Market Overview

UAT Group Has Faced Many Challenges

Share:

Re: Umbra Applied Technologies Group, Inc. 2018 Mid-Year Chairman's Letter

TAMPA, Fla., Aug. 16, 2018 (GLOBE NEWSWIRE) -- UAT Group (OTC:UATG) releases the following letter to shareholders: The past six months have been significant for UAT Group. Over the past two and a half years, UAT Group has faced many challenges, three specifically that needed to be overcome urgently in order to create value for shareholders.

Tradable Security: As a tradable security UAT Group needed to have a market liquidity that was sustained and consistent. For the past thirty months UAT Group (UATG) has maintained an average daily trading volume above seven million shares with an average dollar traded between $200,000 and $400,000 a month. Above average for a company who until just recently was a start-up with little to no revenue

Deliverable Revenues. During the first years, operating in a start-up capacity strictly focused on research and development, UAT was hemorrhaging cash. By the end of 2017 and while recovering from anemic growth, a precarious financial position and a much-needed course correction – UAT was finally generating revenue

Corporate Structure: The issue in the first two and a half years of business was an operational oversight failure that in hindsight never should have happened. Delegating should include a balanced approach to oversight and human capital management. With safeguards and highly detailed protocols in place UAT Group has been able to recover from a caustic time period while building the infrastructure needed to build a company capable of delivering products globally.

The First Half of This Year Has Been Extremely Successful

At the beginning of the year I outlined our 2018 plans to bolster our foundational core objectives in an effort to prepare for the upcoming exponential growth. This was essentially a continued effort which began more than two years ago when we began to course correct the company's trajectory.  The first half of this year has been extremely successful for UAT Group and I would like to take this opportunity to highlight just a few of the major achievements in the first half of 2018 followed by the business strategies for the remainder of the year.

Our track record of more than 35% returning customers/customer retention and 99% customer satisfaction has been one of the most rewarding experiences for UAT's Hygieia team and something that I am particularly proud of considering they initially launched with only two products, several months apart while simultaneously preparing for the launch of more than 20 product SKU's over the next 12 months. I would also add that we have only had three product returns since launching the Hygieia line of products 12 months ago. Of those three returns two were from women who mistakenly purchased men's socks for themselves with only one return coming from an actual complaint. This is extraordinary when one considers that we have only had one complaint out of the thousands of socks we have sold.

Hygieia is a product line that is highly scalable with many verticals that will contribute to revenues in a significant way however, its contribution to corporate recognition was something I admittedly underestimated. Last year we had an organic web ranking of 331 and few knew who we were or what Hygieia was. Last week I was notified that we currently have multiple rankings of 13-32! The marketing team has exceeded my expectations at every step of the way and I am very proud of them and their efforts.

Investing in Our Business Execution Strategy

We ended 2017 with 1070 new customers and Hygieia sales revenue of $80,000.00, the first 4 months of the new product launch. That's an increase of over 61,000% from the previous year and a significant change in revenue flows for the first time in the company's history. We spent 32% of revenue on additional marketing, 49% in variable expenses supporting additional designs and 8.4% on fixed expenses leaving the remaining 10.6% as our adjusted operating income, which is the profit generated from existing sales before investing in new customer acquisitions.

Thus far, this year we have invested $600,000.00 to expand and build inventory while simultaneously investing in our business execution strategy we began more than two years ago. We have committed an additional $500,000.00 to the development of the organization over the next 5 months to support our corporate expansion and up-list.

We completed our first full sales cycle with our new marketing and sales program that is focused on building brand awareness, expanding our demographics and streamlining our fulfillment processes. As our opportunity pipeline continued to expand the challenge then became managing growth in the second quarter while investing in future fulfilment. We met this challenge with securing a temporary fulfilment center with an additional 3000 square feet of warehouse and office space. We will occupy this new space for the next six months while we negotiate the acquisition of our new warehouse and corporate headquarters. The new 12-acre site has already been identified and will provide UAT with over 14,000 square feet of warehouse and office space with room for expansion. Financing for UAT's new corporate headquarters and fulfillment center has already been identified and we are confident that this new location will provide the company with the opportunity to continue expansion while streamlining operations. This new site is intended to house UAT operations for the next 6 years while a site is identified to build UAT's final technology headquarters that will house all facets of operations such as R&D, manufacturing, fulfilment, technology demonstration center and executive offices. We have already initiated the search for an appropriate site and anticipate its acquisition by the end of 2019. We have begun to outline the requirements for the new headquarters and expect to identify and retain an architectural design firm by the end of the year so that we can begin the collaborative effort of designing our flagship offices over the proceeding 18-24 months.

As UAT Group Continues to Advance, We Will Undoubtedly Confront A Full Spectrum of Challenges

In order to build on our success and compete in a highly competitive market segment we must effectively communicate why and how our product marketing strategy has been developed for the purposes of not only educating the customer but the market. This must be done cogently and with an acuity that mitigates the risk of dubiety on the part of our shareholders, team members and customers. Business execution strategies such as branding of our first product line, improved website, first ever media production to introduce products and social media expansion were aggressively developed and deployed to paint a clear picture of what we are and what we do. Internally we streamlined oversight and employee positions and focused on a strategy that kept UAT Group on track to up-list and improve its capital capabilities. Over the next few months we will continue to stay on pace with our objectives while maintaining a firm grasp on our commitment to our shareholders.

As UAT Group continues to advance, we will undoubtedly confront a full spectrum of challenges that present the potential to sedate or even avert corporate expansion. Growing, solidifying and retaining our new and existing consumers will require a commitment to quality, innovation and excellence commensurate with UAT and the standards that UAT customers have grown to expect.

We Have Very Much Built A World Class Team

I am very proud of my team and most of our customers will never know how tirelessly they have been working to deliver the worlds most advanced smart textile products. Most customers do however, appreciate the commitment to quality and attention to detail that is evident the moment their skin is enveloped by the unparalleled combination of functional design and advanced engineering that is the Hygieia experience. People genuinely enjoy and love UAT Hygieia products, which means they not only appreciate our efforts but enjoy the result of said efforts. It is incredibly gratifying to know that we have done something that improves the quality of life for others but also makes people happy. I am very fortunate and incredibly humbled to be privileged to work alongside such dedicated and caring colleagues. We have very much built a world class team and as a result are in the process of developing a world class company.

Objective for The End Of 2018

My objective for the end of 2018 is to ensure that everyone on the UAT team fully understand how to convey their commitment to delivering the best possible products to every UAT customer and UAT Group shareholder. In order for this to be realized I have worked diligently at fostering an environment where innovation and an uncompromising commitment to exceed customer expectations is the starting point for the bare minimum.  Additionally, management has been tremendously committed to ensure that every member of the UAT team fully understands their role and responsibilities as it pertains to our execution strategy and commitment to customer satisfaction.

I hope you will come to share our view that, over the past year, UAT Group has further ameliorated its strategic positioning through an unabated focus on our foremost strategic and operational objectives, the evolution of our strategic execution, our continued commitment to improve our capital allocation protocols, and the insights we have gained through candid assessments of our failures and ultimately our successes. Our team members are highly motivated to optimize all of the resources at our disposal in an effort to enhance UAT Group' intrinsic value of per share.

I thank you for the time you have invested in reading this letter, and for your attention and consideration. Our management team, our executive team, our Advisory Board and I, all take very seriously our responsibilities as stewards of this company's and our investors' capital. We believe that this enumeration of our strategic execution, priorities and capital investment is the most effective and efficient way to deliver UAT Group into the future as successful contributor and influencer in the market segments we operate.

Let me close with the hope that 2018 will continue to be a milestone in the company's long history. I would like to thank everyone that has contributed to our current position and I am confident that our journey has just begun!  

Warm regards,

Alex Umbra
Chairman & Chief Executive Officer
Umbra Applied Technologies Group, Inc.

About Umbra Applied Technologies, Inc.

Umbra Applied Technologies is a member of the Umbra Applied Technologies Group (OTC:UATG) family of companies.  Umbra Applied Technologies, U.S. based Defense and Security Company, is engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services for defense, civil, and commercial applications in United States and internationally. It also provides management, engineering, technical, scientific, logistic, and information services.

In support of air, land and naval forces, the company operates in five segments: Aeronautics, Information Systems & Global Solutions, Biotech, Alternative & Renewable Energy, and Intelligence Systems. The Aeronautics segment offers military aircrafts, such as unmanned combat and air mobility aircrafts, and related technologies. The Information Systems & Global Solutions segment provides advanced technology systems and security expertise, integrated information technology solutions, and management services for civil, defense, intelligence, and other government customers. The Biotech segment addresses critical gaps that are absent in defense medical research programs. The Alternative & Renewable Energy segment provides alternative solutions to energy through research in bioelectricity, wind, thermodynamic and solar energy.  The Intelligence segment provides computational study of signals, open source and network intelligence through advanced metrics and algorithms to locate and extract sentiment from gathered intelligence.

For more information visit www.uatgroup.com or www.uatgroup.com

Investor and Media Contact: Everest Corporate Advisors, Inc.
(702) 902-2361     (702) 982-1339

NEITHER THE SECURITIES EXCHANGE COMMISION NOR ITS REGULATION SERVICES PROVIDER ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Forward-Looking Information

This news release may include "forward-looking statements" including forecasts, estimates, expectations, and objectives for future operations including but not limited to its ability to conclude a business combination with a third party, sale of assets, return of capital or initial public offering and a secondary listing on the OTC as a result of aforementioned and its ability to fund the exploration of its assets through the raising of equity or debt capital or through funding by a joint venture partner that are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of Umbra Applied Technologies including but not limited to capital markets and securities risks and continued development success on technology. There can be and are no actual or implied guarantees that any of the above activities will be completed or completed on terms acceptable to the Company and its shareholders or approved by any regulatory authority having jurisdiction. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Risks and uncertainties about Umbra Applied Technologies business are more fully discussed in the company's disclosure materials, including its MD&A, filed with the securities regulatory authorities in Canada and available at www.sedar.com and readers are urged to read these materials. Umbra Applied Technologies does not assume the obligation to update any forward-looking statement, except as required by applicable law.

Primary Logo

View Comments and Join the Discussion!