority shareholder was $36,959
and $4,225, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Applied UV,
Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Notes to the
Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>March 31, 2020<BR>
(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 &ndash; CAPITAL LEASE OBLIGATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's machinery under a capital
lease, which is included in machinery and equipment is summarized as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 86%; text-align: left">Machinery and Equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right">61,083</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Less: Accumulated Depreciation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(21,775</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">39,308</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Future
minimum principal and interest payments under the capital lease agreements as of </FONT>March 31, 2020, are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 86%; text-align: left">2020</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,280</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2021</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">7,280</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">7,280</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,489</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: Amount representing interest</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,737</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Present value of future minimum lease payments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">21,592</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: current portion</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,380</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">15,212</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 &ndash; LOANS PAYABLE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
December of 2012, the Company received $260,000 from Seagrace Partners that accrued interest at 5% annually with no maturity date
and no stated terms of repayment. As of December 31, 2019 and 2018, the note had an outstanding principal balance of $0 and $131,336,
respectively. Interest expense related to this note for the year ended December 31, 2019 and 2018 was $5,902 and $7,656, respectively.
</FONT> The outstanding principal balance of $132,390 was reclassed to liabilities subject to compromise (note payable- pre-petition).
In 2019, the Company entered into a settlement agreement in relation to the Company's Chapter 11 Bankruptcy (as further described
in Note 10 of the financial statements) with the note holder where the Company would pay $80,000 over the next 90 days, in four
equal installments of $20,000. The entire $80,000 was repaid prior to December 31, 2019. In addition, the Company will provide
the third party lender 8,000 shares of common stock in the Company (subject to certain transfer restrictions), in an amount which
will have a public trading value within 24 months of at least $85,000. If the value of the stock does not reach $85,000 at the
end of 24 months, the shareholders of the Company will provide the third party lender make-up stock to reach the value of $85,000
with a maximum amount of shares to be issued of 17,000 shares. This repayment would constitute as full and final payment of any
and all obligations to the lender. On the date of the settlement, the Company recorded a loss on extinguishments in the amount
of $34,610.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
June of 2018 and June of 2016, the Company received advances from On Deck Capital in the amounts of $150,000 and $100,000, respectively.
</FONT> The June 2016 note matured in one year from the date of issuance and required 52 weekly payments of $2,346. As of December
31, 2019 and 2018, the balance of this note was $0 and interest expense of $3,981 was recorded during the year ended December
31, 2018. The June 2018 note matured in one year from the date of issuance and required 52 weekly payments of $3,605. As of December
31, 2018, the company made no repayments on this note and has an outstanding principal balance of $150,000. As part of the Chapter
11 Bankruptcy, the outstanding principal balance of $150,000 was reclassed to liabilities subject to compromise (note payable-
pre-petition) as further described in Note 10 of the financial statements. Accrued interest on this note as of December 31, 2018
was $17,360 and an additional $20,140 was accrued for based on the proof of claim submitted by the note holder. These amounts
were also reclassed to liabilities subject to compromise (accounts payable and accrued expenses- pre-petition) as further described
in Note 10 of the financial statements. In 2019, the Company paid $18,750, which was 10% of the allowed proof of claim in the
Chapter 11 Bankruptcy of $187,500. In addition, the Company was required to pay $157,500 in a five payments in the amount of $30,000
per year, with an additional $7,500 in year two. The Company recognized a gain on extinguishments of $11,250 in relation to the
settlement in the year ended December 31, 2019. As of March 31, 2020 and December 31, 2019, the company had an outstanding balance
of $157,500.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 &ndash; LOANS PAYABLE (continued)</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">Minimum obligations under
this loan agreement is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify; text-indent: -0.05in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif">For the year Ending December 31,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 86%; text-align: left">2020</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">37,500</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2021</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">2024</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">157,500</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
October of 2017, June of 2017, and September of 2016, the Company received advances from LG Funding, LLC in the amounts of $150,971,
$150,990, and $125,990, respectively, in exchange for notes in the amounts of $182,679, $187,228, and $156,228, respectively.
</FONT> On the initial date of the note, the Company accounted for the notes at face value less a discount for the difference
between the face value and advances received. The discounts were amortized to interest expense in proportion to the repayments
over the total amount loaned. For the years ended three months ended March 31, 2020 and 2019, the Company recorded $0 in interest
expense in relation to these notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company recognized a gain of $81,000 in 2019 as a result of the Chapter 11 Bankruptcy Case and all remaining outstanding balances
were settled in full. </FONT>There were no outstanding balances on this note as of March 31, 2020 and December 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7 &ndash; STOCKHOLDERS' EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Series A Preferred Stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Liquidation Preference</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of shares of Series A Preferred Stock shall not be entitled
to any liquidation preference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Voting</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
any matters presented to the stockholders of the corporation for their action or consideration at any meeting of stockholders
of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred
Stock shall be entitled to vote in an amount equal to </FONT>200 votes per share. Series A Preferred Stock shall vote as a single
class and such voting rights shall be identical in all respects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Conversion</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of the shares of Series
A Preferred Stock shall not have any rights hereunder to convert such shares into, or exchange such shares for, shares of any
other series or class of capital stock of the Corporation or of any other person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Common stock</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of our common stock are
entitled to the following rights:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Voting</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each share of our common stock entitles
its holder to one vote per share on all matters to be voted or consented upon by the stockholders. Holders of our common stock
are not entitled to cumulative voting rights with respect to the election of directors.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7 &ndash; STOCKHOLDERS' EQUITY (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Common stock (continued)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Dividend</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subject to limitations under Delaware
law and preferences that may apply to any shares of preferred stock that we may decide to issue in the future, holders of our
common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out
of funds legally available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Liquidation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event of the liquidation, dissolution,
or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution
after the payment of all of our debts and other liabilities, subject to the prior rights of the holders of our preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Other Matters</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of our common stock have
no subscription, redemption, or conversion privileges. Our common stock does not entitle its holders to preemptive rights. All
of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences and privileges of the
holders of our common stock are subject to the rights of the holders of shares of any series of preferred stock which we may issue
in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 8 &ndash; RELATED PARTY </B></P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">In February of 2019,
the Company engaged Carmel, Milazzo &amp; Feil LLP (the &quot;Firm&quot;) to represent and assist the company with all general
corporate legal matters including the preparation and filing with the Securities and Exchange Commission of a registration statement
on Form S-1 through the Company's intended initial public offering. Ross Carmel, a former board member of Applied UV, is a partner
at the firm. The firm will perform services in exchange for three percent of the outstanding shares of the Company's common stock,
issued as follows: 1.) One percent due upon execution of the agreement 2.) One percent due up the filing of the Form S-1; and
3.) One percent due upon the SEC declaring the Form S-1 effective. As of March 31, 2020 and December 31, 2019, the company was
liable to issue 102,066 shares of common stock to the firm. These shares have not been issued to date and have been recorded as
a liability to be settled in stock for an amount of $507,805 as of March 31, 2020 and December 31, 2019. Because these legal fees
are directly related to the initial public offering, the amount has been capitalized and is included in other assets.</P>


<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 &ndash; LEASING ARRANGEMENTS</B></P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; margin: 0pt 0; text-align: justify">The Company adopted
ASU 2016-02 prospectively as of January 1, 2019, the date of initial application, and therefore prior comparative periods were
not adjusted. As part of the&nbsp;adoption, the Company elected&nbsp;the &ldquo;package of expedients&rdquo;, which permits the
Company not to reassess under the new standard the Company&rsquo;s prior conclusions about lease identification and initial direct
costs. The Company did not elect the use-of hindsight or the practical expedient pertaining to land easements, the latter not
being applicable to the Company.&nbsp;The Company has lease arrangements which are classified as short-term in nature. The Company
has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify,
the Company will not recognize&nbsp;Right of Use (&quot;ROU&quot;)&nbsp;assets&nbsp;or lease liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 &ndash; LEASING ARRANGEMENTS
(continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525; text-align: justify">&nbsp;</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company determines
whether an arrangement is a lease at inception. The Company has operating leases for office space and office equipment. The Company&rsquo;s
leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to
five years. The Company considered these options to extend in determining the lease term used to establish the Company&rsquo;s
right-of use assets and lease liabilities once reasonably certain of exercise. The Company&rsquo;s lease agreements do not contain
any material residual value guarantees or material restrictive covenants.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; color: #252525; margin: 0pt 0; text-align: justify">ROU&nbsp;assets&nbsp;represent
the Company&rsquo;s right to use an underlying asset for the lease term and lease liabilities represent the Company&rsquo;s obligation
to make lease payments arising from the lease. Operating lease&nbsp;ROU&nbsp;assets&nbsp;and operating lease liabilities are recognized
at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease&nbsp;ROU&nbsp;asset&nbsp;also
includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations
of the operating&nbsp;ROU&nbsp;assets&nbsp;and operating lease liabilities include options to extend or terminate the lease when
the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line
basis over the lease term.</P>

<P STYLE="color: #252525; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">As the Company&rsquo;s
leases do not provide an implicit rate, the Company uses an incremental borrowing rate of 5% based on the information available
at commencement date in determining the present value of lease payments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
February 7, 2014, the Company entered into a lease agreement in Mount Vernon, New York on a month to month basis. The monthly
rent under this arrangement from January 1, 2018 through November 30, 2018 was $10,000 per month, from December 2018 through February
2019 was $11,150 per month</FONT>. The company did not record an ROU asset or corresponding liabiltiy as the lease arrangement
was month to month. The Company then amended the lease for a term that commenced on April 1, 2019 and expire on the 31st day of
March 2024 at a monthly rate of $13,400. On April 1, 2019 the company recorded an ROU asset and a corresponding lease liability
in the amount of $710,075. Rent expense for the three months ended March 31, 2020 and 2019 was $39,000 and $34,500, respectively.
As of March 31, 2020 and December 31, 2019, the balance of the ROU asset was $583,067 and $614,522, respectively. The lease can
be cancelled by either party with 150 days of written notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Schedule
maturities of operating lease liabilities outstanding as of </FONT>March 31, 2020 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 87%; text-align: left">2020</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">160,800</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2021</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">160,800</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">2024</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,200</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Total lease payments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">644,400</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: Imputed Interest</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(61,333</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Present value of future minimum
    lease payments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">583,067</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Consistent with ASC 842-20-50-4, the
Company calculated its total lease cost based solely on its monthly rent obligation. The Company had no cash flows arising from
its lease, no finance lease cost, short term lease cost, or variable lease costs. Our lease does not produce any sublease income,
or any net gain or loss recognized from sale and leaseback transactions. As a result, the Company did not need to segregate amounts
between finance and operating leases for cash paid for amounts included in the measurement of lease liabilities, segregated between
operating and financing cash flows; supplemental non-cash information on lease liabilities arising from obtaining right-of-use
assets; weighted-average calculations for the remaining lease term; or the weighted-average discount rate.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>NOTE 10 - COSTS AND ESTIMATED
EARNINGS ON CONTRACTS IN PROGRESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Costs
and estimated earnings on contracts in progress, net of progress billings, are as follows as of </FONT>March 31, 2020 and December
31, 2019:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font: 10pt Times New Roman, Times, Serif; text-align: left">Costs incurred on contracts in progress</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">161,030</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">240,732</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Estimated net earnings thereon</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">597,156</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">42,403</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; font-size: 10pt; text-align: left">Total costs and estimated earnings</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">758,186</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">283,135</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Billings to date</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,230,758</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,232,925</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; font-size: 10pt; text-align: left">Net overbilled</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(472,572</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Contract Assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Contract Liabilities (Deferred
    Revenue)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(472,572</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(472,572</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(949,790</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Contract assets represent amounts earned
under contracts in progress but not yet billed under the terms of those contracts. These amounts become billable according to
the contract terms, which usually consider passage of time, achievement of certain milestones or completion of the project. Substantially
all costs and estimated earnings in excess of billings on contracts in progress are expected to be billed and collected in the
following year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Contract liabilities represent billings
to customers in excess of costs and earnings on contracts in progress. Substantially all such amounts are expected to be earned
in the following year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
11 </B></FONT><B>- SHARE EXCHANGE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
March 26, 2019, March 27, 2019 and July 31, 2019, we and the shareholder of SteriLumen, Inc. and the sole member of Munn Works,
LLC, completed the transactions contemplated by three Share Exchange Agreements. </FONT> Pursuant to the applicable Share Exchange
Agreements, SteriLumen, Inc. and Munn Works, LLC transferred to us all assets and liabilities. The shareholders of SteriLumen,
Inc. exchanged all of their shares in SteriLumen for 2,000 preferred and 2,001,250 common shares of Applied UV, Inc. The sole
member of Munn Works, LLC exchanged all of its membership interest in Munn Works, LLC for 3,000,000 common shares of Applied UV,
Inc. As the Share Exchanges were transactions between entities that are under common control, accounting rules require that our
Consolidated Financial Statements include the results of the Transferred Businesses for all periods presented, including periods
prior to the completion of the Share Exchanges.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12 - LEGAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">APF Management filed and served a complaint
in 2013 New York state court against Munn Works, LLC, Max Munn and various other parties seeking recovery of damages and was awarded
various damages on behalf of APF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2018, Munn Works, LLC.
entered Chapter 11 bankruptcy in order to facilitate an appeal and a resolution to this matter. As part of the Chapter 11 bankruptcy,
APF management filed a claim in the amount of $1,474,505. All of the parties agreed to resolve the disputes whereby, APF would
receive $400,000 payable by the Company. The amount was settled and paid in full in 2019.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
</B></FONT><B>12 - LEGAL (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Administration of Chapter 11 Case</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
June of 2018, Munn Works, LLC received Bankruptcy court approval of certain &quot;first</FONT>-day&quot; motions, which preserved
the Company's ability to continue operations without interruption in Chapter 11. As part of the &quot;first-day&quot; motions,
the Company received approval to pay or otherwise honor certain pre-petition obligations generally designed to support the Company's
operations. Additionally, the Bankruptcy Court confirmed the Company's authority to pay for goods and services received post-petition
in the ordinary course of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
part of the chapter 11 case, the Company has retained, pursuant to Bankruptcy Court authorization, legal and other professionals
to advise the Company in connection with the administration of its chapter 11 case and its litigation with APF management, and
certain other professionals to provide services and advice in the ordinary course business. As a result of the chapter 11 filing,
the payment of pre</FONT>-petition liabilities is generally subject to compromise pursuant to a plan of reorganization. Generally,
under the Bankruptcy Code, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although
payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted the Company authority to pay certain pre-petition
claims in designated categories and subject to certain terms and conditions. Among other things, the Bankruptcy Court has authorized
the Company to pay certain pre-petition claims relating to employees and critical vendors.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 25, 2018. the Company filed
schedules of assets and liabilities and statement of financial affairs (the &quot;Schedules&quot;) with the Bankruptcy Court.
The Bankruptcy Court has entered an order setting October 26, 2018 as the deadline for filing proofs of claim (the &quot;Bar Date&quot;).
The Bar Date is the date by which claims against the Company relating to the period prior to the commencement of the Company's
chapter 11 case must be filed if such claims are not listed in liquidated, non-contingent and undisputed amounts in the Schedules,
or if the claimant disagrees with the amount, characterization or classification of its claim as reflected in the Schedules. Claims
that are subject to the Bar Date and which are not filed on or prior to the Bar Date, may be barred from participating in any
distribution that may be made under a plan of reorganization in the Company's chapter 11 case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company applied Financial Accounting
Standards Board (&quot;FASB&quot;) Accounting Standards Codification (&quot;ASC&quot;) 852, Reorganizations, which is applicable
to companies under bankruptcy protection, and requires amendments to the presentation of key financial statement line items. It
requires that the financial statements for periods subsequent to the chapter 11 filing distinguish transactions and events that
are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains
and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business
must be reported separately as reorganization items in the consolidated statements of operations. The balance sheet must distinguish
pre-petition liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and
from post-petition liabilities. Liabilities that may be subject to a plan of reorganization must be reported at the amounts expected
to be allowed in the Company's chapter 11 case, even if they may be settled for lesser amounts as a result of the plan of reorganization
or negotiations with creditors. In addition, cash used by reorganization items are disclosed separately in the consolidated statements
of cash flow.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
</B></FONT><B>12 - LEGAL (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Liabilities Subject to Compromise</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pre-petition liabilities that are subject
to compromise are required to be reported at the amounts expected to be allowed in the Company's chapter 11 case, even if they
may be settled for lesser amounts. The amounts classified as Liabilities Subject to Compromise as of December 31, 2018 may be
subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events. The Company
cannot reasonably estimate the value of the claims that will ultimately be allowed in its chapter 11 case until its evaluation,
investigation and reconciliation of all filed claims has been completed. The amount of liabilities subject to compromise represents
the Company's estimate, where an estimate is determinable, of known or potential pre-petition claims to be addressed in connection
with its chapter 11 case. Such liabilities are reported at the Company's current estimate, where an estimate is determinable,
of the allowed claim amount, even though they may be settled for lesser amounts. These claims remain subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status
of certain claims, if any, the value of any collateral securing such claims, or other events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2018, Liabilities subject to Compromise
consist of the following (note: all liabilities were settled in 2019, therefore no balances remain as of December 31, 2019):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; font: 10pt Times New Roman, Times, Serif; text-align: left">Accounts payable and accrued expenses-
    pre-petition</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">492,014</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Notes payable- pre-petition</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">370,390</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Expectation damages accrual-
    APF Management</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,474,505</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 0.25in">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,336,909</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to Bankruptcy Court Order
dated May 31, 2019, the Debtor&rsquo;s Second Amended Chapter 11 Plan dated April 29, 2019 (the &ldquo;Plan&rdquo;) was approved
and confirmed. The Plan provided treatment for five (5) classes of claims, with the general unsecured claims composing Class 4
Claimants. Under the Plan, Class 4 Claimants, would receive 10% of their Allowed Claim on the Effective Date. As a result of the
bankruptcy claim, APF received and settled for $400,000 where a gain on settlement of $1,074,505 was recorded. As described in
Note 6 of the financial statements, the Company recorded a total net gain from settlement of debt and gains from its Chapter 11
Bankruptcy case in the amount of $57,640. Other various pre-petition creditors received and settled for a total of $103,761, resulting
in a gain on settlement in the amount of $388,253. The entire amount was escrowed on or before May 23, 2019 and paid within 15
days of the effective date of the stipulation. As a result of the transaction, the Company recorded a total gain on settlement
of $1,520,398.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
13 </B></FONT><B>- SEGMENT REPORTING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">FASB Codification Topic 280, Segment
Reporting, establishes standards for reporting financial and descriptive information about an enterprise&rsquo;s reportable segments.
The Company has two reportable segments: the design, manufacture, assembly and distribution of automated disinfecting mirror systems
for use in hospitals and other healthcare facilities (disinfectant mirror segment) and the manufacture of fine mirrors specifically
for the hospitality industry (hospitality segment). The segments are determined based on several factors, including the nature
of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to </B></FONT><B>the Unaudited Interim Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>March
</B></FONT><B>31, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">NOTE
13 </FONT>- SEGMENT REPORTING (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">An
</FONT>operating segment&rsquo;s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment
income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include
amortization of intangibles, stock-based compensation, other charges (income), net and interest and other, net.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All net sales, cost of goods sold,
and other income (expense) was generated or incurred from the hospitality segment of our business. For the three months ended
March 31, 2020 and 2019, the hospitality segment of our business incurred $316,416 and $316,111, respectively, of selling, general
and administrative expenses. For the three months ended March 31, 2020 and 2019, the disinfectant mirror segment of our business
incurred $12,231 and $11,767, respectively, of selling, general and administrative expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2020 and Deember 31,
2019 assets from the hospitality segment of our business amounted to $4,720,210 and $4,706,535, respectively. As of March 31,
2020 and December 31, 2019, total assets from the disinfectant mirror segment of our business amounted to $63,248 and $62,852,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2020 and December 31,
2019, total liabilities from the hospitality segment of our business amounted to $3,400,204 and $3,347,120, respectively. As of
March 31, 2020 and December 31, 2019, total liabilities from the disinfectant mirror segment of our business amounted to $20,075
and $37,477, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
14 </B></FONT><B>- SUBSEQUENT EVENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Management
has evaluated subsequent events through </FONT>June 24, 2020, the date the financial statements were available to be issued. As
a result of the spread of the COVID-19 Coronavirus and the resulting stay-at-home orders issued by the state and local municipalities
in which the Company operates, the Company is experiencing reduced sales. The duration of the reduction in sales may be only temporary.
However, the related financial impact and duration cannot be reasonably estimated at this time. On April 3, 2020, the Company
submitted a Paycheck Protection Program application to Chase Bank for a loan amount equal to $296,287. The amount was approved
and the Company has received the funds. The amount will be used to cover payroll costs, rent, and utilities. Employee and compensation
levels are expected to be maintained, however, it is not certain at this time whether or not the loan will be forgiven.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
April 20, 2020 SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke&rsquo;s Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai&rsquo;s research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60</FONT>-day exclusive option to negotiate a license for
Mount Sinai&rsquo;s resulting patent rights if such patent was obtained at SteriLumen&rsquo;s request and SteriLumen has paid
for all the costs in obtaining the patent. If the results of the study contained in Mount Sinai&rsquo;s final report are used
by SteriLumen in a successful regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount
Sinai a fee of $30,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: justify; margin: 0pt 0; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Max
Munn, Chief Executive Officer of the Company </FONT>is entitled to a five-year warrant to purchase 80,000 shares of the Company&rsquo;s
common stock at an exercise price equal to the greater of $1.00 per share and the per share market value of the Company's common
stock at the date of the grant in lieu of cash salary. The issuance of the warrants is contingent upon an initial public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
May of 2020, we adopted the Applied UV, Inc. 2020 Omnibus Incentive Plan (the &ldquo;Plan&rdquo;), which is effective as of March
31, 2020. Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights,
restricted stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to </FONT>600,000
shares of common stock to Company employees, officers, directors, consultants and advisors are available under the Plan. The type
of grant, vesting provisions, exercise price and expiration dates are to be established by the Board at the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied UV, Inc. and Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Unaudited Interim Condensed
Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>March 31, 2020</B></P>

<P STYLE="text-align: center; margin-top: 0pt; font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
</B></FONT><B>14 - SUBSEQUENT EVENT (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 18, 2020 the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company&rsquo;s common stock
at an exercise price of equal to the greater of $2.50 per share and the per share market value of the Company's common stock on
the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to the Board, of which
1,250 have been cancelled. The options are subject to equal quarterly vesting over a one-year period. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="background-color: white">Through
and including , 2020, (the 25th day after the date of this prospectus), all dealers effecting transactions in the Common Stock,
whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition
to a dealer&rsquo;s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or
subscription.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>1,000,000 Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>Applied UV,
Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">N E T W O R K <FONT STYLE="color: #FF9900"><B>1</B></FONT>
F I N A N C I A L</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: white"><FONT STYLE="background-color: black">S
E C U R I T I E S, I N C. </FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white; text-indent: 0.75in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
<B>2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>Part II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>INFORMATION
NOT REQUIRED IN PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Item 13. Other
Expenses of Issuance and Distribution.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">The
following table indicates the expenses to be incurred in connection with the offering described in this registration statement,
other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the Securities
and Exchange Commission registration fee and the Financial Industry Regulatory Authority, Inc., or FINRA filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 42.85pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 86%; padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Securities
    and Exchange Commission registration fee</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">800</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">FINRA filing fee</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,438</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">NASDAQ listing fee</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">75,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Accountants&rsquo;
    fees and expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">133,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Legal fees and expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">60,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Printing and engraving
    expenses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">15,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Miscellaneous</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">4,762</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 12pt; text-align: justify; text-indent: -12pt"><FONT STYLE="font-size: 10pt">Total
    expenses</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"><FONT STYLE="font-size: 10pt">290,000</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Item 14. Indemnification
of Directors and Officers.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">Section
102 of the General Company Law of the State of Delaware (&ldquo;DGCL&rdquo;) permits a Company to eliminate the personal liability
of directors of a Company to the Company or its stockholders for monetary damages for a breach of fiduciary duty as a director,
except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained
an improper personal benefit. Our amended and restated certificate of incorporation provides that no director of the Company shall
be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding
any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability
of directors for breaches of fiduciary duty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">Section
145 of the DGCL provides that a Company has the power to indemnify a director, officer, employee, or agent of the Company, or a
person serving at the request of the Company for another Company, partnership, joint venture, trust or other enterprise in related
capacities against expenses (including attorneys&rsquo; fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made
a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, in any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought
by or in the right of the Company, no indemnification shall be made with respect to any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or other adjudicating
court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our amended and restated
certificate of incorporation provides that we will indemnify to the fullest extent permitted from time to time by the DGCL or any
other applicable laws as presently or hereafter in effect, any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including,
without limitation, an action by or in the right of the Company, by reason of his acting as a director or officer of the Company
or any of its subsidiaries (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of
the fact that he is or was an employee or agent of the Company or any of its subsidiaries or is or was serving at the request of
the Company in any other capacity for or on behalf of the Company) against any liability or expense actually and reasonably incurred
by such person in respect thereof; <FONT STYLE="background-color: white"><B><I>provided, however</I></B></FONT>, the Company shall
be required to indemnify an officer or director in connection with an action, suit or proceeding (or part thereof) initiated by
such person only if (i) such action, suit or proceeding (or part thereof) was authorized by the Board of Directors and (ii) the
indemnification does not relate to any liability arising under Section 16(b) of the Exchange Act, as amended, or any rules or regulations
promulgated thereunder. Such indemnification is not exclusive of any other right to indemnification provided by law or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a claim is not paid
in full by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where any undertaking required by the By-laws of the Company has been tendered
to the Company) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Company
to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Company. Neither the failure
of the Company (including its Board of Directors, legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the DGCL, nor an actual determination by the Company (including its Board of Directors, legal
counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable standard of conduct. Indemnification shall include payment
by the Company of expenses in defending an action or proceeding in advance of the final disposition of such action or proceeding
upon receipt of an undertaking by the person indemnified to repay such payment if it is ultimately determined that such person
is not entitled to indemnification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In
any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriters
will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning
of the Securities Act of 1933, as amended, or the Securities Act, against certain liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Item 15.
Recent Sales of Unregistered Securities.*</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Set forth below is information regarding shares of common stock
issued by us since the Company&rsquo;s inception on February 26, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.85pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">(a)
Issuance of Capital Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
March 26, 2019 the Company issued 201,250 shares to accredited investors in exchange for 100% of the issued and outstanding common
stock of SteriLumen, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
March 27, 2019 the Company issued 1,800,000 shares of common stock and 2,000 shares of Series A Preferred Stock to an accredited
investor in exchange for 100% of the issued and outstanding Series A preferred stock of SteriLumen, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
July 1, 2019, the Company issued 3,000,000 shares of common stock to an accredited investor in exchange for all 100% of the equity
interest in Munn Works, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
May 12, 2020, the Company issued 50,518 shares of common stock to Carmel, Milazzo &amp; Feil LLP as part of compensation for legal
services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
June 10, 2020, the Company issued 51,548 shares of common stock to Carmel, Milazzo &amp; Feil LLP as part of compensation for
legal services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Only July 9, 2020,
the Company issued 10,000 unvested shares of common stock to each to four newly elected directors. In each case, the shares will
evenly vest on an annual basis over a period of four (4) years, with the first vesting to occur on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> On July 9, 2020, the Company issued
37,500 shares of unvested common stock to its non-employee directors, which vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> On July 9, 2020, the Company issued
10,000 unvested shares of common stock to the Chairman of the Board. The shares will vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On July 9, 2020,
Company issued 5,000 unvested shares of common stock to each of the Chairman of the Audit Committee and the Chairman the Compensation
Committee. The shares will vest on January 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The issuance of the
capital stock listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated
thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient
of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b) Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On April 1, 2020,
the Company issued to Max Munn a warrant to purchase 80,000 shares of the Company&rsquo;s common stock at a per share exercise
price equal to $5.00 and the per share market value of the Company&rsquo;s common stock on March 31, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The issuance of the
warrant listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated
thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient
of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> July 1, 2020, the
Company issued two warrants to purchase 5,000 shares in aggregate, each at a $5.00 per share exercise price. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c) Option Grants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On April 1, 2020,
the Company issued 2,000 options (of which 1,250 have been cancelled) to its Board of Directors at an exercise price equal to
the greater of $2.50 per share and the per share market value of the Company&rsquo;s common stock on the date of the grant. The
options are subject to equal quarterly vesting over a one-year period. On July 1, 2020 we issued an additional 1,000 options to
certain Board members. To date 375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of
these quarterly options. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On July 9, 2020,
the Company issued options to purchase in aggregate 10,000 shares of restricted Common Stock to the members of the Medical Advisory
Board that vest quarterly over a period of one year at an exercise price of $5.00 per share. None of the options are vested. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The option described
above were deemed exempt from registration in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder
in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipients of
such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(d) Issuance of Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has not
issued any notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">* All common stock
share numbers have been adjusted to reflect a 1 for 5 reverse stock split effected by the Company on June 17, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Item 16. Exhibits
and Financial Statement Schedules.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a) <B><I>Exhibits</I></B>:
Reference is made to the Exhibit Index following the signature pages hereto, which Exhibit Index is hereby incorporated into this
Item.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b) <B><I>Financial
Statement Schedules</I></B>: All schedules are omitted because the required information is inapplicable or the information is presented
in the financial statements and the related notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B>Item 17. Undertakings.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned registrant hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The undersigned registrant
hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) To include any
prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(ii) To reflect in
the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(iii) To include any
material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above
do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form
of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) To remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(4) That, for the purpose
of determining liability under the Securities Act to any purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 32.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(A) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the
filed prospectus was deemed part of and included in the registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(B) Each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(5) That for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of securities,
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) Any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(ii) Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(iii) The portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned registrant hereby undertakes
that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) For purposes of
determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) For the purpose
of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Pursuant to the requirements of the
Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of New York, State of New York, on July 16, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt"><B>APPLIED UV, INC.</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-bottom: 1.5pt; text-align: justify"> &nbsp; </TD>
    <TD STYLE="white-space: nowrap; width: 2%; text-align: justify"> <FONT STYLE="font-size: 10pt">By:&nbsp;&nbsp;</FONT> </TD>
    <TD STYLE="width: 48%; border-bottom: black 1pt solid; text-align: justify"> <FONT STYLE="font-size: 10pt"><I>/s/ Keyoumars
    Saeed</I></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">Keyoumars Saeed</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">Chief Executive Officer (Principal Executive Officer)</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"> <B><A NAME="POA"></A>POWER OF ATTORNEY</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> KNOW ALL PERSONS BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints each of Keyoumars Saeed and Max Munn his true and lawful
attorney-in-fact, with full power of substitution and re-substitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments including pre- and post-effective amendments to this registration statement, any subsequent
registration statement for the same offering which may be filed pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact
or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the
dates indicated.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 36%; border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><B>Name</B></FONT> </TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 42%; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Position</B></FONT> </TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 20%; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Date</B></FONT> </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Keyoumars Saeed</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Chief Executive Officer and Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: left"> <FONT STYLE="font-size: 10pt"><I>Keyoumars Saeed</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">(Principal Executive Officer and Principal Financial and Accounting Officer)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Max Munn</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">President and Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Max Munn</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Joseph N. Himy</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Joseph N. Himy</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">(principal Financial and Accounting Officer)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Joel Kanter</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Chairman of the Board</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Joel Kantar</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Dr. Eugen Bauer</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Dr. Eugene Bauer</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Dr. Alastair Clemow</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Dr. Alastair Clemow</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Dr. Dallas Hack</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Dr. Dallas Hack</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1pt solid"> <FONT STYLE="font-size: 10pt"><I>/s/ Eugene Burleson</I></FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">July 16, 2020</FONT> </TD></TR>
<TR>
    <TD> <FONT STYLE="font-size: 10pt">Eugene Burelson</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">EXHIBIT INDEX</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; border-bottom: black 1pt solid; text-align: justify"><FONT STYLE="font-size: 10pt">Exhibit No.</FONT></TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 89%; border-bottom: black 1pt solid; text-align: justify"><FONT STYLE="font-size: 10pt">Description</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">1.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Form of Underwriting Agreement.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-1.htm"><FONT STYLE="font-size: 10pt">3.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-1.htm"><FONT STYLE="font-size: 10pt">Certificate of Incorporation of the Registrant.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-2.htm"><FONT STYLE="font-size: 10pt">3.2</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-2.htm"><FONT STYLE="font-size: 10pt">Amended and Restated Certificate of Incorporation of the Registrant.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-3.htm"><FONT STYLE="font-size: 10pt">3.3</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-3.htm"><FONT STYLE="font-size: 10pt">Bylaws of The Registrant.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-4.htm"><FONT STYLE="font-size: 10pt">3.4</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-4.htm"><FONT STYLE="font-size: 10pt">Certificate of Designation, Preferences and Rights of Series A Preferred Stock.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-5.htm"><FONT STYLE="font-size: 10pt">3.5</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-5.htm"><FONT STYLE="font-size: 10pt">Certificate of Amendment of Certificate of Incorporation filed on June 17, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-6.htm"><FONT STYLE="font-size: 10pt">3.6</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-6.htm"><FONT STYLE="font-size: 10pt">Certificate of Amendment of Certificate of Incorporation filed on June 23, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-7.htm"><FONT STYLE="font-size: 10pt">3.7</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex3-7.htm"><FONT STYLE="font-size: 10pt">Certificate of Amendment of Certificate of Incorporation filed July 14, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">4.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Form of Underwriter Warrant.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">5.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Opinion of Counsel to Registrant.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-1.htm"><FONT STYLE="font-size: 10pt">10.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-1.htm"><FONT STYLE="font-size: 10pt">Exchange Agreement, dated March 26, 2019 among the Registrant, SteriLumen, Inc. and each of the stockholders of SteriLumen, Inc.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-2.htm"><FONT STYLE="font-size: 10pt">10.2</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-2.htm"><FONT STYLE="font-size: 10pt">Exchange Agreement, dated March 27, 2019 among the Registrant, SteriLumen, Inc. and Laurie Munn.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-3.htm"><FONT STYLE="font-size: 10pt">10.3</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-3.htm"><FONT STYLE="font-size: 10pt">Exchange Agreement, dated July 1, 2019 among the Registrant, Munn Works, LLC and Laurie Munn</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-4.htm"><FONT STYLE="font-size: 10pt">10.4</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-4.htm"><FONT STYLE="font-size: 10pt">Warrant, dated April 1, 2020 issued to Max Munn.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-5.htm"><FONT STYLE="font-size: 10pt">10.5</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-5.htm"><FONT STYLE="font-size: 10pt">the Registrant&rsquo;s 2020 Omnibus Incentive Plan.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-6.htm"><FONT STYLE="font-size: 10pt">10.6</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-6.htm"><FONT STYLE="font-size: 10pt">Form of Option Agreement and Grant issued under February 18, 2020 Board Approval</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-7.htm"><FONT STYLE="font-size: 10pt">10.7</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-7.htm"><FONT STYLE="font-size: 10pt">Agreement, dated April 20, 2020 between Icahn School of Medicine at Mount Sinai and SteriLumen, Inc</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-8.htm"><FONT STYLE="font-size: 10pt">10.8</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD><A HREF="tm2024891d1_ex10-8.htm">Employment Agreement dated June 30, 2020 between the Registrant
and Keyoumars Saeed</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-9.htm"><FONT STYLE="font-size: 10pt">10.9</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-9.htm"><FONT STYLE="font-size: 10pt">Employment Agreement dated June 30, 2020 between the Registrant and James L. Doyle III</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-10.htm"><FONT STYLE="font-size: 10pt">10.10</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-10.htm"><FONT STYLE="font-size: 10pt">Common Stock Purchase Warrant, dated July 1, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-11.htm"><FONT STYLE="font-size: 10pt">10.11</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-11.htm"><FONT STYLE="font-size: 10pt">Common Stock Purchase Warrant, dated July 1, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-12.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">10.12</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-12.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Form of Option issued to Medical Advisory Board members</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-13.htm"><FONT STYLE="font-size: 10pt">10.13</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex10-13.htm"><FONT STYLE="font-size: 10pt">CFO Consulting Agreement dated July 15, 2020 between the Registrant and Joseph Himy</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex21-1.htm"><FONT STYLE="font-size: 10pt">21.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex21-1.htm"><FONT STYLE="font-size: 10pt">List of Subsidiaries of the Registrant. </FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex23-1.htm"><FONT STYLE="font-size: 10pt">23.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex23-1.htm"><FONT STYLE="font-size: 10pt">Consent of Adeptus Partners LLC, dated Jul</FONT>y 14<FONT STYLE="font-size: 10pt">, 2020.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">23.2*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Consent of Counsel to Registrant (included in Exhibit 5.1).</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex23-3.htm"><FONT STYLE="font-size: 10pt">23.3</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex23-3.htm"><FONT STYLE="font-size: 10pt">Consent of ResInnova Laboratories, dated June 15, 2020</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="#POA"><FONT STYLE="font-size: 10pt">24.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="#POA"><FONT STYLE="font-size: 10pt">Power of Attorney.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-1.htm"><FONT STYLE="font-size: 10pt">99.1</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-1.htm"><FONT STYLE="font-size: 10pt">Letter from the U.S. Food &amp; Drug Administration, dated December 19, 2019.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-2.htm"><FONT STYLE="font-size: 10pt">99.2</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-2.htm"><FONT STYLE="font-size: 10pt">Report of ResInnova Laboratories, dated September 8, 2017.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-3.htm"><FONT STYLE="font-size: 10pt">99.3</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-3.htm"><FONT STYLE="font-size: 10pt">Report of ResInnova Laboratories, dated May 8, 2020 which updates their Report dated September 8, 2017.</FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-4.htm"><FONT STYLE="font-size: 10pt">99.4</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-4.htm"><FONT STYLE="font-size: 10pt">Letters from ResInnova Laboratories, dated May 11, 2020 and June 8, 2020. </FONT></A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-5.htm"><FONT STYLE="font-size: 10pt">99.5</FONT></A></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="tm2024891d1_ex99-5.htm"><FONT STYLE="font-size: 10pt">Report of ResInnova Laboratories, dated June 30, 2020</FONT></A></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">*To be filed by an amendment to this registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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[{"type": "S-1", "sequence": "1", "filename": "tm2024891d1_s1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1365473}]
{"company-data": {"conformed-name": "Applied UV, Inc.", "cik": "0001811109", "assigned-sic": "3640", "irs-number": "844373308", "state-of-incorporation": "DE", "fiscal-year-end": "0219"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-239892", "film-number": "201032082"}, "business-address": {"street1": "150 N. MACQUESTEN PKWY", "city": "MOUNT VERNON", "state": "NY", "zip": "10550", "phone": "9292073751"}, "mail-address": {"street1": "150 N. MACQUESTEN PKWY", "city": "MOUNT VERNON", "state": "NY", "zip": "10550"}}
As filed with the Securities and Exchange
Commission on July 16, 2020
Registration No. [*]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Applied
UV, Inc.
(Exact name of registrant as specified in
its charter)
Delaware
3648
84-4373308
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
150 N. Macquesten Parkway
Mount Vernon, NY 10550
(914) 665-6100
(Address, including zip code, and telephone
number, including area code,
"of registrant's principal
executive offices)
Keyoumars Saeed
Chief Executive Officer
Applied UV, Inc.
150 N. Macquesten Parkway
Mount Vernon, NY 10550
(914) 665-6100
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to
:
Ross D. Carmel, Esq.
Jeffrey P. Wofford, Esq.
Lawrence Cohen, Esq.
Carmel, Milazzo & Feil LLP
Gordon Rees Scully Mansukhani, LLP
55 West 39
th
Street, 18
th
Floor
Two North Central Avenue, Suite 2200
New York, New York 10018
Phoenix, AZ 85004
Telephone: (212) 658-0458
Telephone: (602) 794-2485
Approximate date of commencement of proposed
sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box.
x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2
of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
x
Emerging growth company
x
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided to Section 7(a)(2)(B) of the Securities Act.
¨
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
Amount
to be Registered (1)(2)
Proposed Maximum
Offering Price
Per Unit(3)
Proposed
Maximum
Aggregate
Offering Price(1)(3)
Amount of
Registration Fee (4)
Common Stock, $0.0001 par value per share (1)(4)
1,150,000
$
5.00
$
5,750,000
$
746.35
Warrants to purchase Common Stock to be issued to the
    Underwriter (2)(5)
Common Stock issuable upon exercise of Warrants to purchase
    Common Stock to be issued to the Underwriters (2)(4)
80,000
$
6.25
$
500,000
$
64.90
Total
1,230,000
--
$
6,250,000
$
811.25
(1)      Includes
150,000 shares that may be purchased by the underwriters pursuant to their over-allotment option that may be exercised over a 45
period.
(2)      We
have agreed to issue to the representative of the several underwriters, who we refer to as the representative, warrants to purchase
the number of shares of common stock in the aggregate equal to eight percent (8%) of the shares of common stock to be issued and
sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The warrants are exercisable for
a price per share equal to 125% of the public offering price.
(3)      There
is no current market for the securities or price at which the shares are being offered. Estimated solely for the purpose of calculating
the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
(4)      Pursuant
to Rule 416 under the Securities Act of 1933, as amended, there is also being registered hereby such indeterminate number of additional
shares as may be issued or issuable because of stock splits, stock dividends and similar transactions.
(5)      No
fee required pursuant to Rule 457(g).
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting
pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to
buy these securities in any state or other jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated
[*], 2020
PRELIMINARY PROSPECTUS
Applied
UV, Inc.
1,000,000 Shares of Common Stock
This
is an initial public offering of shares of common stock of Applied UV, Inc. We are offering 1,000,000 shares of our common stock.
Upon completion of this offering, a single shareholder will own approximately 81% of our outstanding common stock (approximately
79% if the underwriters exercise their over-allotment option in full). For additional information regarding this shareholder,
see "Principal Stockholders." Upon completion of this offering, we will be a "controlled company" within
the meaning of the listing rules of The Nasdaq Stock Market LLC.
Prior to this offering, there has been
no public market for our common stock. We anticipate that the initial public offering price will be $5.00 per share. We have applied
to have our common stock listed on the Nasdaq Capital Market under the symbol "AUVI" which listing is a condition
to this offering.
Under the terms and subject to the conditions
in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Network 1 Financial Securities,
Inc. is acting as representative, have severally agreed to purchase, and we have agreed to sell to them, severally, 1,000,000 shares
of common stock and the representative shall have an option, exercisable for 45 days from the date of this prospectus, to purchase
up to an additional 150,000 shares of common stock.
We intend to use the proceeds from
this offering for laboratory testing, expansion of sales staff, and general corporate purposes, including working capital and
sales and marketing activities. See "
Use of Proceeds
."
Investing in our common stock
involves a high degree of risk. See "
Risk Factors
" beginning on page 10 of this prospectus for a
discussion of information that should be considered in connection with an investment in our common stock.
Neither the Securities and Exchange
Commission ("
SEC
") nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We are an "emerging growth company" as that term
is used in the Jumpstart Our Business Startups Act of 2012, and we have elected to comply with certain reduced public company reporting
requirements.
Per Share
Total
Initial public offering price
$
5.00
$
5,000,000
Underwriting discounts and commissions (1)(2)
$
0.45
$
450,000
Proceeds, before expenses, to us
$
4.55
$
4,550,000
(1)
Represents underwriting discount and commissions equal to 9% per share (or $0.45 per share), which is the underwriting discount we have agreed to pay on all investors in this offering introduced by the underwriters.
(2)
Does not include a non-accountable expense allowance equal
    to 2% of the gross proceeds of this offering, payable to Network 1 Financial Securities, Inc., as representative of the underwriters,
    or the reimbursement of certain expenses of the underwriters. See "
Underwriting
" beginning on page 64 of
    this prospectus for additional information regarding underwriting compensation.
In addition to the underwriting discounts listed above and
    the non-accountable expense allowance described in the footnote, we have agreed to issue upon the closing of this offering
    to Network 1 Financial Securities, Inc., as representative of the underwriters, warrants that will expire on the fifth anniversary
    of the effective date of this registration statement entitling the representative to purchase 8% of the number of shares of
    common stock sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The registration
    statement of which this prospectus is a part also covers the underwriters' warrants and the common shares issuable upon
    the exercise thereof. For additional information regarding our arrangement with the underwriters, please see "
Underwriting
"
    beginning on page 64.
We have granted the representative an option, exercisable for 45 days from the date of this prospectus, to purchase up to an additional 150,000 shares of common stock on the same terms as the other shares being purchased by the underwriters from us.
The underwriters expect to deliver the
shares against payment in New York, New York on             , 2020.
Prospectus dated                ,
2020
N E T W O R K
1
F I N A N C I A L
S
E C U R I T I E S, I N C.
Table of Contents
ABOUT THIS PROSPECTUS
2
MARKET DATA
3
PROSPECTUS SUMMARY
3
SUMMARY OF THE OFFERING
8
RISK FACTORS
10
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
30
USE OF PROCEEDS
30
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
31
CAPITALIZATION
32
DILUTION
33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    RESULTS OF OPERATIONS
34
BUSINESS
41
MANAGEMENT
53
EXECUTIVE COMPENSATION
58
PRINCIPAL STOCKHOLDERS
59
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
60
DESCRIPTION OF SECURITIES
60
Shares Eligible for Future Sale
63
UNDERWRITING
64
EXPERTS
68
LEGAL MATTERS
68
WHERE YOU CAN FIND MORE INFORMATION
68
INDEX TO FINANCIAL STATEMENTS
F-1
Through and including        ,
2020 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.
You should rely only on the information
contained in this prospectus or any prospectus supplement or amendment. Neither we, nor the underwriters, have authorized any other
person to provide you with information that is different from, or adds to, that contained in this prospectus. If anyone provides
you with different or inconsistent information, you should not rely on it. Neither we nor the underwriters take responsibility
for, and can provide no assurance as to the reliability of, any other information that others may give you. You should assume that
the information contained in this prospectus or any free writing prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results
of operations and prospects may have changed since that date. We are not making an offer of any securities in any jurisdiction
in which such offer is unlawful.
No action is being taken in any jurisdiction
outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in
that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required
to inform themselves about and to observe any restrictions as to this public offering and the distribution of this prospectus
applicable to that jurisdiction.
ABOUT
THIS PROSPECTUS
Throughout this prospectus, unless otherwise
designated or the context suggests otherwise,
●
all references to the "Company," the "registrant," "we," "our," or "us" in this prospectus mean Applied UV, Inc. and its subsidiaries;
●
an initial public offering price of our common stock of $5.00 per share;
●
"year" or "fiscal year"
    mean the year ending December 31
st
;
●
all common share and per common share information in this prospectus gives effect to a 1 for 5 reverse stock split of our common stock, which became effective as of June 17, 2020, and all preferred share and per preferred share information in this prospectus gives effect to a 1 for 5 reverse stock split of our preferred stock, which became effective as of June 23, 2020, and
●
all dollar or $ references, when used in this prospectus, refer to United States dollars.
2
Market
Data
Market data and certain industry data and
forecasts used throughout this prospectus were obtained from internal company surveys, market research, consultant surveys, publicly
available information, reports of governmental agencies and industry publications and surveys. Industry surveys, publications,
consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed
to be reliable, but the accuracy and completeness of such information is not guaranteed. To our knowledge, certain third-party
industry data that includes projections for future periods does not take into account the effects of the worldwide coronavirus
pandemic. Accordingly, those third-party projections may be overstated and should not be given undue weight. We have not independently
verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein.
Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based on our management's
knowledge of the industry, have not been independently verified. Forecasts are particularly likely to be inaccurate, especially
over long periods of time. In addition, we do not necessarily know what assumptions regarding general economic growth were used
in preparing the forecasts we cite. Statements as to our market position are based on the most currently available data. While
we are not aware of any misstatements regarding the industry data presented in this prospectus, our estimates involve risks and
uncertainties and are subject to change based on various factors, including those discussed under the heading "
Risk Factors
"
in this prospectus.
PROSPECTUS
SUMMARY
This summary provides a brief overview
of the key aspects of our business and our securities. The reader should read the entire prospectus carefully, especially the risks
of investing in our common stock discussed under "Risk Factors." Some of the statements contained in this prospectus,
including statements under "Summary" and "Risk Factors" as well as those noted in the documents incorporated
herein by reference, are forward-looking statements and may involve a number of risks and uncertainties. Our actual results and
future events may differ significantly based upon a number of factors. The reader should not put undue reliance on the forward-looking
statements in this document, which speak only as of the date on the cover of this prospectus.
As used in this prospectus, all references
to "capital stock," "common stock," "Shares," "preferred stock," "stockholders,"
 "shareholders" applies only to Applied UV, Inc. and "we," "our," "us," the "Company,"
the "registrant," or "Applied UV" refer to Applied UV, Inc., a Delaware corporation and its subsidiaries,
which currently consist of SteriLumen, Inc., a New York corporation ("SteriLumen") and Munn Works, LLC, a New York
limited liability company ("Munn Works").
About our Company
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 the virus the
causes COVID-19, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (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.
3
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, which according to ResInnova is a common surrogate for coronavirus as described
in further detail under "Business—Second ResInnova Report." 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.
The Initial ResInnova Report and the Mount Sinai Agreement are more fully described in the sections entitled "Business—SteriLumen—The
Initial ResInnova Report," and "—The Mount Sinai Agreement."
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
4
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.
Recent Developments
Acquisition of SteriLumen and
Munn Works.
The Company acquired all of the issued and outstanding common shares of SteriLumen pursuant to an Exchange
Agreement dated March 26, 2019 among the Company, SteriLumen and the shareholders of SteriLumen in which the SteriLumen shareholders
exchanged their SteriLumen common shares for 201,250 shares of Company common stock, of which Laurie Munn, the spouse of Max Munn,
our President and a director of the Company, received 200,000 shares. The Company acquired all of the issued and outstanding preferred
shares of SteriLumen pursuant to an Exchange Agreement dated March 27, 2019 among the Company, SteriLumen and Laurie Munn in which
Ms. Munn exchanged all of her SteriLumen Series A preferred stock for 1,800,000 shares of Company common stock and 2,000 shares
of Company Series A preferred stock. Upon consummation of this exchange the Company owned 100% of the capital shares of SteriLumen.
The Company acquired all of the membership interests in Munn Works pursuant to an Exchange Agreement dated July 1, 2019 among
the Company, Munn Works and Laurie Munn in which Laurie Munn exchange her membership interests in Munn Works for 3,000,000 shares
of Company common stock. All of the equity in the Company owned by Laurie Munn has been transferred to The Munn Family 2020 Irrevocable
Trust, of which the spouse of Max Munn is the trustee.
Effects of Coronavirus Outbreak.
In December 2019, a novel strain of Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread
to over 150 countries and every state in the United States. On January 30, 2020, the World Health Organization declared the outbreak
of Coronavirus a "Public Health Emergency of International Concern." On March 11, 2020, the World Health Organization
declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency.
The spread of the virus in many countries
continues to adversely impact global economic activity and has contributed to significant volatility and negative pressure in financial
markets and supply chains. The pandemic has had, and could have a significantly greater, material adverse effect on the U.S. economy
where we conduct a majority of our business. The pandemic has resulted, and may continue to result for an extended period, in significant
disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect
our liquidity.
Most states and cities have reacted
by instituting quarantines, restrictions on travel, "stay at home" and "social distancing" rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020, that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home.
We have taken steps to take care of
our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate
social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard
to employee, facility, and office hygiene as well as implementing significant travel restrictions. We are also assessing our business
continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue
to monitor and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent
we are able to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly.
5
We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we currently manufacture the majority of our products
in China. The pandemic has impacted and may continue to impact suppliers of materials and the manufacturing locations for our products.
As a result, we have faced and may continue to face delays or difficulty manufacturing certain products, which could negatively
affect our business and financial results. Even if we are able to find alternate sources for materials and manufacturing, they
may cost more, which could adversely impact our profitability and financial condition. Also, because of the disruption to travel
and the decline in the demand for and the closure of hotels, Munn Works has experienced and may continue to experience a decline
in demand for its products which could have a material adverse effect on its operations and financial condition.
If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.
Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020. See "Risk Factors—Risks
Related to our Business and Operations—The Coronavirus pandemic may cause a material adverse effect on our business."
Options
.
On February
18, 2020, the Board approved the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of
the Company's common stock at a per share exercise equal to the greater of $2.50 and the market value per share of the Company's
common stock on the date of the grant. Market value will be determined by an independent valuation company engaged by the Company;
provided, however, if on the date of the grant the Company common stock is listed on a national exchange or quoted on an established
quotation system, then the market value shall equal the closing price of the Company common stock listed on such exchange or quoted
on such quotation system on the trading day immediately prior to the date of the grant. On April 1, 2020, we issued options to
purchase 2,000 shares of Company common stock to members the Board, of which 1,250 have been cancelled. The options are subject
to equal quarterly vesting over a one-year period. On July 1, 2020, we issued an additional 1,000 options to certain Board members.
To date 375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of these quarterly options.
Applied UV, Inc. 2020 Omnibus
Incentive Plan.
On May 4, 2020, we adopted the Applied UV, Inc. 2020 Omnibus Incentive Plan (the "Plan").
Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to 600,000 shares of common
stock to Company employees, officers, directors, consultants, and advisors are available under the Plan. The type of grant, vesting
provisions, exercise price and expiration dates are to be established by the Board at the date of grant.
Mount Sinai Agreement
. On
April 20, 2020, SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke's Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai's research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60-day exclusive option to negotiate a license for Mount Sinai's
resulting patent rights if such patent was obtained at SteriLumen's request and SteriLumen has paid for all the costs in
obtaining the patent. If the results of the study contained in Mount Sinai's final report are used by SteriLumen in a successful
regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.
Second ResInnova Report.
In
April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found the SteriLumen mirror and drain to be greater than 97% and 99.99%, respectively, effective in killing
the OC43 human coronavirus in the bathroom sink area. According to ResInnova, it is expected that the Coronavirus, will be killed
in a similar manner to OC43 since they both are in the Beta genre of coronaviruses. See "Business—Second ResInnova
Report" and "Risk Factors—Certain ResInnova Testing Limitations."
6
Paycheck Protection Program Loan.
On May 4, 2020, Munn Works received $296,287 in net proceeds from a loan (the "PPP Loan") from JP Morgan Chase
Bank under the Paycheck Protection Program ("PPP"), which was established under the Coronavirus Aid, Relief, and Economic
Security Act ("CARES Act") administered by the U.S. Small Business Administration. The proceeds from the PPP Loan will
be used in accordance with the terms of the CARES Act program, as described further below.
The term of the PPP Loan is two years with
an interest rate of 1.00% per annum, which shall be deferred for the first six months of the term of the loan. Pursuant to the
terms of the CARES Act, the proceeds of the PPP Loan may be used for payroll costs, mortgage interest, rent, or utility costs.
Under the terms of the CARES Act, Munn Works can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such
forgiveness will be determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES
Act, as described above, during the 8-week period after loan origination and the maintenance or achievement of certain employee
levels. No assurance is provided that Munn Works will obtain forgiveness under the PPP Loan in whole or in part.
Reverse Stock Splits.
On June
17, 2020 and June 23, 2020, the Company effected a 1 for 5 reverse stock split of its issued and outstanding Common Stock and
effected a 1 for 5 reverse stock split of its issued and outstanding preferred stock, respectively (each a "Reverse Stock
Split") by filing on each date an amendment of the Company's Amended and Restated Certificate of Incorporation with
the Secretary of State of the State of Delaware. No fractional shares were issued as a result of a Reverse Stock Split. Any fractional
shares that would have resulted from a Reverse Stock Split were rounded up to the nearest whole share. The authorized common stock
and preferred stock of the Company was not impacted by the Reverse Stock Splits. Immediately following the Reverse Stock Splits,
the Company had outstanding 5,103,316 shares of Common Stock and 2,000 shares of preferred stock. The Company has retrospectively
adjusted the 2018, 2019 and March 31, 2020 financial statements for profit per share and share amounts as a result of the reverse
stock splits.
Appointment of Executive Officers
.
On June 30, 2020 the Company entered into employment agreements and appointed the Company's Chief Executive Officer
and Chief Operations Officer.
Non-Employee Director Compensation
.
On July 9, 2020 the Board approved a compensation package for non-employee directors of the Board. The compensation for non-employee
directors include; (i) upon of each such director, such director shall be issued 10,000 shares of restricted common stock which
vests evenly on an annual basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares
of restricted common stock to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly
cash payments of $6,250 to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman
of the Board which vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of
restricted common stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate
Governance and Nominating Committees have not yet been established).
Risk Factors
Our business is subject to a number of
risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section
of this prospectus titled "
Risk Factors,
" which begins on page 10 of this prospectus.
Information Regarding our Capitalization
As of June 23, 2020, we have 5,103,316
shares of common stock issued and outstanding, of which Max Munn, our President and a director of the Company has beneficial ownership
of 5,000,000 shares through a trust for which his spouse is the trustee. We also have 2,000 shares of Series A preferred stock
issued and outstanding which provide the holder thereof with 1,000 votes per share (2 million votes in aggregate) and vote as
a single class with common stock on all matters submitted to the shareholders for a vote. Mr. Munn is the beneficial owner of
all of the Series A Preferred Stock through a trust in which his spouse is the trustee. Additional information regarding our issued
and outstanding securities may be found under "
Market for Common Equity and Related Stockholder Matters
" and
 "
Description of Securities
."
Unless otherwise specifically stated, information
throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of our common stock.
Corporate Information
Our principal executive offices are located
at 150 N. Macquesten Parkway, Mount Vernon, NY 10550. Our website address is www.applieduvinc.com. The information included on
our website is not part of this prospectus.
Implications of Being an Emerging Growth
Company
We are an "emerging growth company,"
as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). We will remain an emerging growth company
until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common
stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we
have total annual gross revenues of $1.07 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible
debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable
SEC rules. We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging
growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal
year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement
under the Securities Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions
from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies.
7
These exemptions include:
●
being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "
Management's Discussion and Analysis of Financial Condition and Results of Operations
" disclosure;
●
not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting;
●
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
●
reduced disclosure obligations regarding executive compensation; and
●
not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
We have taken advantage of certain reduced reporting requirements
in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other
public companies in which you hold stock.
An emerging growth company can take advantage
of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would
otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as
a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards
is required for other public reporting companies.
We are also a "smaller reporting
company" as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "
Exchange Act
"),
and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies.
SUMMARY
OF THE OFFERING
Common stock offered by us
1,000,000 shares.
Common stock outstanding prior to the offering
5,013,316 shares common stock.
Common stock to be outstanding after the offering (1)(2)
6,186,855 (6,319,494 shares if the underwriters exercise
    their option to purchase additional shares in full).
Over-allotment option of common stock offered by us
The underwriters have a 45-day option to purchase up to 150,000 additional shares of common stock.
Use of Proceeds
We currently intend to use the net proceeds to us from this offering to hire additional employees, including executive officers and sales professionals and for general corporate purposes, including working capital and sales and marketing activities. See the section of this prospectus titled "
Use of Proceeds
" beginning on page 30.
Proposed Listing
We
                                         have applied to have our common stock listed on the Nasdaq Capital Market under the symbol
                                         "AUVI" which listing is a condition to this offering.
Underwriters' warrants
Upon the closing of this offering, we have agreed to issue to Network 1 Financial Securities, Inc., as representative of the underwriters, warrants, that will expire on the fifth anniversary of the effective date of this offering, entitling the representative to purchase 8% of the number of shares of common stock sold in this offering (excluding shares of common stock sold to cover over-allotments, if any). The registration statement of which this prospectus is a part also covers the underwriters' warrants and the common shares issuable upon the exercise thereof. For additional information regarding our arrangement with the underwriters, please see "
Underwriting
."
8
Lock-up agreements
Our executive officers and directors have agreed with the underwriters not to sell, transfer or dispose of any shares or similar securities for 180 days following the effective date of the registration statement for this offering. For additional information regarding our arrangement with the underwriters, please see "
Underwriting
."
Risk Factors
You should carefully consider the information set forth in this
    prospectus and, in particular, the specific factors set forth in the "
Risk Factors
" section beginning on
    page 10 of this prospectus before deciding whether or not to invest in shares of our common stock.
(1)
As of June 23, 2020. Does not include 51,034 shares of common stock to be issued
    to Carmel, Milazzo & Feil LLP upon the effectiveness of the registration statement related to the offering or 161,000 shares
    of our common stock issuable upon exercise of common stock purchase warrants. For voting purposes only, does not include 2,000
    shares of preferred stock that have been designated as Series A Preferred Stock, all of which are issued and outstanding and
    are entitled to 1,000 votes per share (2,000,000 votes in aggregate) and vote with the common stock as a single class.
(2)
Includes
                                    51,034 shares of common stock to be issued to Carmel, Milazzo & Feil LLP upon the effectiveness
                                    of the registration statement related to the offering and 32,506 shares (37,145 shares if
                                    the underwriters exercise their option to purchase additional shares in full) to be issued
                                    to Carmel, Milazzo & Feil LLP on the closing date of this offering.
On June 17, 2020 we effected a 1 for
5 reverse stock split of the issued and outstanding shares of our common stock. On June 23, 2020 we effected a 1 for 5 reverse
stock split of the issued and outstanding shares of our preferred stock. Except as otherwise indicated, all of the common stock
and preferred stock information in this prospectus gives effect to the reverse stock splits.
9
RISK
FACTORS
Our business is subject to many risks
and uncertainties, which may affect our future financial performance. If any of the events or circumstances described below occur,
our business and financial performance could be adversely affected, our actual results could differ materially from our expectations,
and the price of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may
be additional risks and uncertainties not currently known to us or that we currently do not believe are material that may adversely
affect our business and financial performance. You should carefully consider the risks described below, together with all other
information included in this prospectus including our financial statements and related notes, before making an investment decision.
The statements contained in this prospectus that are not historic facts are forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.
If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that
case, the trading price of our common stock could decline, and investors in our securities may lose all or part of their investment.
Risks Related to Our Business and Operations
The Company
operates through SteriLumen and Munn Works and its only material assets are its equity interests in those subsidiaries. As a result,
our only current source of revenue is distributions from our subsidiaries and SteriLumen has incurred losses since its inception
and we anticipate it will continue to incur significant losses for the foreseeable future and revenue from Munn Works may not be
sufficient to offset those loses.
The Company is
a holding company for SteriLumen and Munn Works and has no material assets other than its equity interests in those subsidiaries.
Therefore, the only current revenue source is future distributions from its subsidiaries. SteriLumen is an early-stage designer
and marketer of disinfection systems with limited operating history spanning from December 2016. We expect negative cash flows
from SteriLumen's operations for the foreseeable future which may not be off-set by cash flows from Munn Works. Our utilization
of cash has been and will continue to be highly dependent on SteriLumen's product development programs and cash flow from
Munn Works' operations. Our cash expenses will be highly dependent on the product development programs SteriLumen chooses
to pursue, the progress of these product development programs, the results of SteriLumen's validation/marketing studies,
the terms and conditions of SteriLumen's contracts with service providers and manufacturing contractors, and the terms of
recruitment of facilities in our validation/marketing studies. In addition, the continuation of SteriLumen's validation/marketing
studies, and quite possibly its entire business, will depend on results of upcoming clinical data analyses and our financial resources
at the time. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial
condition and SteriLumen's ability to develop its product candidates.
SteriLumen has devoted substantially all
of its financial resources to develop its product candidates. SteriLumen has financed its operations primarily through the contributions
of its founders. The amount of SteriLumen's future net losses will depend, in part, on the development of adequate distribution
channels for the SteriLumen Disinfecting System, the demand for the SteriLumen Disinfecting System, the rate of its future expenditures
and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. Disinfection product
development is a highly speculative undertaking and involves a substantial degree of risk. SteriLumen successfully completed the
prototype phase of testing and development for the SteriLumen Disinfecting System, but has not yet commenced pivotal testing in
health care facility settings. Even if SteriLumen obtains positive results from such testing, its future revenue will depend upon
its ability to achieve sufficient market acceptance, pricing, the performance of its independent sales representatives and its
manufacturing and distribution suppliers.
We expect SteriLumen to continue to incur
significant losses until it is able to commercialize the SteriLumen Disinfecting System, which it may not be successful in achieving.
We anticipate that SteriLumen's expenses will increase substantially if and as SteriLumen:
·
continues the research
    and development of the SteriLumen Disinfecting System and other disinfecting products;
·
expands the scope
    of its testing for the SteriLumen Disinfecting System and other disinfecting products;
·
establishes a sales,
    marketing, and distribution infrastructure to commercialize its product candidates;
·
seeks to maintain,
    protect, and expand its intellectual property portfolio;
·
seeks to attract and
    retain skilled personnel; and
10
·
creates
    additional infrastructure to support its product candidate development and planned future commercialization efforts.
Furthermore, any additional fundraising
efforts may divert our management from our subsidiaries' day-to-day activities, which may adversely affect our ability to
develop and commercialize their product candidates. In addition, we cannot guarantee that future financing will be available in
sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings
or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility
of such issuance, may cause the market price of our shares to decline. The incurrence of indebtedness could result in increased
fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability
to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating
restrictions that could adversely affect our ability to conduct our business. We could also be required to seek funds through arrangements
with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish
rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a
material adverse effect on our business, operating results, and prospects. Even if we believe that we have sufficient funds for
our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific
strategic considerations.
If we are unable to obtain funding on a
timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs
or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business
opportunities, as desired, which could materially affect our business, financial condition and results of operations.
The pandemic caused by the spread
of the Coronavirus could have an adverse impact on our financial condition and results of operations and other aspects of our
business.
In December 2019, a novel strain of
Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread to over 150 countries and every state in
the United States. On January 30, 2020, the World Health Organization declared the outbreak of Coronavirus a "Public Health
Emergency of International Concern." On March 11, 2020, the World Health Organization declared the outbreak a pandemic,
and on March 13, 2020, the United States declared a national emergency.
The spread of the virus in many countries
continues to adversely impact global economic activity and has contributed to significant volatility and negative pressure in financial
markets and supply chains. The pandemic has had, and could have a significantly greater, material adverse effect on the U.S. economy
where we conduct a majority of our business. The pandemic has resulted, and may continue to result for an extended period, in significant
disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect
our liquidity
Most states and cities have reacted
by instituting quarantines, restrictions on travel, "stay at home" and "social distancing" rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020 that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home.
We have taken steps to take care of
our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate
social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard
to employee, facility, and office hygiene as well as implementing significant travel restrictions. We are also assessing our business
continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue
to monitor and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent
we are able to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly.
We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we currently manufacture the majority of our products
in China. The pandemic has impacted and may continue to impact suppliers of materials and the manufacturing locations for our products.
As a result, we have faced and may continue to face delays or difficulty manufacturing certain products, which could negatively
affect our business and financial results. Even if we are able to find alternate sources for materials and manufacturing, they
may cost more, which could adversely impact our profitability and financial condition.
11
If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.
Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020.
We are vulnerable to continued global economic uncertainty
and volatility in financial markets.
Our business is highly sensitive to changes
in general economic conditions as a seller of goods and services. Financial markets inside the United States and internationally
have experienced extreme disruption in recent times, including, among other things, extreme volatility in security prices, severely
diminished liquidity and credit availability, and declining valuations of investments. We believe these disruptions are likely
to have an ongoing adverse effect on the world economy. A continuing economic downturn and financial market disruptions could have
a material adverse effect on our business, financial condition, and results of operations, including by:
·
reducing
                                         demand for our products and services, increasing order cancellations and resulting in
                                         longer sales cycles and slower adoption of new technologies;
·
increasing
                                         the difficulty of collecting accounts receivable and the risk of excess and obsolete
                                         inventories;
·
increasing
                                         price competition in our served markets; and
·
resulting
                                         in supply interruptions, which could disrupt our ability to produce our products.
We could need to raise additional capital in the future,
and if we are unable to secure adequate funds on terms acceptable to us, we could be unable to execute our business plan.
To remain competitive, we must continue
to make significant investments in the development of our products, the expansion of our sales and marketing activities, and the
expansion of our operating and management infrastructure as we increase sales domestically and internationally. If cash generated
from our operations is insufficient to fund such growth, we could be required to raise additional funds through the issuance of
equity or debt securities in the public or private markets, or through a collaborative arrangement or sale of assets. Additional
financing opportunities may not be available to us, or if available, may not be on favorable terms. The availability of financing
opportunities will depend, in part, on market conditions, and the outlook for our business. Any future issuance of equity securities
or securities convertible into equity securities could result in substantial dilution to our stockholders, and the securities issued
in such a financing could have rights, preferences or privileges senior to those of our common stock. In addition, if we raise
additional funds through debt financing, we could be subject to debt covenants that place limitations on our operations. We could
not be able to raise additional capital on reasonable terms, or at all, or we could use capital more rapidly than anticipated.
If we cannot raise the required capital when needed, we may not be able to satisfy the demands of existing and prospective customers,
we could lose revenue and market share and we may have to curtail our capital expenditures.
The following factors, among others, could
affect our ability to obtain additional financing on favorable terms, or at all:
•
our results of operations;
•
general economic conditions and conditions in the sanitation and disinfection industries and performance
of sanitation devices as opposed to sanitation and disinfection substances;
•
the perception of our business in the capital markets;
12
•
making capital improvements to improve our infrastructure;
•
hiring qualified management and key employees;
•
responding to competitive pressures;
•
complying with regulatory requirements, if any;
•
our ratio of debt to equity;
•
our financial condition;
•
our business prospects; and
•
interest rates.
If we are unable to obtain sufficient capital
in the future, we could have to curtail our capital expenditures. Any curtailment of our capital expenditures could result in a
reduction in net revenue, reduced quality of our products, increased manufacturing costs for our products, harm to our reputation,
or reduced manufacturing efficiencies and could have a material adverse effect on our business, financial condition, and results
of operations.
Raising additional capital may cause
dilution to our existing stockholders and restrict our operations or require us to relinquish certain intellectual property rights
.
We may seek additional capital through
a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, licensing arrangements,
and grants. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership
interest of our existing stockholders may be diluted, and the terms may include liquidation or other preferences that adversely
affect the rights of our stockholders. Debt and receivables financings may be coupled with an equity component, such as warrants
to purchase shares, which could also result in dilution of our existing stockholders' ownership. The incurrence of indebtedness
would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations
on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other
operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic
partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our or
our subsidiaries' products or grant licenses on terms that are not favorable to us. A failure to obtain adequate funds may
cause us to curtail certain operational activities, including research and development, validation/marketing studies, sales and
marketing, and manufacturing operations, in order to reduce costs and sustain the business, and would have a material adverse
effect on our business and financial condition.
Our success depends, in part, on
our relationships with, and the efforts of, third-party manufacturers, distributors, and other third parties that perform various
tasks for us. If these third parties do not successfully carry out their contractual duties or meet expected, we may not be able
to commercialize our product candidates and our business could be substantially harmed.
While we internally manufacture all of
Munn Works' products that are manufactured domestically, currently approximately 75% of Munn Works' products and all
of SteriLumen's products are manufactured overseas in China by third party manufacturers. We do not currently have the infrastructure
or capability internally to manufacture all of the components of our products and systems, and we lack the resources and the capability
to manufacture and distribute the SteriLumen Disinfecting System on a commercial scale. We plan to rely on third parties for such
operations. There are a limited number of manufacturers who have the ability to produce our products, and there may be a need to
identify alternate manufacturers to prevent a possible disruption of our manufacturing and distribution process. Switching manufacturers
or distributors, if necessary, may involve substantial costs and is likely to result in a delay in our desired commercial timelines,
which could harm our business and results of operations.
Our suppliers may not supply us with
a sufficient amount or adequate quality of materials, which could have a material adverse effect on our business, financial condition,
and results of operations.
Our business depends on our ability to
obtain timely deliveries of materials, components, and subassemblies of acceptable quality and in acceptable quantities from third-party
suppliers. We generally purchase components and subassemblies from a limited group of suppliers through purchase orders, rather
than written supply contracts. Consequently, many of our suppliers have no obligation to continue to supply us on a long-term basis.
In addition, our suppliers manufacture products for a range of customers, and fluctuations in demand for the products those suppliers
manufacture for others could affect their ability to deliver components for us in a timely manner. Moreover, our suppliers could
encounter financial hardships, be acquired, or experience other business events unrelated to our demand for components, which could
inhibit or prevent their ability to fulfill our orders and satisfy our requirements.
13
If any of our suppliers cease to provide
us with sufficient quantities of our components in a timely manner or on terms acceptable to us, or ceases to manufacture components
of acceptable quality, we could incur manufacturing delays and sales disruptions while we locate and engage alternative qualified
suppliers, and we might be unable to engage acceptable alternative suppliers on favorable terms. In addition, we could need to
reengineer our components, which could significantly delay production. Any interruption or delay in the supply of components or
materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could
impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive procedures. We
are continually in the process of identifying and qualifying alternate source suppliers for our key components. There can be No
assurance, however, that we will successfully identify and qualify an alternate source supplier for any of our key components or
that we could enter into an agreement with any such alternate source supplier on terms acceptable to us, or at all.
Our reliance on third parties requires
us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will
be misappropriated or disclosed.
Because we rely on third parties to develop
and manufacture our products, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in
part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements,
consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning
research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose
our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties,
the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our
competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our
trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect
on our business.
Our near-term success is dependent
in large part upon SteriLumen's ability to commence sales of the SteriLumen Disinfecting System and continued sales and positive
cash flow from Munn Works' products
.
Our success will depend, in part, upon
SteriLumen's ability to create a commercial market for the SteriLumen Disinfecting System. Attracting new customers and distribution
networks requires substantial time and expense. Any failure to commercialize SteriLumen's products would adversely affect
its operating results and adversely affect our business, results of operations and financial condition. Many factors could affect
the market acceptance and commercial success of SteriLumen's products, including:
•
SteriLumen's
ability to convince its potential customers of the advantages and economic value of products over competing products and methodologies;
•
the
breadth of its product menu;
•
changes
to policies, procedures or currently accepted best practices in the health care industry;
•
the
extent and success of its marketing and sales efforts; and
•
its
ability to manufacture in quantity its products and meet demand in a timely fashion.
Recent U.S.
tax legislation may materially affect our financial condition, results of operations and cash flows.
The recently enacted
Tax Cuts and Jobs Act (the "Tax Act") has significantly changed the U.S. federal income taxation of U.S. businesses,
including by reducing the U.S. corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain
capital expenditures, modifying or repealing many business deductions and credits.
The Coronavirus
Aid, Relief, and Economic Security Act (the "CARES Act") modifies certain provisions of the Tax Act, including increasing
the amount of interest expense that may be deducted.
The Tax Act as
modified by the CARES Act is unclear in many respects and could be subject to potential amendments and technical corrections, as
well as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase certain adverse
impacts of the legislation. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation,
which often uses federal taxable income as a starting point for computing state and local tax liabilities. Our analysis and interpretation
of this legislation is preliminary and ongoing and there may be material adverse effects resulting from the legislation that we
have not yet identified. While some of the changes made by the tax legislation may adversely affect us, other changes may be beneficial.
We continue to work with our tax advisors and auditors to determine the full impact that the recent tax legislation as a whole
will have on us. We urge our investors to consult with their legal and tax advisors with respect to such legislation and its potential
effect on an investment in our common stock.
14
Our operating
results are affected by many factors and may fluctuate significantly on a quarterly basis.
Our operating
results may vary substantially from quarter to quarter and may be greater or less than those achieved in the immediately preceding
period or in the comparable period of the prior year. Factors that may cause quarterly results to vary include, but are not limited
to, the following:
•
the number of new product introductions by our subsidiaries;
•
losses related to inventory write-offs;
•
marketing exclusivity, if any, which may be obtained on certain new products;
•
the level of competition in the marketplace for certain products;
•
our subsidiaries' ability to create demand in the marketplace for their products;
•
availability of raw materials and finished products from suppliers;
•
our subsidiaries' ability to contract manufacturers to make their products;
•
SteriLumen's dependence on a small number of products for a significant portion of net revenue
or income;
•
price erosion and customer consolidation; and
•
uncertainty of future import tariffs.
The profitability
of our subsidiaries' product sales is also dependent upon the prices they are able to charge for their products, the costs
to purchase products from third parties, and their ability to manufacture their products in a cost-effective manner. If their revenues
decline or do not grow as anticipated, they may not be able to reduce their operating expenses to offset such declines. Failure
to achieve anticipated levels of revenues could, therefore, significantly harm our operating results for a particular fiscal period.
We could be subject to significant
warranty obligations if our products are defective, which could have a material adverse effect on our business, financial condition,
and results of operations.
In manufacturing our products, we depend
upon third parties for the supply of various components. Many of these components require a significant degree of technical expertise
to design and produce. If we fail to adequately design, or if our suppliers fail to produce components to specification, or if
the suppliers, or we, use defective materials or workmanship in the manufacturing process, the reliability and performance of our
products will be compromised. Our products could contain defects that cannot be repaired easily and inexpensively that can result
some or all of the following:
·
loss
                                         of customer orders and delay in order fulfillment;
·
damage
                                         to our brand reputation;
·
increased
                                         cost of our warranty program due to product repair or replacement;
·
inability
                                         to attract new customers;
15
·
diversion
                                         of resources from our manufacturing and engineering and development departments into
                                         our service department; and
·
legal
                                         action.
We are increasingly dependent on
information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.
Significant disruptions to our information
technology systems or breaches of information security could adversely affect our business. In the ordinary course of business,
we collect, store and transmit large amounts of confidential information, and it is critical that we do so in a secure manner to
maintain the confidentiality and integrity of such information. We have also outsourced significant elements of our information
technology infrastructure; as a result, we manage independent vendor relationships with third parties who are responsible for maintaining
significant elements of our information technology systems and infrastructure and who may or could have access to our confidential
information. The size and complexity of our information technology systems, and those of our third-party vendors, make such systems
potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees,
partners or vendors. These systems are also vulnerable to attacks by malicious third parties and may be susceptible to intentional
or accidental physical damage to the infrastructure maintained by us or by third parties. Maintaining the secrecy of confidential,
proprietary, and/or trade secret information is important to our competitive business position. While we have taken steps to protect
such information and have invested in systems and infrastructures to do so, there can be no guarantee that our efforts will prevent
service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential
information that could adversely affect our business operations or result in the loss, dissemination, or misuse of critical or
sensitive information. A breach our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination,
misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of
theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce competing products,
use our proprietary technology or information, and/or adversely affect our business position. Further, any such interruption, security
breach, loss or disclosure of confidential information could result in financial, legal, business, and reputational harm to us
and could have a material adverse effect on our business, financial position, results of operations and/or cash flow.
Product liability claims against
us could be costly and could harm our reputation.
The sale of our products involves the risk
of product liability claims against us. Claims could exceed our product liability insurance coverage limits. Our insurance policies
are subject to various standard coverage exclusions, including damage to the product itself, losses from recall of our product,
and losses covered by other forms of insurance such as workers compensation. We cannot be certain that we will be able to successfully
defend any claims against us, nor can we be certain that our insurance will cover all liabilities resulting from such claims. In
addition, we cannot provide assurance that we will be able to obtain such insurance in the future on terms acceptable to us, or
at all. Regardless of merit or eventual outcome, any product liability claim brought against us could result in harm to our reputation,
decreased demand for our products, costs related to litigation, product recalls, loss of revenue, an increase in our product liability
insurance rates, or the inability to secure coverage in the future, and could have a material adverse effect on our business by
reducing cash collections from customers and limiting our ability to meet our operating cash flow requirements.
Litigation against us could be costly
and time-consuming to defend and could materially and adversely affect our business, financial condition, and results of operations.
We are from time to time involved in various
claims, litigation matters and regulatory proceedings incidental to our business, including claims for damages arising out of the
use of our products or services and claims relating to intellectual property matters, employment matters, commercial disputes,
competition, sales and trading practices, environmental matters, personal injury, and insurance coverage. Some of these lawsuits
include claims for punitive as well as compensatory damages. The defense of these lawsuits could divert our management's
attention, and we could incur significant expenses in defending these lawsuits. In addition, we could be required to pay damage
awards or settlements or become subject to unfavorable equitable remedies. Moreover, any insurance or indemnification rights that
we could have may be insufficient or unavailable to protect us against potential loss exposures.
16
If we lose our key management personnel,
or are unable to attract or retain qualified personnel, it could adversely affect our ability to execute our growth strategy.
Our success is dependent, in part, upon
our ability to hire and retain management, engineers, marketing and sales personnel, and technical, research and other personnel
who are in high demand and are often subject to competing employment opportunities. Our success will depend on our ability to retain
our current personnel and to attract and retain qualified like personnel in the future. Competition for senior management, engineers,
marketing and sales personnel, and other specialized technicians is intense and we may not be able to retain our personnel. If
we lose the services of any executive officers or key employees, our ability to achieve our business objectives could be harmed
or delayed, which could have a material adverse effect on our daily operations, operating cash flows, results of operations, and
ultimately share price. In general, our officers could terminate their employment at any time without notice for any reason.
Climate change initiatives could
materially and adversely affect our business, financial condition, and results of operations.
Both domestic and international legislation
to address climate change by reducing greenhouse gas emissions and establishing a price on carbon could create increases in energy
costs and price volatility. Considerable international attention is now focused on development of an international policy framework
to address climate change. Proposed and existing legislative efforts to control or limit greenhouse gas emissions could increase
the cost of raw materials derived from sources that generate greenhouse gas emissions. If our suppliers are unable to obtain energy
at a reasonable cost in the future, the cost of our raw materials could be negatively impacted which could result in increased
manufacturing costs.
Risks Related to SteriLumen's Business
Certain ResInnova testing limitations.
Our claims on the effectiveness of
the SteriLumen Disinfecting System against certain pathogens are supported by the analysis of the SteriLumen Disinfecting System
performed in ResInnova's laboratory. The environment in ResInovva's laboratory is controlled and does not account
for all of the variables that can occur outside of the laboratory such as [
get variables from Matthew Hardwick
]. If any
one of these un-accounted for variables proves to be significant in the evaluation of the effectiveness of the SteriLumen Disinfecting
System, the laboratory results obtained by ResInnova could be significantly more favorable than the results experienced by our
customers. Furthermore, in accordance with CDC guidelines only laboratories with a biosafety level 3 or 4 may test against SAR-CoV-2,
the virus that causes COVID-19. Since ResInnova is a biosafety level 2 laboratory it cannot test against SAR-CoV-2 and instead
tested against OC43 human coronavirus, which, according to ResInnova is a common surrogate for SAR-CoV-2 as both are of the Beta
genre of coronaviruses. If the results of testing the StertiLumen Disinfecting System against OC43 are different from the results
that would have occurred with SAR-CoV-2, the laboratory results obtained by ResInnova with respect to OC43 could be significantly
more favorable than the results experienced by our customers with respect to SAR-CoV-2. If the results contained in ResInnova's
reports are materially more favorable than the results experienced by our customers, this could have a material adverse effect
on the sales of the SteriLumen Disinfecting System, which would have a material adverse effect on our business and financial condition.
If SteriLumen is unable to develop a successful marketing
approach, our business will suffer.
If SteriLumen
fails to develop a successful marketing approach or to manage its growth effectively, our business and financial results will be
materially harmed. Healthcare facilities operate in a highly regulated and dynamic market with changing regulations, codes, standards
and guidelines and as a result are very loyal to vendors they trust. Achieving market acceptance will require extensive customer
education and product validation. Some of the ways in which SteriLumen intends on achieving market acceptance is through working
with professional trade organizations, having articles published in industry trade publications, conducting validation/marketing
studies at well-known hospitals and lab testing. However, there is no assurance that SteriLumen will be successful in organizing
these efforts or if the results from them will be positive. SteriLumen may also seek to expand its business through complementary
or strategic acquisitions of other businesses, products or assets, or through joint ventures, strategic partnerships or other arrangements
with established and trusted disinfection companies. Any such acquisitions, joint ventures or other business combinations may involve
significant integration challenges, operational complexities and time consumption and require substantial resources and effort.
It may also disrupt SteriLumen's ongoing businesses, which may adversely affect its relationships with customers, employees
and others with whom it has business or other dealings. Further, if SteriLumen is unable to realize synergies or other benefits
expected to result from any acquisitions, joint ventures or other business combinations, or to generate additional revenue to offset
any unanticipated inability to realize these expected synergies or benefits, its growth and ability to compete may be impaired,
which would require it and us to focus additional resources on the integration of operations rather than other profitable areas
of its business, and may otherwise cause a material adverse effect on our business, results of operations and financial condition.
However, failure to acquire or partner with established and trusted disinfection companies would prevent SteriLumen's products
from being part of a bundle of disinfection products that could be sold all at once, which could have a material adverse effect
on the financial results of our business.
17
SteriLumen's success depends,
in part, on its relationships with healthcare providers and hotel developers and the success of the Mount Sinai study.
To date, SteriLumen has invested substantially
all of its efforts and financial resources to design, develop and market the SteriLumen Disinfecting System, including conducting
laboratory studies and providing general and administrative support for these operations. SteriLumen's future success is
dependent on its ability to successfully commercialize the SteriLumen Disinfecting System.
Mount Sinai has agreed to conduct a study
on the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms in Mount Sinai St. Luke's Hospital in
New York, NY, however a final report with their findings will not be completed until the second quarter of 2021. The Mount Sinai
study will be the first time the SteriLumen Disinfecting System is tested in an actual healthcare facility setting. There is no
guarantee that the results of this study will be positive or even completed. Resolution of any issues raised in the study could
require capital that we have not budgeted for and require us to seek additional funding at less than favorable terms, which could
have a material adverse effect on our business, results of operations and financial condition.
Additionally, we may be limited in publications
and applications of the Mount Sinai study due to the intellectual property and confidentiality provisions of said agreement.
SteriLumen's
business is highly dependent on its suppliers' and any disruption in their operations could have a material adverse effect
on our business, results of operations and financial condition.
SteriLumen's
operations will be dependent upon the continued ability of its suppliers to deliver systems, components, raw materials, and finished
disinfection products. Its UVC LEDs are manufactured in South Korea and then shipped to China or the United States for assembly
with all other components, which if manufactured in China, the finished products are shipped to Long Beach, California for warehousing
and distribution, otherwise the units are shipped from Mount Vernon. Any number of factors, including labor disruptions, catastrophic
weather events, contractual or other disputes with suppliers, and supplier financial difficulties or solvency problems could disrupt
its suppliers' operations and lead to uncertainty in its supply chain or cause supply disruptions, which could, in turn, disrupt
its operations. If SteriLumen experiences supply disruptions, it may not be able to develop alternate sourcing quickly. Any disruption
of its production schedule caused by an unexpected shortage of systems, components, raw materials or parts even for a relatively
short period of time could cause it to alter production schedules or suspend production entirely. If any such disruptions occur
it could have a material adverse effect on our business, results of operations and financial condition.
SteriLumen's business is highly
dependent on market perceptions of it and the safety and quality of its products.
Market perceptions of SteriLumen's
business are very important to us, especially market perceptions of the safety and quality of SteriLumen's products. If any
of its products or similar products that other companies distribute are subject to market withdrawal or recall or are proven to
be, or are claimed to be, harmful to end users, then this could have a material adverse effect on our business, results of operations
and financial condition. Also, because SteriLumen's business is dependent on market perceptions, negative publicity associated
or perceived to be associated with its business, products or product pricing could have a material adverse impact on our business,
results of operations and financial condition.
SteriLumen is working in a highly
competitive market
Our disinfection system has not yet
been manufactured at a commercial scale for use as a partial substitute of chemical disinfectants and this process has significant
risks. Additionally, while our patented technology does not require approval by any regulatory authority in the United States,
including the Food and Drug Administration ("FDA") or to our knowledge any foreign regulatory authority, if such approval
is required in the future, it may cause significant delays in the commercialization process of the SteriLumen Disinfecting System.
Danish company UVD Robots and Texas based Xenex Disinfection Services, believe that they are effective at killing pathogens, including
Coronavirus and have sent shipments of the disinfecting devices to Italy and East Asia in an effort to stop further spread in
hotels and hospitals. In addition, Boeing has designed a prototype for a self-cleaning airplane bathroom that uses UV light to
disinfect after each use. Outside of those industrial uses, there are a number of consumer-oriented portable UV sanitizing boxes,
wands, and water bottles that claim to kill 99.9% of bacteria and viruses on phones, toothbrushes, pacifiers, and a number of
other surfaces.
18
Customers may be hesitant in adopting
UV light-based technologies, and our inability to overcome this hesitation could limit the market acceptance of our products and
our market share.
Our UV light disinfection systems represent
relatively new technologies in the market. Only a small percentage of professional medical institutions or hospitality providers
are immediately willing to conduct sanitation using our systems. Our future success will depend on our ability to increase demand
for our products by demonstrating to a broad spectrum of medical professional, dentists, hospitality industry, their patients and
customers, the potential performance advantages of our UV light systems over traditional methods of disinfection over competitive
UV light systems, and our inability to do so could have a material adverse effect on our business, financial condition, and results
of operations.
Conventional germicidal UV light was
historically considered as a human health hazard if improperly used and can lead to skin cancer and cataracts. We may experience
long sales cycles because healthcare facilities and hotels and other facilities may be slow to adopt new technologies on a widespread
basis and admit that such technologies can sanitize public space without damaging public health. As a result, we generally are
required to invest a significant amount of time and resources to educate general public about the benefits of our products in
comparison to competing products and technologies before completing a sale, if any. Factors that could inhibit adoption of UV
technologies by healthcare facilities or hospitality companies include the initial cost and concerns about the safety, efficacy,
and reliability of our UV systems. In addition, economic pressure, caused, for example, by an economic slowdown as a result of
Coronavirus, changes in health care reimbursement or by competitive factors in a specific market, could make businesses reluctant
to purchase substantial capital equipment or invest in new technologies. Customer acceptance will depend on the recommendations
of governmental authorities, as well as other factors, including the relative effectiveness, safety, reliability, and comfort
of our systems as compared to other instruments and methods for performing disinfecting procedures.
If future data proves to be inconsistent
with our research results or if competitors' products present more favorable results our revenues could decline and our business,
financial condition, and results of operations could be materially and adversely affected.
Even though our disinfecting devices are
protected with patents, if new studies or comparative studies generate results that are not as favorable as our research results,
our revenues could decline. Additionally, if future studies indicate that our competitors' products are more effective or
safer than ours, our revenues could decline. Furthermore, hospitals and businesses could choose not to purchase our UV light sanitation
systems until they receive additional published long-term clinical evidence and recommendations from prominent hospitals and businesses
that indicate our UV light sanitation systems are effective for disinfecting applications.
We may face competition from other
companies, many of which have substantially greater resources than we do. If we do not successfully develop and commercialize enhanced
or new products that remain competitive with products or alternative technologies developed by others, we could lose revenue opportunities
and customers and our ability to grow our business would be impaired.
A number of competitors have substantially
greater capital resources, larger customer bases, larger technical, sales and marketing forces and stronger reputations with target
customers than ours. We compete with a number of domestic and foreign companies that market traditional chemical sanitation products,
as well as companies that market UV technologies. The marketplace is highly fragmented and very competitive. We expect that the
rapid technological changes occurring in the health care industry could lead to the entry of new competitors, particularly if UV
disinfecting increases market acceptance. If we do not compete successfully, our revenue and market share could decline, which
would impact our ability to meet our operating cash flow requirements and our business, financial condition, and results of operations
could be adversely affected.
Our long-term success depends upon our
ability to (i) distinguish our products through improving our product performance and pricing, protecting our intellectual property,
improving our customer support, accurately timing the introduction of new products, and developing sustainable distribution channels
worldwide; and (ii) develop and successfully commercialize new products, new or improved technologies, and additional applications
for our UV light sanitation systems. We may not be able to distinguish our products and commercialize any new products, new or
improved technologies, or additional applications for our UV light disinfecting systems.
19
We could incur problems in manufacturing
our products.
In order to grow our business, we must
expand our manufacturing capabilities to produce the systems and accessories necessary to meet any demand we may experience. We
could encounter difficulties in increasing the production of our products, including problems involving production capacity and
yields, quality control and assurance, component supply, and shortages of qualified personnel. In addition, before we can begin
commercial manufacture of our products, we must ensure our manufacturing facilities, processes, and quality systems, and the manufacture
of our UV light sanitation systems, quality control, and documentation policies and procedures.
From time to time, we could expend significant
resources in obtaining, maintaining, and addressing our compliance with various federal and requirements that may be subject to
changes. Our success will depend in part upon our ability to manufacture our products without FDA approval or compliance with and
other regulatory requirements.
We have not experienced significant quality
issues with components of our products supplied by third parties, however, we could in the future. Our future success depends on
our ability to manufacture our products on a timely basis with acceptable manufacturing costs, while at the same time maintaining
good quality control and complying with applicable regulatory requirements, and an inability to do so could have a material adverse
effect on our product sales, cash collections from customers, and our ability to meet operating cash flow requirements, which could
have a material adverse effect on our business, financial condition, and results of operations.
Adverse publicity regarding our technology
or products could negatively impact us.
Adverse publicity regarding any of our
products or similar products marketed or sold by others could negatively affect us. If any studies raise or substantiate concerns
regarding the efficacy or safety of our products or other concerns, our reputation could be harmed and demand for our products
could diminish, which could have a material adverse effect on growth in new customers and sales of our products, leading to a decline
in revenues, cash collections, and ultimately our ability to meet operating cash flow requirements.
Rapidly changing standards and competing
technologies could harm demand for our products, result in significant additional costs, and have a material adverse effect on
our business, financial condition, and results of operations.
The markets in which our products compete
are subject to rapid technological change, evolving industry standards, changes in the regulatory environment, and frequent introductions
of new devices and evolving sanitizing solutions and practices, specifically catalyzed by the impact of the Coronavirus pandemic.
Competing products could emerge that render our products uncompetitive or obsolete. We cannot guarantee that we will successfully
identify new product opportunities, identify new and innovative applications of our technology, or be financially or otherwise
capable of completing the research and development required to bring new products to market in a timely manner. An inability to
expand our product offerings or the application of our technology could limit our growth. In addition, we could incur higher manufacturing
costs if manufacturing processes or standards change, and we could need to replace, modify, design, or build and install equipment,
all of which would require additional capital expenditures.
We could be unable to effectively
manage and implement our growth strategies, which could have a material adverse effect on our business, financial condition, and
results of operations.
Our growth strategy includes expanding
our product line and applications by developing enhancements and transformational innovations, including new solutions for various
fields and industries. Expansion of our existing product line and entry into new applications divert the use of our resources and
systems, require additional resources that might not be available (or available on acceptable terms), may require regulatory approvals,
result in new or increasing competition, could require longer implementation times or greater start-up expenditures than anticipated,
and could otherwise fail to achieve the desired results in a timely fashion, if at all. These efforts could also require that we
successfully commercialize new technologies in a timely manner, price them competitively and cost-effectively, and manufacture
and deliver sufficient volumes of new products of appropriate quality on time. We could be unable to increase our sales and earnings
by expanding our product offerings in a cost-effective manner, and we could fail to accurately predict future customer needs and
preferences or to produce viable technologies. In addition, we could invest heavily in research and development of products that
do not lead to significant revenue. Even if we successfully innovate and develop new products and product enhancements, we could
incur substantial costs in doing so. In addition, promising new products could fail to reach the market or realize only limited
commercial success because of efficacy or safety concerns, failure to achieve positive clinical outcomes, or uncertainty over third-party
reimbursement.
20
International sales may comprise
a significant portion of SteriLumen's revenues and will be subject to risks associated with operating in domestic and international
markets.
International sales may comprise a significant
portion of SteriLumen's revenue, and we intend to continue to pursue and expand our international business activities. Political
and economic conditions outside the United States could make it difficult for us to increase our international revenue or to operate
abroad. International operations are subject to many inherent risks, which could have a material adverse effect on our revenues
and operating cash flow, including among others:
•
adverse changes in tariffs and trade restrictions;
•
political, social, and economic instability and increased security concerns;
•
fluctuations in foreign currency exchange rates;
•
longer collection periods and difficulties in collecting receivables from foreign entities;
•
exposure to different legal standards;
•
transportation delays and difficulties of managing international distribution channels;
•
reduced protection for our intellectual property in some countries;
•
difficulties in obtaining domestic and foreign export, import, and other governmental approvals, permits, and licenses, and
compliance with foreign laws;
•
the imposition of governmental controls;
•
unexpected changes in regulatory or certification requirements;
•
difficulties in staffing and managing foreign operations; and
•
potentially adverse tax consequences and the complexities of foreign value-added tax systems.
We believe that international sales may
represent a significant portion of SteriLumen's revenue, and we intend to expand its international operations. In international
markets where our sales are denominated in U.S. dollars, an increase in the relative value of the dollar against the currency in
such markets could indirectly increase the price of our products in those markets and result in a decrease in sales. We do not
currently engage in any transactions as a hedge against risks of loss due to foreign currency fluctuations. However, we could do
so in the future.
SteriLumen's collaborations
with outside scientists and consultants may be subject to restriction and change.
SteriLumen works
with scientists at academic and other institutions, and consultants who assist it in its research, development, and design efforts.
These scientists and consultants have provided, and we expect that they will continue to provide, valuable advice on SteriLumen's
programs. These scientists and consultants are not our or SteriLumen's employees, may have other commitments that would limit
their future availability to SteriLumen and typically will not enter into non-compete agreements with SteriLumen. If a conflict
of interest arises between their work for SteriLumen and their work for another entity, SteriLumen may lose their services. In
addition, SteriLumen will be unable to prevent them from establishing competing businesses or developing competing products. For
example, if a key scientist acting as a principal investigator in any of SteriLumen's clinical trials identifies a potential
product or compound that is more scientifically interesting to his or her professional interests, his or her availability to remain
involved in its clinical trials could be restricted or eliminated.
SteriLumen has
entered into or intends to enter into non-competition agreements with certain of SteriLumen's employees. These agreements
prohibit its employees, if they cease working for it, from competing directly against it or working for its competitors for a limited
period. However, under current law, SteriLumen may be unable to enforce these agreements against certain of its employees and it
may be difficult for it to restrict their competitors from gaining the expertise its former employees gained while working for
it. If SteriLumen cannot enforce its employees' non-compete agreements, it may be unable to prevent its competitors from
benefiting from the expertise of its former employees.
21
Risks Related to Munn Works' Business
The custom design decorative framed
mirror supply market is highly competitive, and we may not be able to compete successfully.
Munn Works operates within the highly competitive
custom design decorative framed mirror supply market, which is characterized by competition from a number of other manufacturers.
Competition is further intensified during economic downturns. Munn Works competes with numerous large national and regional companies
for, among other things, customers, raw materials and skilled management and labor resources. Purchase volumes have fluctuated
substantially from time to time in the past, and we expect such fluctuations to occur from time to time in the future. Some of
its competitors have greater financial, marketing and other resources than it does and, therefore, may be able to adapt to changes
in customer preferences more quickly, devote more resources to the marketing and sale of their products, generate greater national
brand recognition or adopt more aggressive pricing policies than Munn Works can.
In addition, some of our competitors may
resort to price competition to sustain or gain market share and manufacturing capacity utilization, and Munn Works may have to
adjust the prices on some of its products to stay competitive, which could reduce its revenues. Munn Works may not ultimately succeed
in competing with other manufacturers and distributors in its market, which may have a material adverse effect on our business,
financial condition or results of operations.
Munn Works' possible failure
to develop new products or respond to changing consumer preferences and purchasing practices could have a material adverse effect
on our business, financial condition or results of operations.
The custom design decorative framed mirror
supply market is subject to changing consumer trends, demands and preferences. The uncertainties associated with developing and
introducing new products, such as gauging changing consumer preferences and successfully developing, manufacturing, marketing and
selling new products, could lead to, among other things, rejection of a new product line, reduced demand and price reductions for
our products. If Munn Works' products do not keep up with consumer trends, demands and preference, it could lose market share,
which could have a material adverse effect on our business, financial condition or results of operations.
Changes to the buying strategies of Munn
Works' customer's could also affect its ability to compete. Further, the volatile and challenging economic environment
of recent years has caused shifts in trends, demands, preferences and purchasing practices and changes in the business models and
strategies of its customers. Shifts in consumer preferences, which may or may not be long-term, have altered the quantity, type
and prices of products demanded by the end-consumer and Munn Works' customers. If it does not timely and effectively identify
and respond to these changing consumer preferences and purchasing practices, its relationships with our customers could be harmed,
the demand for its products could be reduced and its market share could be negatively affected.
Munn Works'
independent sales force may not be effective.
Munn Works hires
independent sales representatives who have primary responsibility for contacting existing and potential customers and are paid
on a commission basis. While this sales model has proven successful in the past, to continue to be effective, sales representatives
will need to continue to be extremely knowledgeable about Munn Works' products. However, these independent sales representatives
may be selling products from different non-competitive sellers, which could prevent them from focusing on Munn Works' products
and providing the required information to the customers, which could have a material adverse effect on our business, results of
operations and financial condition.
Munn Works'
business is highly dependent on its suppliers' and any disruption in their operations could have a material adverse effect
on our business, results of operations and financial condition.
Munn Works'
operations will be dependent upon the continued ability of its suppliers to deliver components, raw materials, and finished products.
Although many of its products are manufactured at our corporate headquarters in New York, many of its products are manufactured
overseas. Any number of factors, including labor disruptions, catastrophic weather events, contractual or other disputes with suppliers,
and supplier financial difficulties or solvency problems could disrupt its suppliers' operations and lead to uncertainty in its
supply chain or cause supply disruptions, which could, in turn, disrupt its operations. If Munn Works experiences supply disruptions,
it may not be able to develop alternate sourcing quickly. Any disruption of its production schedule caused by an unexpected shortage
of systems, components, raw materials or parts even for a relatively short period of time could cause it to alter production schedules
or suspend production entirely. If any such disruptions occur it could have a material adverse effect on our business, results
of operations and financial condition.
22
Munn Works' business is highly
dependent on market perceptions of it and the quality of its products.
Market perceptions
of Munn Works' business are very important to us, especially market perceptions of the quality of Munn Works' products.
Because Munn Works' business is dependent on market perceptions, negative publicity associated or perceived to be associated
with its business, products or product pricing could have a material adverse impact on our business, results of operations and
financial condition.
Risks Related to Our Intellectual Property
If the patents that we own or license,
or our other intellectual property rights, do not adequately protect our technologies, we could lose market share to our competitors
and be unable to operate our business profitably.
Our future success depends, in part, on
our ability to obtain and maintain patent protection for our products and technology, to preserve our trade secrets and to operate
without infringing the intellectual property of others. We rely on patents to establish and maintain proprietary rights in our
technology and products. We currently possess a number of issued patents and patent applications with respect to our products and
technology. However, we cannot ensure that any additional patents will be issued, that the scope of any patent protection will
be effective in helping us address our competition, or that any of our patents will be held valid if subsequently challenged. It
is also possible that our competitors could independently develop similar or more desirable products, duplicate our products, or
design products that circumvent our patents. The laws of foreign countries may not protect our products or intellectual property
rights to the same extent as the laws of the United States. In addition, there have been recent changes in the patent laws and
rules of the U.S. Patent and Trademark Office ("USPTO"), and there could be future proposed changes that, if enacted,
have a significant impact on our ability to protect our technology and enforce our intellectual property rights. If we fail to
protect our intellectual property rights adequately, our competitive position could be adversely affected, and there could be a
material adverse effect on sales, cash collections, and our ability to meet operating cash flow requirements.
If third parties claim that we infringe
their intellectual property rights, we could incur liabilities and costs and have to redesign or discontinue selling certain products,
which could have a material adverse effect on our business, financial condition, and results of operations.
We face substantial uncertainty regarding
the impact that other parties' intellectual property positions will have on UV light applications. From time to time, we
expect to continue to receive, notices of claims of infringement, misappropriation, or misuse of other parties' proprietary
rights. Some of these claims could lead to litigation. We may not prevail in any future intellectual property infringement litigation
given the complex technical issues and inherent uncertainties in litigation. Any claims, with or without merit, could be time-consuming
and distracting to management, result in costly litigation, or cause product shipment delays. Adverse determinations in litigation
could subject us to significant liability and could result in the loss of proprietary rights. A successful lawsuit against us could
also force us to cease selling or redesign products that incorporate the infringed intellectual property. Additionally, we could
be required to seek a license from the holder of the intellectual property to use the infringed technology, and we may not be able
to obtain a license on acceptable terms, or at all.
Patent terms are limited and we may
not be able to effectively protect our products and business.
Patents have a limited lifespan. In the
U.S., the natural expiration of a patent is generally 20 years after it is filed. Although various extensions may be available,
the life of a patent, and the protection it affords, is limited. In addition, upon issuance in the U.S., the patent term may be
extended based on certain delays caused by the applicant(s) or the USPTO. Even if we obtain effective patent rights for all our
current patent applications, we may not have sufficient patent terms or regulatory exclusivity to protect our products, and our
business and results of operations would be adversely affected.
We may be subject to claims challenging
the inventorship of our patents and other intellectual property.
We may be subject to claims that former
employees, collaborators or other third parties have an interest in or right to compensation with respect to our patents or other
intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations
of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these
and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition
to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use,
valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful
in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
To the extent that our employees have not effectively waived the right to compensation with respect to inventions that they helped
create, they may be able to assert claims for compensation with respect to our future revenue may be successful. As a result, we
may receive less revenue from future products if such claims are successful which in turn could impact our future profitability.
23
Changes in U.S. patent law could
diminish the value of patents in general, thereby impairing our ability to protect our products.
As is the case with other equipment
manufacturing companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing
patents in the biotechnology industry involves both technological and legal complexity. Therefore, obtaining and enforcing patents
is costly, time-consuming, and inherently uncertain. In addition, the U.S. has recently enacted and is currently implementing
wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available
in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty
with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to
the value of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts and the USPTO, the laws
and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to
enforce our existing patents and patents that we might obtain in the future.
We may not be able to protect our
intellectual property rights throughout the world.
Filing, prosecuting and defending patents
on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights
in some countries outside the U.S. can be less extensive than those in the U.S. In addition, the laws of some foreign countries
do not protect intellectual property rights to the same extent as federal and state laws in the U.S. Competitors may use our technologies
in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing
products to territories where we have patent protection, but enforcement is not as strong as that in the U.S. These products may
compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them
from competing.
Many companies have encountered significant
problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries,
particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property
protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement
of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our
patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and
attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our
patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any
lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our
efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage
from the intellectual property that we develop or license.
Risks Related to this Offering
Our management will have broad discretion
over the use of any net proceeds from this offering and you may not agree with how we use the proceeds, and the proceeds may not
be invested successfully.
Our management will have broad discretion
as to the use of any net proceeds from this offering and could use them for purposes other than those contemplated at the time
of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of any proceeds from
the exercise of warrants on a cash basis in this offering and you will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does
not yield a favorable, or any, return for you.
24
Investors in this offering may experience
future dilution as a result of this and future equity offerings.
In order to raise additional capital, we
may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common
stock. Investors purchasing our shares or other securities in the future could have rights superior to existing common stockholders,
and the price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable
for our common stock in future transactions may be higher or lower than the price per share in this offering.
Sales of a significant number of
shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price
of our common stock.
Sales of a substantial number of shares
of our common stock in the public markets could depress the market price of our common stock and impair our ability to raise capital
through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock would have
on the market price of our common stock.
If securities or industry analysts
do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could
decline.
The trading market for our common stock
will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several
analysts cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about
our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish
reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
Risks Relating to Ownership of Our Securities.
There is no active public trading
market for our common stock and we cannot assure you that an active trading market will develop in the near future.
Our common stock is not quoted in the
over-the-counter markets and is not listed on any stock exchange and there is currently no active trading in our securities. We
have applied to have our common stock listed on the Nasdaq Capital Market under the symbol "AUVI" which listing is
a condition to this offering. We cannot assure you that an active trading market for our common stock will develop in the future
due to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock
brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even
if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company
such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. We cannot
give you any assurance that an active public trading market for our common stock will develop or be sustained. You may not be
able to liquidate your shares quickly or at the market price if trading in our common stock is not active.
The public price of our common stock
may be volatile, and could, following a sale decline significantly and rapidly.
The initial public
offering price for the shares will be determined by negotiations between us and the underwriters and may not be indicative of prices
that will prevail in the open market following this offering. The market price of our common stock may decline below the initial
offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in the offering,
or at all. Following this Offering, the public price of our common stock in the secondary market will be determined by private
buy and sell transaction orders collected from broker-dealers.
We may not be able to satisfy listing
requirements of Nasdaq to maintain a listing of our common stock.
If our common stock is listed on Nasdaq,
we must meet certain financial and liquidity criteria to maintain such listing. If we violate the maintenance requirements for
continued listing of our common stock, our common stock may be delisted. In addition, our board may determine that the cost of
maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock
from Nasdaq may materially impair our stockholders' ability to buy and sell our common stock and could have an adverse effect
on the market price of, and the efficiency of the trading market for, our common stock. In addition, the delisting of our common
stock could significantly impair our ability to raise capital.
25
This offering has not been reviewed
by independent professionals.
We have not retained any independent professionals
to review or comment on this prospectus or otherwise protect the interest of the investors hereunder. Although we have retained
our own counsel, neither such counsel nor any other counsel has made, on behalf of the investors, any independent examination of
any factual matters represented by management herein. Therefore, for purposes of making a decision to purchase our common stock,
you should not rely on our counsel with respect to any matters herein described. Prospective investors are strongly urged to rely
on the advice of their own legal counsel and advisors in making a determination to purchase our shares of common stock.
There has been no public market for
our common stock prior to this offering, and an active market in which investors can resell their shares may not develop.
Prior to this offering, there has been
no public market for our common stock. All investments in securities involve the risk of loss of capital. No guarantee or representation
is made that an investor will receive a return of its capital. The value of our common stock can be adversely affected by a variety
of factors, including development problems, regulatory issues, technical issues, commercial challenges, competition, legislation,
government intervention, industry developments and trends, and general business and economic conditions. We cannot predict the
extent to which an active market for our common stock will develop or be sustained after this Offering, or how the development
of such a market might affect the market price of our common stock.
Max Munn, our President and a
director of the Company indirectly owns or controls approximately 97% of our common stock and will be able to exert a controlling
influence over our business affairs and matters submitted to stockholders for approval.
Max Munn, our President and a director
of the Company beneficially owns approximately 97% of our common stock through a trust in which his spouse is the trustee. After
this offering, it is anticipated that Mr. Munn will beneficially own or control 5,000,000 shares of our common stock (excluding
80,000 shares underlying a warrant issued to Mr. Munn), which will represent approximately81% of the outstanding shares of our
common stock after the closing of the offering (excluding any over-allotment shares). Additionally, Mr. Munn beneficially owns
2,000 shares of the Company's Series A Preferred Stock through a trust in which his spouse is the trustee, which is entitled
to 1,000 votes per share and votes with the common stock as a single class. As a result, Mr. Munn will have control over all matters
submitted to our stockholders for approval, including the election and removal of directors, amendments to our certificate of
incorporation and bylaws, the approval of any business combination and any other significant corporate transaction. These actions
may be taken even if they are opposed by other stockholders. This concentration of ownership may also have the effect of delaying
or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could
prevent our stockholders from receiving a premium for their shares.
Additionally, Mr. Munn has been assessed
responsible person tax penalties of approximately (i) $516,000 imposed by the United States Internal Revenue Service and (ii)
$185,000, in aggregate amount, imposed by the New York State Department of Taxation and Finance, in each case which arose out
of Mr. Munn's position as an executive officer and principal of APF Group, Inc. in 2008 and 2009. Although Mr. Munn and
his tax counsel believe that Mr. Munn will either be able to successfully challenge the federal and state tax assessments or settle
for an amount that will be well within Mr. Munn's economic reach, no assurances can be given that Mr. Munn will succeed
in his attempt to challenge or settle these claims. If Mr. Munn is not successful with respect to these claims, the economic consequences
could become a significant distraction to Mr. Munn in the performance of his duties as President and a director of the Company,
which could have a material adverse effect on the operations and financial condition of the Company.
Mr. Munn may have interests different from
yours.
Our failure to maintain effective
internal controls over financial reporting could have an adverse impact on us
.
We are required to establish and maintain
appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once
established, could adversely impact our public disclosures regarding our business, financial condition or results of operations.
In addition, management's assessment of internal controls over financial reporting may identify weaknesses and conditions
that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure
of management's assessment of our internal controls over financial reporting or disclosure of our public accounting firm's
attestation to or report on management's assessment of our internal controls over financial reporting may have an adverse
impact on the price of our common stock.
A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition,
the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative
to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management
override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with
policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and may not be detected.
26
At present, we
believe that we have effective internal controls in place. However, our management, including our Chief Executive Officer, cannot
guarantee that our internal controls and disclosure controls that we have in place will prevent all possible errors, mistakes or
all fraud.
Our financial
controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a public
company, could materially harm our stock price.
We require significant
financial resources to maintain our public reporting status. We cannot assure you we will be able to maintain adequate resources
to ensure that we will not have any future material weakness in our system of internal controls. The effectiveness of our controls
and procedures may in the future be limited by a variety of factors including:
·
faulty human judgment and simple errors,
omissions or mistakes;
·
fraudulent action of an individual or
collusion of two or more people;
·
inappropriate management override of procedures;
and
·
the possibility that any enhancements to controls
and procedures may still not be adequate to assure timely and accurate financial information.
Our internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in
the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could
have a material effect on the financial statements.
Despite these
controls, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Furthermore, smaller reporting companies like us face additional limitations. Smaller reporting companies employ fewer individuals
and can find it difficult to employ resources for complicated transactions and effective risk management. Additionally, smaller
reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
If
we fail to have effective controls and procedures for financial reporting in place, we could be unable to provide timely and accurate
financial information and be subject to investigation by the Securities and Exchange Commission and civil or criminal sanctions.
We must
implement additional and expensive procedures and controls in order to grow our business and organization and to satisfy new reporting
requirements, which will increase our costs and require additional management resources.
Upon becoming
a fully public reporting company, we will be required to comply with the Sarbanes-Oxley Act of 2002 (the "
Sarbanes-Oxley
Act
") and the related rules and regulations of the SEC, including the requirements that we maintain disclosure controls
and procedures and adequate internal control over financial reporting. In the future, if our securities are listed on a national
exchange, we may also be required to comply with marketplace rules and heightened corporate governance standards. Compliance with
the Sarbanes-Oxley Act and other SEC and national exchange requirements will increase our costs and require additional management
resources. We recently have begun upgrading our procedures and controls and will need to continue to implement additional procedures
and controls as we grow our business and organization and to satisfy new reporting requirements. If we are unable to complete the
required assessment as to the adequacy of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley
Act or if we fail to maintain internal control over financial reporting, our ability to produce timely, accurate and reliable periodic
financial statements could be impaired.
27
If we do not maintain
adequate internal control over financial reporting, investors could lose confidence in the accuracy of our periodic reports filed
under the Securities Exchange Act of 1934, as amended (the "
Exchange Act
"). Additionally, our ability to obtain
additional financing could be impaired or a lack of investor confidence in the reliability and accuracy of our public reporting
could cause our stock price to decline.
We are an
 "emerging growth company" under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors.
We are an "emerging
growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we may take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
 "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation
requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our
common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as
a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
In addition, Section
107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the "Securities Act") for complying with new or revised
accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition
period for complying with new or revised accounting standards.
We will
remain an "emerging growth company" until the last day of the fiscal year following the fifth anniversary of the date
of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will
lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three
year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day
of our most recently completed second fiscal quarter.
Our status
as an "emerging growth company" under the JOBS Act may make it more difficult to raise capital as and when we need
it.
Because of the
exemptions from various reporting requirements provided to us as an "emerging growth company" and because we will have
an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors
and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business
with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in
our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations
may be materially and adversely affected.
We have
not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our stock.
We have never paid cash dividends on our
common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future. We currently intend to
retain any future earnings to support the development of our business and do not anticipate paying cash dividends in the foreseeable
future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various
factors, including, but not limited to, our financial condition, operating results, cash needs, growth plans and the terms of any
credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited
by Delaware state law. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never
occur, as the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our common
stock.
28
The elimination of personal liability
against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers
and employees may result in substantial expenses.
Our Amended and Restated Certificate of
Incorporation and our Bylaws eliminate the personal liability of our directors and officers to us and our stockholders for damages
for breach of fiduciary duty as a director or officer to the extent permissible under Delaware law. Further, our amended and restated
certificate of incorporation and our Bylaws and individual indemnification agreements we have entered with each of our directors
and executive officers provide that we are obligated to indemnify each of our directors or officers to the fullest extent authorized
by the Delaware law and, subject to certain conditions, advance the expenses incurred by any director or officer in defending any
action, suit or proceeding prior to its final disposition. Those indemnification obligations could expose us to substantial expenditures
to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to afford. Further,
those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or
former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders.
Our certificate of incorporation
will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated
by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with
us.
Our amended and restated certificate
of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery
of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of
the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of
the Company to the Company or the Company's stockholders, (c) any action asserting a claim arising pursuant to any provision
of the Delaware General Corporation Law, the Company's Certificate of Incorporation or the Bylaws, or (d) any action asserting
a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest
in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated
certificate of incorporation described above.
We believe these provisions benefit us
by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate
disputes and in the application of the Securities Act by federal judges, as applicable, efficient administration of cases on a
more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, the provision
may have the effect of discouraging lawsuits against our directors, officers, employees and agents as it may limit any stockholder's
ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with us or our directors, officers,
employees or agents. The enforceability of similar choice of forum provisions in other companies' certificates of incorporation
has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us,
a court could find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or
unenforceable in such action. If a court were to find the choice of forum provision contained in our restated certificate of incorporation
to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other
jurisdictions, which could adversely affect our business, financial condition or results of operations.
You should consult your own independent
tax advisor regarding any tax matters arising with respect to the securities offered in connection with this offering.
Participation in this offering could result
in various tax-related consequences for investors. All prospective purchasers of the resold securities are advised to consult their
own independent tax advisors regarding the U.S. federal, state, local and non-U.S. tax consequences relevant to the purchase, ownership
and disposition of the resold securities in their particular situations.
IRS CIRCULAR 230 DISCLOSURE: TO ENSURE
COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, WE INFORM YOU THAT ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING
ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE INTERNAL
REVENUE CODE. IN ADDITION, ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS WRITTEN TO SUPPORT THE "PROMOTION
OR MARKETING" OF THE MATTER(S) ADDRESSED HEREIN. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM YOUR
OWN INDEPENDENT TAX ADVISOR.
29
IN ADDITION TO THE ABOVE RISKS, BUSINESSES
ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS FILING, POTENTIAL INVESTORS SHOULD
KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT THE COMPANY'S BUSINESS OPERATIONS AND THE VALUE OF THE COMPANY'S
SECURITIES.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking
statements." Forward-looking statements reflect the current view about future events. When used in this prospectus, the words
 "anticipate," "believe," "estimate," "expect," "future," "intend,"
 "plan," or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking
statements. Such statements, include, but are not limited to, statements contained in this prospectus relating to our business
strategy, our future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our
current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking
statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult
to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither
statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any
of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking
statements include, without limitation:
1.
Our ability to effectively operate our business segments;
2.
Our ability to manage our research, development, expansion, growth and operating expenses;
3.
Our ability to evaluate and measure our business, prospects and performance metrics;
4.
Our ability to compete, directly and indirectly, and succeed in the highly competitive and evolving ridesharing industry;
5.
Our ability to respond and adapt to changes in technology and customer behavior;
6.
Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand; and
7.
other factors (including the risks contained in the section of this prospectus entitled "
Risk Factors
") relating to our industry, our operations and results of operations.
Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated,
believed, estimated, expected, intended or planned.
Factors or events that could cause our
actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee
future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual
results.
USE
OF PROCEEDS
We estimate that we will receive net proceeds
of approximately $4,550,000 (or approximately $5,232,500 if the underwriters' option to purchase additional shares is exercised
in full) from the sale of the common stock offered by us in this offering, based on public offering price of $5.00 per share, and
after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
The principal purposes of this offering
are to increase our capitalization and financial flexibility, increase our visibility in the marketplace and create a public market
for our common stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net
proceeds to us from this offering. However, we currently intend to use the net proceeds to us from this offering to hire additional
employees, including executive officers and sales professionals and for general corporate purposes, including working capital and
sales and marketing activities.
30
We will retain broad discretion in the
allocation of the net proceeds from this offering and could utilize the proceeds in ways that do not necessarily improve our results
of operations or enhance the value of our common stock.
The table below sets forth the manner in
which we expect to use the net proceeds we receive from this offering. All amounts included in the table below are estimates.
Description
Amount
Research and Development
$
250,000
Hiring Staff
800,000
Sales and Marketing
$
500,000
Working Capital and General Corporate Purposes
$
3,000,000
Total
$
4,550,000
The foregoing information is an estimate
based on our current business plan. We may find it necessary or advisable to re-allocate portions of the net proceeds reserved
for one category to another, and we will have broad discretion in doing so. Pending these uses, we intend to invest the net proceeds
of this offering in a money market or other interest-bearing account.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is not listed on any
stock exchange or over-the-counter market or quotation system. There is currently no active trading market in our common stock.
We have applied to have our common stock listed on the Nasdaq Capital Market under the symbol "AUVI" which listing
is a condition to this offering. For more information see the section "
Risk Factors
."
As of July [*], 2020, we have 5,013,316
shares of our common stock issued and outstanding and held by 7 stockholders of record.
We also have outstanding:
●
A warrant issued to Max Munn, our President and a director of the Company
    to purchase up to 80,000 shares of our common stock at an exercise price equal to the greater of $5.00 per share and
    the market value of our common stock on the date of issuance, subject to adjustment in certain circumstances as provided therein;
●
Warrants to purchase 1,000 shares of our common stock in the aggregate, each at an exercise
    price of $5.00 per share, subject to adjustment in certain circumstances provided therein;
●
Options granted to members of the Board
    of Directors to purchase up to 1,375 shares of our common stock at an exercise price equal to the greater of $2.50 per share
    and the per share market value of the Company's common stock on the date of the grant, subject to quarterly equal vesting
    over a one year period and adjustment in certain circumstances as provided therein (375 of which are vested);
●
40,000 unvested shares of our common stock in aggregate issued
    to four (4) members of our Board of Directors which vest evenly over a period of four years, with the first vesting to occur
    on January 1, 2021;
●
89,308 unvested shares of our common stock, issued to our
    Chief Executive Officer pursuant to his employment agreement with the Company. The shares vest quarterly on an equal basis
    over a period of 18 months, with the first vesting to occur on September 30, 2020;
●
38,275 unvested shares of our common stock, issued to our
    Chief Operations Officer pursuant to his employment agreement with the Company. The shares vest quarterly on an equal basis
    over a period of 18 months, with the first vesting to occur on September 30, 2020;
●
2,000 shares of preferred stock have been designated as Series A Preferred Stock all of
    which are beneficially owned by Max Munn through a trust in which his spouse is the trustee.  The Series A Preferred
    Stock entitles the holder thereof to 1,000 votes per share and vote with the Company's common stock as a single class
    and provides the trust with 2,000,000 votes on all matters submitted to the stockholders for a vote.
Dividends
We have not declared any cash dividends
since inception and we do not anticipate paying any dividends in the foreseeable future. Instead, we anticipate that all of our
earnings will be used to provide working capital, to support our operations, and to finance the growth and development of our business,
including potentially the acquisition of, or investment in, businesses, technologies or products that complement our existing business.
The payment of dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements,
financial condition, prospects, applicable Delaware law, which provides that dividends are only payable out of surplus or current
net profits, and other factors our board might deem relevant. There are no restrictions that currently limit our ability to pay
dividends on our common stock other than those generally imposed by applicable state law.
31
Securities Authorized for Issuance under
Equity Compensation Plan
On May 4, 2020, the Board of Directors
of the Company adopted the Plan. The Plan governs equity awards to our employees, directors, officers, consultants, and other
eligible participants. Under the 2020 Plan there are 600,000 shares of common stock reserved for issuance.
The types of awards permitted under the
Plan include nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock
units, performance shares, performance units, and other awards. Each option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify.
The Board of Directors has the power to
amend, suspend or terminate the Plan without stockholder approval or ratification at any time or from time to time. No change may
be made that increases the total number of shares of our common stock reserved for issuance pursuant to incentive awards or reduces
the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our
stockholders within one year.
The Company has not granted any awards
under the plan.
CAPITALIZATION
The following table sets forth our
consolidated cash and capitalization, as of March 31, 2020. Such information is set forth on the following basis:
-
actual
                                         basis (giving effect, on a retroactive basis, to a 1 for 5 reverse stock splits for both
                                         common stock and preferred stock which were consummated in June of 2020; and
-
on a pro forma basis
                                         giving effect to the sale of 1,000,000 shares of common stock by us in this offering
                                         at a public offering price of $5.00 per share after deducting the underwriting discounts
                                         and commissions and estimated offering expenses payable by us.
You should read the following table
in conjunction with "
Use of Proceeds
," "
Management's Discussion and Analysis of Financial Condition
and Results of Operations
" and our financial statements and related notes included in this prospectus. The following
table sets forth our cash and cash equivalents and capitalization as of March 31, 2020:
Actual
Pro Forma (1)(2)
Cash
$
1,712,387
$
6,012,391
Short term liabilities, including
    deferred revenue due within one year
$
2,836,706
$
2,836,706
Total liabilities including lease
    obligations - net of current portion
$
583,573
$
583,573
Stockholders' equity:
Common stock, $0.0001 par value, 150,000,000 shares authorized, 5,001,250 shares outstanding
    actual, 6,186,856 shares outstanding as adjusted
500
619
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; 2,000 shares
    of Series A Preferred Stock outstanding
1
1
Additional paid-in capital
4,299,881
Accumulated deficit
1,362,678
1,362,678
Total stockholders' equity
1,363,179
5,663,179
Total capitalization
$
4,697,058
$
9,083,458
(1) Does not include: (a) shares issuable
upon the exercise of the underwriter's option to purchase up to 150,000 additional shares of common stock; (b) 80,000 shares
of our common stock issuable up exercise of the underwriter's warrant and (c) 80,000 shares of our common stock issuable
upon exercise of the warrant issued to Max Munn.
(2) Includes 102,066 shares issued subsequent to March 31,
2020, but prior to the effective date of the registration statement and 51,034 shares to be issued to Carmel, Milazzo & Feil
LLP on the effective date of the registration statement for this offering and 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) to be issued to Carmel, Milazzo & Feil LLP on the closing date
of the offering.
32
DILUTION
Purchasers of our common stock in this
offering will experience an immediate and substantial dilution in the as adjusted net tangible book value of their shares of common
stock. Dilution in as adjusted net tangible book value represents the difference between the public offering price per share and
the as adjusted net tangible book value per share of our common stock immediately after the offering.
The historical net tangible book value
of our common stock as of March 31, 2020, was $1,247,142 or $0.25 per share. Historical net tangible book value per share of our
common stock represents our total tangible assets (total assets less intangible assets) less total liabilities divided by the
number of shares of common stock outstanding as of that date. After giving effect to the sale of 1,000,000 shares in this offering
at an initial public offering price of $5.00 per share for net proceeds of approximately $4.55 million, as if such offering had
occurred at the end of March 31, 2020, our pro forma net tangible book value as of March 31, 2020 would have been approximately
$5,663,176, or approximately $0.92 per share of our common stock. This represents an immediate increase in as adjusted pro forma,
net tangible book value per share of $0.67 to the existing stockholders and an immediate dilution in as adjusted pro forma net
tangible book value per share of $4.08 to new investors who purchase shares of common stock in the offering. The following table
illustrates this per share dilution to new investors:
Public
    offering price per share
$
5.00
Historical
    net tangible book value per share as of March 31, 2020
$
0.25
Increase
    in as adjusted pro forma net tangible book value per share attributable to the offering
0.67
Pro
    forma net tangible book value (deficit) per share as of March 31, 2020
0.92
Dilution
    in net tangible book value per share to new investors
$
4.08
After completion of this offering,
our existing stockholders would own approximately 84% and our new investors would own approximately 16% of the total number of
shares of our common stock outstanding after this offering.
To the extent that outstanding options
or warrants are exercised, you will experience further dilution. In addition, we may choose to raise additional capital due to
market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating
plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance
of these securities may result in further dilution to our stockholders.
Capitalization Table
Shares Purchased
Total Consideration
Number
Percent
Amount
Percent
Per Share
Existing stockholders
5,186,855
(1)
83.8
%
$
22,629,805
(2)
81.9
%
$
4.36
New Investors
1,000,000
16.2
%
$
5,000,000
18.1
%
$
5.00
6,186,855
100.00
%
$
27,629,805
100.00
%
--
(1)Includes 51,034 shares to be issued to Carmel, Milazzo
 & Feil LLP on the effective date of the registration statement for this offering and 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) to be issued to Carmel, Milazzo & Feil LLP on the closing date
of the offering.
(2) Includes (i) the combined appraised
value of Munn Works and SteriLumen (the combined equity of which was exchanged for 5,000,000 shares of Company common stock held
by an existing shareholder) of $22,122,000 as of December 31, 2019, set forth in an appraisal report prepared on May 13, 2020
by an independent appraisal firm and (ii) a liability for legal services in the amount of $507,805 that the Company has accrued
and which will be satisfied with the payment of shares of the Company's common stock
33
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements made in this prospectus
are "forward-looking statements" regarding the plans and objectives of management for future operations. Such statements
involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of
the "Company" to be materially different from any future results, performance or achievements expressed or implied
by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately
and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and therefore, there can be no assurance the forward-looking
statements included in this prospectus will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved.
Our actual results
may differ materially from those anticipated in these forward-looking statements as a result of various factors, including
those set forth under "Risk Factors" and in other parts of this prospectus. Our fiscal year ends on December 31.
Overview
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 all of the stockholders of SteriLumen exchanged their
shares in SteriLumen for shares of common stock in the Company. The Company acquired all of the equity 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 was formed to engage in the
design, manufacture, assembly and distribution of the SteriLumen Disinfecting System for use in hospitals and other healthcare
facilities. The Company has received several patent approvals for the SteriLumen Disinfecting System from the United States and
the European Union and is in the process of receiving approval from various countries including China, Japan, Taiwan, South Korea
and the Gulf Cooperation Council. The technology of the SteriLumen Disinfecting System uses UVC LED embedded in various bathroom
fixtures as an infection prevention apparatus for use in inhabited facilities for killing airborne bacteria and other pathogens
as well as killing bacteria and other pathogens residing on hard surfaces in proximity to the apparatus.
Munn Works is a manufacturer of custom
designed fine mirrors specifically for the hospitality industry with one manufacturing facility in Mount Vernon, New York. Our
goal is to contribute to the creation of what our design industry clients seek: manufacturing better framed mirrors on budget and
on time. As part of our long-term strategy, we have instituted multi-site production for high-value items, complicated designs
and finishes. Our headquarters in Mount Vernon, NY serves as the center for multi-country manufacturing. We work with a satellite
network of artisans and craftsmen, including gilders, carvers, and old-world finishers. In addition to our domestic partners, we
maintain overseas production capability with on-site Munn Works employees. Moreover, as company policy, we conduct on-site factory
visits for all in-process and outgoing orders, which are observed and checked by a project manager from our home office in Mount
Vernon, NY before they leave our overseas partners' facilities. The combination of quality, innovative, stylish merchandise,
and value pricing has led us to develop a loyal customer base.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following
factors:
• our ability to acquire new customers or retain existing
customers;
• our ability to offer competitive product pricing;
• our ability to broaden product offerings;
• industry demand and competition; and
• market conditions and our market positions
34
Results of Operations
Three Months Ended March 31, 2020 Compared to the
Three Months Ended March 31, 2019
2020
2019
Net Sales
$
1,528,400
$
1,460,737
Cost of Goods Sold
1,161,813
76.0
%
1,138,252
77.9
%
Gross Profit
366,587
24.0
%
322,485
22.1
%
Selling. General and Administrative Expenses
388,198
25.4
%
327,879
22.4
%
Operating Loss
(21,611
)
-1.4
%
(5,394
)
-0.4
%
Other Income (Expense)
Interest income (expense)
0.0
%
465
0.0
%
Total Other Expense
-
0.0
%
465
0.0
%
Loss Before Provision for Income Taxes
(21,611
)
-1.4
%
(4,929
)
-0.3
%
Provision for Income Taxes
-
0.0
%
-
0.0
%
Net Loss
$
(21,611
)
-1.4
%
$
(4,929
)
-0.3
%
Net sales and gross profit are the
most significant drivers of our operating performance. Net sales consist of all sales to customers, net of returns. Our net sales
for the three months ended 2020 increased by 4.4% to $1,528,400 from $1,460,737 in the three months ended 2019. All net sales
for all periods presented were generated entirely from our Munn Works subsidiary. Historically, first quarter revenues are typically
the lowest for the Company as the third party facilities in China are closed for three weeks to celebrate the Chinese New Year.
The net sales increase in 2020 resulted primarily from an increase in domestic manufacturing capabilities. An increase in our
domestic manufacturing capabilities has resulted in less lead time from when a project is initiated to its completion. The Company
plans to expand its manufacturing facility which will result in an increase in revenues generated from our domestic manufacturing.
Accordingly, gross profit expressed
as a percentage of net sales can be influenced by many factors including overall sales performance. For three months ended 2020,
gross profit increased to $366,587 from $322,485 for three month ended 2019. Gross profit as a percentage of net sales increased
to 24.0% for three months ended 2020 from 22.1% in three months ended 2019, primarily driven by an increase in percentage of sales
generated from our third party warehouses in China which is historically more profitable for our business. Margins from period
to period and can vary based on the profitability of each individual job. In 2020, the Company worked on several large contracts
that were slightly more profitable than the previous year. Major components and cost drivers of our cost of sales is influenced
by the cost of materials, shipping, overhead, and labor costs. Historically, first quarter profits are typically the lowest for
the Company as the third-party facilities in China are closed for three weeks to celebrate the Chinese New Year.
Selling, General and Administrative
expenses, including the costs of operating our corporate office, are also an important component of our operating performance.
Compensation and benefits comprise the majority of our operating expenses. Selling, General and Administrative expenses contain
fixed and variable costs and managing the operating expense ratio (operating expenses expressed as a percentage of net sales)
is an important focus of management as we seek to increase our overall profitability. Operating expenses include cash costs as
well as non-cash costs, such as depreciation and amortization associated with corporate and property and equipment and impairment
of long-lived assets. Operating expenses can also include certain costs that are of a one-time or non-recurring nature. For three
months ended 2020, Selling, General and Administrative expenses increased to $388,198 from $327,879 in three months ended 2019.
The increase was attributable to an increase in professional and consulting fees to assist the Company in financial reporting.
Selling, General and Administrative
expenses expressed as a percentage of net sales can be influenced by many factors including overall sales performance. For three
months ended 2020, selling, general and administrative expenses as a percentage of net sales increased 3.0% from 25.4% in three
months ended 2020 and 22.4% in three months ended 2019. The company was able to maintain its fixed operating costs from year to
year and generate slightly more revenues, however, the increase in professional fees caused the percentage to increase over the
prior period.
We recorded net loss of $21,611 in
the three months ended 2020, compared to net loss of $4,929 in the three months ended 2019, an increase of net loss of $16,682
from the three months ended 2019. The increase in net loss compared to 2019 was primarily attributable to an increase in professional
fees.
Year Ended December 31, 2019 Compared to the Year
Ended December 31, 2018
2019
2018
Net Sales
$
9,329,720
$
7,556,444
Cost of Goods Sold
6,009,730
64.4
%
4,890,012
64.7
%
Gross Profit
3,319,990
35.6
%
2,666,432
35.3
%
Selling. General and Administrative Expenses
1,916,386
20.5
%
1,913,101
25.3
%
Operating Income
1,403,604
15.0
%
753,331
10.0
%
Other Income (Expense)
Gain on settlement (See Note 10)
1,520,399
16.3
%
-
0.0
%
Other income
-
0.0
%
2,552
0.0
%
Interest Expense
-15,736
-0.2
%
-35,640
-0.5
%
Total Other Income (Expense)
1,504,663
16.1
%
-33,088
-0.4
%
Income Before Provision for Income Taxes
2,908,267
31.2
%
720,243
9.5
%
Provision for Income Taxes
106,861
1.1
%
-
0.0
%
Net Income
$
2,801,406
30.0
%
$
720,243
9.5
%
Net sales and gross profit are the
most significant drivers of our operating performance. Net sales consist of all sales to customers, net of returns. Our net sales
for year ended 2019 increased by 19% to $9,329,720 from $7,556,444 in year ended 2018. All net sales for all periods presented
were generated entirely from our Munn Works subsidiary. The net sales increase in fiscal 2019 resulted primarily from an increase
in domestic manufacturing capabilities. An increase in our domestic manufacturing capabilities has resulted in less lead time
from when a project is initiated to its completion. The Company plans to expand its manufacturing facility which will result in
an increase in revenues generated from our domestic manufacturing.
Accordingly, gross profit expressed as a percentage of net
sales can be influenced by many factors including overall sales performance. For year ended 2019, gross profit increased 19.7%
to $3,319,990 from $2,666,432 for year ended 2018. Gross profit as a percentage of net sales increased to 35.6% for year ended
2019 from 35.3% in year ended 2018, primarily driven by an increase in sales generated from our domestic manufacturing. Margins
remained consistent from year to year and can vary based on the profitability of each individual job. In 2019, the Company worked
on several large contracts that were slightly more profitable than the previous year. Major components and cost drivers of our
cost of sales is influenced by the cost of materials, freight, overhead, and labor costs.
Selling, General and Administrative expenses,
including the costs of operating our corporate office, are also an important component of our operating performance. Compensation
and benefits comprise the majority of our operating expenses. Selling, General and Administrative expenses contain fixed and variable
costs and managing the operating expense ratio (operating expenses expressed as a percentage of net sales) is an important focus
of management as we seek to increase our overall profitability. Operating expenses include cash costs as well as non-cash costs,
such as depreciation and amortization associated with corporate and property and equipment and impairment of long-lived assets.
Operating expenses can also include certain costs that are of a one-time or non-recurring nature. For year ended 2019, Selling,
General and Administrative expenses increased 0.2% to $1,916,386 from $1,913,101 in year ended 2018. The change was primarily driven
from an increase in sales commissions, professional fees, and office salaries, however, the increase was offset by a decrease in
Officer Salaries in the amount of $400,000.
Selling, General and Administrative expenses
expressed as a percentage of net sales can be influenced by many factors including overall sales performance. For year 2019, selling,
general and administrative expenses as a percentage of net sales decreased 5% from 20.3% in year ended 2019 and 25.3% in year ended
2018. The decrease was primarily driven from a decrease in officer salaries of $400,000. The company was also able to maintain
its fixed operating costs from year to year.
Net other income was $1,504,663 in year
ended 2019, compared to net other expense of $33,088 in year ended 2018, representing an increase of $1,537,671. The increase
from 2018 was primarily due to a gain on settlement of $1,520,399 from the Chapter 11 Bankruptcy Case. As a result of settlement
in the bankruptcy case, the Company was able to settle certain liabilities at a significantly reduced amount. The difference between
the carrying amount of the liability and the settled amount was recorded as a gain on settlement as other income.
Income tax expense was $106,801 in
year ended 2019, compared to income tax expense of $- in year ended 2018, representing an increase of $106,801. Prior to the share
exchange in 2019, Munn Works, LLC was taxed as a single member Limited Liability Company for federal and state income tax purposes.
As such, the Company will not pay income taxes for earnings prior to the share exchange, as any income or loss will be included
in the tax returns of the individual member. Accordingly, no provision is made for income taxes in the financial statements prior
to the share exchange.
35
We recorded net income of $2,801,466
in the year ended 2019, compared to net income of $720,243 in the year ended 2018, an increase of net income of $2,081,223 from
the year ended 2018. The increase in net income compared to 2018 was primarily attributable to the increased revenues, gross profit
and gain on settlement from the Chapter 11 Bankruptcy case.
Liquidity and Capital Resources
Three Months Ended March 31, 2020 Compared to the
Three Months Ended March 31, 2019
Net cash provided by
    operating activities
$
813,429
$
423,908
Net cash used in investing activities
(98,244
)
-
Net cash used in provided by financing
    activities
(32,734
)
-
Net increase in cash and cash equivalents
    and restricted cash
682,451
423,908
Cash and cash equivalents at beginning
    of year
1,029,936
793,766
Cash and cash equivalents at end
    of year
1,712,387
1,217,674
In three months ended 2020, cash provided
by operating activities was $813,429, as compared to cash provided in operating activities was $423,908 in three months ended
2019. Our operating cash inflows include cash received primarily from sales of our product. These cash inflows are offset largely
by cash paid primarily to our suppliers for production materials and parts used in our manufacturing process, operation expenses,
and employee compensation. The major operating activities that reduced cash in the three months ended 2020 was a decrease of accounts
payable and accrued expenses of $78,103, increase in vendor deposits of $126,350, and an increase of prepaid expenses of $52,351.
The major operating activity that provided cash for the three months ended March 31, 2020 was from a decrease of accounts receivable
$965,883 and an increase of deferred revenue of $145,240.
In three months ended 2020, net cash
used in investing activities was $98,244, as compared to cash used from investing activities of $0 in three months ended 2019.
The increase in cash used was from purchases of machinery and equipment to improve our domestic facility.
In three months 2020, cash used in
financing activities was $32,734, as compared to cash provided by financing activities of $0 in three months ended 2019. The major
financing activities that used cash in year ended 2020 were loans to our officer.
Working
Capital.
We had a working capital of $600,511 at March 31, 2020, a decrease of $298,070 from a working capital
of $898,581 as of March 31, 2019. The decrease in working capital is attributable from an increase in cash of $494,714 a decrease
of deferred revenue of $1,190,242 offset by a decrease in accounts receivable of $1,377,900, an increase in lease liability-current
of $134,706, a decrease of vendor payments of $230,867, an increase of accounts payable and accrued expenses of $58,797, an increase
of current notes payable of $37,500, and an increase in income tax payable of $106,861.
Year Ended December 31, 2019 Compared to the Year
Ended December 31, 2018
Net cash provided by operating activities
$
770,260
$
528,561
Net cash used in investing activities
(12,999
)
(3,865
)
Net cash (used in) provided by financing activities
(521,091
)
142,797
Net increase in cash and cash equivalents and restricted cash
236,170
667,493
Cash and cash equivalents at beginning of year
793,766
126,273
Cash and cash equivalents at end of year
1,029,936
793,766
In year ended 2019, cash provided by
operating activities was $770,260, as compared to cash provided in operating activities was $528,561 in year ended 2018. Our operating
cash inflows include cash received primarily from sales of our product. These cash inflows are offset largely by cash paid primarily
to our suppliers for production materials and parts used in our manufacturing process, operation expenses, employee compensation,
and interest expenses of our financings. The major operating activities that reduced cash in the year ended 2019 was a decrease
of accounts payable and accrued expenses of $382,343, increase in accounts receivable of $250,459, and an increase prepaid expenses
of $146,676. The major operating activity that provided cash for year ended December 31, 2019 was income from operations of $1,403,604.
In year ended 2019, net cash used in investing
activities was $12,999, as compared to cash used from investing activities of $3,865 in year ended 2018.
In year ended 2019, cash used in financing
activities was $521,091, as compared to cash provided by financing activities of $142,797 in year ended 2018. The major financing
activities that used cash in year ended 2019 were repayments for loans of $83,000 and cash paid to settle liabilities subject
to compromise of $531,511. The major financing activity that provided cash for year ended December 31, 2019 was cash received
from an officer of $99,496.
Working
Capital.
We had a working capital of $728,692 at December 31, 2019, a decrease of $183,700 from a working capital
of $912,392 as of December 31, 2018. The decrease in working capital is attributable from an increase in cash of $236,170, an
increase of accounts receivable of $250,459 offset by a decrease in loan to shareholder of $99,496, an increase in deferred revenue
of $65,141, an increase in income tax payable of $106,861, an increase of accounts payable and accrued expenses of $254,960 and
an increase of lease liability-current of $133,097
Contractual Obligations and Other
Commitments
summarizes the obligations as of March 31,
2020, as derived from the unaudited consolidated financial statements of Applied UV, Inc. as of that date.
Payment
    due by period
Total
2020
2021-2023
2024-2025
Thereafter
Capital lease obligations
    (1)
$
23,329
$
7,280
$
7,280
$
7,280
$
1,489
Operating lease obligations
644,400
160,800
160,800
160,800
162,000
Notes payable
    (2)
157,500
37,500
30,000
30,000
60,000
Total
$
825,229
$
205,580
$
198,080
$
198,080
$
223,489
(1) The Company entered into
                               a lease agreement in Mount Vernon, New York for a term that commenced on April 1, 2019 and expires
                               on the 31st day of March 2024 at a monthly rate of $13,400.
(2) In March 2020, as part of the On-Deck Capital
        settlement, the Company issued a promissory note for the principal amount of $157,500 due within the next 5 years. The
        Company is required to pay $157,500 in five payments in the amount of $30,000 per year, with an additional $7,500 in year
        two.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The following discussion relates to critical
accounting policies for our company. The preparation of financial statements in conformity with GAAP requires our management to
make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures
of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation
of our financial statements. These accounting policies are important for an understanding of our financial condition and results
of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results
of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates
are particularly sensitive because of their significance to financial statements and because of the possibility that future events
affecting the estimate may differ significantly from management's current judgments. We believe the following critical accounting
policies involve the most significant estimates and judgments used in the preparation of our financial statements:
36
Revenue and Cost Recognition.
On
January 1, 2018, the Company adopted accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments
using the modified retrospective method for all customer contracts not yet completed as of the adoption date. The adoption of ASC
606 did not have a significant impact on our Consolidated Financial Statements.
The Company recognizes revenue when the
performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:
1)
Identify
the contract with a customer.
A contract with a customer exists when (i) the Company enters into an enforceable contract with
a customer that defines each party's rights regarding the services to be transferred and identifies the payment terms related to
these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all
consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration.
The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors
including the customer's historical payment experience or, in the case of a new customer, published credit and financial information
pertaining to the customer.
2)
Identify
the performance obligations in the contract.
Performance obligations promised in a contract are identified based on the services
that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service
either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct
in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract.
To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services
are capable of being distinct in the context of the contract. If these criteria are not met the promised services are accounted
for as a combined performance obligation. The Company promises to design, manufacture and sell custom mirrors through contractual
arrangements. It was determined that most services within a contract are substantially the same and have the same pattern of transfer
to the customer over the term of the agreement and are therefore highly interdependent upon each other. As such, the Company determined
that the services within a contract are not separately identifiable in the context of the contract and should therefore be bundled
into a single performance obligation.
3)
Determine
the transaction price.
The transaction price is determined based on the consideration to which the Company will be entitled
in exchange for transferring services to the customer. We evaluate whether a significant financing component exists when we recognize
revenue in advance of customer payments that occur over time. We do not adjust the transaction price for the effects of financing
if, at contract inception, the period between the transfer of control to a customer and final payment is expected to be one year
or less. The Company establishes pricing for contracts with customers based on a fixed price for a fixed fee. Contracts do not
provide for a discount or refund to customers and historically, no discounts or refunds have been given.
4)
Allocate
the transaction price to performance obligations in the contract.
If the contract contains a single performance obligation,
the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that
are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company
must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts
that contain multiple performance obligations require an allocation of the transaction price based on management's judgment. The
identified promises are considered to be bundled in arriving at the overall promise within the contract. This promise therefore
results in one performance obligation, to design, manufacture and sell custom mirrors to our customer, therefore, allocation of
the transaction price is not necessary.
5)
Recognize
revenue when or as the Company satisfies a performance obligation.
Revenue is comprised of projects that are completed within
our own facility or from a third-party vendor (Direct Sales). For projects that are completed within our own facility, the Company
satisfies performance obligations at over time. For projects that are completed from a third-party vendor, the performance obligation
is recognized at a point in time.
For projects that are completed within
our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals through contractual agreements. These
sales require us to deliver our products within three to six months from commencement of order acceptance. We recognize revenue
over time by using the input method based on costs incurred as it depicts our progress toward satisfaction of the performance
obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio
of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs include all
direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools,
repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased
or moved to work in process as required by the project's engineering design. Cost based input methods of revenue recognition
require us to make estimates of costs to complete the projects. In making such estimates, significant judgment is required to
evaluate assumptions related to the costs to complete the projects, including materials, labor and other system costs. If the
estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated loss in the
period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts billed in excess of revenues
and profits recognized. Revenues and profits recognized in excess of amounts billed typically does not occur as we will not perform
any work in excess of the amount we bill to our customers.
37
Each product or service delivered to
a third-party customer that is manufactured by a third-party vendor is considered to satisfy a performance obligation. Performance
obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. These sales
are shipped from the manufacturer to the customer without our taking physical inventory possession. We report direct sales on
a gross basis, that is, the amounts billed to our customers are recorded as "Sales," and inventory purchased from manufacturers
are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory before it is transferred
to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise to our customers, taking
on inventory risk of returned product, and having discretion in establishing pricing. We typically pay our vendors a portion of
the total cost up front and the remaining balance is accrued for and paid within 30-90 days of when the products are shipped from
the third-party warehouse. Vendor payments are capitalized until completion of the project and are recorded as vendor deposits.
Accounts Receivable.
Accounts
receivables are non-collateralized customer obligations due under normal trade terms generally requiring payment within 30-90
days from the invoice date. The carrying amounts of accounts receivable is reduced by an allowance for doubtful accounts that
reflects management's best estimate of the amounts that will not be collected. The Company includes any accounts receivable
balances that are determined to be uncollectible, along with a general reserve, in its overall allowance for doubtful accounts.
Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical
bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. After all attempts to collect
a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company
believes an allowance for doubtful accounts of $50,000 as of March 31, 2020 and December 31, 2019 is adequate.
Inventory.
Inventories are valued at the lower
of cost or net realizable value using the first-in, first-out method. Inventory is comprised of raw materials that are purchased
on the initial start date of a specific project and are capitalized using the percentage of completion method of accounting. We
amortize these costs to the associated contract proportion with our percentage of completion on the contract, calculated using
a cost-based input method. Capitalized costs are considered impaired when the net contract cost asset plus future costs to complete
the contract are less than the remaining revenue to be recognized under the contract. When capitalized costs are impaired, we
record a charge to the impairment, impairment charges cannot be reversed. As of March 31, 2020 and December 31, 2019 no impairment
charges were recorded and management has determined that an excess and obsolete reserve is not required.
Property and Equipment.
Property
and equipment are recorded at cost. Depreciation of furniture and fixtures is provided using the straight-line method, generally
over the terms of the lease. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets,
are expensed as incurred. Depreciation of machinery and equipment is based on the estimated useful lives of the assets. Machinery
and equipment have an estimated useful life of the lesser of term of lease or useful life. Furnitures and fixtures are based the
estimated useful life of 7 years.
An asset is disposed of or retired when
no future economic benefits are expected to arise from continued use of the asset. The gain or loss arising on the disposal or
retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset.
Fair Value of Financial Instruments.
The Company records the fair value of assets and liabilities in accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 820,
Fair Value Measurement
. FASB ASC 820 establishes a framework for
measuring fair value under accounting principles generally accepted in the United States. That framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. the three levels of the fair value hierarchy
under FASB ASC 820 are as follows:
38
-	Level 1 - Valuations based on unadjusted
quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
-	Level 2 - Valuations based generally
on observable inputs for similar assets and liabilities, or identical or similar assets and liabilities in inactive markets.
-	Level 3 - Valuations based on inputs
that are unobservable and significant to the overall fair value measurement. Valuation techniques could include the use of discounted
cash flow models and other similar techniques
The carrying amounts reported in the consolidated
balance sheets as of December 31, 2019 and 2018 for cash and cash equivalents, accounts receivable, prepaid expenses and other
current assets, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these
financial instruments. The fair value of capital lease obligations approximates their carrying value because these financial instruments
bear interest at rates that approximate current market rates for loans with similar maturities and credit quality.
Recent Accounting Pronouncements
Recently Adopted.
In
February 2016, FASB, issued in Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), which requires
lessees to recognize right-of-use, or ROU, assets and related lease liabilities on the balance sheet for all leases greater than
one year in duration. We adopted ASC 842 on January 1, 2019 using a modified retrospective transition approach for leases existing
at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified
retrospective approach did not require any transition accounting for leases that expired before the earliest comparative period
presented. The adoption of this standard resulted in the recording of ROU assets and lease liabilities for all our lease agreements
with original terms of greater than one year. The adoption of ASC 842 did not have a significant impact on our statements of income
or cash flows.
In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting
for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation — Stock Compensation,
to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of
the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted
to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not have a material
impact on our financial statements.
In August 2018, the FASB issued ASU
2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value
Measurement, which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related
to transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses
for the period and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes.
ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted.
The adoption of this standard did not have a material impact on our financial statements.
In June 2016, the FASB issued ASU 2016-13,
Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces
the current incurred loss impairment methodology for financial assets with a methodology that reflects expected credit losses.
The new credit losses model must be applied to loans, accounts receivable, and other financial assets. ASU 2016-13 is effective
for annual periods beginning after December 15, 2019, including interim periods within those annual periods. The adoption of this
standard did not have a material impact on our financial statements.
We currently believe that all other issued
and not yet effective accounting standards are not relevant to our financial statements.
Recent Developments
Acquisition of SteriLumen and
Munn Works.
The Company acquired all of the issued and outstanding common shares of SteriLumen pursuant to an Exchange
Agreement dated March 26, 2019 among the Company, SteriLumen and the shareholders of SteriLumen in which the SteriLumen shareholders
exchanged their SteriLumen common shares for 201,250 shares of Company common stock, of which Laurie Munn, the spouse of our President
and a director of the Company received 200,000 shares. The Company acquired all of the issued and outstanding preferred shares
of SteriLumen pursuant to an Exchange Agreement dated March 27, 2019 among the Company, SteriLumen and Laurie Munn in which Ms.
Munn exchanged all of her SteriLumen Series A preferred shares for 1,800,000 shares of Company common stock and 2,000 shares of
Company Series A preferred stock. Upon consummation of this exchange the Company owned 100% of the capital shares of SteriLumen.
The Company acquired all of the membership interests in Munn Works pursuant to an Exchange Agreement dated July 1, 2019 among
the Company, Munn Works and Laurie Munn in which Laurie Munn exchange her membership interests in Munn Works for 600,000 shares
of Company common stock. All of the equity in the Company owned by Laurie Munn has been transferred to The Munn Family 2020 Irrevocable
Trust, of which Laurie Munn is the trustee.
39
Effects of Coronavirus Outbreak.
In December 2019, a novel strain of Coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread
to over 150 countries and every state in the United States. On January 30, 2020, the World Health Organization declared the outbreak
of COVID-19 a "Public Health Emergency of International Concern." On March 11, 2020, the World Health Organization
declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency.
Most states and cities have reacted
by instituting quarantines, restrictions on travel, "stay at home" and "social distancing" rules and restrictions
on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain
it. On March 20, 2020, the Governor of New York announced a stay at home order to go into effect on March 22, 2020 that has been
extended to at least June 6, 2020, unless regions in the state can meet certain criteria related to the Coronavirus. Pursuant
to this order, non-essential businesses were forced to close. However, as of the date of this prospectus, our Mount Vernon office
is open with the majority of our employees working from home.
We have taken steps to take care of our
employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate social
distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard to employee,
facility and office hygiene as well as implementing significant travel restrictions. We are also assessing our business continuity
plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue to monitor
and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent we are able
to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly.
We are dependent upon suppliers to provide
us with all of the raw materials for products that we manufacture and sell and we are currently dependent on out-sourced manufactures
in China to manufacture the SteriLumen Disinfecting System. The pandemic has impacted and may continue to impact suppliers of materials
for and manufacturers of certain of our products. As a result, we have faced and may continue to face delays or difficulty manufacturing
certain products, which could negatively affect our business and financial results. Even if we are able to find alternate sources
for materials and manufacturing, they may cost more, which could adversely impact our profitability and financial condition.
If the current pace of the pandemic cannot
be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect
that government and health authorities may announce new or extend existing restrictions, which could require us to make further
adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources.
In addition, our operations could be disrupted if any of our employees were suspected of having the virus, which could require
quarantine of some or all such employees or closure of our facilities for disinfection. The duration of any business disruption
cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional
costs.
Although it is difficult to predict
the effect and ultimate impact of the Coronavirus outbreak on our business, it is likely that the impact of Coronavirus will adversely
affect our results of operations, financial condition and cash flows in fiscal year 2020. See "Risk Factors—Our Business
and Operations—Effect of the Coronavirus pandemic."
Applied UV, Inc. 2020 Omnibus
Incentive Plan.
On May 4, 2020, we adopted the Plan. Under the Plan, the Company may grant nonqualified stock options,
incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance
units, and other awards. Awards of up to 600,000 shares of common stock to Company employees, officers, directors, consultants
and advisors are available under the Plan. The type of grant, vesting provisions, exercise price and expiration dates are to be
established by the Board at the date of grant.
40
Options.
On February
18, 2020 the Board approved the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of
the Company's common stock at an exercise price equal to the greater of $2.50 and the market value per share of the Company's
common stock on the date of the grant. Market value will be determined by an independent valuation company engaged by the Company;
provided, however if on the date of grant the Company common stock is listed on a national exchange or quoted on an established
quotation system, then market value shall equal the closing price of the Company common stock listed on such exchange or quoted
on such quotation system on the trading day immediately prior to the date of the grant. On April 1, 2020, we issued options to
purchase 2,000 shares of Company common stock to the Board, of which 1,250 have been cancelled. The options are subject to equal
quarterly vesting over a one-year period. On July 1, 2020 we issued an additional 1,000 options to certain Board members. To date
375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of these quarterly options..
Mount Sinai Agreement
. On
April 20, 2020, SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke's Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai's research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60-day exclusive option to negotiate a license for Mount Sinai's
resulting patent rights if such patent was obtained at SteriLumen's request and SteriLumen has paid for all the costs in
obtaining the patent. If the results of the study contained in Mount Sinai's final report are used by SteriLumen in a successful
regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.
Second ResInnova Report
.
In April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found the SteriLumen mirror and drain to be greater than 97% and 99.99%, respectively, effective in killing
the OC43 human coronavirus in the bathroom sink area. According to ResInnova, it is expected that the Coronavirus will be killed
in a similar manner to OC43 since they both are in the Beta genre of coronaviruses. See "Business—Second ResInnova
Report" and "Risk Factors—Certain ResInnova Testing Limitations."
Paycheck Protection Program Loan.
On May 4, 2020, Munn Works received $296,287 in net proceeds from a PPP Loan from JP Morgan Chase Bank under the PPP, which
was established under the CARES Act and administered by the U.S. Small Business Administration. The proceeds from the PPP Loan
will be used in accordance with the terms of the CARES Act program, as described further below.
The term of the PPP Loan is two years with
an interest rate of 1.00% per annum, which shall be deferred for the first six months of the term of the loan. Pursuant to the
terms of the CARES Act, the proceeds of the PPP Loan may be used for payroll costs, mortgage interest, rent or utility costs for
up to an 8-week period after loan origination. Under the terms of the CARES Act, Munn Works can apply for and be granted forgiveness
for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds
in accordance with the terms of the CARES Act, as described above, during the 8-week period after loan origination and the maintenance
or achievement of certain employee levels. No assurance is provided that Munn Works will obtain forgiveness under the PPP Loan
in whole or in part.
Reverse Stock Splits.
On June
17, 2020 and June 23, 2020, the Company effected a 1 for 5 reverse stock split of its issued and outstanding Common Stock and
effected a 1 for 5 reverse stock split of its issued and outstanding preferred stock, respectively (each a "Reverse Stock Split")
by filing on each date an amendment of the Company's Amended and Restated Certificate of Incorporation with the Secretary
of State of the State of Delaware. No fractional shares were issued as a result of a Reverse Stock Split. Any fractional shares
that would have resulted from a Reverse Stock Split were rounded up to the nearest whole share. The authorized common stock and
preferred stock of the Company was not impacted by the Reverse Stock Splits. Immediately following the Reverse Stock Splits, the
Company had outstanding 5,103,316 shares of Common Stock and 2,000 shares of preferred stock. The Company has retrospectively
adjusted the 2018, 2019 and March 31, 2020 financial statements for profit per share and share amounts as a result of the reverse
stock splits.
Appointment of Executive Officers
.
On June 30, 2020 the Company entered into employment agreements and appointed the Company's Chief Executive Officer
and Chief Operations Officer.
Non-Employee Director Compensation
.
On July 9, 2020 the Board approved a compensation package for non-employee directors of the Board. The compensation for non-employee
directors include; (i) upon of each such director, such director shall be issued 10,000 shares of restricted common stock which
vests evenly on an annual basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares
of restricted common stock to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly
cash payments of $6,250 to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman
of the Board which vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of
restricted common stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate
Governance and Nominating Committees have not yet been established).
BUSINESS
Corporate History
The Company was incorporated in Delaware
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 stockholders 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
in Munn Works in July of 2019 pursuant to an exchange agreement in exchange for shares of common stock of the Company. The Company
conducts all of its operations through SteriLumen and Munn Works.
Our principal executive offices are
located at 150 N. Macquesten Parkway, Mount Vernon, NY 10550 and our telephone number is (914) 665-6100. The Company currently
has 26 employees, including executive officers, all of which are fulltime. Our website address is www.applieduvinc.com. The information
contained therein or accessible thereby shall not be deemed to be incorporated into this Prospectus.
41
SteriLumen
Business Overview
. SteriLumen
was incorporated on December 8, 2016 in New York. SteriLumen develops and may acquire medical devices that eliminate pathogens
that may cause HAIs for distribution primarily to facilities that have high customer turnover such as hospitals, assisted living
facilities, doctors' offices and walk-in clinics as well as hotels, cruise lines, schools, airplanes and other public spaces.
SteriLumen has developed and designed a unique, patented and automated disinfecting system that relies on UVC LED 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 a virus, bacteria, fungus and other pathogens, including, Coronavirus and human coronaviruses
in general in the bathroom sink area. The SteriLumen Disinfecting System was initially developed by Max Munn while working with
NBBJ
5
, a global architectural firm whose clients include Cambridge University, Cleveland Clinic, Massachusetts General
Hospital and Stanford University, and Healthcare Surface Consultants ("HSC")
6
. However, SteriLumen owns
all of the patents and other intellectual property with respect to the SteriLumen Disinfecting System and NBBJ and HSC have waived
any claims they may have to any interest in the SteriLumen Disinfecting System. 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) 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 FDA Act and therefore the Company
is not required to comply with the requirements of the FDA Act.
During the last three years SteriLumen
has focused on research and development, manufacturing and design and marketing and sales of the SteriLumen Disinfecting System.
The SteriLumen Disinfecting System was initially submitted to ResInnova for an analysis of its effectiveness in killing certain
pathogens such as C diff, MRSA and E coli. ResInnova provided SteriLumen with their findings in the Initial ResInnova Report which
found the SteriLumen Disinfecting System to be effective in dramatically reducing pathogens in the bathroom vanity/sink area as
described in greater detail below under "—Initial ResInnova Report." SteriLumen also submitted the SteriLumen
Disinfecting System to ResInnova for testing its effectiveness in killing the Coronavirus. On June 30 ResInovva issued a report
on the effectiveness of the SteriLumen mirror and SteriLumen drain against OC43 human coronavirus as further described under "—Second
ResInnova Report." Furthermore, pursuant to the Mount Sinai Agreement SteriLumen will sponsor a study by Mount Sinai on
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 study in a report to be issued in the second quarter
of 2021 as well as publishing their results in an academic, peer reviewed, journal. The study performed under the Mount Sinai
Agreement will be the first test of the SteriLumen Disinfecting System in an actual healthcare facility setting.
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 potential suppliers and creating its own network of professional consultants. SteriLumen
has manufacturing and assembly suppliers in 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 units 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 and a cruise line that may
have an interest in reducing its pathogen levels in its cruise ships. We intend to target international markets in Gulf Cooperation
Council countries, China and Japan.
The Initial ResInnova Report
.
In 2017 SteriLumen submitted two wall mounted mirror prototypes of the SteriLumen Disinfecting System to ResInnova for testing
of their effectiveness to kill three healthcare-relevant bacteria: C diff, E coli and MRSA. The production version of the SteriLumen
Disinfecting System was submitted to ResInnova in 2020 for testing of its effectiveness to kill MRSA.
_____________________________
5
NBBJ was founded in 1943 and is highly regarded as an international leader in architecture for healthcare facilities.
NBBJ have over 50 hospitals as clients. A few of their domestic healthcare clients are NYU Langone Health, Cleveland Clinic, Stanford
University and Massachusetts General Hospital.
6
HSC was founded in 2012 with a mission to mitigate the spread of infection within the healthcare environment by addressing
the critical issue of surfaces. HSC focuses on the science of surfaces and how they contribute to the spread of infection. HSC
works with healthcare facilities and manufacturers to develop effective infection remediation procedures.
42
The Initial ResInnova Report concluded
that a prototype of the SteriLumen Disinfecting System caused the following reductions in pathogens in the following sink areas:
Faucet Handles
·
C diff
spores: greater than 4 logs (99.99%) reduction after
one hour exposure;
·
E coli
: greater than 4 logs (99.99%) reduction after 30 minute
exposure;
·
MRSA: greater than 4 logs (99.99%) reduction after 30 minute exposure.
Drain
·
C diff
spores: greater than 3 logs (99.9%) reduction after
two hour exposure;
·
E coli
: greater than 4 logs (99.99%) reduction after 30 minute
exposure;
·
MRSA: greater than 4 logs (99.99%) reduction after 30 minute exposure.
Side Edges
·
C diff
spores: almost 3 logs (99.9%) reduction after two hour
exposure;
·
E coli
: almost 2 logs (99%) reduction after 1 hour exposure;
·
MRSA: almost 2 logs (99%) reduction after 1 hour
exposure.
The Initial Report concluded that the production version caused
the following reductions in MRSA:
Faucet Handles
·
greater than 6 logs (99.9999%) reduction after two hour exposure.
Drain
·
greater than 4 logs (99.99%) reduction after two hour exposure.
Side Edges
·
Greater than 6 logs (99.9999%) reduction after two hour exposure.
Backsplash
·
Greater than 6 logs (99.9999%) reduction after two
hour exposure.
The Initial ResInnova Report also concluded
that "a 2 hour non-stop operation of the UV-emitting mirror should have a dramatic antimicrobial effect on the bathroom vanity/sink
area."
The Second ResInnova Report
.
In April 2020, the Company submitted the SteriLumen Disinfecting System to ResInnova for testing on its effectiveness in killing
the Coronavirus. ResInnova tested the SteriLumen mirror and drain product lines against OC43 human coronavirus. In a Report dated
June 30, 2020, ResInnova found that the SteriLumen drain demonstrated a greater than 97% kill after 15 minutes of exposure and
the SteriLumen Mirror demonstarated a greater than 99.99% kill after a 2-hour exposure. According to ResInnova, it is expected
that SAR-CoV-2, the virus that causes COVID19, will be killed in a similar manner to OC43 since they are both in the Beta genre
of coronaviruses.
43
SteriLumen Disinfection System.
The
SteriLumen Disinfecting System consists of four product lines: (i) the SteriLumen Disinfecting Mirror; the SteriLumen Disinfecting
Drain; the SteriLumen Disinfecting Shelf; and the SteriLumen Disinfecting Medicine Cabinet. Each product in the SteriLumen Disinfection
System product line has the following attributes:
Focus on the sink area and drain.
Focuses on pathogens that accumulate on the sink area, including handles, faucets and backsplash and in the drain.
UVC LED infection destruction
.
Destroys 4 logs (99.99%) of common pathogens, including, we believe, the Coronavirus in the bathroom vanity/sink area with
at least two hours of continuous use.
Automatic operation
.
Has
a built-in programmable controller that ensures operation for the full required daily and is not dependent on manual operation.
Its functionality is expandable and may become a source for recurring income through additional data reporting, leasing and maintenance
of add-on elements.
Continuous operation
.
Works
in cycles of two hour on and four hours off, except for the disinfecting drain which is on 15 minutes every hour. The timing protocol
is managed by a programmable controller and a motion detector enclosed within each device and works while the patient room is
still occupied and while the bathroom is not in use, therefore, continuously disinfecting an area of ongoing high contamination.
Research has shown that microbes can rebound to pre-disinfection levels within two hours following manual terminal cleaning and
disinfection. UVC products generally used for terminal cleaning in patient rooms have helped to reduce infections. Unfortunately,
these can only be used after a patient is transferred/discharged and the patient room is vacant.
Safety
.
Built-in motion detector
and sensor automatically shuts off the UVC light when anyone enters the room eliminating any concern over UV safety. Once there
is no movement in the room for 10 minutes the UVC light comes back on to restart and continue its cycle.
Removable UVC LED panel
.
The
UVC LEDs are installed via a removable panel, leading to ease of replacement or upgrade. The UVC LEDs are expected to become more
powerful over time and users may want to replace the earlier generation UVC LEDs (at an interval and cost not yet determined) with
more powerful models as the microbial world continues to change.
Ease of Installation
. The
unit is easy to install and uses standard electrical wiring.
IOT connectivity
.
IOT connectivity
uses Wi-Fi and RF technology that will enable continuous transmission of use and functionality data over the internet for collection
and analysis. This could include data on the length of time the UVC light was on as well as the length of time, frequency and interval
length concerning the bathroom use and its cleaning by the hospital staff. A companion software platform enables the administrator
to view and analyze the use and functionality data.
44
SteriLumen Disinfecting Mirror.
SteriLumen
has embedded its disinfection system into a mirror with electrified built-in "white day-light" LED lighting (typically
found in better hotel bathrooms) that replaces the typical mirror (and also replaces the wall lighting) found above the sink in
a hospital bathroom. As a mirror, the SteriLumen Disinfecting System meets all design and lighting requirements for healthcare
facilities and provides disinfection for the backsplash, sink, drain and surrounding countertops. Underneath the mirror are eight
UVC LEDs focused on high-risk bathroom sink surfaces, faucets and drains. This effectively reduces the bioburden of dangerous pathogens
that are easily acquired and transmitted throughout the healthcare setting. It is safe, effective, patented and unique in the market.
This mirror type without any disinfecting function is common in the hospitality industry which has an annual market size in excess
of $100 million.
SteriLumen Disinfecting Drain.
Consists
of a stainless-steel pipe that is easily substituted for the ordinary pipe that fits between the bathroom sink drain cover and
the C-trap. A UVC LED sits in a one-half inch perforation in the pipe and is covered with a waterproof sapphire lens which is
in the plane of the interior of the pipe in order not to disrupt water flow. The UVC light destroys 6 logs (99.9999%) of the most
common pathogens, thereby disinfecting the aerosol plume that rises out of the drain when the faucet is turned on.
SteriLumen Disinfecting Shelf
.
To be installed over the hospital sinks that do not have or require a mirror above them and incorporating the attributes of the
SteriLumen Disinfecting Mirror,
i.e.
, back-lit side lighting and UVC LEDs to disinfect the countertop and sink area. Additionally,
the shelf could be installed under a simple ordinary mirror.
45
SteriLumen Disinfecting Medicine Cabinet.
A traditional medicine cabinet incorporating the attributes of the SteriLumen Disinfecting Mirror, i.e., back-lit side lighting
and UVC LEDs to disinfect the countertop or sink in a residential bathroom.
HAIs
. The Center for
Disease Control 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%
7
. 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
8
. Research shows that the most common germs causing HAIs are C. difficile (12%), Staphylococcus
aureus (MRSA, 11%), E. coli (9%) and Candida auris (7%)
9
. 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.
10
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.
_____________________________
7
AJIC
8
AJIC
9
AJIC
10
AJIC
46
Many healthcare facilities have seen success
with temporarily reducing their HAI rates, but may not have been able to sustain these reductions. A big part of the challenge
is controlling the presence of infectious agents in the patient room.
Complications with disinfection
.
There are many issues that complicate effective disinfection including:
Current Hospital Designs
:
The
bathroom is an area of high contamination. Toilets are located close to the sink and countertops. When flushed, they release a
plume of microbial contamination into the air, ultimately landing on surfaces. Healthcare workers, the patient and visitors frequently
use this room with many opportunities for acquisition and transmission of microbes throughout the patient care environment. Despite
this, during a patient's stay this room is typically cleaned only once a day.
Materials
:
Multiple surface
materials and textiles cannot all be cleaned and disinfected effectively the same way. Surfaces that are not smooth can leave protective
reservoirs for microbes to proliferate in and not be reached by the biocides used to destroy them.
Lack of Time
:
The average
daily patient room disinfection time is 10 minutes (approximately 7 minutes for the main room and 3 minutes for the bathroom).
Standard Cleaning and Disinfection Protocol.
Current infection control protocol focuses on manual cleaning,
i.e.
wiping hospital room and bathroom surfaces with
a disinfecting system. The standard cleaning and disinfecting protocol address three types of cleaning and disinfection:
Daily
: 10 minutes per room of manual
wipe down using disinfecting fluids may not allow enough time to effectively disinfect areas of high contamination.
Outbreak
: requiring different cleaning
products and processes based on the type of microbe and where the outbreak is. Often disinfectant products require a 10-minute
dwell time which is rarely followed. Pathogens are left on surfaces to proliferate and rebound to pre-disinfection levels.
Terminal
: This is done following
patient discharge. Typically, a process that takes 45 minutes to 1 ½ hours. First, a deep manual cleaning performed by
the environmental services staff possibly followed by "no touch" disinfection technology. No touch disinfection includes
UV disinfection robots or hydrogen peroxide mist or vapor machine. In either case, the rooms cannot be occupied.
All three processes require manual
cleaning/disinfection and proper use of disinfectant products. Effective human behavior determines the success or failure of each
process. Despite best cleaning/disinfecting efforts, microbes can continue to thrive on surfaces for days, weeks, and even months.
Facilities understand the limitations
of their current approach and are increasingly open to bundled or system-based solutions utilizing a variety of products and processes
including "no touch" technology. No-touch systems are gaining acceptance by providing additional disinfection to the
standard and required manual disinfection protocol described above. Many of these have been successful in addressing areas that
may not have been disinfected effectively before. Examples of no-touch products include: (a) Hydrogen peroxide vapor or mist to
get disinfectant into areas not always reached in the regular wipe-down, and (b) robotic systems that shine UVC light to kill
bacteria. Each of these systems has significant limitations:
Room occupation
:
Both systems
require that the room be unoccupied. As a result, they can only be used for "terminal" disinfection following patient
discharge.
Line of sight
:
UVC systems
require "line-of-sight" to the affected areas. Microbes on surfaces outside the line of sight of the light source
are not affected. When used in a patient bathroom, for example, UVC robots cannot reach areas such as the inside of the sink bowl,
drain, and areas behind the faucet.
The SteriLumen Disinfecting System can
operate while the patient room occupied and does not need human intervention.
Effective disinfection in a healthcare
facility requires attention to detail. In a hospital bathroom, bacteria thrive in sink drains, splashing out when the faucet is
turned on, contaminating the bowl, countertop, faucets, and backsplash. In 2011-2012 the Clinical Center of the National Institutes
of Health faced an infection outbreak that originated from a sink drain, resulting in the deaths of 11 patients.
47
UV Science
Ultraviolet light.
Ultraviolet ("UV") light
is one form of electromagnetic energy produced primarily by the sun, although it can also come from made-made sources such as
tanning beds and welding torches. As shown above, UV light is a designated band of light (or electromagnetic energy) with wavelength
from 100 to 400 nanometers (nm), which is shorter than visible light but longer than x-rays. UV light has enough energy to break
chemical bonds. Due to their higher energies, UV photons can cause
ionization
, a process in which electrons break away
from atoms. The resulting vacancy affects the chemical properties of the atoms and causes them to form or break chemical bonds
that they otherwise would not. This can be useful for chemical processing, or it can be damaging to materials and living tissues.
This damage can be beneficial, for instance, in disinfecting surfaces, but it can also be harmful, particularly to skin and eyes.
UV is generally divided into three sub-bands: UVA, UVB, and UVC. Of the three, UVC has the shortest wavelength, the highest energy,
and is most easily absorbed by most organic material.
UVC Disinfection.
Using UV light
to disinfect is a fast, effective, and safe technique that utilizes UVC. When exposed to UVC light, microorganisms such as bacteria,
viruses, fungi, cysts, and mold are affected in a way such that they can no longer multiply, rendering them harmless. UV disinfection
can be used on surfaces, in air, and in water. Disinfection performance is a function of the UVC dose applied to the microorganism.
While all micro-organisms respond to UVC light in different ways, if given the appropriate dose, which is the product of UVC power
multiplied by time, 99.99% of micro-organisms can be killed. Microorganisms such as bacteria, viruses, fungi, cysts, and mold
are simple life forms that reproduce by subdivision, budding, or by producing spores. Reproduction of these organisms is vital
to their life cycle: loss of their ability to grow and multiply is classified as cellular death, and renders them harmless and
no longer pathogenic. When exposing microorganisms to UVC light, the energy generated from UVC light is absorbed into the microbes'
cellular RNA and DNA, damaging nucleic acids and preventing microorganisms from infecting and reproducing. The absorption of UVC
energy forms new bonds between nucleotides, creating double bonds or "dimers." Demineralization of molecules, particularly
thymine, is the most common type of damage done to microorganisms by UVC. Formation of thymine dimers in the DNA of bacteria,
fungi and viruses prevents replication and the ability to infect. Because UVC disinfection does not rely on chemicals or filtration
materials, it can be used effectively and safely in many applications including in drinking water, in air.
LEDs
. The traditional approach to
generating UV light for disinfection applications has been the mercury discharge lamp, which is a fluorescent bulb without the
phosphor coating. Mercury lamps come in two main types: a low-pressure lamp that produces a single wavelength at 254nm; and a medium
pressure lamp that emits a multiple wavelength output. Unlike traditional mercury lamps, whose output wavelength is fixed, UV LEDs
can be manufactured to operate at the optimum wavelength for the application. UV LEDs also switch on and off instantly and can
actually be pulsed without any detriment to lifetime, making them more user-friendly and safer for the operator. Miniature, robust,
and operating with a low electrical power, UV LEDs can be manufactured with a highly stable output, operating at the optimum wavelength
for the application, making them ideal for compact and portable systems. The design rules for UV LEDs open new opportunities of
what can be disinfected as, unlike the long tube shape of mercury lamps, LEDs can be mounted in flat panels; on flexible circuit
boards; on the outside of cylinders and elsewhere.
48
Intellectual Property
Developing and maintaining a strong
intellectual property position is an important element of our business. We maintain the intellectual property through a combination
of patent protection, trademarks, and trade secrets. We have sought, and will continue to seek, patent protection for our technology,
for improvements to our technology, as well as for any of our other technologies where we believe such protection will be advantageous.
As of July [*], 2020, SteriLumen owned
five issued patents and two pending patent applications in the United States; owned one issued patent in the European Union and
has 6 pending patent applications, which are in China, the Gulf Cooperation Council (GCC), Hong Kong, Japan, South Korea, and
Taiwan.  The U.S. patent numbers are 9,724,442, 10,039,853, 10,307,504, 10,456,496 and 10,463,759 issued on August 8, 2017,
August 7, 2018 and June 4, 2019, October 29, 2019 and November 5, 2019, respectively.  Two of the three pending U.S. patent
applications have been allowed and these will be issued in due course. The issued patents and pending patent applications cover
various aspects of the SteriLumen Disinfecting System including, the disinfection system; disinfection system embedded into a
fixture generally, and a vanity mirror specifically, and the mechanical components of any such mirror, including hinge mount and
programmable controller for regulating UV light.
On December 3, 2019, SteriLumen received
a trademark registration of its trademark or brand name "SteriLumen."
SteriLumen will be protecting and enforcing
its issued patents, trade secrets, know-how, copyrights, and trademarks, as well as continuing to pursue technological innovation
and licensing opportunities, and developing and maintaining its competitive position in the vanity mirror and disinfecting product
markets for hospitality, hospital and healthcare facilities. Our success depends in part on SteriLumen obtaining and enforcing
patent protection for its products and processes, preserving and maintaining trade secrets, issued patents, copyrights and trademarks,
and operating with state of the art technologies while respecting the proprietary rights of third parties, and acquiring licenses
for technology or products as may be beneficial to the company.
Our Strategy for SteriLumen
We believe that SteriLumen has developed
a safe, effective, unique and patented disinfecting system that may significantly reduce the number of pathogens found in healthcare
facilities. Our goal is to build a successful disinfecting system development and design company that contributes to a national
decreased rate of HAIs through the commercialization of innovative, efficacious and cost-effective disinfection system products
that address compelling market opportunities in the infection prevention industry. We will seek to achieve this goal by having
SteriLumen actively involved in the following activities:
Focus on healthcare facilities
:
(i) Target infection prevention professionals' at large hospitals and healthcare networks; (ii) Identify and target healthcare
networks that have been fined for high infection rates; and (iii) Leverage key teaching hospitals to facilitate both scientific
evidence as well as return on investment components.
Educate and work with healthcare
professionals
:
Educate and work with healthcare professionals to address the gaps they face in existing disinfection processes
and provide additional systems that can be used in conjunction with required disinfection protocol.
Leverage two routes to
market
:
(i) Architects and contractors specializing in healthcare construction
11
;
and (ii) Direct sales to healthcare facilities and contracted facility management companies.
Continue scientific validation
:
through lab testing and in situation research then publishing in peer review journals case studies and supporting data.
Establish a validation
study
:
Establish a validation/marketing study to demonstrate the effectiveness of the SteriLumen Disinfecting System, which
we have commissioned pursuant to the Mount Sinai Agreement.
Leverage an outsourced
supply chain
:
Leverage an outsourced supply chain for production and warehousing.
______________________
11
Architects are usually involved in major renovations and construction projects that are large. They specify products
such as bathroom fixtures including the mirror. Healthcare-oriented architects such as NBBJ are also often seeking systems to
support infection control. These firms serve as primary business development targets.
49
The supply chain and production strategy
are illustrated below:
Hotels and Other Relevant Non-Healthcare Facilities
Beyond healthcare facilities, we focus
our marketing efforts in the following additional market segments:
Hotels
.
Hotels, including
those attached to hospitals or primarily serving patients traveling for medical care; hotels catering to an elderly clientele;
and hotels wishing to make disinfection, safety, cleanliness,
etc
. part of their branded experience could all be potential
targets in the future.
Airplane
and Cruise Line Bathrooms
.
Because of the close quarters inside most airplane cabins, pathogens can easily
be spread among passengers, especially on long flights where airplane bathrooms have more use and may not be cleaned before flight's
end. The SteriLumen Disinfecting could provide an important means for disinfecting airplane bathrooms and decrease the spread
of germs in the airplane cabin.
Schools
.
Schools and
education authorities pay very close attention to disinfection to prevent the spread of influenza as well as other contagious threats.
The CDC maintains guidelines for disinfection of schools and many other organizations also advise schools on proper disinfection
protocol. SteriLumen's disinfection systems could find a receptive audience among school facilities managers looking for
new solutions to this issue.
Restaurants
.
Given
the need to prevent foodborne illness, restaurants are constantly urging staff to wash their hands and are required by public health
authorities to keep their premises as clean and germ-free as possible. SteriLumen could become part of upscale restaurants'
strategy to demonstrate dedication and commitment to customers and health department to reduce the spread of infections within
their establishment.
Homes
.
The general
consumer market could become important, especially for patients receiving care at home, people with compromised immune systems
or in homes with young children or elderly residents that are looking to reduce the chances of catching an infectious disease.
SteriLumen has designed (and has a patent pending) a disinfecting medicine cabinet, in addition to its standard SteriLumen Disinfecting
System, as a potential entry into this market.
Competition
Given the uniqueness of the SteriLumen
Disinfecting System, we are not aware of any direct competition, including other manufacturers of mirrors and surface disinfection
systems.
Competitive mirrors
.
Hospitals
have been frequent buyers of mirrors not only in-patient bathrooms, but also other areas, none of which currently have disinfection
capabilities. The same architects that specify other kinds of mirrors will specify the SteriLumen Disinfecting System. We believe
that other mirror manufacturers will not be the most significant competition for SteriLumen, as most decision makers will view
SteriLumen's products as disinfection systems and overlook the current cost of buying a plain mirror, which in a hospital
bathroom are priced in the $100-$300 range. For backlit (electrified) mirrors the range is wider, from $300-$700. Backlit mirrors
are often sold to enhance design and create a healing environment. They are not common in hospitals, although that is rapidly changing.
We anticipate that the unit price of the SteriLumen Disinfecting System will be more than these backlit mirrors, but initially
less than $1,000. Because of this price differential, the SteriLumen Disinfecting System will be positioned in the market as an
essential disinfecting tool, but as a mirror with supplemental lighting that also provides disinfection.
50
Disinfecting Systems.
While
we are not aware of any disinfecting systems that are directly comparable to the SteriLumen Disinfecting System, no-touch disinfecting
systems and Systems
No-touch Systems
. No-touch systems
have increased in popularity in recent years as complimentary and add on systems for addressing infection prevention issues following
required cleaning and disinfection protocols. These have proven to be effective with a few major drawbacks. They are used only
following patient transfer or discharge and cannot be used while the patient room is occupied. Due to the high cost for no touch
systems, healthcare facilities generally choose one of several no-touch options, either UVC robots or peroxide vapor. An additional
issue exists based on the available time for terminal disinfection if patients are waiting for a room or if staff is simply too
busy to move this technology into the room and turn it on and off. Depending on the technology, the disinfecting system may need
to be moved into the bathroom (additional cycle time) due to the constraints of the technology.
This system requires approximately
2 hours' time. The applicable room is completely closed and sealed off. All vents are sealed, doors with the equipment inside
to be run. Following the running of the machine, there is a specified time for the air to clear before anyone can go back into
the room and remove all of the seals put in place. There is concern about potential residual effects and potential patient safety
as well.
UVC systems
. UVC disinfection
is fast and very effective on surfaces in line of sight. Products on the market include but are not limited to ceiling mounted,
wall-mounted, upper air UV disinfection units as well as UVC robots. Larger robot units recommend that their units be moved periodically
to address critical areas that may be limited by shadowing or areas outside of the direct line of sight. Typically, the larger
robots are used for terminal cleaning when the patient is discharged as a room must be empty to run these units. There are several
manufacturers currently developing other products including smaller portable units that could be put in a patient room while the
patient is receiving treatment elsewhere in the hospital. The competitive advantage of the SteriLumen system is its use of UVC
LEDs. All of the below systems which generate UV light use mercury or xenon bulbs which are inherently dangerous if mishandled.
Peroxide vapor systems
. Hydrogen
peroxide vapor systems use machines to disperse a concentrated hydrogen peroxide vapor throughout a room. The micro condensation
of the system on all surfaces deactivates harmful pathogens. The peroxide condensate breaks down to oxygen and water vapor, which
means there is no harmful residue. Like UVC robot systems, peroxide vapor systems cannot be run when a patient is in the room.
Furthermore, there is a need to seal the room and for personnel to wear hazmat suits during the disinfection process.
51
Munn Works
Munn Works was formed on November 9,
2012, as a New York limited liability company. manufactures and supplies fine decorative framed mirrors, framed art, and vanities
to 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 has 37 fulltime employees and 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. Munn Works currently manufactures approximately 20%
to 25% of its products domestically, but expects this to increase to 35% due to increasing lead times, production costs and tariffs
associated with manufacturing goods in China. We consider Munn Works to be a leader in the custom design decorative framed mirror
market. Our main competitors are Majestic Mirror located in Miami Florida and Mirror Image located in Los Angeles who make decorative
mirrors for hotels and Electric Mirror located in Seattle Washington who make backlit mirrors that are placed over vanities in
the bathroom. None of these competitors have any meaning domestic manufacturing capability.
On June 25, 2018, Munn Works filed
a voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code in order to (i) pursue its appeal of a $1.4
million New York State court judgment arising out of an employment and business dispute with a former employer of Mr. Munn (of
which Mr. Munn's family-owned 50% of the equity) and (ii) preserve its ongoing operations from collection efforts with respect
to such judgment. Munn Works settled the dispute by making a $400,000 cash payment and on June 28, 2019, concluded its Chapter
11 proceedings.
Litigation
From
time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We may in the future receive
claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation
may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of third-party proprietary
rights, or to establish our proprietary rights. The results of any future litigation cannot be predicted with certainty, and regardless
of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources,
and other factors.
To date, we have not been made aware of any actual, pending or threatened litigation against the Company.
Property
We lease and maintain our primary offices
and manufacturing facility at 150 N. Macquesten Parkway, Mount Vernon, NY 10550. We do not currently own any real estate.
52
MANAGEMENT
The following are our executive officers
and directors and their respective ages and positions as of July 15, 2020.
Name
Age
Position
Keyoumars Saeed
56
Chief Executive Officer and Director
Max Munn
75
President and Director
James L. Doyle, III
52
Chief Operations Officer
Joseph Himy
51
Chief Financial Officer
Joel Kanter
63
Chairman of the Board
Dr. Eugene A. Bauer, M.D.
78
Director
Dr. Alastair Clemow, Ph.D.
69
Director
Dallas C. Hack, M.D
67
Director
Eugene E. Burleson
79
Director
Keyoumars Saeed
is our Chief
Executive Officer. Mr. Saeed has over 25 years of proven experience in strategic planning, operations, sales and executive management
of advanced technologies. A seasoned CEO and senior executive, under his leadership, record of achievement in sales, marketing
and operations development, strategic planning, and business development. Mr. Saeed recently was CEO of Ubiquity LLC and advised
the National Mental Health Innovation Center (NMHIC) and worked with CU Innovations on business partnerships and co development
with their technology innovation network (TIN) on virtual and augmented reality to conduct interventions and training protocols
and at the University of Colorado Anschutz Medical Center. Previously, in 2016 he was founder and CEO of Vital Neuro, Inc. which
has converged machine learning, cloud technologies in a closed feedback system. Vital Neuro is an evidence based, proven service
relieving employee stress with a personalized 15 minute daily session to a headphone through an app to company subscriber base.
Prior to that and until the end of 2015 Mr. Saeed spent three and a half years at Kymeta Corporation, a Bill Gates company, as
the EVP of Strategy and development creating a market approach to the connected car strategy, sourcing and securing unique raw
materials and industry relations and partnerships. Among several smaller startups, Mr. Saeed Co-founded Open Range Communications
in 2004 to deliver broadband to rural and underserved communities in the US. In 2001 Mr. Saeed was instrumental in the launch
of the first cellular Blackberry at T-Mobile USA where he was part of the pioneering team introducing the first device converging
voice and data to the market in 2001. He spent the worked at AT&T wireless advanced services organization introducing CDPD
and converged wireless data through 1999.
Max Munn
is the President
and a director of the Company and is also CEO of Munn Works. Mr. Munn has held this position at Munn Works for over 20 years.
Mr. Munn is also Co-chairman of Dieu Donne Inc., a not-for-profit and a leading, world recognized atelier wherein dimensional,
handmade paper is utilized in the making of art. Mr. Munn attended MIT from 1961-1966, majored in chemistry and architecture;
and received a Bachelors of Architecture degree. Mr. Munn also attended Columbia University for post graduate studies from 1966-1968,
working toward a Ph.D. in architectural history.
James L. Doyle, III
is our Chief
Operations Officer. Mr. Doyle has over 28 years' experience in general management, operations, marketing, sales and consulting.
Most recently, Mr. Doyle was the President of Panasonic Enterprise Solutions company, a $450 million solution and engineering
company focused primarily on North America, but with limited clients in Asia and Europe. This company built complex solutions
for Panasonic's global customers in sports and entertainment, energy, and smart city industries. His clients ranged from
the Philadelphia Eagles to MGM to the US Government. Before joining Panasonic, Mr. Doyle was a Consulting Partner with IBM Global
Business Services leading its North American Electronics industry solutions unit, the final role in a thirteen-year span with
IBM. Mr. Doyle currently serves on the board of Mobilitynext, a nonprofit organization that brings public and private entities
together to solve the world's most challenging transportation and mobility challenges. Mr. Doyle also served as an Officer
in the US Marine Corps, participating in Operation Restore Hope in Somalia. Mr. Doyle has an MBA in Marketing and Decision &
Information Systems from Indiana University and a BS in Marketing from Syracuse University.
Joseph N. Himy
is our
Chief Financial Officer. Mr. Himy is a Director of The CFO Squad, a financial and business advisory firm providing outsourced
CFO advisory and regulatory consulting services primarily for public companies, since August 2011. From May 2009 until August
2011, Mr. Himy was Chief Financial Officer of Vyteris, Inc., manufacturer of the first active transdermal patch approved by the
U.S. Food and Drug Administration for the pain associated with blood draws, intravenous cannulations and laser ablation of superficial
skin lesions. Prior to May 2009 and from October 2004, Mr. Himy held various other positions at Vyteris, including Corporate Controller
and VP of Finance. Mr. Himy received a B.S. degree in Accounting from Brooklyn College of the City University of New York and
is a certified public accountant. Mr. Himy's accounting and financial and corporate governance experience background enhances
the breadth of experience of the board of directors.  Mr. Himy is also Independent Director of Tofutti Brands Inc. and a
member of its Audit Committee since October 30, 2013.
Joel Kanter
is the Chairman
of the Board of the Company. Mr. Kanter serves as President of Windy City, Inc., a privately held investment firm, since July 1986.
From 1989 to November 1999, Mr. Kanter served as the President, and subsequently as the President and Chief Executive Officer of
Walnut Financial Services, Inc., a publicly traded company (Nasdaq: WNUT). Walnut Financial's primary business focus was
the provision of various forms of financing to small business including equity financing to start-up and early stage development
companies, bridge financing to small and medium-sized companies, and later stage institutional financing to mature enterprises.
Tower Hill Capital bought the Company in 1999 in a transaction valued at approximately $400 million. From 1978 - 1980, Mr. Kanter
served as a Legislative Assistant to former Congressman Abner J. Mikva (D-Ill.).  In that position, Mr. Kanter provided support
to Congressman Mikva with respect to activities related to his position on the House Judiciary Committee.  In particular,
Mr. Kanter was intimately involved in efforts to reform the Federal Criminal Code.  Mikva subsequently became the Chief Judge
of the U.S. Court of Appeals for the District of Columbia Circuit, and then served as White House Counsel to President Clinton.
From 1980 - 1983, Mr. Kanter served as Special Assistant to the National Association of Attorneys General.  In that position,
he represented the interests of the State Attorneys General in Washington, D.C. in the criminal justice and environmental arenas. 
Mr. Kanter serves on the Board of Directors of one currently public company, Magna-Labs, Inc., which was formerly involved in the
development of a cardiac MRI device. Mr. Kanter also serves on the boards of several private biotechnology companies. Mr. Kanter
is a National Association of Corporate Directors "Governance Fellow." Mr. Kanter is a current Trustee Emeritus and
past President of the Board of Trustees of The Langley School in McLean, Virginia, a former Trustee at the Georgetown Day School
in Washington, D.C., and a former Trustee of the Union Institute & University, the Country's first Online University.
We believe that Mr. Kanter is qualified
to serve as a member of our board of directors because of his experience as a public company executive, his extensive finance background,
his service as a current director of public and private companies, and his knowledge of the industry in which we operate.
Dr. Eugene A. Bauer, M.D.
is
a Director of the Company. In 2010, Dr. Bauer co-founded Dermira, a publicly traded specialty biopharmaceutical company acquired
by Eli Lilly and Company in 2020. Dr. Bauer served as Chief Medical Officer of Dermira, a wholly-owned subsidiary of Lilly, through
March 2020. Prior to founding Dermira, Dr. Bauer served as Director, President and Chief Medical Officer of Pelpin, Inc., a publicly
traded specialty pharmaceutical company, from 2008 to 2010. Dr. Bauer served as Chief Executive Officer of Neosil, Inc., a specialty
pharmaceutical company, from 2004 to 2008, and he co-founded and served as a member of the board of directors at Connetics, a
publicly traded specialty pharmaceutical company, from 1990 to 2006. Prior to initiating his career in industry, Dr. Bauer served
as Dean of Stanford University School of Medicine from 1995 to 2001 and as Chair of the Department of Dermatology at Stanford
University School of Medicine from 1988 to 1995. Dr. Bauer is Professor Emeritus at Stanford University School of Medicine, a
position he has held since 2002. Dr. Bauer was a U.S. National Institutes of Health ("NIH")-funded investigator for
25 years and has served on review groups and Councils for the NIH. Dr. Bauer has served on the boards of directors of a number
of public and private companies, including Aevi Genomic Medicine, Inc. (formerly Medgenics, Inc.), First Wave Technologies, Inc.,
and Kadmon Holdings, Inc. He is member of numerous honorific societies, including the National Academy of Medicine. Dr. Bauer
received his B.S. in medicine from Northwestern University and his M.D. from Northwestern University Medical School.
We believe that Dr. Bauer's background
of service on the boards of directors of numerous public pharmaceutical companies and his vast industry experience provides him
with the qualifications and skills to serve on our Board.
53
Alastair J. Clemow, Ph.D.
is a Director of the Company. Dr. Clemow currently serves as Chairman of Ensemble Orthopedics, an early-stage company developing
an innovative pyrocarbon finger joint for the treatment for early state osteoarthritis. From 2010 to 2019, Dr. Clemow served as
President and Chief Executive Officer of Regentis Biomaterials, a private company developing an innovative material for cartilage
repair. He also held positions of president and chief executive officer in a number of companies that he helped found, including
Nexgen Spine, Inc., which developed an artificial spinal disc; Gelifex, Inc., which developed an innovative spinal nucleus replacement
implant and which was acquired in 2004 by Synthes Spine, Inc.; and Minimally Invasive Surgical Technologies, Inc., which developed
a novel series of implants for minimally invasive total knee replacement and which was acquired in 2005 by MAKO Surgical Corp.
From 2000 to 2004, Dr. Clemow served as Principal of Tanton Technologies, Inc., an organization that provided strategic and technical
assessment of new medical device opportunities for large, mid-cap, and early-stage development companies. From 1981 to 2000, Dr.
Clemow held numerous positions with Johnson & Johnson, including Vice President of Worldwide Business Development for Ethicon
Endo-Surgery, Inc.; Vice President of New Business Development for Johnson & Johnson Professional, Inc.; and Director of Research
and Development of Johnson & Johnson Orthopedics. In those capacities, Dr. Clemow was responsible for acquiring or developing
what today represents billions of dollars of Johnson & Johnson revenue. Dr. Clemow serves or has served on the boards of numerous
private and public companies including Aevi Genomics; Encore Medical; Echo Healthcare Acquisition Corp.; BioMedical Enterprises,
Inc.; and Kinetic Muscles, Inc. He graduated from the University of Surrey with a Bachelor of Science Degree in metallurgy and
Ph.D. in metallurgy and earned his MBA degree from Columbia University in New York.
With extensive senior management experience
within healthcare companies, including Johnson & Johnson, as well as a member of the boards of numerous public and private
companies, we believe that Dr. Clemow is qualified to serve as a member of our Board.
Dallas C. Hack, M.D., M.P.H.
is a Director of the Company.
He is board certified in General Preventive
Medicine and Public Health and a Fellow in the American College of Military Public Health. He directed trauma research for the
military from 2008 to 2014, with responsibility for more than $2 billion in grant funding. He served as Command Surgeon at the
strategic level during Operations Enduring Freedom and Iraqi Freedom. He held numerous military medical leadership positions including
Commander of the NATO Headquarters Healthcare Facility, and Command Surgeon at the strategic level during Operations Enduring
Freedom and Iraqi Freedom. COL(R) Hack received numerous military awards including the Bronze Star, two Legion of Merit awards,
and was inducted as a Distinguished Member of the Military Order of Medical Merit. He has a BA from Andrews University (1972),
an MPH from Johns Hopkins University (1995), a MD from Loma Linda University (1976), an MSS from the US Army War College (2004),
and a CPE from the Certifying Commission in Medical Management (1997). He was recognized as the Distinguished Alumnus of the Year
by Loma Linda University in May 2015. Dr. Hack has an appointment from the School of Medicine, University of Pittsburgh as Adjunct
Professor of Neurosurgery and from Virginia Commonwealth University as an Associate Clinical Professor, Department of Physical
Medicine and Rehabilitation. After retiring from 28 years of military service in 2015, Dr. Hack has worked with numerous biotechs
and non-profits to advance medical research and transition the progress to improved clinical practice.
We believe that Dr. Hack is qualified
to serve as a member of our Board because of his extensive knowledge of the industry in which we operate.
Eugene E. Burleson
is
a Director of the Company. He is a private investor and was Chairman of PET DRx Corporation from June 2005 to July 1, 2010,
and its Chief Executive Officer from October 2008 until its acquisition by VCA Antech in July 2010. Mr. Burleson was a director
of HealthMont Inc. from September 2000 until its acquisition by SunLink in October 2003. Mr. Burleson served as Chairman
of the Board of Directors of Mariner Post-Acute Network, Inc. from January 2000 to June 2002. Mr. Burleson also served as Chairman
of the Board of Directors of Alterra Healthcare Inc. a developer and operator of assisted living facilities and is on the Board
of Deckers Outdoor Corporation Inc. Mr. Burleson served as Chairman of the Board of GranCare Inc. from October 1989 to November
1997. Additionally, Mr. Burleson served as President and Chief Executive Officer of GranCare Inc. from December 1990 to February
1997. Upon completion of the merger of GranCare's pharmacy operations with Vitalink Pharmacy Services Inc. in February 1997,
he became Chief Executive Officer and a Director of Vitalink Pharmacy Services Inc. Mr. Burleson resigned as Chief Executive Officer
and Director of Vitalink Pharmacy Services in August 1997. From June 1986 to March 1989, Mr. Burleson served as President, Chief
Operating Officer and a Director of American Medical International Inc. ("AMI"), an owner and operator of acute care
hospitals. Based in London from May 1981 to June 1986, Mr. Burleson served as Managing Director of AMI's international operations.
Mr. Burleson received his early management training at Eastman Kodak from 1963 to 1974. He graduated from East Tennessee State
University with a Bachelor of Science Degree in accounting and earned an MBA degree in 1972.
We believe Mr. Burleson vast business experience provides
him with the qualifications and skills to serve on our Board.
Code of Ethics
Our Board plans to adopt a written code
of business conduct and ethics ("
Code
") that applies to our directors, officers and employees, including our
principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing
similar functions. We intend to post on our website a current copy of the Code and all disclosures that are required by law in
regard to any amendments to, or waivers from, any provision of the Code.
Board Leadership Structure and Risk
Oversight
The Board oversees our business and considers
the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a
whole. Each of the Board committees, as set forth below, will also provide risk oversight in respect of its areas of concentration
and reports material risks to the board for further consideration.
Board of Directors
Our business
and affairs are managed under the direction of our Board. Our Board consists of seven directors, five of whom qualify as "independent"
under the listing standards of Nasdaq.
Directors serve until the next annual meeting
and until their successors are elected and qualified. Officers are appointed to serve for one year until the meeting of the Board
following the annual meeting of shareholders and until their successors have been elected and qualified.
54
Director Independence
Our
board of directors are composed of a majority of "independent directors" as defined under the rules of Nasdaq.
We use the definition of "
independence
" applied by Nasdaq to make this determination. Nasdaq Listing Rule 5605(a)(2)
provides that an "
independent director
" is a person other than an officer or employee of the company or any
other individual having a relationship which, in the opinion of the Company's Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot
be considered independent if:
●
the director is, or at any time during the past three (3) years was, an employee of the company;
●
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve (12) consecutive months within the three (3) years preceding the independence determination (subject to certain exemptions, including, among other things, compensation for board or board committee service);
●
the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient's consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exemptions);
●
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three (3) years, any of the executive officers of the company served on the compensation committee of such other entity; or
●
the director or a family member of the director is a current partner of the company's outside auditor, or at any time during the past three (3) years was a partner or employee of the company's outside auditor, and who worked on the company's audit.
Under such definitions,
our
Board has undertaken a review of the independence of each director. Based on information provided by each director concerning
his or her background, employment and affiliations, our Board has determined that Joel Kanter, Dr. Eugene A. Bauer, Dr. Alastair
Clemow, Dr. Dallas Hack and Eugene Burleson
are all independent directors of the Company. However, our common stock is
not currently quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of
our Board be independent and, therefore, the Company is not subject to any director independence requirements.
Committees
of the Board of Directors
Our Board has established an audit committee
and a compensation committee. Our Board has not yet adopted procedures by which stockholders may recommend nominees to the Board
of Directors. The composition and responsibilities of each of the committees of our Board is described below. Members serve on
these committees until their resignation or until as otherwise determined by our board of directors.
Audit Committee
We have established an audit committee
consisting of Eugene Burleson, Alastair Clemow and Dallas Hack. Eugene Burleson is the Chairman of the audit Committee.
In
addition, our Board has determined that Eugene Burleson is an audit committee financial expert within the meaning of Item 407(d)
of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act.
The audit committee's
duties, which are specified in our Audit Committee Charter, include, but are not limited to:
●
reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our annual disclosure report;
●
discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;
●
discussing with management major risk assessment and risk management policies;
●
monitoring the independence of the independent auditor;
●
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
55
●
reviewing and approving all related-party transactions;
●
inquiring and discussing with management our compliance with applicable laws and regulations;
●
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;
●
appointing or replacing the independent auditor;
●
determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
●
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and
●
approving reimbursement of expenses incurred by our management team in identifying potential target businesses.
The audit committee is composed exclusively
of "independent directors" who are "financially literate" as defined under the Nasdaq listing standards.
The Nasdaq listing standards define "financially literate" as being able to read and understand fundamental financial
statements, including a company's balance sheet, income statement and cash flow statement.
In addition, the Company intends to certify
to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance
or accounting, requisite professional certification in accounting, or other comparable experience or background that results in
the individual's financial sophistication.
Compensation Committee
We have established a compensation
committee of the board of directors to consist of Alastair Clemow, Eugene Bauer and Eugene Burleson, each of whom is an independent
director.
Each member of our compensation committee is also a non-employee director,
as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, or Rule 16b-3, and an outside
director, as defined pursuant to Section 162(m) of the Code, or Section 162(m).
Alastair Clemow is the chairman
of the compensation committee. The compensation committee's duties, which are specified in our Compensation Committee Charter,
include, but are not limited to:
●
reviews, approves and determines, or makes recommendations to our board of directors regarding, the compensation of our executive officers;
●
administers our equity compensation plans;
●
reviews and approves, or makes recommendations to our board of directors, regarding incentive compensation and equity compensation plans; and
●
establishes and reviews general policies relating to compensation and benefits of our employees.
Director
Compensation
On February 18, 2020, the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company's common stock
at an exercise price equal to the greater of $2.50 per share and the per share market value of the Company's common stock
on the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to members of the
Board, of which 1,250 have been cancelled. On July 1, 2020, we issued an additional 1,000 options in aggregate to two members
of the Board. The options are subject to quarterly equal vesting over a one-year period. To date 375 of these options have vested.
On July 9, 2020, the Board cancelled any further issuance of these quarterly options.
On July 9, 2020 the Board approved
a compensation package for non-employee directors of the Board. The compensation for non-employee directors include; (i) upon
of each such director, such director shall be issued 10,000 shares of restricted common stock which vests evenly on an annual
basis over a four year period beginning on January 1, 2021; (ii) the annual issuance of 7,500 shares of restricted common stock
to each such director which vests in full in next calendar year from the date of issuance; (iii) quarterly cash payments of $6,250
to each such director; (iv) the annual issuance of 10,000 shares of restricted common stock to the Chairman of the Board which
vests in full in next calendar year from the date of issuance and (v) the annual issuance of 5,000 shares of restricted common
stock to each chairman of the Audit, Nominating, Compensation and Corporate Governance Committees(Corporate Governance and Nominating
Committees have not yet been established).
Family Relationships
There are no family relationships among
any of our officers or directors.
Involvement in Certain Legal Proceedings
Except as disclosed below, to our knowledge,
none of our current directors or executive officers has, during the past ten (10) years:
●
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
56
●
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;
●
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
●
been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
●
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
●
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
On July 5, 2011, Max Munn filed for bankruptcy
pursuant to Chapter 7 of the Bankruptcy Code. Mr. Munn filed for bankruptcy as a result of guarantees made by Mr. Munn of construction
loans made by APF Group that were defaulted on in 2008 and 2009 during the financial crisis. Mr. Munn was a principal of APF Group.
On January 30, 2012, the Chapter 7 proceedings were concluded.
On June 25, 2018, Munn Works, all of the
equity of which was beneficially owned by Max Munn as of such date, filed a voluntary petition for reorganization pursuant to Chapter
11 of the Bankruptcy Code as further described in the section entitled "Business—Munn Works."
Medical Advisory Board
The
Company has established a Medical Advisory Board (the "MAB"), the purpose of which is to
provide non-binding
medical advice to the Board and the Company's management relating to the development, manufacture, and sale of the Company's
disinfection devices and related products. The MAB shall meet at least twice annually with the Board and each member shall receive
on an annual basis an option to purchase 5,000 shares of the Company's common stock at initially $5.00 per share and the
Chairman of the MAB shall receive on an annual basis an option to purchase 10,000 shares of the Company's common stock at
initially $5.00 per share. All of the options vest quarterly.
Currently, the MAB consists of the
following two members and no chairman:
Dr.
Nawar M. Shara, Ph.D.
is a Director of the Company and is currently an Associate Professor of Medicine at Georgetown
University Medical Center; Director, Biostatistics, Epidemiology and Research Design at Georgetown-Howard Universities Center
for Clinical and Translational Science; and Director, Department of Biostatistics and Bioinformatics, MedStar Health Research
Institute. Dr. Nawar has more than a decade of experience in grant proposal development, statistical consulting, clinical trials,
statistical analysis, and data management; and teaching specialized courses to medical students and healthcare providers, including
nurses and physicians. Dr. Nawar has more than seven years of experience in serving as a scientific reviewer on study sections
for Veterans Affairs, Department of Defense ("DOD"), and National Institutes of Health ("NIH"). Dr Nawar
has Developed biostatistics modular courses for professionals in health sciences, biostatistics, and regulatory science; served
as statistical reviewer for peer-reviewed journals (e.g.,
American Journal of Cardiology
,
Diabetes
,
Diabetes
Care
, and
Journal of Community Hospital Internal Medicine Perspectives
). Dr Shara's research focus includes Big
Data solutions, Artificial Intelligence, Machine Learning, data visualization, Predictive Analytics, Adaptive Designs and Optimization
schemes in clinical trials. Dr. Shara She is a member of American Statistical Association, the Royal Statistical Society, the
American Society of Nephrology, the Women in Statistics Caucus, ASA Scientific and Public Affairs Advisory Committee. She is the
President of the National Arab American Medical Association (NAAMA DC Chapter) as well as the chair of the Science and Research
Committee for NAAMA. Dr. Shara has served as a peer reviewer for the following journals: Diabetes, American Journal of Cardiology
and Journal of Community Hospital Internal Medicine Perspectives and has authored over 50 peer-reviewed journal publications.
Dr. Shara served as Principal Investigator of several NIH-funded studies, National Kidney Foundation, Robert Wood Johnson Foundation.
Her earlier work aimed at examining correlated of kidney and cardiovascular disease including oxidative Stress and surrogates
of kidney function. She is currently the principal investigator of a NIH NCATS supplements looking to leverage voice activated
technology (Alexa) to help patients with Heart Failure to better manage their disease. Dr. Shara conducts, supports and oversees
clinical and translational research across MedStar hospitals and is involved in teaching and education at Georgetown she is also
course Director for many offerings at Georgetown University including, Biostatistics in Medical Research, Research methodology
and Analytic approaches in Regulatory Science, a course offered as part of the Master of Science in Regulatory Science program
at Georgetown University (CERSI) and the Chair for a session on AI in medicine at the First International Conference in Systems
and Network Medicine at Georgetown University, Washington DC, September 2019. Dr. Nawar received a Ph.D. in Applied Sciences from
American University in 2002 and an M.S. in Applied Statistics from American University in 1996.
57
Dr.
Adam Auerbach, M.D.
is a Director of the Company and is currently serving as the Medical Director of the Sandra
Atlas Bass Heart Hospital at North Shore Hospital as well as the Associate Medical Director of North Shore University Hospital.
Dr. Auerbach has been in these roles for two years. He is also currently serving as the head of quality for the department
of cardiology. Dr. Auerbach has been in this role since 2014 and served as the Director of Inpatient Cardiac Services at North
Shore University Hospital from 2012-2017. Dr. Auerbach graduated from Rutgers University in 1998 with a degree in Molecular
Biology and Biochemistry, he then attended Albert Einstein College of Medicine of Yeshiva University from 1998 to 2002. Dr. Auerbach
completed a residency in internal medicine at Long Island Jewish Medical Center from 2002 to 2005 and completed a fellowship
in Cardiovascular Diseases at North Shore University Hospital and Long Island Jewish Medical Center from 2005 to 2008. Dr. Auerbach
was briefly in a private cardiology practice until he joined the faculty of North Shore University Hospital in 2010.
EXECUTIVE COMPENSATION
The following table illustrates the compensation
paid by the Company to its executive officers. The disclosure is provided for the years ended December 31, 2019 and
December
31, 2018.
Name
    and Principal Position
Year
Salary($)(1)
Total($)
Keyoumars Saeed(2)
Chief Executive Officer and
Director
2019
--
--
2018
--
--
Max Munn,
President and
Director
2019
$400,000(3)
$400,000
2018
$400,000(4)
$400,000
James L. Doyle, III(5)
Chief Operations Officer
2019
--
--
2018
--
--
Joseph N. Himy(6)
2019
--
--
2018
--
--
(1)
We periodically
    review, and may increase, base salaries in accordance with the Company's normal annual compensation review for each
    of our named executive officers.
(2)
Mr. Saeed was
    hired as the Company's Chief Executive Officer on June 30, 2020.
(3)
The cash salary
    of $400,000 was forgone by Mr. Munn and on April 1, 2020, he was issued a five-year warrant to purchase 80,000 shares of the
    Company's common stock at an exercise price equal to the greater of $5.00 per share and market value per share of the
    Company's common stock on the date of issuance in lieu of cash salary.
(4)
Represents amounts
    paid by Munn Works prior to the Company's formation.
(5)
Mr. Doyle was
    hired as the Company's Chief Operations Officer on June 20, 2020.
(6)
Joseph N. Himy
    was hired as the Company's Chief Financial Officer on July, 15, 2020
58
Equity Awards
As of December 31, 2019, and 2018, the Company did not have any
outstanding equity awards.
Employment Agreements
.
As of December 31, 2019, and 2018, the Company
had no employment agreements with any of its named executive officers.
However,
on June 30, 2020, the Company entered into employment agreements with its Chief Executive Officer and Chief Operations Officer
.
PRINCIPAL
STOCKHOLDERS
The following table sets forth certain
information, as of July 15, 2020, with respect to the holdings of (1) each person who is the beneficial owner of more than 5%
of Company voting stock, (2) each of our directors, (3) each executive officer, and (4) all of our current directors and executive
officers as a group.
Beneficial
ownership of the voting stock is determined in accordance with the rules of the SEC and includes any shares of Company voting
stock over which a person exercises sole or shared voting or investment power, or of which a person has a right to acquire ownership
at any time within 60 days of July 15, 2020. Except as otherwise indicated, we believe that the persons named in this table have
sole voting and investment power with respect to all shares of voting stock held by them. Applicable percentage ownership in the
following table is based on 5,103,316 shares of common stock issued and outstanding on July 15, 2020, and 6,186,856 after the
offering assuming a common stock offering of 1,000,000 shares (excluding 150,000 shares which may be sold upon exercise of
the underwriters' over-allotment option and including 51,034
shares of common stock to be issued upon the effectiveness
of the registration statement related to the offering and 32,506 shares to be issued by the closing date of this offering), plus,
for each individual, any securities that individual has the right to acquire within 60 days of June 23, 2020.
To the best of our knowledge, except as
otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of
our common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge,
none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is
no arrangement, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date
result in a change in control of the Company.
Name
    and Address
of Beneficial Owner
Title
Title
    of Class
Beneficially
owned
Percent
    of Class
Before Offering
Percent
    of Class
After Offering
Officers and Directors
Keyoumars Saeed
Chief Executive Officer and
    Director
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Max Munn
President
Common Stock
5,080,000
99.5
%
82.1
%
Series A Preferred Stock
2,000
100
%
100
%
James L. Doyle III
Chief Operations Officer
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Joseph N. Himy
Chief Financial Officer
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Joel Kanter
Chairman of the Board
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Dr. Eugene A. Bauer, M.D.
Director
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Dr. Alastair Clemow, Ph.D
Director
Common Stock
5,000
--
--
Series A Preferred Stock
--
--
--
Dr. Dallas C. Hack, M.D.
Director
Common Stock
--
--
--
Series A Preferred Stock
--
--
--
Eugene E. Burleson
Director
Common Stock
5,000
*
*
Series A Preferred Stock
--
--
--
Officers and Directors
    as a Group (total of 9 persons)
Common Stock
5,100,000
99.5
%
82.1
%
Series A Preferred Stock
2,000
100
%
100
%
5% Stockholders
Common Stock
5,000,000
98
%
80.8
%
Series A Preferred Stock
2,000
100
%
100
%
(1) Unless otherwise indicated, the principal
address of the named directors and directors and 5% stockholders of the Company is c/o Applied UV, Inc., 150 N. Macquesten Parkway,
Mount Vernon, NY 10550.
(2) Includes 5,000,000 shares which
are held in the name of The Munn Family 2020 Irrevocable Trust, for which the spouse of Max Munn is the trustee and 80,000 shares
underlying a warrant issued to Mr. Munn.
(3) Held in the name of The Munn Family
2020 Irrevocable Trust, for which the spouse of Max Munn is the trustee. Each share of Series A Preferred Stock is entitled to
1,000 votes (2,000,000 votes in aggregate) and votes with the Company's common stock as a single class.
59
CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
In
February of 2019, the Company engaged Carmel, Milazzo & Feil LLP to represent and assist the company with all general corporate
legal matters including this offering of the Company's common stock. Ross Carmel, a former board member of Applied UV, is
a partner at Carmel, Milazzo & Feil LLP. As partial compensation for its legal services, Carmel, Milazzo & Feil LLP will
receive three percent of the outstanding shares of the Company's common stock, including the shares issued in this offering
and the shares issued to Carmel, Milazzo & Feil LLP. As of June 19, 2020, Carmel, Milazzo & Feil LLP, has been issued
102,066 shares of the Company's common stock. Carmel, Milazzo & Feil LLP will receive an additional 51,034 upon the
effectiveness of the registration statement for this offering and an additional 32,506 shares (37,145 shares if the underwriters
exercise their option to purchase additional shares in full) on the closing date of the offering. As of March 31, 2020, the Company
has recorded a liability to be settled in stock for an amount of $507,
805, which does not include the shares to be issued
at the closing of the offering.
DESCRIPTION
OF SECURITIES
The following description of our securities is only a summary
and is qualified in its entirety by reference to the actual terms and provisions of the capital stock contained in our certificate
of incorporation and our bylaws.
General
The Company is authorized to issue
two classes of stock. The total number of shares of stock which the Company is authorized to issue is 151,000,000 shares of capital
stock, consisting of 150,000,000 shares of common stock, $0.0001 par value per share, and 1,000,000 shares of preferred stock,
$0.0001 par value per share. On June 17, 2020 we effected a 1 for 5 reverse stock split of the issued and outstanding shares of
our common stock. The number of authorized shares of common stock remained at 150,000,000. On June 23, 2020 we effected a 1 for
5 reverse stock split of the issued and outstanding shares of preferred stock. The number of authorized shares of preferred stock
remained at 1,000,000.
Common Stock
The holders of our common stock are entitled
to the following rights:
Voting Rights
. Each share
of our common stock entitles its holder to one vote per share on all matters to be voted or consented upon by the stockholders.
Holders of our common stock are not entitled to cumulative voting rights with respect to the election of directors.
Dividend Rights
. Subject
to limitations under Delaware law and preferences that may apply to any shares of preferred stock that we may decide to issue in
the future, holders of our common stock are entitled to receive ratably such dividends or other distributions, if any, as may be
declared by our Board out of funds legally available therefor.
Liquidation Rights
. In the
event of the liquidation, dissolution or winding up of our business, the holders of our common stock are entitled to share ratably
in the assets available for distribution after the payment of all of our debts and other liabilities, subject to the prior rights
of the holders of our preferred stock.
Other Matters
. The holders
of our common stock have no subscription, redemption or conversion privileges. Our common stock does not entitle its holders to
preemptive rights. All of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences
and privileges of the holders of our common stock are subject to the rights of the holders of shares of any series of preferred
stock which we may issue in the future.
60
Preferred Stock
As of July 15, 2020, 2,000 shares of
preferred stock have been designated as Series A Preferred Stock, all of which are beneficially owned by a trust, the trustee
of which is the spouse of our President, Max Munn. The holders of our Series A Preferred Stock are entitled to the following rights:
Voting Rights
. Each share
of our Series A Preferred Stock entitles its holder to 1,000 votes per share and votes with our common stock as a single class
on all matters to be voted or consented upon by the stockholders.
Dividend Rights.
The holders
of our Series A Preferred Stock are not entitled to any dividend rights.
Liquidation Rights.
The holders
of the Series A Preferred Stock are not entitled to any liquidation preference.
Other Matters
. The holders of our Series A Preferred
Stock have no subscription, redemption or conversion privileges and are not subject to redemption. Our Series A Preferred Stock
does not entitle its holders to preemptive rights. All of the outstanding shares of our Series A Preferred Stock are fully paid
and non-assessable.
Additional Preferred Stock.
Our
Board has the authority to issue additional preferred stock in one or more classes or series and to fix the designations, powers,
preferences, and rights, and the qualifications, limitations or restrictions thereof including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting
any class or series, without further vote or action by the stockholders.
While we do not currently have any plans
for the issuance of any additional preferred stock, the issuance of additional preferred stock could adversely affect the rights
of the holders of common stock and, therefore, reduce the value of the common stock. It is not possible to state the actual effect
of the issuance of any shares of preferred stock on the rights of holders of the common stock until the Board of Directors determines
the specific rights of the holders of the preferred stock; however, these effects may include:
●
Restricting dividends on the common stock;
●
Diluting the voting power of the common stock;
●
Impairing the liquidation rights of the common stock; or
●
Delaying or preventing a change in control of the Company without further action by the stockholders.
Warrants
On April 1, 2020, the Company
issued to Max Munn, the Company's President and a director of the Company, in lieu of paying his salary for 2019,
warrants to purchase a total of 80,000 shares of Company common stock at the exercise equal to the greater of $5.00 and the
market value per share of the Company's common stock on the date of issuance. Market value will be determined by an
independent valuation company engaged by the Company; provided, however, if on the date of the issuance of the warrant the
Company common stock is listed on a national exchange or quoted on an established quotation system, then market value shall
equal the closing price of the Company common stock listed on such exchange or quoted on such quotation system on the trading
day immediately prior to the date of the grant. The warrant expires five years from the date of issuance.
On July 1, 2020, the Company issued
two warrants to purchase 5,000 shares in aggregate, each at a $5.00 per share exercise price in exchange for consulting services.
Options
On February 18, 2020, the Board approved
the quarterly issuance of options to the Board as described above in the section entitled "Management—Director Compensation."
Currently, such options to purchase 1,750 shares issued to the Board are outstanding, 375 of which are vested. No further issuances
no further issuances of these options will be made.
On July 9, 2020, the Board approved
the annual issuance of options to purchase 5,000 shares of restricted Common Stock to each member of the MAB and the annual issuance
of an option to purchase 10,000 shares of restricted Company common stock to the Chairman of the MAB. The options have an exercise
price of $5.00 per share and vest evenly on a quarterly basis over a period of one year. The Company has issued options to purchase
10,000 shares of Company common stock to members of the MAB, none of which are vested.
61
Restricted Shares Subject to
Vesting
On June 30, 2020 we entered into employment
agreements with our Chief Executive Officer and our Chief Operating Officer, pursuant to which 89,308 unvested restricted shares
of our common stock and 38,275 unvested shares of our common stock were issued to our Chief Executive Officer and our Chief Operations
Officer, respectively. In each case, the shares will evenly vest on a quarterly basis over a period of 18 months, with the first
vesting to occur on September 30, 2020
Only July 9, 2020, the Board approved
the issuance of 10,000 unvested shares of restricted stock to each of four newly elected directors. In each case, the shares will
evenly vest on an annual basis over a period of four (4) years, with the first vesting to occur on January 1, 2021.
On July 9, 2020, the Board approved
the annual issuance of 7,500 unvested shares of restricted common stock to our non-employee directors. The shares will be issued
on the first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 7,500
shares to a director will be issued immediately and vest on January 1 of the next calendar year. 37,500 shares were issued to
our non-employee directors on July 9, 2020, which vest on January 1, 2021.
On July 9, 2020, the Board approved
the annual issuance of 10,000 unvested shares of restricted common stock to the Board chairman. The shares will be issued on the
first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 10,000 shares
to a Board chairman will be issued immediately and vest on January 1 of the next calendar year. 10,000 shares were issued to our
Chairman on July 9, 2020, which vest on January 1, 2021.
On July 9, 2020, the Board approved the annual issuance
of 5,000 unvested shares of restricted common stock to the chairman of the Audit, Compensation, Nomination and Corporate Governance
Committees (the Nominating and Corporate Governance Committees have not yet been established). The shares will be issued on the
first trading day of each year and vest on January 1 of the following year; provided however, the first issuance of 5,000 shares
to a committee chairman will be issued immediately and vest on January 1 of the next calendar year. 10,000 shares were issued
to our committee chairman on July 9, 2020, which vest on January 1, 2021.
S-8 Registration Statement
On May 4, 2020, we adopted the Plan.
Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to 600,000 shares of common
stock to Company employees, officers, directors, consultants and advisors are available under the Plan. The type of grant, vesting
provisions, exercise price and expiration dates are to be established by the Board at the date of grant. Currently, no awards
have been granted under the Plan. We may file one or more registration statements on Form S-8 under the Securities Act to register
the shares of common stock issued or issuable under our Plan. Any such Form S-8 registration statement will become
effective automatically upon filing. Once these shares are registered, they can be sold in the public market upon issuance, subject
to Rule 144 limitations applicable to affiliates and vesting restrictions.
62
Exclusive Forum
Our Certificate of Incorporation, as
amended provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State
of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company,
(b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Company
to the Company or the Company's stockholders, (c) any action asserting a claim arising pursuant to any provision of the
Delaware General Corporation Law, the Company's Certificate of Incorporation or the Bylaws, or (d) any action asserting
a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. This exclusive forum provision may limit the ability of our stockholders
to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers,
which may discourage lawsuits against us or our directors or officers. Our Certificate of Incorporation also provides that this
choice of forum provision does not apply to claims arising under federal securities laws.
Section 203 of the Delaware General
Corporation Law
We are subject to the provisions of Section
203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances,
from engaging in a "business combination" with:
●
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an "interested stockholder");
●
an affiliate of an interested stockholder; or
●
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
A "business combination" includes
a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
●
our board of directors approves the transaction that made the stockholder an "interested stockholder," prior to the date of the transaction;
●
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
Transfer Agent and Registrar
The transfer agent and registrar for our common stock will be
VStock Transfer, LLC.
Listing
We have applied to have our common
stock listed on the Nasdaq Capital Market under the symbol "AUVI" which listing is a condition to this offering.
SHARES
ELIGIBLE FOR FUTURE SALE
There is not currently an established U.S.
trading market for our common stock. We cannot predict the effect, if any, that market sales of shares of our common stock or the
availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time.
Sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding warrants, in the public
market after this offering, could adversely affect market prices prevailing from time to time and could impair our ability to raise
capital through the sale of our equity securities.
Upon completion of the sale of 1,000,000
shares of common stock pursuant to this offering, we will have 6,196,856 shares of common stock issued and outstanding. In the
event the underwriters exercise the over-allotment option in full, we will have 6,351,495 shares of common stock issued and outstanding.
The common stock sold in this offering will be freely tradable without restriction or further registration or qualification under
the Securities Act.
63
All previously issued shares of common
stock that were not offered and sold in this offering, as well as shares issuable upon the exercise of warrants and subject to
employee stock options, are or will be upon issuance, "restricted securities," as that term is defined in Rule 144
under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under
the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 under the Securities Act, which
are summarized below.
In general, a person who has beneficially
owned restricted shares of our common stock for at least six months in the event we have been a reporting company under the Exchange
Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not
deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days
preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such
person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the
following:
1% of the number of shares of our common stock then outstanding;
or
1% of the average weekly trading volume
of our common stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to
the sale;
provided that, in each case, we are subject to the periodic
reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner
of sale, notice and other provisions of Rule 144, to the extent applicable.
Lock-Up Agreements
Our officers and directors have agreed,
subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise
dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our
common stock for a period of 180 days after the effective date of the registration statement for this offering without the prior
written consent of the representative (as defined herein).
UNDERWRITING
Prior to this offering, there has been
no public market for our common stock. We have applied for approval of our common stock for listing on The Nasdaq Capital Market
under the symbol "AUVI." Trading of our common stock on Nasdaq is expected to begin following this prospectus being
declared effective by the SEC.
Underwriting
Under the terms and subject to the conditions
in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Network 1 Financial Securities,
Inc. is acting as the representative, have severally agreed to purchase, and we have agreed to sell to them, severally, the number
of shares indicated below:
Name
Number of Shares
Network 1 Financial Securities, Inc.
Total:
The underwriters and the representative
are collectively referred to as the "underwriters" and the "representative," respectively. The underwriters
are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock
offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions.
The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares
are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters' over-allotment
option described below.
64
The underwriters initially propose to offer
part of the shares of common stock directly to the public at the offering price listed on the cover page of this prospectus and
part to certain dealers. After the initial offering of the shares of common stock, the offering price and other selling terms may
from time to time be varied by the representative.
Over-Allotment Option
We have granted to the underwriters an
option, exercisable for 45 days from the date of this prospectus, to purchase up to 150,000 additional shares of common stock at
the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters
may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the
shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated,
subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed
next to the underwriter's name in the preceding table bears to the total number of shares of common stock listed next to
the names of all underwriters in the preceding table.
Discounts and Commissions and Expenses
We have agreed to pay the underwriters
a cash fee equal to 9.0% of the aggregate gross proceeds.
The representative has advised us that
the underwriters propose to offer the shares directly to the public at the public offering price set forth on the cover of this
prospectus. In addition, the representative may offer some of the shares to other securities dealers at such price less a concession
of up to $[ ] per share. After the offering to the public, the offering price and other selling terms may be changed by the representative
without changing the Company's proceeds from the underwriters' purchase of the shares.
The following table shows the public offering
price, underwriting discounts and proceeds, before expenses, to us. The information assumes either no exercise or full exercise
by the underwriters of their over-allotment option. The underwriting discounts are equal to the public offering price per share
less the amount per share the underwriters pay us for the shares.
Per
                                         Share of
Common
                                         Stock
Total without
    Over-allotment Option
Total with
Over-allotment
    Option
Public offering price
$
$
5,000,000
$
5,750,000
Underwriting discounts
$
$
450,000
$
517,500
Proceeds, before expenses, to us
$
$
4,550,000
$
5,232,500
We have agreed to pay the representative
a non-accountable expense allowance of 2% of the gross proceeds of the offering. We estimate that the total expenses, but excluding
underwriting discounts and commissions and the 2% non-accountable expense allowances, will be approximately $[*], all of which
are payable by us. This figure includes expense reimbursements we have agreed to pay the representative for reimbursement of its
expenses related to the offering up to a maximum aggregate expense allowance of $75,000, for which we have paid a $35,000 advance,
which will be returned to us to the extent not offset by actual expenses in accordance with FINRA Rule 5110(f)(2)(C).
Underwriters' Warrants
As additional compensation to the underwriters,
upon consummation of this offering, we will issue to the underwriters or their designees warrants to purchase an aggregate number
of shares of our common stock equal to 8% of the number of shares of common stock issued in this offering (excluding shares of
common stock sold to cover over-allotments, if any), at an exercise price per share equal to 125% of the initial public offering
price (the "
Underwriters' Warrants
"). The Underwriters' Warrants and the underlying shares of common
stock shall not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities
by any person for a period of 180 days immediately following the date of the public offering in accordance with FINRA Rule 5110(g)(1).
The Underwriters' Warrants will be exercisable, in whole or in part, commencing 180 days from the closing date of the offering
and will expire on the fifth anniversary of the effective date of the registration statement related to the offering in accordance
with FINRA Rule 5110(f)(2)(G)(i). In addition, we have granted the underwriters a one-time demand registration right at our expense,
an additional demand registration at the holder's expense and unlimited "piggyback" registration rights with
respect to the underlying shares. The demand registration rights will not be greater than five years from the effective date of
the registration statement related to the offering in compliance with FINRA Rule 5110(f)(2)(G)(iv).The piggyback registration
right will not be greater than five years from the effective date of the registration statement related to the offering in compliance
with FINRA Rule 5110(f)(2)(G)(v).
65
Determination
of Offering Price
Before this offering,
there has been no public market for our common stock. Accordingly, the public offering price will be negotiated between us and
the Representative. Among the factors to be considered in these negotiations are:
●
the information set forth in this prospectus and otherwise available to the underwriters;
●
the prospects for our Company and the industry in which we operate;
●
An assessment of our management;
●
our past and present financial and operating performance;
●
our prospects for future earnings;
●
financial and operating information and market valuations of publicly traded companies engaged in activities similar to ours;
●
the prevailing conditions of United States securities markets at the time of this offering; and
●
other factors deemed relevant.
Neither we nor the underwriters can assure investors that an
active trading market will develop for shares of our common stock, or that the shares will trade in the public market at or above
the initial public offering price.
Lock-Up Agreements
We and each of our officers, directors
affiliates and certain existing stockholders have agreed, for a period of 180 days after the effective date of the registration
statement for this offering, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option
for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable
for shares of our common stock without the prior written consent of the representative.
The representative may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period. When determining whether or not to release shares from the lock-up agreements, the representative will consider, among
other factors, the security holder's reasons for requesting the release, the number of shares for which the release is being requested
and market conditions at the time.
Pursuant to the underwriting agreement,
we have also agreed, for a period of 180 days from the closing date of the offering, that we will not, subject to specified exempt
issuances, offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common
stock; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery
of common stock or such other securities, in cash or otherwise; or (iii) file any registration statement with the SEC relating
to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock.
Right of First
Negotiation
According to the terms of the underwriting
agreement, the representative shall have the right of first negotiation for a period of twelve months after the closing of this
offering to act as co-manager for all future public or private securities offerings by us, or any successor to or subsidiary of
our company, during such period.
Finder's Fee
In the event that at any time prior to
the second anniversary of the closing date of the offering , the Company enters into any transaction with a party introduced directly
or indirectly to the Company by the representative, the Company shall pay the representative a transaction fee equal to a percentage
of the consideration received by the Company in such transaction as follows:
5% of the first $1,000,000
4% of the next $1,000,000
3% of the next $1,000,000
2% of the next $1,000,000
1% of all amounts in excess
of $4,000,000.
66
Indemnification
We have agreed to indemnify the underwriters
against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may
be required to make in respect thereof.
Electronic
Offer, Sale and Distribution of Shares
A prospectus in
electronic format may be made available on a website maintained by the representative and may also be made available on a website
maintained by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online
brokerage account holders. Internet distributions will be allocated by the Representative to underwriters that may make Internet
distributions on the same basis as other allocations. In connection with the offering, the underwriters or syndicate members may
distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe®
PDF will be used in connection with this offering.
The underwriters
have informed us that they do not expect to confirm sales of shares offered by this prospectus to accounts over which they exercise
discretionary authority.
Other than the prospectus in electronic
format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter
is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or
endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.
Price Stabilization, Short Positions
and Penalty Bids
In connection
with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common
stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares than are set forth
on the cover page of this prospectus. This creates a short position in our common stock for its own account. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock
over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment
option. In a naked short position, the number of shares of common stock involved is greater than the number of shares of common
stock in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment
option. The underwriters may also elect to stabilize the price of our common stock or reduce any short position by bidding for,
and purchasing, common stock in the open market.
The underwriters
may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for
distributing a security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.
Finally, the underwriters
may bid for, and purchase, shares of our common stock in market making transactions, including "passive" market making
transactions as described below.
These activities
may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist
in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.
In connection
with this offering, the underwriters and selling group members, if any, or their affiliates may engage in passive market making
transactions in our common stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of
Regulation M under the Exchange Act. Rule 103 generally provides that:
a passive market maker may not effect transactions
or display bids for our common stock in excess of the highest independent bid price by persons who are not passive market makers:
●
net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker's average daily trading volume in our common stock during a specified two-month prior period or 200 shares, whichever is greater, and must be discontinued when that limit is reached; and
●
passive market making bids must be identified as such.
67
Certain Relationships
Certain of the
underwriters and their affiliates have provided and may in the future provide various investment banking, commercial banking and
other financial services for us and our affiliates for which they have or may in the future receive customary fees, however, except
for the right of first refusal and the finder's fee disclosed in this prospectus, we have no present arrangements with any
of the underwriters for any further services.
Offer Restrictions
Outside the United States
Other than in the United States, no action
has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any
jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of
any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance
with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised
to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This
prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus
in any jurisdiction in which such an offer or a solicitation is unlawful.
EXPERTS
Adeptus Partners LLC, an independent certified public accounting
firm, audited our financial statements for the years ended December 31, 2019 and 2018. We have included our financial statements
in this prospectus and elsewhere in the registration statement in reliance on the reports of Adeptus Partners LLC, given on their
authority as experts in accounting and auditing.
LEGAL
MATTERS
Certain legal matters with respect
to the validity of the securities being offered by this prospectus will be passed upon by Carmel, Milazzo & Feil LLP, New
York, New York. Gordon Rees Scully Mansukhani, LLP, New York, New York, is acting as counsel for the representative of the underwriters
with respect to the offering.
WHERE
YOU CAN FIND MORE INFORMATION
We have filed
with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of our common stock offered
by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information
set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the
rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration
statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning
the contents of any contract or any other document is not necessarily complete. If a contract or document has been filed as an
exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this
prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. You may obtain
copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.
20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us,
that file electronically with the SEC. The address of that website is
www.sec.gov
.
We are subject
to the information and reporting requirements of the Exchange Act and, in accordance with this law, are required to file periodic
reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are
available for inspection and copying at the SEC's public reference facilities and the website of the SEC referred to above.
We also maintain a website at
www.applieduvinc.com
. You may access these materials free of charge as soon as reasonably
practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part
of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.
68
Applied UV, Inc. and Subsidiaries
Consolidated Financial
Statements
December 31, 2019 and 2018
F-
1
Applied UV, Inc. and Subsidiaries
Index to the Consolidated Financial
Statements
December 31, 2019 and 2018
Page
Independent Auditors
    Report
F-3
Financial Statements
Consolidated
    Balance Sheets
F-4
Consolidated
    Statements of Income
F-5
Consolidated
    Statements of Changes in Stockholders' Equity (Deficit)
F-6
Consolidated
    Statements of Cash Flows
F-7
Notes
    to the Consolidated Financial Statements
F-8 - F-25
F-
2
Report of Independent Registered
Public Accounting Firm
To the Board of Directors and
Stockholders of Applied UV, Inc. and
Subsidiaries
We have audited the accompanying consolidated
balance sheets of Applied UV, Inc. and Subsidiaries (the Company) as of December 31, 2019 and 2018, and the related consolidated
statements of income, stockholders' equity (deficit), and cash flows for each of the years in the two-year period ended
December 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and
the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity
with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we
are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such
opinion.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide
a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters
arising from the current period audit of the financial statements that were communicated or required to be communicated to the
audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
Adeptus Partners, LLC
We have served as the Company's
auditor since 2020.
Ocean, New Jersey
June 23, 2020
F-
3
Applied UV, Inc. and Subsidiaries
Consolidated Balance
Sheets
As of December 31, 2019 and 2018
2019
2018
Assets
Current Assets
Cash
$
1,029,936
$
793,766
Vendor deposit
104,517
95,556
Accounts receivable, net of allowance for doubtful
    accounts
2,227,792
1,977,333
Inventory
99,543
112,113
Loan to shareholder
4,225
103,721
Prepaid expense and other current
    assets
30,639
-
Total Current Assets
3,496,652
3,082,489
Machinery and equipment, net of accumulated depreciation
34,371
29,493
Right of use asset
614,522
-
Other assets
623,842
-
Total Assets
$
4,769,387
$
3,111,982
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued expenses
$
1,238,822
$
983,862
Income tax payable
106,861
-
Capital lease obligations-current portion
6,380
6,076
Lease liability-current
133,097
-
Notes payable
37,500
-
Deferred revenue
1,245,300
1,180,159
Total Current Liabilities
2,767,960
2,170,097
Long-term Liabilities
Capital lease obligations - less current portion
15,212
21,592
Note payable-less current portion
120,000
-
Lease liability-less current portion
481,425
-
Liabilities subject to compromise
-
2,336,909
Total Long-Term Liabilities
616,637
2,358,501
Total Liabilities
3,384,597
4,528,598
Stockholders' Equity
Common
    stock $.0001 par value, 150,000,000 shares authorized;
5,001,250 shares issued and outstanding, respectively
500
500
Series
    A voting preferred stock $.0001 par value, 1,000,000 shares
authorized; 10,000 shares issued and outstanding
1
1
Retained earnings (Deficit)
1,384,289
(1,417,117
)
Total Stockholders' Equity (Deficit)
1,384,790
(1,416,616
)
Total Liabilities and Stockholders'
    Equity (Deficit)
$
4,769,387
$
3,111,982
See accompanying
notes to the financial statements.
F-
4
Applied UV, Inc. and Subsidiaries
Consolidated Statements
of Income
For the Years Ended December 31, 2019
and 2018
2019
2018
Net Sales
$
9,329,720
$
7,556,444
Cost of Goods Sold
6,009,730
4,890,012
Gross Profit
3,319,990
2,666,432
Selling. General and Administrative
    Expenses
1,916,386
1,913,101
Operating Income
1,403,604
753,331
Other Income (Expense)
Gain on settlement (See Note 12)
1,520,399
-
Other Income
-
2,552
Interest Expense
(15,736
)
(35,640
)
Total Other Income (Expense)
1,504,663
(33,088
)
Income Before Provision for Income Taxes
2,908,267
720,243
Provision for Income Taxes
106,861
-
Net Income
$
2,801,406
$
720,243
Basic and Diluted Earnings Per
    Common Share
$
0.56
$
0.14
See accompanying
notes to the financial statements.
F-
5
Applied UV, Inc. and Subsidiaries
Consolidated Statements
of Changes in Stockholders' Equity (Deficit)
For the Years Ended December 31, 2019
and 2018
Preferred Stock
Common Stock
Total
Series A Voting
Retained
Stockholders
Shares
Amount
Shares
Amount
Earnings
Equity
Balance, January 1, 2018
10,000
$
1
5,001,250
$
500
$
(2,137,360
)
$
(2,136,859
)
Net income
-
-
-
-
720,243
720,243
Balance, December 31, 2018
10,000
1
5,001,250
500
(1,417,117
)
(1,416,616
)
Net Income
-
-
-
-
2,801,406
2,801,406
Balance, December 31, 2019
10,000
$
1
5,001,250
$
500
$
1,384,289
$
1,384,790
See accompanying
notes to the financial statements.
F-
6
Applied UV, Inc. and Subsidiaries
Consolidated Statements
of Cash Flows
For the Years Ended December 31, 2019
and 2018
2019
2018
Cash flows from Operating Activities
Net Income
$
2,801,406
$
720,243
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities
Stock based compensation
85,000
-
Bad debt expense
-
50,000
Amortization of debt discount
-
18,291
Gain on settlement
(1,520,399
)
-
Depreciation and amortization
8,121
6,250
Changes in Assets and Liabilities
Increase in accounts receivable
(250,459
)
(855,576
)
Decrease (increase) in inventories
12,570
(41,868
)
Increase in vendor deposits
(8,961
)
(5,661
)
(Increase) in prepaid expenses
(146,676
)
-
Increase in income taxes payable
106,861
-
Increase (decrease) in accounts payable and accrued
    expenses
(382,343
)
208,851
Increase (decrease) in deferred
    revenue
65,140
428,031
Total Adjustments
(2,031,146
)
(191,682
)
Net Cash Provided by Operating
    Activities
770,260
528,561
Cash Flows From Investing Activities
Purchase of machinery and equipment
(12,999
)
(3,865
)
Net Cash Used in Investing Activities
(12,999
)
(3,865
)
Cash Flows From Financing Activities
Payments on capital leases
(6,076
)
(5,511
)
Increase (decrease) in liabilities subject to compromise
(531,511
)
234,746
Loan from (to) officer
99,496
(133,303
)
Payments on loans payable
(83,000
)
(101,260
)
Proceeds from loans payable
-
148,125
Net Cash (Used In) Provided by
    Financing Activities
(521,091
)
142,797
Net Increase in Cash and equivalents
236,170
667,493
Cash and equivalents at January
    1,
793,766
126,273
Cash and equivalents at December
    31,
$
1,029,936
$
793,766
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest
$
-
$
18,291
Supplemental Non-Cash Items Not Included above resulting
    from the adoption of ASC 842
Initial recognition of operating
    lease asset
$
710,075
$
-
Initial recognition of operating
    lease liabilities
$
710,075
$
-
Supplemental Non-Cash Items
Capitalized stock based compensation
    for initial public offering costs
$
507,805
$
-
See accompanying
notes to the financial statements.
F-
7
Applied UV, Inc. and Subsidiaries
Notes to Consolidated
Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Business
In March 2019, Applied UV, Inc. (the "Company")
was formed and incorporated in the State of Delaware for the intended purpose of creating a legal holding company structure for
SteriLumen, Inc. and Munn Works, LLC and any future potential mergers or acquisitions. The then-existing shareholders and members
of SteriLumen, Inc. and Munn Works, LLC exchanged all of their interest for shares of Applied UV, Inc. with substantially similar
economic voting interests for each shareholder immediately before and after the share exchange. As a result of the share exchange,
SteriLumen, Inc. and Munn Works, LLC became wholly-owned subsidiaries of Applied UV, Inc and, collectively referred to as (the
 "Company"). The combination met the criteria outlined in ASC 850 to be accounted for as a transaction between entities
under common control and therefore the financial statements are being presented as if the transfer happened at the beginning of
the period and prior year financial information has been retrospectively adjusted to furnish comparative information.
SteriLumen, Inc. is engaged in the design,
manufacture, assembly and distribution of automated disinfecting mirror systems for use in hospitals and other healthcare facilities.
The Company was incorporated in the State of New York in November of 2012 and is headquartered in Mount Vernon, New York. Munn
Works, LLC is engaged in the manufacture of fine mirrors specifically for the hospitality industry.
Basis of Presentation
The accompanying consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US
GAAP").
Principles of Consolidation
The consolidated financial statements
include the accounts of Applied UV, Inc., Munn Works, LLC and SteriLumen, Inc. All significant intercompany transactions and balances
are eliminated in consolidation.
Concentration of Credit and Business Risk
At times throughout the year, the Company
maintains cash balances at various institutions, which may exceed the Federal Deposit Insurance Corporation limit. As of December
31, 2019 and 2018, amounts of $37,029 and $459,543, respectively were in excess of FDIC insured limits.
The Company provides credit in the normal
course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts
based on factors surrounding the credit risk of specific customers, historical trends and other information.
For the year ended December 31, 2019,
the Company had four major suppliers that accounted for approximately 78% of supplies and materials used by the Company and for
the year ended December 31, 2018, the Company had three major suppliers that accounted for approximately 76% of supplies and materials
used by the Company. The amounts have been recorded as costs of sales in the consolidated statements of income.
Cash and Cash Equivalents
The Company considers all time deposits,
certificates of deposit and all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.
The Company does not have any cash equivalents at December 31, 2019 and 2018.
F-
8
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Use of Estimates
The preparation of consolidated financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Accounts Receivable
Accounts receivable are non-collateralized
customer obligations due under normal trade terms generally requiring payment within 30-60 days from the invoice date. The carrying
amounts of accounts receivable is reduced by a an allowance for doubtful accounts that reflects management's best estimate
of the amounts that will not be collected. The Company includes any accounts receivable balances that are determined to be uncollectible,
along with a general reserve, in its overall allowance for doubtful accounts. Management reviews accounts receivable on a monthly
basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are
used in evaluating the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable
is written off against the allowance. Based on the information available, the Company believes an allowance for doubtful accounts
of $50,000 as of December 31, 2019 and 2018 is adequate.
Inventory
Inventories are valued at the lower of
cost or net realizable value using the first-in, first-out method. Inventory is comprised of raw materials that are purchased
on the initial start date of a specific project and are capitalized using the percentage of completion method of accounting. We
amortize these costs to the associated contract proportion with our percentage of completion on the contract, calculated using
a cost-based input method. Capitalized costs are considered impaired when the net contract cost asset plus future costs to complete
the contract are less than the remaining revenue to be recognized under the contract. When capitalized costs are impaired, we
record a charge to the impairment, impairment charges cannot be reversed. As of December 31, 2019 and 2018 no impairment charges
were recorded and management has determined that an excess and obsolete reserve is not required.
Property and Equipment
Property and equipment are recorded at
cost. Depreciation of furniture and fixtures is provided using the straight-line method, generally over the terms of the lease.
Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred. Depreciation
of machinery and equipment is based on the estimated useful lives of the assets.
Years
Machinery and equipment
Lesser of term of
    lease or useful life
Furniture and fixtures
7
An asset is disposed of or retired when
no future economic benefits are expected to arise from continued use of the asset. The gain or loss arising on the disposal or
retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset.
Revenue and Cost Recognition
On January 1, 2018, the Company adopted
accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments using the modified retrospective
method for all customer contracts not yet completed as of the adoption date. The adoption of ASC 606 did not have a significant
impact on our Consolidated Financial Statements.
F-
9
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Revenue and Cost Recognition
(continued)
The Company recognizes revenue when the
performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:
1)
Identify the contract with a customer
A contract
with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights
regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial
substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred
is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining
the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment
experience or, in the case of a new customer, published credit and financial information pertaining to the customer.
2)
Identify the performance obligations in the contract
Performance
obligations promised in a contract are identified based on the services that will be transferred to the customer that are both
capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources
that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the
transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple
promised services, the Company must apply judgment to determine whether promised services are capable of being distinct in the
context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.
The Company promises to design, manufacture and sell custom mirrors through contractual arrangements. It was determined that most
services within a contract are substantially the same and have the same pattern of transfer to the customer over the term of the
agreement and are therefore highly interdependent upon each other. As such, the Company determined that the services within a
contract are not separately identifiable in the context of the contract and should therefore be bundled into a single performance
obligation.
3)
Determine the transaction price
The transaction
price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to
the customer. We evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments
that occur over time. We do not adjust the transaction price for the effects of financing if, at contract inception, the period
between the transfer of control to a customer and final payment is expected to be one year or less. The Company establishes pricing
for contracts with customers based on a fixed price for a fixed fee. Contracts do not provide for a discount or refund to customers
and historically, no discounts or refunds have been given.
F-
10
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Revenue and Cost Recognition
(continued)
4)
Allocate the transaction price to performance obligations
                                         in the contract
If the contract
contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However,
if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with
variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to
a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction
price based on management's judgment. The identified promises are considered to be bundled in arriving at the overall promise
within the contract. This promise therefore results in one performance obligation, to design, manufacture and sell custom mirrors
to our customer, therefore, allocation of the transaction price is not necessary.
5)
Recognize revenue when or as the Company satisfies a performance
                                         obligation
Revenue is
comprised of projects that are completed within our own facility or from a third-party vendor (direct sales). For projects that
are completed within our own facility, the Company satisfies performance obligations at over time. For projects that are completed
from a third-party vendor, the performance obligation is recognized at a point in time.
As of December 31, 2019 and
2018, total deferred revenue was $1,245,300 and $1,180,159. As of December 31, 2019, deferred revenue was comprised of work generated
from our own Mount Vernon facility of $844,331, work performed at the third-party manufacturer of $363,942 and billings made upfront
of $37,029. As of December 31, 2018, deferred revenue was comprised of work generated from our own Mount Vernon facility of $514,280,
work performed at the third-party manufacturer of $206,337 and billings made upfront of $459,542. Deferred revenue balances at
the beginning of the 2019 and 2018 reporting periods was recognized in full during the years ended December 31, 2019 and 2018,
respectively. Each component of deferred revenue is further explained below.
For projects,
that are completed within our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals through contractual
agreements. These sales require us to deliver our products within three to six months from commencement of order acceptance. We
recognize revenue over time by using the input method based on costs incurred as it depicts our progress toward satisfaction of
the performance obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based
on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs
include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor,
supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials
have been purchased or moved to work in process as required by the project's engineering design. Cost based input methods
of revenue recognition require us to make estimates of costs to complete the projects. In making such estimates, significant judgment
is required to evaluate assumptions related to the costs to complete the projects, including materials, labor and other system
costs. If the estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated
loss in the period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts billed in excess
of revenues and profits recognized. Total deferred revenue from the input method of accounting was $844,331 and $514,280 as of
December 31, 2019 and 2018, respectively. Revenues and profits recognized in excess of amounts billed typically does not occur
as we will not perform any work in excess of the amount we bill to our customers. On January 1, 2019, total deferred revenue from
the input method of accounting was $204,880.
Each product
or service delivered to a third-party customer that is manufactured by a third-party vendor is considered to satisfy a performance
obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the
customer. These sales are shipped from the manufacturer to the customer without our taking physical inventory possession. We report
direct sales on a gross basis, that is, the amounts billed to our customers are recorded as "Sales," and inventory purchased
from manufacturers are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory before
it is transferred to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise to our
customers, taking on inventory risk of returned product, and having discretion in establishing pricing. We typically pay our vendors
a portion of the total cost up front and the remaining balance is accrued for and paid within 30 to 60 days of when the products
are shipped from the third-party warehouse. Vendor payments are capitalized until completion of the project and are recorded as
vendor deposits. As of December 31, 2019 and 2018, the vendor deposit balance was $104,517 and $95,556, respectively.
F-
11
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Revenue and Cost Recognition
(continued)
5)
Recognize revenue when or as the Company satisfies a performance
                                         obligation (continued)
Losses
expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Deferred
revenue from these projects as of December 31, 2019 and 2018 was $363,942 and $206,337, respectively. On January 1, 2019, total
deferred revenue from these projects were $255,875. At December 31, 2019 and 2018, there were no losses charged to expense.
There are
times that we bill upfront where no work is performed until 30 to 60 days after the deposit is received from our customer. Accordingly,
no revenue is recognized and the amounts are deferred. As of December 31, 2019 and 2018, deferred revenue balances related to
these invoices were $37,029 and $459,542, respectively. On January 1, 2019, total deferred revenue related to these billings were
$291,372.
For the year ended December 31, 2019,
the Company generated revenues of $6,628,792 at a point in time and $2,700,928 over time.
For the year ended December 31, 2018,
the Company generated revenues of $5,815,970 at a point in time and $1,740,474 over time.
Shipping and Handling Charges
The Company reports shipping and handling
fees charged to customers as part of net sales and the associated expense as part of cost of sales. Shipping charges amounted
to $1,664,950 and $938,111 for the years ended December 31, 2019 and 2018, respectively.
Advertising
Advertising costs are charged to operations
when incurred. Advertising expense for the years ended December 31, 2019 and 2018 was $218,724 and $265,637, respectively.
Research and Development
The Company accounts for research and
development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development ("ASC 730-10").
Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and
development costs are expensed as incurred. The Company did not incur any research and development expenses during the years ended
December 31, 2019 and 2018.
Income Taxes
The Company files income tax returns using
the accrual basis of accounting. Income taxes are accounted for under the asset and liability method. Current income taxes are
based on the year's income taxable for federal and state tax reporting purposes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences
are expected to affect taxable income. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extend that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset
to be recovered.
Per FASB ASC 740-10, disclosure is not
required of an uncertain tax position unless it is considered probable that a claim will be asserted and there is a more-likely-than-not
possibility that the outcome will be unfavorable. Using this guidance, as of December 31, 2019 and 2018, the Company has no uncertain
tax positions that qualify for either recognition or disclosure in the financial statements. The Company's 2018, 2017 and 2016
Federal and State tax returns remain subject to examination by their respective taxing authorities. Neither of the Company's Federal
or State tax returns are currently under examination.
F-
12
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Fair Value of Financial Instruments
The Company records the fair value
of assets and liabilities in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 820,
Fair Value Measurement
. FASB ASC 820 establishes a framework for measuring fair value under accounting
principles generally accepted in the United States. That framework provides a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value.
The three levels of the fair value hierarchy
under FASB ASC 820 are as follows:
-
Level 1 - Valuations based on
                                         unadjusted quoted prices in active markets for identical assets or liabilities that the
                                         Company has the ability to access.
-
Level 2 - Valuations based generally
                                         on observable inputs for similar assets and liabilities, or identical or similar assets
                                         and liabilities in inactive markets.
-
Level 3 - Valuations based on
                                         inputs that are unobservable and significant to the overall fair value measurement. Valuation
                                         techniques could include the use of discounted cash flow models and other similar techniques.
The carrying amounts reported in the consolidated
balance sheets as of December 31, 2019 and 2018 for cash and cash equivalents, accounts receivable, prepaid expenses and other
current assets, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these
financial instruments. The fair value of capital lease obligations approximate their carrying value because these financial instruments
bear interest at rates that approximate current market rates for loans with similar maturities and credit quality.
Stock- Based Compensation
The Company accounts for its stock-based
compensation awards in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification
Topic 718 ("ASC"), Compensation-Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments
to employees, including grants of employee stock options and restricted stock and modifications to existing stock options, to
be recognized in the statements of operations based on their fair values.
Patent Costs
We capitalize costs consisting principally
of outside legal costs and filing fees related to obtaining patents. We amortize patent costs over the useful life of the patent,
beginning with the date the U.S. Patent and Trademark Office, or foreign equivalent, issues the patent. As of December 31, 2019
and 2018, we capitalized $60,092 and $0 of patent costs. As of December 31, 2019 and 2018, we have not recorded any amortization
expense for these patents.
Warranty Costs
The Company typically provides warranty
on its products. The Company accrues for the estimated warranty costs at the time when revenue is recognized. The warranty accruals
are regularly monitored by management based upon historical experience and any specifically identified failures. While the Company
engages in extensive product quality assessment, actual product failure rates, material usage or service delivery costs could
differ from estimates and revisions to the estimated warranty liability would be required. There was no warranty accrual as of
December 31, 2019 and 2018, respectively.
F-
13
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Subsequent Events Evaluation Date
The Company evaluated the events and
transactions subsequent to the December 31, 2019 balance sheet date, in accordance with ASC 855-10-50, "Subsequent Events",
through June 23, 2020, which is the date the consolidated financial statements were available to be issued.
Recent Accounting Pronouncements
Recently Adopted
In February 2016, the Financial Accounting
Standards Board, or the FASB, issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use, or
ROU, assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC
842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require
any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard
resulted in the recording of ROU assets and lease liabilities for all our lease agreements with original terms of greater than
one year. The adoption of ASC 842 did not have a significant impact on our statements of income or cash flows.
In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the
accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation — Stock
Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard,
most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments
granted to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not
have a material impact on our financial statements.
Not Yet Adopted
In August 2018, the FASB issued ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,
which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related to transfers
between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period
and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes. ASU 2018-13 is
effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We will
modify our disclosures beginning in the first quarter of 2020 to conform to this guidance. We do not expect the adoption of this
standard and the associated changes to our disclosures to have a material impact to our financial statements.
In June 2016, the FASB issued ASU 2016-13,
Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces
the current incurred loss impairment methodology for financial assets with a methodology that reflects expected credit losses.
The new credit losses model must be applied to loans, accounts receivable, and other financial assets. ASU 2016-13 is effective
for annual periods beginning after December 15, 2019, including interim periods within those annual periods. We plan to adopt
the new standard in the first quarter of 2020 using a modified retrospective approach with a cumulative-effect adjustment to retained
earnings as of the beginning of the year of adoption. We do not believe this guidance will have a material impact on our statements
of operations or cash flows.
We currently believe that all other issued
and not yet effective accounting standards are not relevant to our financial statements.
F-
14
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 2 - INVENTORY
Inventory consists of raw materials of
$99,543 and $112,113 at December 31, 2019 and 2018, respectively.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are summarized
by major classifications as follows:
December 31,
2019
2018
Machinery and Equipment
$
39,583
$
39,583
Furniture and Fixtures
16,864
3,865
56,447
43,448
Less: Accumulated Depreciation
(22,076
)
(13,955
)
$
34,371
$
29,493
Depreciation expense, including amortization
of assets under capital leases, for the years ended December 31, 2019 and 2018 was $8,121 and $6,250, respectively.
NOTE 4 - DUE TO AND FROM SHAREHOLDER
As of December 31, 2019 and 2018 the Company
loaned its majority shareholder noninterest-bearing advances, which are due upon demand. As of December 31, 2019 and 2018, amounts
owed from the Company's majority shareholder was $4,225 and $103,721, respectively.
NOTE 5 - CAPITAL LEASE OBLIGATION
The Company's machinery under a capital
lease, which is included in machinery and equipment is summarized as follows:
Machinery and Equipment
$
39,583
Less: Accumulated Depreciation
(20,205
)
$
19,378
Future minimum principal and interest
payments under the capital lease agreements as of December 31, 2019, are as follows:
2020
$
7,280
2021
7,280
2022
7,280
2023
1,489
Less: Amount representing interest
(1,737
)
Present value of future minimum lease payments
21,592
Less: current portion
(6,380
)
$
15,212
F-
15
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 6 - LOANS PAYABLE
In December of 2012, the Company received
$260,000 from Seagrace Partners that accrued interest at 5% annually with no maturity date and no stated terms of repayment. As
of December 31, 2019 and 2018, the note had an outstanding principal balance of $0 and $131,336, respectively. Interest expense
related to this note for the year ended December 31, 2019 and 2018 was $5,902 and $7,656, respectively. The outstanding principal
balance of $132,390 was reclassed to liabilities subject to compromise (note payable- pre-petition). In 2019, the Company entered
into a settlement agreement in relation to the Company's Chapter 11 Bankruptcy (as further described in Note 10 of the financial
statements) with the note holder where the Company would pay $80,000 over the next 90 days, in four equal installments of $20,000.
The entire $80,000 was repaid prior to December 31, 2019. In addition, the Company will provide the third party lender 8,000 shares
of common stock in the Company (subject to certain transfer restrictions), in an amount which will have a public trading value
within 24 months of at least $85,000. If the value of the stock does not reach $85,000 at the end of 24 months, the shareholders
of the Company will provide the third party lender make-up stock to reach the value of $85,000 with a maximum amount of shares
to be issued of 17,000 shares. This repayment would constitute as full and final payment of any and all obligations to the lender.
On the date of the settlement, the Company recorded a loss on extinguishments in the amount of $34,610.
In June of 2018 and June of 2016, the
Company received advances from On Deck Capital in the amounts of $150,000 and $100,000, respectively. The June 2016 note matured
in one year from the date of issuance and required 52 weekly payments of $2,346. As of December 31, 2019 and 2018, the balance
of this note was $0 and interest expense of $3,981 was recorded during the year ended December 31, 2018. The June 2018 note matured
in one year from the date of issuance and required 52 weekly payments of $3,605. As of December 31, 2018, the company made no
repayments on this note and has an outstanding principal balance of $150,000. As part of the Chapter 11 Bankruptcy, the outstanding
principal balance of $150,000 was reclassed to liabilities subject to compromise (note payable- pre-petition) as further described
in Note 10 of the financial statements. Accrued interest on this note as of December 31, 2018 was $17,360 and an additional $20,140
was accrued for based on the proof of claim submitted by the note holder. These amounts were also reclassed to liabilities subject
to compromise (accounts payable and accrued expenses- pre-petition) as further described in Note 10 of the financial statements.
In 2019, the Company paid $18,750, which was 10% of the allowed proof of claim in the Chapter 11 Bankruptcy of $187,500. In addition,
the Company was required to pay $157,500 in a five payments in the amount of $30,000 per year, with an additional $7,500 in year
two. The Company recognized a gain on extinguishments of $11,250 in relation to the settlement in the year ended December 31,
2019. As of December 31, 2019, the company has an outstanding balance of $157,500.
Minimum obligations under this
loan agreement is as follows:
For the year Ending December 31,
2020
$
37,500
2021
30,000
2022
30,000
2023
30,000
2024
30,000
$
157,500
F-
16
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 6 - LOANS PAYABLE (continued)
In October of 2017, June of 2017, and
September of 2016, the Company received advances from LG Funding, LLC in the amounts of $150,971, $150,990, and $125,990, respectively,
in exchange for notes in the amounts of $182,679, $187,228, and $156,228, respectively. On the initial date of the note, the Company
accounted for the notes at face value less a discount for the difference between the face value and advances received. The discounts
were amortized to interest expense in proportion to the repayments over the total amount loaned. For the years ended December
31, 2019 and 2018, the Company recorded $0 and $48,837 in interest expense in relation to these notes. As of December 31, 2019
and 2018, the loans from this third party consisted of the following:
December 31,
2019
2018
October 2017 Note
$
-
$
87,828
June 2017 Note
-
39,628
September 2016 Note
-
-
Less: Unamortized Discount
-
(22,914
)
Current Portion of Long-Term Debt
-
104,542
Less: Notes payable- pre-petition
    (Liabilities Subject to Compromise)*
-
(104,542
)
Current Portion of Long-Term Debt
$
-
$
-
The Company recognized a gain of $81,000
in 2019 as a result of the Chapter 11 Bankruptcy Case and all remaining outstanding balances were settled in full.
NOTE 7 - STOCKHOLDERS' EQUITY
Series A Preferred Stock
Liquidation Preference
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of shares of Series A Preferred Stock shall not be entitled
to any liquidation preference.
Voting
On any matters presented to the stockholders
of the corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent
of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred Stock shall be entitled to vote in
an amount equal to
1,000 v
otes per share. Series A Preferred Stock shall vote as a single class and such voting rights
shall be identical in all respects.
Conversion
The holders of the shares of Series A
Preferred Stock shall not have any rights hereunder to convert such shares into, or exchange such shares for, shares of any other
series or class of capital stock of the Corporation or of any other person.
Common stock
The holders of our common stock are entitled
to the following rights:
Voting
Each share of our common stock entitles
its holder to one vote per share on all matters to be voted or consented upon by the stockholders. Holders of our common stock
are not entitled to cumulative voting rights with respect to the election of directors.
F-
17
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 7 - STOCKHOLDERS' EQUITY (continued)
Common stock (continued)
Dividend
Subject to limitations under Delaware
law and preferences that may apply to any shares of preferred stock that we may decide to issue in the future, holders of our
common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out
of funds legally available.
Liquidation
In the event of the liquidation, dissolution,
or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution
after the payment of all of our debts and other liabilities, subject to the prior rights of the holders of our preferred stock.
Other Matters
The holders of our common stock have
no subscription, redemption, or conversion privileges. Our common stock does not entitle its holders to preemptive rights. All
of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences and privileges of the
holders of our common stock are subject to the rights of the holders of shares of any series of preferred stock which we may issue
in the future.
NOTE 8 - RELATED PARTY
In February of 2019,
the Company engaged Carmel, Milazzo & Feil LLP (the "Firm") to represent and assist the company with all general
corporate legal matters including the preparation and filing with the Securities and Exchange Commission of a registration statement
on Form S-1 through the Company's intended initial public offering. Ross Carmel, a former board member of Applied UV, is a partner
at the firm. The firm will perform services in exchange for three percent of the outstanding shares of the Company's common stock,
issued as follows: 1.) One percent due upon execution of the agreement 2.) One percent due up the filing of the Form S-1; and
3.) One percent due upon the SEC declaring the Form S-1 effective. As of December 31, 2019, the company was liable to issue 102,066
shares of common stock to the firm. These shares have not been issued to date and have been recorded as a liability to be settled
in stock for an amount of $507,805. Because these legal fees are directly related to the initial public offering, the amount has
been capitalized and is included in other assets.
NOTE 9 - LEASING ARRANGEMENTS
The Company adopted ASU
2016-02 prospectively as of January 1, 2019, the date of initial application, and therefore prior comparative periods were not
adjusted. As part of the adoption, the Company elected the "package of expedients", which permits the Company
not to reassess under the new standard the Company's prior conclusions about lease identification and initial direct costs.
The Company did not elect the use-of hindsight or the practical expedient pertaining to land easements, the latter not being applicable
to the Company. The Company has lease arrangements which are classified as short-term in nature. The Company has elected
the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company
will not recognize Right of Use ("ROU") assets or lease liabilities.
The Company determines
whether an arrangement is a lease at inception. The Company has operating leases for office space and office equipment. The Company's
leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to
five years. The Company considered these options to extend in determining the lease term used to establish the Company's
right-of use assets and lease liabilities once reasonably certain of exercise. The Company's lease agreements do not contain
any material residual value guarantees or material restrictive covenants.
F-
18
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 9 - LEASING ARRANGEMENTS (continued)
ROU assets represent
the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation
to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized
at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also
includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations
of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when
the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line
basis over the lease term.
As the Company's
leases do not provide an implicit rate, the Company uses an incremental borrowing rate of 5% based on the information available
at commencement date in determining the present value of lease payments. On the date of adoption the company recorded a ROU asset
and a corresponding lease liability in the amount of $710,075.
On February 7, 2014, the Company entered
into a lease agreement in Mount Vernon, New York on a month to month basis. The monthly rent under this arrangement from January
1, 2018 through November 30, 2018 was $10,000 per month, from December 2018 through February 2019 was $11,150 per month. The Company
then amended the lease for a term that commenced on April 1, 2019 and expire on the 31st day of March 2024 at a monthly rate of
$13,400. Rent expense for the year ended December 31, 2019 and 2018 was $156,300 and $121,150, respectively. The lease can be
cancelled by either party with 150 days of written notice.
Schedule maturities of operating lease
liabilities outstanding as of December 31, 2019 are as follows:
2020
$
160,800
2021
160,800
2022
160,800
2023
160,800
2024
40,200
Total lease payments
683,400
Less: Imputed Interest
(68,878
)
Present value of future minimum
    lease payments
$
614,522
Consistent with ASC 842-20-50-4, the
Company calculated its total lease cost based solely on its monthly rent obligation. The Company had no cash flows arising from
its lease, no finance lease cost, short term lease cost, or variable lease costs. Our lease does not produce any sublease income,
or any net gain or loss recognized from sale and leaseback transactions. As a result, the Company did not need to segregate amounts
between finance and operating leases for cash paid for amounts included in the measurement of lease liabilities, segregated between
operating and financing cash flows; supplemental non-cash information on lease liabilities arising from obtaining right-of-use
assets; weighted-average calculations for the remaining lease term; or the weighted-average discount rate.
F-
19
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 10 - COSTS AND ESTIMATED
EARNINGS ON CONTRACTS IN PROGRESS
Costs and estimated earnings on contracts
in progress, net of progress billings, are as follows as of December 31, 2019 and 2018:
Costs incurred on contracts in progress
$
240,732
$
255,870
Estimated net earnings thereon
42,403
300,402
Total costs and estimated earnings
283,135
556,272
Billings to date
(1,232,925
)
(1,070,552
)
Net overbilled
$
(949,790
)
$
(514,280
)
Contract Assets
$
-
$
-
Contract Liabilities (Deferred
    Revenue)
(949,790
)
(514,280
)
$
(949,790
)
$
(514,280
)
Contract assets represent amounts earned
under contracts in progress but not yet billed under the terms of those contracts. These amounts become billable according to
the contract terms, which usually consider passage of time, achievement of certain milestones or completion of the project. Substantially
all costs and estimated earnings in excess of billings on contracts in progress are expected to be billed and collected in the
following year.
Contract liabilities represent billings
to customers in excess of costs and earnings on contracts in progress. Substantially all such amounts are expected to be earned
in the following year.
NOTE 11 - SHARE EXCHANGE
On March 26, 2019, March 27, 2019 and
July 31, 2019, we and the shareholder of SteriLumen, Inc. and the sole member of Munn Works, LLC, completed the transactions contemplated
by three Share Exchange Agreements. Pursuant to the applicable Share Exchange Agreements, SteriLumen, Inc. and Munn Works, LLC
transferred to us all assets and liabilities. The shareholders of SteriLumen, Inc. exchanged all of their shares in SteriLumen
for 10,000 preferred and 2,001,250 common shares of Applied UV, Inc. The sole member of Munn Works, LLC exchanged all of its membership
interest in Munn Works, LLC for 3,000,000 common shares of Applied UV, Inc. As the Share Exchanges were transactions between entities
that are under common control, accounting rules require that our Consolidated Financial Statements include the results of the
Transferred Businesses for all periods presented, including periods prior to the completion of the Share Exchanges.
NOTE 12 - LEGAL
APF Management filed and served a complaint
in 2013 New York state court against Munn Works, LLC, Max Munn and various other parties seeking recovery of damages and was awarded
various damages on behalf of APF.
On June 25, 2018, Munn Works, LLC.
entered Chapter 11 bankruptcy in order to facilitate an appeal and a resolution to this matter. As part of the Chapter 11 bankruptcy,
APF management filed a claim in the amount of $1,474,505. All of the parties agreed to resolve the disputes whereby, APF would
receive $400,000 payable by the Company. The amount was settled and paid in full in 2019.
F-
20
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 12 - LEGAL (continued)
Administration of Chapter 11 Case
In June of 2018, Munn Works, LLC received
Bankruptcy court approval of certain "first-day" motions, which preserved the Company's ability to continue operations
without interruption in Chapter 11. As part of the "first-day" motions, the Company received approval to pay or otherwise
honor certain pre-petition obligations generally designed to support the Company's operations. Additionally, the Bankruptcy Court
confirmed the Company's authority to pay for goods and services received post-petition in the ordinary course of business.
As part of the chapter 11 case, the Company
has retained, pursuant to Bankruptcy Court authorization, legal and other professionals to advise the Company in connection with
the administration of its chapter 11 case and its litigation with APF management, and certain other professionals to provide services
and advice in the ordinary course business. As a result of the chapter 11 filing, the payment of pre-petition liabilities is generally
subject to compromise pursuant to a plan of reorganization. Generally, under the Bankruptcy Code, actions to enforce or otherwise
effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted,
the Bankruptcy Court granted the Company authority to pay certain pre-petition claims in designated categories and subject to
certain terms and conditions. Among other things, the Bankruptcy Court has authorized the Company to pay certain pre-petition
claims relating to employees and critical vendors.
On June 25, 2018. the Company filed schedules
of assets and liabilities and statement of financial affairs (the "Schedules") with the Bankruptcy Court. The Bankruptcy
Court has entered an order setting October 26, 2018 as the deadline for filing proofs of claim (the "Bar Date"). The
Bar Date is the date by which claims against the Company relating to the period prior to the commencement of the Company's chapter
11 case must be filed if such claims are not listed in liquidated, non-contingent and undisputed amounts in the Schedules, or
if the claimant disagrees with the amount, characterization or classification of its claim as reflected in the Schedules. Claims
that are subject to the Bar Date and which are not filed on or prior to the Bar Date, may be barred from participating in any
distribution that may be made under a plan of reorganization in the Company's chapter 11 case.
The Company applied Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 852, Reorganizations, which is applicable
to companies under bankruptcy protection, and requires amendments to the presentation of key financial statement line items. It
requires that the financial statements for periods subsequent to the chapter 11 filing distinguish transactions and events that
are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains
and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business
must be reported separately as reorganization items in the consolidated statements of operations. The balance sheet must distinguish
pre-petition liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and
from post-petition liabilities. Liabilities that may be subject to a plan of reorganization must be reported at the amounts expected
to be allowed in the Company's chapter 11 case, even if they may be settled for lesser amounts as a result of the plan of reorganization
or negotiations with creditors. In addition, cash used by reorganization items are disclosed separately in the consolidated statements
of cash flow.
Liabilities Subject to Compromise
Pre-petition liabilities that are subject
to compromise are required to be reported at the amounts expected to be allowed in the Company's chapter 11 case, even if they
may be settled for lesser amounts. The amounts classified as Liabilities Subject to Compromise as of December 31, 2018 may be
subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events. The Company
cannot reasonably estimate the value of the claims that will ultimately be allowed in its chapter 11 case until its evaluation,
investigation and reconciliation of all filed claims has been completed.
F-
21
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 12 - LEGAL (continued)
Liabilities Subject to Compromise
(Continued)
The amount of liabilities subject to compromise
represents the Company's estimate, where an estimate is determinable, of known or potential pre-petition claims to be addressed
in connection with its chapter 11 case. Such liabilities are reported at the Company's current estimate, where an estimate is
determinable, of the allowed claim amount, even though they may be settled for lesser amounts. These claims remain subject to
future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events.
As of December 31, 2018, Liabilities subject to Compromise
consist of the following (note: all liabilities were settled in 2019, therefore no balances remain as of December 31, 2019):
2018
Accounts payable and accrued expenses- pre-petition
$
492,014
Notes payable- pre-petition
370,390
Expectation damages accrual- APF
    Management
1,474,505
Total
$
2,336,909
Pursuant to Bankruptcy Court Order
dated May 31, 2019, the Debtor's Second Amended Chapter 11 Plan dated April 29, 2019 (the "Plan") was approved
and confirmed. The Plan provided treatment for five (5) classes of claims, with the general unsecured claims composing Class 4
Claimants. Under the Plan, Class 4 Claimants, would receive 10% of their Allowed Claim on the Effective Date. As a result of the
bankruptcy claim, APF received and settled for $400,000 where a gain on settlement of $1,074,505 was recorded. As described in
Note 6 of the financial statements, the Company recorded a total net gain from settlement of debt and gains from its Chapter 11
Bankruptcy case in the amount of $57,640. Other various pre-petition creditors received and settled for a total of $103,761, resulting
in a gain on settlement in the amount of $388,253. The entire amount was escrowed on or before May 23, 2019 and paid within 15
days of the effective date of the stipulation. As a result of the transaction, the Company recorded a total gain on settlement
of $1,520,398.
NOTE 13 - INCOME TAXES
The provision for federal and state income taxes for the years
ended is as follows:
2019
2018
Current provision:
Federal
$
113,786
$
-
State
5,671
-
Deferred provision (benefit):
Federal
$
(12,110
)
$
-
State
(486
)
-
Total Deferred
(12,596
)
-
Total provision for income taxes
$
106,861
$
-
F-
22
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 13 - INCOME TAXES (continued)
The income tax provision differs from
the expense that would result from applying federal statutory rates to income before income taxes because the Company is subject
to state income taxes, deferred income taxes are based on average tax rates and a portion of gifts and meals and entertainment
are not tax deductible. A valuation allowance has been provided to reduce deferred tax assets to an amount that is more likely
than not to be realized.
On December 22, 2017, the U.S. federal
government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act
makes broad and complex changes to the U.S. federal tax code, including, but not limited to reducing the U.S. federal corporate
tax rate from 35 percent to 21 percent, effective January 1, 2018.
Prior to the share exchange, Munn Works,
LLC was taxed as a single member Limited Liability Company for federal and state income tax purposes. As such, the Company will
not pay income taxes for earnings prior to the share exchange, as any income or loss will be included in the tax returns of the
individual member. Accordingly, no provision is made for income taxes in the financial statements prior to the share exchange.
Effective tax rates differ from the federal
statutory rate of 21% applied to income before provision for income taxes due to the following:
2019
2018
Federal statutory rate times financial
    statement income
$
610,746
$
151,251
Less: Tax Rate applied to pre share exchange earnings
(501,233
)
(151,251
)
Permanent tax basis differences
(7,838
)
-
State taxable income
5,186
-
Total provision for income taxes
$
106,861
$
-
NOTE 14 - SEGMENT REPORTING
FASB Codification Topic 280, Segment
Reporting, establishes standards for reporting financial and descriptive information about an enterprise's reportable segments.
The Company has two reportable segments: the design, manufacture, assembly and distribution of automated disinfecting mirror systems
for use in hospitals and other healthcare facilities (disinfectant mirror segment) and the manufacture of fine mirrors specifically
for the hospitality industry (hospitality segment). The segments are determined based on several factors, including the nature
of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.
An operating segment's performance
is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost
of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based
compensation, other charges (income), net and interest and other, net.
All net sales, cost of goods sold,
and other income (expense) was generated or incurred from the hospitality segment of our business. For the years ended December
31, 2019 and 2018, the hospitality segment of our business incurred $1,860,422 and $1,857,240, respectively, of selling, general
and administrative expenses. For the years ended December 31, 2019 and 2018, the disinfectant mirror segment of our business incurred
$55,963 and $55,861, respectively, of selling, general and administrative expenses.
F-
23
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 14 - SEGMENT REPORTING (continued)
As of December 31, 2019 and 2018, total
assets from the hospitality segment of our business amounted to $4,706,535and $3,090,548, respectively. As of December 31, 2019
and 2018, total assets from the disinfectant mirror segment of our business amounted to $62,852 and $21,434, respectively.
As of December 31, 2019 and 2018, total
liabilities from the hospitality segment of our business amounted to $3,347,120 and $4,471,181, respectively. As of December 31,
2019 and 2018, total liabilities from the disinfectant mirror segment of our business amounted to $37,477 and $57,417, respectively.
NOTE 15 - SUBSEQUENT EVENT
Management has evaluated subsequent
events through June 23, 2020, the date the financial statements were available to be issued. As a result of the spread of the
COVID-19 Coronavirus and the resulting stay-at-home orders issued by the state and local municipalities in which the Company operates,
the Company is experiencing reduced sales. The duration of the reduction in sales may be only temporary. However, the related
financial impact and duration cannot be reasonably estimated at this time. On April 3, 2020, the Company submitted a Paycheck
Protection Program application to Chase Bank for a loan amount equal to $296,287. The amount was approved and the Company has
received the funds. The amount will be used to cover payroll costs, rent, and utilities. Employee and compensation levels are
expected to be maintained, however, it is not certain at this time whether or not the loan will be forgiven.
On April 20, 2020 SteriLumen entered into
the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of the effectiveness of the SteriLumen Disinfecting
System in 17 patient bathrooms at Mount Sinai St. Luke's Hospital in New York, NY. SteriLumen will be responsible for funding
the direct and indirect costs of Mount Sinai's research in the amount of $160,000 plus all of the cost of microbiological
testing. To the extent any intellectual property resulting from the research is conceived by Mount Sinai it will be the intellectual
property of Mount Sinai and to the extent it is conceived by SteriLumen it will be the intellectual property of SteriLumen. SteriLumen
has a 60-day exclusive option to negotiate a license for Mount Sinai's resulting patent rights if such patent was obtained
at SteriLumen's request and SteriLumen has paid for all the costs in obtaining the patent. If the results of the study contained
in Mount Sinai's final report are used by SteriLumen in a successful regulatory filing or a successful fundraising effort,
the Sponsor will be obligated to pay Mount Sinai a fee of $30,000.
Max Munn, Chief Executive Officer of
the Company is entitled to a five-year warrant to purchase 80,000 shares of the Company's common stock at an exercise price
equal to the greater of $5.00 per share and the per share market value of the Company's common stock at the date of the grant
in lieu of cash salary. The issuance of the warrants is contingent upon an initial public offering.
In May of 2020, we adopted the Applied
UV, Inc. 2020 Omnibus Incentive Plan (the "Plan"), which is effective as of March 31, 2020. Under the Plan, the Company
may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units,
performance shares, performance units, and other awards. Awards of up to 600,000 shares of common stock to Company employees,
officers, directors, consultants and advisors are available under the Plan. The type of grant, vesting provisions, exercise price
and expiration dates are to be established by the Board at the date of grant.
F-
24
Applied UV, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
NOTE 15 - SUBSEQUENT EVENT (continued)
On February 18, 2020 the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company's common stock
at an exercise price of equal to the greater of $2.50 per share and the per share market value of the Company's common stock on
the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to the Board, of which
1,250 have been cancelled. The options are subject to equal quarterly vesting over a one-year period.
In June of 2020, we effected a 5:1
reverse stock split (the "Reverse Stock Split") by filing an amendment to the Company's Amended and Restated
Certificate Incorporation with the Delaware Secretary of State. The Reverse Stock Split combined every five shares of Common Stock
issued and outstanding immediately prior to effecting the Reverse Stock Split into one share of Common Stock. As a result, the
number of issued and outstanding shares of Common Stock was retroactively adjusted in the consolidated financial statements.
F-
25
Applied UV, Inc. and Subsidiaries
Consolidated Financial Statements
March
31, 2020 and 2019
F-
26
Applied UV, Inc. and Subsidiaries
Index to the
Consolidated Financial Statements
March 31, 2020 and 2019
Page
Financial
    Statements
Condensed
    Consolidated Balance Sheets at March 31, 2020 (unaudited) and December 31, 2019
F-28
Condensed
    Consolidated Statements of Operations for the Three Months Ended
March
    31, 2020 and 2019 (unaudited)
F-29
Condensed
    Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the
Three
    Months Ended March 31, 2020 and 2019 (unaudited)
F-30
Condensed
    Consolidated Statements of Cash Flows for the Three Months Ended March 31,
2020
    and 2019 (unaudited)
F-31
Notes
    to the Unaudited Interim Condensed Consolidated Financial Statements
F-32
    - F-47
F-
27
Applied
UV, Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets
March 31,
2020
December 31,
2019
(Unaudited)
Assets
Current Assets
Cash
$
1,712,387
$
1,029,936
Vendor deposit
230,867
104,517
Accounts receivable, net of allowance for doubtful accounts
1,261,909
2,227,792
Inventory
120,995
99,543
Loan to shareholder
36,959
4,225
Prepaid expense and other current assets
74,100
30,639
Total Current Assets
3,437,217
3,496,652
Machinery and equipment, net of accumulated depreciation
130,442
34,371
Right of use asset
583,067
614,522
Other assets
632,732
623,842
Total Assets
$
4,783,458
$
4,769,387
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued expenses
$
1,160,719
$
1,238,822
Income tax payable
106,861
106,861
Capital lease obligations-current portion
6,380
6,380
Lease liability-current
134,706
133,097
Notes payable
37,500
37,500
Deferred revenue
1,390,540
1,245,300
Total Current Liabilities
2,836,706
2,767,960
Long-term Liabilities
Capital lease obligations - less current portion
15,212
15,212
Note payable-less current portion
120,000
120,000
Lease liability-less current portion
448,361
481,425
Total Long-Term Liabilities
583,573
616,637
Total Liabilities
3,420,279
3,384,597
Stockholders' Equity
Common stock $.0001 par value, 150,000,000
    shares authorized; 5,001,250 shares issued and outstanding, respectively
500
500
Series A voting preferred stock $.0001 par value, 1,000,000
    shares authorized; 2,000 shares issued and outstanding
1
1
Retained earnings
1,362,678
1,384,289
Total Stockholders' Equity
1,363,179
1,384,790
Total Liabilities and Stockholders' Equity
$
4,783,458
$
4,769,387
The accompanying notes are an integral
part of these condensed consolidated financial statements.
F-
28
Applied
UV, Inc. and Subsidiaries
Condensed
Interim Consolidated Statements of Operations
(Unaudited)
Three
    Months Ended
March 31,
2020
2019
Net Sales
$
1,528,400
$
1,460,737
Cost of Goods Sold
1,161,813
1,138,252
Gross Profit
366,587
322,485
Selling. General and Administrative Expenses
388,198
327,879
Operating Loss
(21,611
)
(5,394
)
Other Income (Expense)
Other Income
-
465
Total Other Income (Expense)
-
465
Loss Before Provision for Income Taxes
(21,611
)
(4,929
)
Provision for Income Taxes
-
-
Net Loss
(21,611
)
(4,929
)
Basic and Diluted Earnings Per Common Share
$
-
$
-
The accompanying notes are an integral
part of these condensed consolidated financial statements.
F-
29
Applied
UV, Inc. and Subsidiaries
Condensed
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
(Unaudited)
Preferred Stock
Common Stock
Total
Series A Voting
Retained
Stockholders
Shares
Amount
Shares
Amount
Earnings
Equity
Balance, January 1, 2019
2,000
$
1
5,001,250
$
500
$
(1,417,117
)
$
(1,416,616
)
Net loss
-
-
-
-
(4,929
)
(4,929
)
Balance, March 31, 2019
2,000
$
1
5,001,250
$
500
$
(1,422,046
)
$
(1,421,545
)
Balance, January 1, 2020
2,000
$
1
5,001,250
$
500
$
1,384,289
$
1,384,790
Net loss
-
-
-
-
(21,611
)
(21,611
)
Balance, March 31, 2020
2,000
$
1
5,001,250
$
500
$
1,362,678
$
1,363,179
The accompanying notes are an integral
part of these condensed consolidated financial statements.
F-
30
Applied
UV, Inc. and Subsidiaries
Consolidated
Interim Consolidated Statements of Cash Flows
(Unaudited)
For
    the Three Months Ended
March 31,
2020
2019
Cash flows from Operating Activities
Net Loss
$
(21,611
)
$
(4,929
)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation and amortization
2,173
2,173
Changes in Assets and Liabilities
Decrease (Increase) in accounts receivable
965,883
(662,476
)
(Increase) in inventories
(21,452
)
(532
)
(Increase) in vendor deposits
(126,350
)
(417,957
)
(Increase) in prepaid expenses
(52,351
)
(11,055
)
(Decrease) increase in accounts payable and accrued
    expenses
(78,103
)
118,061
Increase in deferred revenue
145,240
1,400,623
Total Adjustments
835,040
428,837
Net Cash Provided by Operating Activities
813,429
423,908
Cash Flows From Investing Activities
Purchase of machinery and equipment
(98,244
)
-
Net Cash Used in Investing Activities
(98,244
)
-
Cash Flows From Financing Activities
Loan from (to) officer
(32,734
)
-
Net Cash Used In Financing Activities
(32,734
)
-
Net Increase in Cash and equivalents
682,451
423,908
Cash and equivalents at January 1,
1,029,936
793,766
Cash and equivalents at March 31,
$
1,712,387
$
1,217,674
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest
$
-
$
4,573
The accompanying notes are an integral
part of these condensed consolidated financial statements.
F-
31
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE
1
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
In March 2019, Applied UV, Inc. (the
 "Company") was formed and incorporated in the State of Delaware for the intended purpose of creating a legal holding
company structure for SteriLumen, Inc. and Munn Works, LLC and any future potential mergers or acquisitions. The then-existing
shareholders and members of SteriLumen, Inc. and Munn Works, LLC exchanged all of their interest for shares of Applied UV, Inc.
with substantially similar economic voting interests for each shareholder immediately before and after the share exchange. As
a result of the share exchange, SteriLumen, Inc. and Munn Works, LLC became wholly-owned subsidiaries of Applied UV, Inc and,
collectively referred to as (the "Company"). The combination met the criteria outlined in ASC 850 to be accounted for
as a transaction between entities under common control and therefore the financial statements are being presented as if the transfer
happened at the beginning of the period and prior year financial information has been retrospectively adjusted to furnish comparative
information.
SteriLumen, Inc. is engaged in the
design, manufacture, assembly and distribution of automated disinfecting mirror systems for use in hospitals and other healthcare
facilities. The Company was incorporated in the State of New York in November of 2012 and is headquartered in Mount Vernon, New
York. Munn Works, LLC is engaged in the manufacture of fine mirrors specifically for the hospitality industry.
Basis of Presentation
The
accompanying
unaudited condensed consolidated financial statements and related notes have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information,
and with the rules and regulations of the United States Securities and Exchange Commission (the "SEC") set forth in
Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete
financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.
Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should
be read along with the Annual Report filed of the Company for the annual period ended December 31, 2019. The consolidated balance
sheet as of December 31, 2019 was derived from the audited consolidated financial statements as of and for the year then ended.
The consolidated financial statements include the accounts of Applied UV, Inc., Munn Works, LLC and SteriLumen, Inc. All significant
intercompany transactions and balances are eliminated in consolidation.
F-
32
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Revenue and Cost Recognition
On January 1, 2018, the Company adopted
accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments using the modified retrospective
method for all customer contracts not yet completed as of the adoption date. The adoption of ASC 606 did not have a significant
impact on our Consolidated Financial Statements.
F-
33
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Revenue and Cost Recognition
(continued)
The Company recognizes revenue when
the performance obligations in the client contract has been achieved. A performance obligation is a contractual promise to transfer
a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and
recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized
when a customer obtains control of promised services in an amount that reflects the consideration we expect to receive in exchange
for those services. To achieve this core principal, the Company applies the following five steps:
1)
Identify the contract with a customer
A contract with
a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding
the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance
and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable
based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the
customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience
or, in the case of a new customer, published credit and financial information pertaining to the customer.
2)
Identify the performance obligations in the contract
Performance obligations
promised in a contract are identified based on the services that will be transferred to the customer that are both capable of
being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are
readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer
of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised
services, the Company must apply judgment to determine whether promised services are capable of being distinct in the context
of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. The
Company promises to design, manufacture and sell custom mirrors through contractual arrangements. It was determined that most
services within a contract are substantially the same and have the same pattern of transfer to the customer over the term of the
agreement and are therefore highly interdependent upon each other. As such, the Company determined that the services within a
contract are not separately identifiable in the context of the contract and should therefore be bundled into a single performance
obligation.
3)
Determine the transaction price
The transaction
price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to
the customer. We evaluate whether a significant financing component exists when we recognize revenue in advance of customer payments
that occur over time. We do not adjust the transaction price for the effects of financing if, at contract inception, the period
between the transfer of control to a customer and final payment is expected to be one year or less. The Company establishes pricing
for contracts with customers based on a fixed price for a fixed fee. Contracts do not provide for a discount or refund to customers
and historically, no discounts or refunds have been given.
F-
34
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Revenue and Cost Recognition (continued)
4)
Allocate the transaction price to performance obligations
                                         in the contract
If the contract
contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However,
if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with
variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to
a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction
price based on management's judgment. The identified promises are considered to be bundled in arriving at the overall promise
within the contract. This promise therefore results in one performance obligation, to design, manufacture and sell custom mirrors
to our customer, therefore, allocation of the transaction price is not necessary.
5)
Recognize revenue when or as the Company satisfies a performance
                                         obligation
Revenue is comprised
of projects that are completed within our own facility or from a third-party vendor (direct sales). For projects that are completed
within our own facility, the Company satisfies performance obligations at over time. For projects that are completed from a third-party
vendor, the performance obligation is recognized at a point in time.
As of March 31,
2020 and December 31, 2019, total deferred revenue was $1,390,540 and $1,245,300. As of March 31, 2020, deferred revenue was comprised
of work generated from our own Mount Vernon facility of $558,973 and work performed at the third-party manufacturer of $831,568.
At January 1, 2020, deferred revenue was $1,245,300 which $1,000,177 was recognized as revenue during the three months ended March
31, 2020. As of December 31, 2019, deferred revenue was comprised of work generated from our own Mount Vernon facility of $844,331,
work performed at the third-party manufacturer of $363,942 and billings made upfront of $37,029. At January 1, 2019, deferred
revenue consisted of $1,180,159 which $1,098,337 was recognized as revenue during the three months ended March 31, 2019. Each
component of deferred revenue is further explained below.
For
projects, that are completed within our own facility, we design, manufacture and sell custom mirrors for hotels and hospitals
through contractual agreements. These sales require us to deliver our products within three to six months from commencement of
order acceptance. We recognize revenue over time by using the input method based on costs incurred as it depicts our progress
toward satisfaction of the performance obligation. Under this method, revenue arising from fixed price contracts is recognized
as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance
obligations. Incurred costs include all direct material and labor costs and those indirect costs related to contract performance,
such as indirect labor, supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs
when the project materials have been purchased or moved to work in process as required by the project's engineering design.
Cost based input methods of revenue recognition require us to make estimates of costs to complete the projects. In making such
estimates, significant judgment is required to evaluate assumptions related to the costs to complete the projects, including materials,
labor and other system costs. If the estimated total costs on any contract are greater than the net contract revenues, we recognize
the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Deferred Revenue represents amounts
billed in excess of revenues and profits recognized. Total deferred revenue from the input method of accounting was $
558,973
and $844,331 as of March 31, 2020 and December 31, 2019, respectively. Revenues and profits recognized in excess of amounts billed
typically does not occur as we will not perform any work in excess of the amount we bill to our customers.
Each
product or service delivered to a third
-party customer that is manufactured by a third-party vendor is considered to satisfy
a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods
passes to the customer. These sales are shipped from the manufacturer to the customer without our taking physical inventory possession.
We report direct sales on a gross basis, that is, the amounts billed to our customers are recorded as "Sales," and inventory
purchased from manufacturers are recorded as Cost of Sales. We are the principal of direct sales because we control the inventory
before it is transferred to our customers. Our control is evidenced by us being primarily responsible for fulfilling the promise
to our customers, taking on inventory risk of returned product, and having discretion in establishing pricing. We typically pay
our vendors a portion of the total cost up front and the remaining balance is accrued for and paid within 30 to 60 days of when
the products are shipped from the third-party warehouse. Vendor payments are capitalized until completion of the project and are
recorded as vendor deposits. As of Mrch 31, 2020 and December 31, 2019, the vendor deposit balance was $230,867 and $104,517,
respectively.
F-
35
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Revenue and Cost Recognition (continued)
5)
Recognize revenue when or as the Company satisfies a performance
                                         obligation (continued)
Losses
expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Deferred
revenue from these projects as of
March 31, 2020 and December 31, 2019 was $831,568 and $363,942, respectively. At March
31, 2020 and December 31, 2019, there were no losses charged to expense.
There
are times that we bill upfront where no work is performed until 30 to 60 days after the deposit is received from our customer.
Accordingly, no revenue is recognized and the amounts are deferred. As of
March 31, 2020 and December 31, 2019, deferred
revenue balances related to these invoices were $- and $37,029, respectively.
For the three months
ended March 31, 2020, the Company generated revenues of $892,236 at a point in time and $636,164 over time. For the three months
ended March 31, 2019, the Company generated revenues of $542,812 at a point in time and $917,925 over time.
F-
36
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements
Recently Adopted
In February 2016, the Financial Accounting
Standards Board, or the FASB, issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use, or
ROU, assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC
842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning
of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require
any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard
resulted in the recording of ROU assets and lease liabilities for all our lease agreements with original terms of greater than
one year. The adoption of ASC 842 did not have a significant impact on our statements of income or cash flows.
In June 2018, the FASB issued ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the
accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation — Stock
Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard,
most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments
granted to employees. This standard became effective for our company on January 1, 2019. The adoption of this standard did not
have a material impact on our financial statements.
In
August 2018, the FASB issued ASU 2018
-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the
Disclosure Requirements for Fair Value Measurement, which removes, modifies and adds various disclosure requirements related to
fair value disclosures. Disclosures related to transfers between fair value hierarchy levels will be removed and further detail
around changes in unrealized gains and losses for the period and unobservable inputs used in determining level 3 fair value measurements
will be added, among other changes. ASU 2018-13 is effective for interim and annual reporting periods beginning after December
15, 2019, and early adoption is permitted. The adoption of this standard did not have a material impact on our financial statements.
F-
37
Applied UV,
Inc. and Subsidiaries
Notes to the
Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Recent Accounting Pronouncements (Continued)
In
June 2016, the FASB issued ASU 2016
-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments, which replaces the current incurred loss impairment methodology for financial assets with a methodology
that reflects expected credit losses. The new credit losses model must be applied to loans, accounts receivable, and other financial
assets. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those
annual periods. The adoption of this standard did not have a material impact on our financial statements.
We currently believe that all other
issued and not yet effective accounting standards are not relevant to our financial statements.
NOTE
2 –
INVENTORY
Inventory
consists of raw materials of $
120,995 and $99,543 at March 31, 2020 and December 31, 2019, respectively.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment are summarized
by major classifications as follows:
March 31,
December 31,
2020
2019
Machinery and Equipment
$
61,083
$
39,583
Furniture and Fixtures
33,385
16,864
Leasehold improvements
60,223
-
154,691
56,447
Less: Accumulated Depreciation
(24,249
)
(22,076
)
$
130,442
$
34,371
Depreciation
expense, including amortization of assets under capital leases, for the
three months ended March 31, 2020 and 2019 was
$2,173 and $2,173, respectively.
NOTE 4 – DUE TO AND FROM SHAREHOLDER
As
of
March 31, 2020 and December 31, 2019 the Company loaned its majority shareholder noninterest-bearing advances, which
are due upon demand. As of March 31, 2020 and December 31, 2019, amounts owed from the Company's majority shareholder was $36,959
and $4,225, respectively.
F-
38
Applied UV,
Inc. and Subsidiaries
Notes to the
Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE 5 – CAPITAL LEASE OBLIGATION
The Company's machinery under a capital
lease, which is included in machinery and equipment is summarized as follows:
Machinery and Equipment
$
61,083
Less: Accumulated Depreciation
(21,775
)
$
39,308
Future
minimum principal and interest payments under the capital lease agreements as of
March 31, 2020, are as follows:
2020
$
7,280
2021
7,280
2022
7,280
2023
1,489
Less: Amount representing interest
(1,737
)
Present value of future minimum lease payments
21,592
Less: current portion
(6,380
)
$
15,212
NOTE 6 – LOANS PAYABLE
In
December of 2012, the Company received $260,000 from Seagrace Partners that accrued interest at 5% annually with no maturity date
and no stated terms of repayment. As of December 31, 2019 and 2018, the note had an outstanding principal balance of $0 and $131,336,
respectively. Interest expense related to this note for the year ended December 31, 2019 and 2018 was $5,902 and $7,656, respectively.
The outstanding principal balance of $132,390 was reclassed to liabilities subject to compromise (note payable- pre-petition).
In 2019, the Company entered into a settlement agreement in relation to the Company's Chapter 11 Bankruptcy (as further described
in Note 10 of the financial statements) with the note holder where the Company would pay $80,000 over the next 90 days, in four
equal installments of $20,000. The entire $80,000 was repaid prior to December 31, 2019. In addition, the Company will provide
the third party lender 8,000 shares of common stock in the Company (subject to certain transfer restrictions), in an amount which
will have a public trading value within 24 months of at least $85,000. If the value of the stock does not reach $85,000 at the
end of 24 months, the shareholders of the Company will provide the third party lender make-up stock to reach the value of $85,000
with a maximum amount of shares to be issued of 17,000 shares. This repayment would constitute as full and final payment of any
and all obligations to the lender. On the date of the settlement, the Company recorded a loss on extinguishments in the amount
of $34,610.
In
June of 2018 and June of 2016, the Company received advances from On Deck Capital in the amounts of $150,000 and $100,000, respectively.
The June 2016 note matured in one year from the date of issuance and required 52 weekly payments of $2,346. As of December
31, 2019 and 2018, the balance of this note was $0 and interest expense of $3,981 was recorded during the year ended December
31, 2018. The June 2018 note matured in one year from the date of issuance and required 52 weekly payments of $3,605. As of December
31, 2018, the company made no repayments on this note and has an outstanding principal balance of $150,000. As part of the Chapter
11 Bankruptcy, the outstanding principal balance of $150,000 was reclassed to liabilities subject to compromise (note payable-
pre-petition) as further described in Note 10 of the financial statements. Accrued interest on this note as of December 31, 2018
was $17,360 and an additional $20,140 was accrued for based on the proof of claim submitted by the note holder. These amounts
were also reclassed to liabilities subject to compromise (accounts payable and accrued expenses- pre-petition) as further described
in Note 10 of the financial statements. In 2019, the Company paid $18,750, which was 10% of the allowed proof of claim in the
Chapter 11 Bankruptcy of $187,500. In addition, the Company was required to pay $157,500 in a five payments in the amount of $30,000
per year, with an additional $7,500 in year two. The Company recognized a gain on extinguishments of $11,250 in relation to the
settlement in the year ended December 31, 2019. As of March 31, 2020 and December 31, 2019, the company had an outstanding balance
of $157,500.
F-
39
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE 6 – LOANS PAYABLE (continued)
Minimum obligations under
this loan agreement is as follows:
For the year Ending December 31,
2020
$
37,500
2021
30,000
2022
30,000
2023
30,000
2024
30,000
$
157,500
In
October of 2017, June of 2017, and September of 2016, the Company received advances from LG Funding, LLC in the amounts of $150,971,
$150,990, and $125,990, respectively, in exchange for notes in the amounts of $182,679, $187,228, and $156,228, respectively.
On the initial date of the note, the Company accounted for the notes at face value less a discount for the difference
between the face value and advances received. The discounts were amortized to interest expense in proportion to the repayments
over the total amount loaned. For the years ended three months ended March 31, 2020 and 2019, the Company recorded $0 in interest
expense in relation to these notes.
The
Company recognized a gain of $81,000 in 2019 as a result of the Chapter 11 Bankruptcy Case and all remaining outstanding balances
were settled in full.
There were no outstanding balances on this note as of March 31, 2020 and December 31, 2019.
NOTE 7 – STOCKHOLDERS' EQUITY
Series A Preferred Stock
Liquidation Preference
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of shares of Series A Preferred Stock shall not be entitled
to any liquidation preference.
Voting
On
any matters presented to the stockholders of the corporation for their action or consideration at any meeting of stockholders
of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred
Stock shall be entitled to vote in an amount equal to
200 votes per share. Series A Preferred Stock shall vote as a single
class and such voting rights shall be identical in all respects.
Conversion
The holders of the shares of Series
A Preferred Stock shall not have any rights hereunder to convert such shares into, or exchange such shares for, shares of any
other series or class of capital stock of the Corporation or of any other person.
Common stock
The holders of our common stock are
entitled to the following rights:
Voting
Each share of our common stock entitles
its holder to one vote per share on all matters to be voted or consented upon by the stockholders. Holders of our common stock
are not entitled to cumulative voting rights with respect to the election of directors.
F-
40
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE 7 – STOCKHOLDERS' EQUITY (continued)
Common stock (continued)
Dividend
Subject to limitations under Delaware
law and preferences that may apply to any shares of preferred stock that we may decide to issue in the future, holders of our
common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out
of funds legally available.
Liquidation
In the event of the liquidation, dissolution,
or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution
after the payment of all of our debts and other liabilities, subject to the prior rights of the holders of our preferred stock.
Other Matters
The holders of our common stock have
no subscription, redemption, or conversion privileges. Our common stock does not entitle its holders to preemptive rights. All
of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences and privileges of the
holders of our common stock are subject to the rights of the holders of shares of any series of preferred stock which we may issue
in the future.
NOTE 8 – RELATED PARTY
In February of 2019,
the Company engaged Carmel, Milazzo & Feil LLP (the "Firm") to represent and assist the company with all general
corporate legal matters including the preparation and filing with the Securities and Exchange Commission of a registration statement
on Form S-1 through the Company's intended initial public offering. Ross Carmel, a former board member of Applied UV, is a partner
at the firm. The firm will perform services in exchange for three percent of the outstanding shares of the Company's common stock,
issued as follows: 1.) One percent due upon execution of the agreement 2.) One percent due up the filing of the Form S-1; and
3.) One percent due upon the SEC declaring the Form S-1 effective. As of March 31, 2020 and December 31, 2019, the company was
liable to issue 102,066 shares of common stock to the firm. These shares have not been issued to date and have been recorded as
a liability to be settled in stock for an amount of $507,805 as of March 31, 2020 and December 31, 2019. Because these legal fees
are directly related to the initial public offering, the amount has been capitalized and is included in other assets.
NOTE 9 – LEASING ARRANGEMENTS
The Company adopted
ASU 2016-02 prospectively as of January 1, 2019, the date of initial application, and therefore prior comparative periods were
not adjusted. As part of the adoption, the Company elected the "package of expedients", which permits the
Company not to reassess under the new standard the Company's prior conclusions about lease identification and initial direct
costs. The Company did not elect the use-of hindsight or the practical expedient pertaining to land easements, the latter not
being applicable to the Company. The Company has lease arrangements which are classified as short-term in nature. The Company
has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify,
the Company will not recognize Right of Use ("ROU") assets or lease liabilities.
F-
41
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE 9 – LEASING ARRANGEMENTS
(continued)
The Company determines
whether an arrangement is a lease at inception. The Company has operating leases for office space and office equipment. The Company's
leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to
five years. The Company considered these options to extend in determining the lease term used to establish the Company's
right-of use assets and lease liabilities once reasonably certain of exercise. The Company's lease agreements do not contain
any material residual value guarantees or material restrictive covenants.
ROU assets represent
the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation
to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized
at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also
includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations
of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when
the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line
basis over the lease term.
As the Company's
leases do not provide an implicit rate, the Company uses an incremental borrowing rate of 5% based on the information available
at commencement date in determining the present value of lease payments.
On
February 7, 2014, the Company entered into a lease agreement in Mount Vernon, New York on a month to month basis. The monthly
rent under this arrangement from January 1, 2018 through November 30, 2018 was $10,000 per month, from December 2018 through February
2019 was $11,150 per month
. The company did not record an ROU asset or corresponding liabiltiy as the lease arrangement
was month to month. The Company then amended the lease for a term that commenced on April 1, 2019 and expire on the 31st day of
March 2024 at a monthly rate of $13,400. On April 1, 2019 the company recorded an ROU asset and a corresponding lease liability
in the amount of $710,075. Rent expense for the three months ended March 31, 2020 and 2019 was $39,000 and $34,500, respectively.
As of March 31, 2020 and December 31, 2019, the balance of the ROU asset was $583,067 and $614,522, respectively. The lease can
be cancelled by either party with 150 days of written notice.
Schedule
maturities of operating lease liabilities outstanding as of
March 31, 2020 are as follows:
2020
$
160,800
2021
160,800
2022
160,800
2023
160,800
2024
1,200
Total lease payments
644,400
Less: Imputed Interest
(61,333
)
Present value of future minimum
    lease payments
$
583,067
Consistent with ASC 842-20-50-4, the
Company calculated its total lease cost based solely on its monthly rent obligation. The Company had no cash flows arising from
its lease, no finance lease cost, short term lease cost, or variable lease costs. Our lease does not produce any sublease income,
or any net gain or loss recognized from sale and leaseback transactions. As a result, the Company did not need to segregate amounts
between finance and operating leases for cash paid for amounts included in the measurement of lease liabilities, segregated between
operating and financing cash flows; supplemental non-cash information on lease liabilities arising from obtaining right-of-use
assets; weighted-average calculations for the remaining lease term; or the weighted-average discount rate.
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42
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE 10 - COSTS AND ESTIMATED
EARNINGS ON CONTRACTS IN PROGRESS
Costs
and estimated earnings on contracts in progress, net of progress billings, are as follows as of
March 31, 2020 and December
31, 2019:
Costs incurred on contracts in progress
$
161,030
$
240,732
Estimated net earnings thereon
597,156
42,403
Total costs and estimated earnings
758,186
283,135
Billings to date
(1,230,758
)
(1,232,925
)
Net overbilled
$
(472,572
)
$
(949,790
)
Contract Assets
$
-
$
-
Contract Liabilities (Deferred
    Revenue)
(472,572
)
(949,790
)
$
(472,572
)
$
(949,790
)
Contract assets represent amounts earned
under contracts in progress but not yet billed under the terms of those contracts. These amounts become billable according to
the contract terms, which usually consider passage of time, achievement of certain milestones or completion of the project. Substantially
all costs and estimated earnings in excess of billings on contracts in progress are expected to be billed and collected in the
following year.
Contract liabilities represent billings
to customers in excess of costs and earnings on contracts in progress. Substantially all such amounts are expected to be earned
in the following year.
NOTE
11
- SHARE EXCHANGE
On
March 26, 2019, March 27, 2019 and July 31, 2019, we and the shareholder of SteriLumen, Inc. and the sole member of Munn Works,
LLC, completed the transactions contemplated by three Share Exchange Agreements.
Pursuant to the applicable Share Exchange
Agreements, SteriLumen, Inc. and Munn Works, LLC transferred to us all assets and liabilities. The shareholders of SteriLumen,
Inc. exchanged all of their shares in SteriLumen for 2,000 preferred and 2,001,250 common shares of Applied UV, Inc. The sole
member of Munn Works, LLC exchanged all of its membership interest in Munn Works, LLC for 3,000,000 common shares of Applied UV,
Inc. As the Share Exchanges were transactions between entities that are under common control, accounting rules require that our
Consolidated Financial Statements include the results of the Transferred Businesses for all periods presented, including periods
prior to the completion of the Share Exchanges.
NOTE 12 - LEGAL
APF Management filed and served a complaint
in 2013 New York state court against Munn Works, LLC, Max Munn and various other parties seeking recovery of damages and was awarded
various damages on behalf of APF.
On June 25, 2018, Munn Works, LLC.
entered Chapter 11 bankruptcy in order to facilitate an appeal and a resolution to this matter. As part of the Chapter 11 bankruptcy,
APF management filed a claim in the amount of $1,474,505. All of the parties agreed to resolve the disputes whereby, APF would
receive $400,000 payable by the Company. The amount was settled and paid in full in 2019.
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43
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE
12 - LEGAL (continued)
Administration of Chapter 11 Case
In
June of 2018, Munn Works, LLC received Bankruptcy court approval of certain "first
-day" motions, which preserved
the Company's ability to continue operations without interruption in Chapter 11. As part of the "first-day" motions,
the Company received approval to pay or otherwise honor certain pre-petition obligations generally designed to support the Company's
operations. Additionally, the Bankruptcy Court confirmed the Company's authority to pay for goods and services received post-petition
in the ordinary course of business.
As
part of the chapter 11 case, the Company has retained, pursuant to Bankruptcy Court authorization, legal and other professionals
to advise the Company in connection with the administration of its chapter 11 case and its litigation with APF management, and
certain other professionals to provide services and advice in the ordinary course business. As a result of the chapter 11 filing,
the payment of pre
-petition liabilities is generally subject to compromise pursuant to a plan of reorganization. Generally,
under the Bankruptcy Code, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although
payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted the Company authority to pay certain pre-petition
claims in designated categories and subject to certain terms and conditions. Among other things, the Bankruptcy Court has authorized
the Company to pay certain pre-petition claims relating to employees and critical vendors.
On June 25, 2018. the Company filed
schedules of assets and liabilities and statement of financial affairs (the "Schedules") with the Bankruptcy Court.
The Bankruptcy Court has entered an order setting October 26, 2018 as the deadline for filing proofs of claim (the "Bar Date").
The Bar Date is the date by which claims against the Company relating to the period prior to the commencement of the Company's
chapter 11 case must be filed if such claims are not listed in liquidated, non-contingent and undisputed amounts in the Schedules,
or if the claimant disagrees with the amount, characterization or classification of its claim as reflected in the Schedules. Claims
that are subject to the Bar Date and which are not filed on or prior to the Bar Date, may be barred from participating in any
distribution that may be made under a plan of reorganization in the Company's chapter 11 case.
The Company applied Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 852, Reorganizations, which is applicable
to companies under bankruptcy protection, and requires amendments to the presentation of key financial statement line items. It
requires that the financial statements for periods subsequent to the chapter 11 filing distinguish transactions and events that
are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains
and losses, and provisions for losses that can be directly associated with the reorganization and restructuring of the business
must be reported separately as reorganization items in the consolidated statements of operations. The balance sheet must distinguish
pre-petition liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and
from post-petition liabilities. Liabilities that may be subject to a plan of reorganization must be reported at the amounts expected
to be allowed in the Company's chapter 11 case, even if they may be settled for lesser amounts as a result of the plan of reorganization
or negotiations with creditors. In addition, cash used by reorganization items are disclosed separately in the consolidated statements
of cash flow.
F-
44
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE
12 - LEGAL (continued)
Liabilities Subject to Compromise
Pre-petition liabilities that are subject
to compromise are required to be reported at the amounts expected to be allowed in the Company's chapter 11 case, even if they
may be settled for lesser amounts. The amounts classified as Liabilities Subject to Compromise as of December 31, 2018 may be
subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations
of the secured status of certain claims, if any, the value of any collateral securing such claims, or other events. The Company
cannot reasonably estimate the value of the claims that will ultimately be allowed in its chapter 11 case until its evaluation,
investigation and reconciliation of all filed claims has been completed. The amount of liabilities subject to compromise represents
the Company's estimate, where an estimate is determinable, of known or potential pre-petition claims to be addressed in connection
with its chapter 11 case. Such liabilities are reported at the Company's current estimate, where an estimate is determinable,
of the allowed claim amount, even though they may be settled for lesser amounts. These claims remain subject to future adjustments
depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of the secured status
of certain claims, if any, the value of any collateral securing such claims, or other events.
As of December 31, 2018, Liabilities subject to Compromise
consist of the following (note: all liabilities were settled in 2019, therefore no balances remain as of December 31, 2019):
2018
Accounts payable and accrued expenses-
    pre-petition
$
492,014
Notes payable- pre-petition
370,390
Expectation damages accrual-
    APF Management
1,474,505
Total
$
2,336,909
Pursuant to Bankruptcy Court Order
dated May 31, 2019, the Debtor's Second Amended Chapter 11 Plan dated April 29, 2019 (the "Plan") was approved
and confirmed. The Plan provided treatment for five (5) classes of claims, with the general unsecured claims composing Class 4
Claimants. Under the Plan, Class 4 Claimants, would receive 10% of their Allowed Claim on the Effective Date. As a result of the
bankruptcy claim, APF received and settled for $400,000 where a gain on settlement of $1,074,505 was recorded. As described in
Note 6 of the financial statements, the Company recorded a total net gain from settlement of debt and gains from its Chapter 11
Bankruptcy case in the amount of $57,640. Other various pre-petition creditors received and settled for a total of $103,761, resulting
in a gain on settlement in the amount of $388,253. The entire amount was escrowed on or before May 23, 2019 and paid within 15
days of the effective date of the stipulation. As a result of the transaction, the Company recorded a total gain on settlement
of $1,520,398.
NOTE
13
- SEGMENT REPORTING
FASB Codification Topic 280, Segment
Reporting, establishes standards for reporting financial and descriptive information about an enterprise's reportable segments.
The Company has two reportable segments: the design, manufacture, assembly and distribution of automated disinfecting mirror systems
for use in hospitals and other healthcare facilities (disinfectant mirror segment) and the manufacture of fine mirrors specifically
for the hospitality industry (hospitality segment). The segments are determined based on several factors, including the nature
of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics.
F-
45
Applied UV, Inc. and Subsidiaries
Notes
to
the Unaudited Interim Condensed Consolidated Financial Statements
March
31, 2020
(Unaudited)
NOTE
13
- SEGMENT REPORTING (Continued)
An
operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment
income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include
amortization of intangibles, stock-based compensation, other charges (income), net and interest and other, net.
All net sales, cost of goods sold,
and other income (expense) was generated or incurred from the hospitality segment of our business. For the three months ended
March 31, 2020 and 2019, the hospitality segment of our business incurred $316,416 and $316,111, respectively, of selling, general
and administrative expenses. For the three months ended March 31, 2020 and 2019, the disinfectant mirror segment of our business
incurred $12,231 and $11,767, respectively, of selling, general and administrative expenses.
As of March 31, 2020 and Deember 31,
2019 assets from the hospitality segment of our business amounted to $4,720,210 and $4,706,535, respectively. As of March 31,
2020 and December 31, 2019, total assets from the disinfectant mirror segment of our business amounted to $63,248 and $62,852,
respectively.
As of March 31, 2020 and December 31,
2019, total liabilities from the hospitality segment of our business amounted to $3,400,204 and $3,347,120, respectively. As of
March 31, 2020 and December 31, 2019, total liabilities from the disinfectant mirror segment of our business amounted to $20,075
and $37,477, respectively.
NOTE
14
- SUBSEQUENT EVENT
Management
has evaluated subsequent events through
June 24, 2020, the date the financial statements were available to be issued. As
a result of the spread of the COVID-19 Coronavirus and the resulting stay-at-home orders issued by the state and local municipalities
in which the Company operates, the Company is experiencing reduced sales. The duration of the reduction in sales may be only temporary.
However, the related financial impact and duration cannot be reasonably estimated at this time. On April 3, 2020, the Company
submitted a Paycheck Protection Program application to Chase Bank for a loan amount equal to $296,287. The amount was approved
and the Company has received the funds. The amount will be used to cover payroll costs, rent, and utilities. Employee and compensation
levels are expected to be maintained, however, it is not certain at this time whether or not the loan will be forgiven.
On
April 20, 2020 SteriLumen entered into the Mount Sinai Agreement pursuant to which Mount Sinai has agreed to conduct a study of
the effectiveness of the SteriLumen Disinfecting System in 17 patient bathrooms at Mount Sinai St. Luke's Hospital in New
York, NY. SteriLumen will be responsible for funding the direct and indirect costs of Mount Sinai's research in the amount
of $160,000 plus all of the cost of microbiological testing. To the extent any intellectual property resulting from the research
is conceived by Mount Sinai it will be the intellectual property of Mount Sinai and to the extent it is conceived by SteriLumen
it will be the intellectual property of SteriLumen. SteriLumen has a 60
-day exclusive option to negotiate a license for
Mount Sinai's resulting patent rights if such patent was obtained at SteriLumen's request and SteriLumen has paid
for all the costs in obtaining the patent. If the results of the study contained in Mount Sinai's final report are used
by SteriLumen in a successful regulatory filing or a successful fundraising effort, the Sponsor will be obligated to pay Mount
Sinai a fee of $30,000.
Max
Munn, Chief Executive Officer of the Company
is entitled to a five-year warrant to purchase 80,000 shares of the Company's
common stock at an exercise price equal to the greater of $1.00 per share and the per share market value of the Company's common
stock at the date of the grant in lieu of cash salary. The issuance of the warrants is contingent upon an initial public offering.
In
May of 2020, we adopted the Applied UV, Inc. 2020 Omnibus Incentive Plan (the "Plan"), which is effective as of March
31, 2020. Under the Plan, the Company may grant nonqualified stock options, incentive stock options, stock appreciation rights,
restricted stock, restricted stock units, performance shares, performance units, and other awards. Awards of up to
600,000
shares of common stock to Company employees, officers, directors, consultants and advisors are available under the Plan. The type
of grant, vesting provisions, exercise price and expiration dates are to be established by the Board at the date of grant.
F-
46
Applied UV, Inc. and Subsidiaries
Notes to the Unaudited Interim Condensed
Consolidated Financial Statements
March 31, 2020
(Unaudited)
NOTE
14 - SUBSEQUENT EVENT (continued)
On February 18, 2020 the Board approved
the grant to each member of the Board, on a quarterly basis, of options to purchase 500 shares of the Company's common stock
at an exercise price of equal to the greater of $2.50 per share and the per share market value of the Company's common stock on
the date of the grant. On April 1, 2020, we issued options to purchase 2,000 shares of Company common stock to the Board, of which
1,250 have been cancelled. The options are subject to equal quarterly vesting over a one-year period.
F-
47
Through
and including , 2020, (the 25th day after the date of this prospectus), all dealers effecting transactions in the Common Stock,
whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition
to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or
subscription.
1,000,000 Shares
Applied UV,
Inc.
PROSPECTUS
N E T W O R K
1
F I N A N C I A L
S
E C U R I T I E S, I N C.
,
2020
66
Part II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13. Other
Expenses of Issuance and Distribution.
The
following table indicates the expenses to be incurred in connection with the offering described in this registration statement,
other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the Securities
and Exchange Commission registration fee and the Financial Industry Regulatory Authority, Inc., or FINRA filing.
Amount
Securities
    and Exchange Commission registration fee
$
800
FINRA filing fee
1,438
NASDAQ listing fee
75,000
Accountants'
    fees and expenses
133,000
Legal fees and expenses
60,000
Printing and engraving
    expenses
15,000
Miscellaneous
4,762
Total
    expenses
$
290,000
Item 14. Indemnification
of Directors and Officers.
Section
102 of the General Company Law of the State of Delaware ("DGCL") permits a Company to eliminate the personal liability
of directors of a Company to the Company or its stockholders for monetary damages for a breach of fiduciary duty as a director,
except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained
an improper personal benefit. Our amended and restated certificate of incorporation provides that no director of the Company shall
be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding
any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability
of directors for breaches of fiduciary duty.
Section
145 of the DGCL provides that a Company has the power to indemnify a director, officer, employee, or agent of the Company, or a
person serving at the request of the Company for another Company, partnership, joint venture, trust or other enterprise in related
capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made
a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, in any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought
by or in the right of the Company, no indemnification shall be made with respect to any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or other adjudicating
court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Our amended and restated
certificate of incorporation provides that we will indemnify to the fullest extent permitted from time to time by the DGCL or any
other applicable laws as presently or hereafter in effect, any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including,
without limitation, an action by or in the right of the Company, by reason of his acting as a director or officer of the Company
or any of its subsidiaries (and the Company, in the discretion of the Board of Directors, may so indemnify a person by reason of
the fact that he is or was an employee or agent of the Company or any of its subsidiaries or is or was serving at the request of
the Company in any other capacity for or on behalf of the Company) against any liability or expense actually and reasonably incurred
by such person in respect thereof;
provided, however
, the Company shall
be required to indemnify an officer or director in connection with an action, suit or proceeding (or part thereof) initiated by
such person only if (i) such action, suit or proceeding (or part thereof) was authorized by the Board of Directors and (ii) the
indemnification does not relate to any liability arising under Section 16(b) of the Exchange Act, as amended, or any rules or regulations
promulgated thereunder. Such indemnification is not exclusive of any other right to indemnification provided by law or otherwise.
II-
1
If a claim is not paid
in full by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where any undertaking required by the By-laws of the Company has been tendered
to the Company) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Company
to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Company. Neither the failure
of the Company (including its Board of Directors, legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the DGCL, nor an actual determination by the Company (including its Board of Directors, legal
counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable standard of conduct. Indemnification shall include payment
by the Company of expenses in defending an action or proceeding in advance of the final disposition of such action or proceeding
upon receipt of an undertaking by the person indemnified to repay such payment if it is ultimately determined that such person
is not entitled to indemnification.
In
any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriters
will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning
of the Securities Act of 1933, as amended, or the Securities Act, against certain liabilities.
Item 15.
Recent Sales of Unregistered Securities.*
Set forth below is information regarding shares of common stock
issued by us since the Company's inception on February 26, 2019.
(a)
Issuance of Capital Stock.
On
March 26, 2019 the Company issued 201,250 shares to accredited investors in exchange for 100% of the issued and outstanding common
stock of SteriLumen, Inc.
On
March 27, 2019 the Company issued 1,800,000 shares of common stock and 2,000 shares of Series A Preferred Stock to an accredited
investor in exchange for 100% of the issued and outstanding Series A preferred stock of SteriLumen, Inc.
On
July 1, 2019, the Company issued 3,000,000 shares of common stock to an accredited investor in exchange for all 100% of the equity
interest in Munn Works, LLC.
On
May 12, 2020, the Company issued 50,518 shares of common stock to Carmel, Milazzo & Feil LLP as part of compensation for legal
services.
On
June 10, 2020, the Company issued 51,548 shares of common stock to Carmel, Milazzo & Feil LLP as part of compensation for
legal services.
Only July 9, 2020,
the Company issued 10,000 unvested shares of common stock to each to four newly elected directors. In each case, the shares will
evenly vest on an annual basis over a period of four (4) years, with the first vesting to occur on January 1, 2021.
On July 9, 2020, the Company issued
37,500 shares of unvested common stock to its non-employee directors, which vest on January 1, 2021.
On July 9, 2020, the Company issued
10,000 unvested shares of common stock to the Chairman of the Board. The shares will vest on January 1, 2021.
On July 9, 2020,
Company issued 5,000 unvested shares of common stock to each of the Chairman of the Audit Committee and the Chairman the Compensation
Committee. The shares will vest on January 1, 2021.
The issuance of the
capital stock listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated
thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient
of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.
II-
2
(b) Warrants.
On April 1, 2020,
the Company issued to Max Munn a warrant to purchase 80,000 shares of the Company's common stock at a per share exercise
price equal to $5.00 and the per share market value of the Company's common stock on March 31, 2020.
The issuance of the
warrant listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated
thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient
of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.
July 1, 2020, the
Company issued two warrants to purchase 5,000 shares in aggregate, each at a $5.00 per share exercise price.
(c) Option Grants.
On April 1, 2020,
the Company issued 2,000 options (of which 1,250 have been cancelled) to its Board of Directors at an exercise price equal to
the greater of $2.50 per share and the per share market value of the Company's common stock on the date of the grant. The
options are subject to equal quarterly vesting over a one-year period. On July 1, 2020 we issued an additional 1,000 options to
certain Board members. To date 375 of these options have vested. On July 9, 2020, the Board cancelled any further issuance of
these quarterly options.
On July 9, 2020,
the Company issued options to purchase in aggregate 10,000 shares of restricted Common Stock to the members of the Medical Advisory
Board that vest quarterly over a period of one year at an exercise price of $5.00 per share. None of the options are vested.
The option described
above were deemed exempt from registration in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder
in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipients of
such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.
(d) Issuance of Notes.
The Company has not
issued any notes.
* All common stock
share numbers have been adjusted to reflect a 1 for 5 reverse stock split effected by the Company on June 17, 2020.
Item 16. Exhibits
and Financial Statement Schedules.
(a)
Exhibits
:
Reference is made to the Exhibit Index following the signature pages hereto, which Exhibit Index is hereby incorporated into this
Item.
(b)
Financial
Statement Schedules
: All schedules are omitted because the required information is inapplicable or the information is presented
in the financial statements and the related notes.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
The undersigned registrant
hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any
prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in
the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any
material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above
do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form
of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(3) To remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for the purpose
of determining liability under the Securities Act to any purchaser:
(A) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the
filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of securities,
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes
that:
(1) For purposes of
determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.
(2) For the purpose
of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of New York, State of New York, on July 16, 2020.
APPLIED UV, INC.
By:
/s/ Keyoumars
    Saeed
Keyoumars Saeed
Chief Executive Officer (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS,
that each person whose signature appears below constitutes and appoints each of Keyoumars Saeed and Max Munn his true and lawful
attorney-in-fact, with full power of substitution and re-substitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments including pre- and post-effective amendments to this registration statement, any subsequent
registration statement for the same offering which may be filed pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact
or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the
dates indicated.
Name
Position
Date
/s/ Keyoumars Saeed
Chief Executive Officer and Director
July 16, 2020
Keyoumars Saeed
(Principal Executive Officer and Principal Financial and Accounting Officer)
/s/ Max Munn
President and Director
July 16, 2020
Max Munn
/s/ Joseph N. Himy
Chief Financial Officer
July 16, 2020
Joseph N. Himy
(principal Financial and Accounting Officer)
/s/ Joel Kanter
Chairman of the Board
July 16, 2020
Joel Kantar
/s/ Dr. Eugen Bauer
Director
July 16, 2020
Dr. Eugene Bauer
/s/ Dr. Alastair Clemow
Director
July 16, 2020
Dr. Alastair Clemow
/s/ Dr. Dallas Hack
Director
July 16, 2020
Dr. Dallas Hack
/s/ Eugene Burleson
Director
July 16, 2020
Eugene Burelson
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EXHIBIT INDEX
Exhibit No.
Description
1.1*
Form of Underwriting Agreement.
3.1
Certificate of Incorporation of the Registrant.
3.2
Amended and Restated Certificate of Incorporation of the Registrant.
3.3
Bylaws of The Registrant.
3.4
Certificate of Designation, Preferences and Rights of Series A Preferred Stock.
3.5
Certificate of Amendment of Certificate of Incorporation filed on June 17, 2020
3.6
Certificate of Amendment of Certificate of Incorporation filed on June 23, 2020
3.7
Certificate of Amendment of Certificate of Incorporation filed July 14, 2020
4.1*
Form of Underwriter Warrant.
5.1*
Opinion of Counsel to Registrant.
10.1
Exchange Agreement, dated March 26, 2019 among the Registrant, SteriLumen, Inc. and each of the stockholders of SteriLumen, Inc.
10.2
Exchange Agreement, dated March 27, 2019 among the Registrant, SteriLumen, Inc. and Laurie Munn.
10.3
Exchange Agreement, dated July 1, 2019 among the Registrant, Munn Works, LLC and Laurie Munn
10.4
Warrant, dated April 1, 2020 issued to Max Munn.
10.5
the Registrant's 2020 Omnibus Incentive Plan.
10.6
Form of Option Agreement and Grant issued under February 18, 2020 Board Approval
10.7
Agreement, dated April 20, 2020 between Icahn School of Medicine at Mount Sinai and SteriLumen, Inc
10.8
Employment Agreement dated June 30, 2020 between the Registrant
and Keyoumars Saeed
10.9
Employment Agreement dated June 30, 2020 between the Registrant and James L. Doyle III
10.10
Common Stock Purchase Warrant, dated July 1, 2020
10.11
Common Stock Purchase Warrant, dated July 1, 2020
10.12
Form of Option issued to Medical Advisory Board members
10.13
CFO Consulting Agreement dated July 15, 2020 between the Registrant and Joseph Himy
21.1
List of Subsidiaries of the Registrant.
23.1
Consent of Adeptus Partners LLC, dated Jul
y 14
, 2020.
23.2*
Consent of Counsel to Registrant (included in Exhibit 5.1).
23.3
Consent of ResInnova Laboratories, dated June 15, 2020
24.1
Power of Attorney.
99.1
Letter from the U.S. Food & Drug Administration, dated December 19, 2019.
99.2
Report of ResInnova Laboratories, dated September 8, 2017.
99.3
Report of ResInnova Laboratories, dated May 8, 2020 which updates their Report dated September 8, 2017.
99.4
Letters from ResInnova Laboratories, dated May 11, 2020 and June 8, 2020.
99.5
Report of ResInnova Laboratories, dated June 30, 2020
*To be filed by an amendment to this registration statement.