Controlling expenses is a major portion of any business operation. "Debt free" is not a term that many companies trading on Wall Street, certainly very few trading on the Over the Counter exchange, can use when referencing their company’s financial status. Like it or not, big debt just happens to be a part of publicly-traded companies, but lack of control with debt is what causes many companies to spiral out of control and inevitably into bankruptcy court all too often.
Today, Centerville, Massachusetts-based UV Flu Technologies, Inc. (OTCBB:UVFT) released significant news about cleaning-up its balance sheet through a conversion of debt to restricted shares. The Company is an innovative developer, manufacturer and distributor of biotechnology products initially targeting the rapidly growing Indoor Air Quality industry sector.
It manufactures and markets the ViraTech UV-400 through a Class II medical device listing from the FDA which utilizes high-intensity germicidal ultraviolet radiation (UV-C) inside a killing chamber that goes beyond filtration to destroy harmful airborne bacteria at rates exceeding 99.2% on a first-pass basis as well as reducing odors and concentration of VOC’s (Volatile Organic Compounds) at the same time.
Business developments through marketing and branding are moving along smoothly for UV Flu as the Company has recently shipped an order to the Hockey Canada practice and training facility at Canada Olympic Park in Calgary; making UV Flu an official supplier to Hockey Canada.
This is not the first household name company to utilize the product as other major organizations such as the Boston Bruins and Pittsburgh Penguins are currently reaping the benefits of the UV-400 unit.
Sales generate revenues, but often bring about debt to facilitate expansion. UV Flu was not in the sort of financial turmoil that many OTC companies find themselves, but was bearing the weight of nearly $860,000 in debt on their balance sheet.
Per the announcement, as of February 25, 2011, major lenders agreed to convert 100% of the currently due debt of $696,233.70 into restricted common shares of UVFT at the price of seven cents, a healthy premium to the $0.045 closing price on that day.
The transaction effectively restructures 81% of the Company's total debt, leaving $160,000 in debt remaining, of which $115,000 is due to the recent acquisition of RxAir which was announced as completed on January 31, 2011.
This agreement leaves UV Flu well-positioned for ongoing expansion and operations with its newly-acquired RxAir as the Company’s debt-to-equity ratio is now under 5% and provides major savings from not having to make interest payments on the debt which can be better served growing the UV client portfolio.
A teaser comment was certainly dropped by Jack Lennon, President of UV Flu Technologies, as the final sentence of his comments on the newfound strength of UV’s budget in today’s press release which stated, "These initiatives are designed to coincide with the planned introduction of a new product which we believe will revolutionize the market."
Major clients, an FDA-cleared product, new acquisition and now a strong balance sheet, have to leave investors performing due diligence on UV Flu Technologies wondering what is coming next. Time will tell what the Company has in store for its shareholders and the Indoor Air Quality industry sector.
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