VANCOUVER, BC, Aug. 29, 2022 /PRNewswire/ - Atmofizer Technologies Inc. (the "Company" or "Atmofizer") (CSE: ATMO) (Frankfurt: J3K) (OTCQB: ATMFF) is pleased to announce its financial results for the quarter ended June 30, 2022. All amounts are expressed in United States dollars unless otherwise noted.
CORORATE DEVELOPMENTS
On April 5, 2022, the United States Patent and Trademark Office (the "USPTO") issued U.S. Patent No. 11,291,939 relating to the Company's air and water purification technology. The patent provides protection for the application of the Company's air and water purification technology in the United States.
On April 28, 2022, the Company amended its December 13, 2021 agreement with Emerging Markets Consulting, LLC ("EMC"). EMC provides investor and public relations services including content creation, web development, and webcasting for the Company in North America. Pursuant to the terms and conditions of the amended agreement, EMC continued to provide these services for an additional two months for a cash fee of $225,000. Certain functions of EMC may include "investor relations activities" under the policies of the CSE and applicable securities laws.
On May 11, 2022, the Company announced test results of its airborne nanoparticle agglomeration engine. The test results at Atmofizer's Toronto lab showed that the Company's technology, before the use of an air filter, reduced the number of airborne ultra-fine particles smaller than one micron by 81.7%, while doubling the removal of larger particles sized above 2.5 microns. The Company believes this was significant scientifically and medically, as it demonstrated the ability to remove ultra-fine nanoscopic particles from the air (including toxic industrial pollution, smoke, and infectious disease). The ability to filter particles smaller than 2.5 microns is commonly regarded as an indicator of good air quality. Doubling the amount of particles larger than 2.5 microns demonstrated that the smaller particles were effectively being agglomerated together into larger clusters by the Company's technology. These larger clusters are typically more easily filtered by the body and common air filters. The results were achieved without the use of a common air filter. The Company has also added additional staff to its Toronto testing facility to focus on applying its agglomeration technology into mobile (transport vehicles) and heating, ventilation, and air conditioning ("HVAC") aftermarket applications. The additional staff will enable the Company to test and evaluate new Atmofizer airflow configurations and prototypes more quickly.
On May 24, 2022, the Company announced the launch of a new customer lease-finance program through its majority-owned leasing subsidiary. The program enables Atmofizer customers to acquire Atmofizer nanoparticle reduction air purifiers for less than one dollar per day. Customers may be required to make a down payment (ranging from $0- $99) and then pay $29.99/month to participate in the program. The down payment is less than 10% of the manufacturer's suggested retail price. Customers utilizing the lease-finance program will receive a standard limited warranty for the Atmofizer for the duration of a 36 month term lease. This credit facility will make the Company's air purification technology more accessible to a wider range of consumers. For higher volume customers, such as hotels, cruise ships and schools, the Company intends to extend the "clean air for less than a dollar a day" financing with no down payment required, subject to certain terms and conditions.
On May 26, 2022, the Company announced a non-exclusive U.S. distribution agreement with Safeware Inc. ("Safeware"). Safeware is an industry leader in safety equipment that supplies U.S. state and local governments and education organizations. For more than 40 years, Safeware has provided public safety equipment nationally with expertise in personal protective equipment, environmental detection and monitoring, and tactical and rescue gear. Safeware services and supports all aspects of safety for law enforcement and fire services, schools, public works and facilities. Beginning in third quarter 2022, the Company's products will be in Safeware's inventory catalog and will be marketed by its sales and key account teams across the United States. The Company expects initial orders to begin by the third quarter of 2022, with revenue to be generated by the fourth quarter of 2022.
As of the six months ended June 30, 2022, the Company had issued 26,407,500 common shares in the authorized share structure of the Company ("Common Shares") with gross proceeds of C$1,824,790 under the "at-the-market" equity distribution program pursuant to a prospectus supplement dated February 26, 2022 (the "ATM Program").
FINANCIAL HIGHLIGHTS FOR QUARTER ENDED JUNE 30, 2022
For the three months ended June 30, 2022, the Company generated revenue of $nil compared to $53,000 with a gross profit of $20,488 (38.66%) during the three months ended June 30, 2021. There were a number of issues contributing to the lack of sales in the quarter. The Company has faced supply chain challenges for critical components for its Atmofizer ONE air purifiers that have contributed to this situation. Additional supply chain issues occurred in respect of computer chips, one of the critical components facing a global short supply. During the quarter the Company has been able to source some of these components and expects to have increased supply of A500 units late in the third quarter. Additionally, the Company found the regulatory environment challenging to import and sell its products during the quarter under the United States Environmental Protection Agency's pesticide device regulations. As a result under these regulations, the Company was unable to actually make any meaningful claims about its products efficacy despite having lab results showing the products' ability to neutralize bacteria and viruses through third-party labs. To overcome the issue impacting its unit sales, Atmofizer will now market its air purifiers in the United States under "Guidance for Industry and Food and Drug Administration Staff – Enforcement Policy for Sterilizers, Disinfectant Devices, and Air Purifiers During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency" (the "FDA's Air Purifier Policy") issued in March 2020 by the U.S. Food and Drug Administration (the "FDA"). . Atmofizer has assessed the conditions of FDA's Air Purifier Policy and determined the subject device meets the relevant technological characteristics and is substantiated by the performance criteria and labeling recommended by FDA.
The Company currently markets their products, under FDA's Air Purifier Policy as a means to support response efforts to the ongoing COVID-19 Public Health Emergency. In alignment with FDA's guidance, the Company is seeking to expand the availability and capability of Air Purifiers presumed efficacious against SARS-CoV-2 (the virus which causes COVID-19) during the public health emergency. Furthermore, Atmofizer intends to market the device in agreement with FDA's stance per this guidance, in that the company believes that increased access to these air purifying devices may facilitate reduced risk of viral exposure for patients, healthcare providers, and consumers to SARS-CoV-2. The Company expects that this new marketing of its products under the FDA's Air Purifier Policy will result in unit sales starting late in the third quarter of 2022.
The new model 4-log Atmofizer ONE devices are expected to be available in late in the third quarter of 2022 and will be marketed and imported into the United States under the FDA's Air Purifier Policy referenced above, to create streamline importation and best align market opportunities and regulatory requirements. The Company will also seek to restructure United States distributor contracts to free up more inventory for sale in North America, and to reduce delivery concentration in channels not moving as quickly. Atmofizer also plans to redirect some inventory previously intended for the United States market to other countries where it has seen some sales success through one of its distributors.
During the six months ended June 30, 2022, the Company generated revenue of $210,000 with a gross profit of $60,296 (28.71%) compared to $53,000 with a gross profit of $20,488 (38.66%) during the six months ended June 30, 2021.
The Company incurred $4.5 million in expenses during the three months ended June 30, 2022 compared to $1.5 million during the three months ended June 30, 2021. The increase of $3.0 million increase in expenses was driven primarily by share based payments of $2.5 million and $1.3 million in sales and marketing expense of which $1 million was paid by issuing Common Shares. There were significant decreases over the previous quarter in management fees ($0.3 million) and research and development ($0.3 million). Salaries and wages and sales and marketing expenses were increased by $0.3 million and $0.3 million respectively.
The Company incurred $11 million in expenses during the six months ended June 30, 2022 compared to $3.8 million during the six months ended June 30, 2021. The increase of $7.3 million increase in expenses was driven primarily by share based payments of $6.4 million and $1.4 million in sales and marketing expense of which $1 million was paid by issuing Common Shares. There were significant decreases over the previous year in consulting fees ($0.8 million decrease), management fees ($0.5 million) and research and development expenses ($0.3 million).
During the three months ended June 30, 2022, the Company recorded net loss of $5 million compared to a net loss of $1.4 million for the three months ended June 30, 2021. The biggest contributors to the increase in the net loss of $3.7 million was share-based payments of $3 million.
During the six months ended June 30, 2022, the Company recorded net loss of $11.5 million compared to a net loss of $3.8 million for the six months ended June 30, 2021. The biggest contributors to the increase in the net loss of $7.8 million was share-based payments of $7.6 million.
"The Company achieved a number of important technology development milestones during the second quarter of 2022. Our science team continued to make significant advancements to prove and productize our technology to achieve our ultimate goal of delivering cleaner air, energy savings and improved efficiency during the quarter. We are doing this by expanding beyond our appliance business and into the multi-billion dollar HVAC industry. We recently received a Notice of Allowance for new claims related to the Company's air purification technology from the USPTO. The recent Notice of Allowance from the USPTO is directed to a new design that delivers ultra-fine particle agglomeration and nanoparticle reduction performance in larger air ducts with faster-moving air, using less parts," said Atmofizer CEO, Olivier Center. "The Company plans to market this patent to be licensed by air purification device manufacturers, HVAC suppliers and service companies. Our first priority is to leverage our strong relationships with HVAC distribution partners to commercialize our nano particle agglomeration technology through licensing. With respect to our appliance business, we experienced head winds from both supply chain related issues as well as regulatory issues. We see ourselves now in a better position to work with our distributors under the FDA's Air Purifier Policy and deliver appliance sales as well as having more appliance inventory on hand to sell through. We continue to follow our asset light objective of developing new clean technology and licensing or partnering with industry leaders to scale faster and capital efficiently."
SUBSEQUENT EVENTS
On August 23, 2022, the Company announced that the USPTO issued a Notice of Allowance for new claims related to the Company's air and water purification technology. The allowed patent application, titled, "Ultra-Fine Particle Aggregation, Neutralization and Filtration" (US Patent Application No. 11,291,939) provides broad protection for important aspects of Atmofizer's air purification technology. The recent Notice of Allowance from the USPTO is directed to a new design that delivers ultra-fine particle agglomeration and nanoparticle reduction performance in larger air ducts with faster-moving air, using less parts. The Company plans to market this patent to be licensed by air purification device manufacturers, HVAC suppliers and service companies.
On August 25, 2022, the Company announced the latest testing performed by a third-party laboratory on Atmofizer ONE technology demonstrated a greater than 4-log reduction ( > 99.99%) in specifically targeted microorganisms, including gram-positive bacteria, gram-negative bacteria, and enveloped virus. The Atmofizer ONE is now marketed subject to the U.S. Food and Drug Administration's "Enforcement Policy for Sterilizers, Disinfectant Devices, and Air Purifiers During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency" (March 2020).
Atmofizer ONE Performance Update
Atmofizer Efficacy Claims:
- 99.99% reduction of Klebsiella Aerogenes [gram-negative bacteria]
- 99.99% reduction of Staphylococcus Epidermis [gram-positive bacteria]
- 99.99% reduction of Phi-6 Bacteriophage [enveloped virus, Surrogate for SARS-CoV-2]
Atmofizer SARS-CoV-2 Specific Efficacy Claims
- Atmofizer reduces airborne SARS-CoV-2
- Atmofizer destroys over 99.99% SARS-CoV-2 without a filter
- Atmofizer destroys SARS-CoV-2 by over 99.99% in 45 minutes
These results are based on third-party laboratory tests at 180 minutes of continuous device operation. The FDA has not evaluated Atmofizer technology. Atmofizer ONE has not been reviewed or approved by the FDA. SARS-CoV-2 data is based on Third-Party Testing of Phi-6 Bacteriophage, a surrogate microorganism for SARS-CoV-2.
About Atmofizer Technologies Inc.
Atmofizer's consumer and industrial solutions are based on its patent-protected and patent pending technology for ultrafine particle agglomeration and neutralization. This capability creates a revolutionary and more efficient method for addressing the wide range of dangerous nano-scale particles, viruses and bacteria that are too small to be effectively managed by conventional HEPA filters and ultraviolet lights. Atmofizer plans to disrupt the air treatment industry by improving air safety and purification efficiency while lowering customers' operational costs.
Atmofizing air refers to the process of using ultrasonic acoustic waves to agglomerate (cluster together) small particles into a larger target that is then radiated by ultraviolet light to neutralize their harmful properties, making the air you breath less hazardous to your health. Using units that atmofize air in tandem with high efficiency particulate air ("HEPA") filters can make the HEPA filters work more efficiently, enable the use of a less-powerful filter and result in a cleaner and longer-lasting filter that reduces operating costs and is less of a health hazard to clean or replace.
Atmofizer is patent-pending and patent-protected sole source of technology to atmofize air and is applying its proprietary technology in consumer and industrial air purification products currently manufactured under the Atmofizer brand, as well as in retail and commercial devices produced by other companies that integrate Atmofizer technology into their own products under license. Atmofizer's owned and licensed product lines include wearable, portable and mobile use for personal air treatment, as well as larger systems to handle higher air volumes for commercial, industrial, institutional and residential applications.
Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking information contained herein includes, without limitation, the Company's new customer lease-finance program, the Company's sales and order expectations from its distribution agreement with Safeware and the business and strategic plans of the Company.
By their nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release including, without limitation: the Company's ability to comply with all applicable laws and governmental regulations relating to its commercial products; the ability of the Company to protect its intellectual property; impacts to the business and operations of the Company due to the COVID-19 pandemic; the conflict in eastern Europe; having only a limited operating history, the ability of the Company to access capital to meet future financing needs; the Company's reliance on management and key personnel; competition; changes in consumer trends; foreign currency fluctuations; and general economic, market or business conditions.
Additional risk factors can also be found in the Company's continuous disclosure documents, which have been filed on SEDAR and can be accessed at www.sedar.com. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
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SOURCE Atmofizer Technologies Inc.
