Thank you for joining us today for the TOMI Environmental Solutions Investor Update Conference Call. On today's call is TOMI's CEO and Chairman of the Board, Dr. Halden Shane; and Nick Jennings, TOMI's CFO. Dr. Shane will provide an overview of recent business highlights and discuss critical financial benchmarks for the most recent quarter before addressing any questions you may have. A telephone replay of today's conference will be available through November 19, 2020, and the details are included in the company's press release of November 9, 2020. A webcast replay will also be available at TOMI's website, www.tomimist.com. Please note, the information contained within this call is relevant only to the day of which it is recorded, November 12, 2020, and you are, therefore, advised that time-sensitive information may no longer be accurate at any time of replay. Certain written or oral statements made by management of TOMI may constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by such words and phrases as we expect, expected to, estimates, estimated, current outlook, we look forward to, would equate to, projects, projections, projected to be, anticipates, anticipated, we believe, could be and other similar phrases. All statements addressing operating performance, events or developments that the company expects or anticipated -- anticipates will occur in the future, including statements related to revenue growth, earnings and earnings share per growth -- earnings per share growth or similar projections are forward-looking statements within the meaning of the Reform Act. They are forward looking, and they should be evaluated in light of important risk factors that could cause our actual results to differ materially from our anticipated results. The information provided in this conference call is based upon facts and circumstances known at this time. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now proceed to give the call to TOMI's CEO and Chairman of the Board, Dr. Halden Shane.

Thank you, and welcome, everybody, for joining TOMI Environmental Solutions' Third Quarter 2020 Earning Call. We certainly hope you and your family continue to remain safe and healthy in what remains an ever-changing and challenging environment for all. For those new to the company, TOMI manufactures, licenses, services and sells our SteraMist brand of products, including SteraMist BIT Solution. SteraMist is a hydrogen peroxide-based fog and mist that was invented under a defense grant in association with the Defense Advanced Research Projects Agency, or DARPA, of the United States Department of Defense. BIT is registered with the United States Environmental Protection Agency, the EPA. SteraMist iHP is on the EPA's list G, H, K, L, M and N for COVID-19. List G is for norovirus; H is for MRSA; K is for C. difficile spores; L is for Ebola; M is for avian flu or influenza as we knew it; and N is an emerging viral pathogen, which includes our SARS-CoV-2. Our technology uses a low-percentage hydrogen peroxide as its only active ingredient to produce a fog composed primarily of hydroxyl radicals. This is known as ionized Hydrogen Peroxide, trademarked iHP. Represented by TOMI's SteraMist brand of products, iHP produces a germ-killing aerosol that works like a visual, non-caustic gas. TOMI acquired the technology in 2009 and commercialized the product in 2013. Our Binary Ionization Technology, or otherwise known as BIT, is used in Hospital-Healthcare, the life sciences, service industry and commercial facilities throughout the world. SteraMist is very effective that it consistently delivers 6-log 99.999% kill. It's eco-friendly and registered as organic. SteraMist is unique in the disinfection/decontamination industry because it does not damage materials, finishes, antiques, art, electronics or any technology, including delicate medical and scientific instruments. SteraMist is applied in seconds and does not leave residue nor…

[Operator Instructions] Your first question is coming from [ Michael Kay ].

Given the substantial progress the company is making in terms of earnings and revenues and the research development, what is it doing to make the Wall Street investment community more aware of the company since I think it's very much not even on the radar of large segments of the investor population? And also, I'd like to ask the -- why do you think the FDA is so sluggish given the demonstrated efficacy of the technique and the SteraMist? Why do you think, especially at this time, that they are so sluggish in certifying it for additional uses?

Okay. Thanks for the question. So the first part is we just recently got up-listed to NASDAQ, as I'm sure you're aware. We are bringing in an Investor Relations firm that will assist in making Wall Street, as you say, more aware of our product. We are also going ahead and doing interviews. I just finished one for Ameritrade not too long ago and have more scheduled to be delivered in the next week or 2. And that sure will help assist having -- making them all aware. The second part of the question is a little more complicated to answer. I feel that the FDA quickly approved some products that they probably should have taken a step back and performed further testing on, in fact, the testing that they are now putting us through. In saying that, if you can read this, a lot of the various articles that are written, nurses and nurses' unions are having trouble with the reprocessing of these masks with these caustic materials. We've proven to the FDA that we don't have a caustic material. And now they've gone ahead and asked us to go further and do all sorts of intra-filtration testing to demonstrate this for them. So I believe that they're using our research arm and our phenomenal partners that are out there in the academic world that have been put through pure hell in delivering results to the FDA. I think that shortly, once we get the rest of the testing in, they will definitely go ahead and approve our product. And I was saying that we'll see what happens. Thanks for the questions.

Your next question is coming from [ Houston Meeks ].

The performance of the third quarter is disturbing in that it is not in line with the growth of the second quarter. Is that so -- and I don't really feel that the -- you provided significant rationale for that, especially with the continued pandemic issues and everything else. You are a vital industry and should be able to operate as such, regardless of these hiccups that other companies might represent.

Are you...

What's going on here?

Are you new to the company?

No, sir. I am not new to the company. I've been involved with the company for at least a year.

Oh, okay. Well, then you knew the -- so the company has been around for quite some time. And...

No, I understand that. I understand that.

Our real product is going ahead and treating all these industries and developing a gold standard. The pandemic, obviously, got us all blindsided in the world. And after we came out with the amount of sales that we did, our product requires a significant amount of training, usually personnel training where we send a trainer to a facility and they train 10, 15 people at a time. What's happened is the pandemic has prevented that. So we had to catch up on all our sales after the first half of the year, which we've been doing. And COVID, with all of us, has created not only new cleaning program -- protocols, but it's created an ability to go ahead and redo the way we train, the way we don't travel, the way we do our engineering and things like that. So we're now focused on that. So don't judge our revenue. I mean our growth is phenomenal. So...

So then let me ask -- let me rephrase...

Let me finish...

Let me rephrase for a moment. Let me rephrase for a moment. The -- if I look at the comparison in your -- in the revenue that's derived from training, what does that show me?

I don't know. What do you see?

Well, you I think believe said that your revenue -- you have an increased revenue in the third quarter from training activities. Is that correct?

No.

So your training activities have not maintained or...

I don't think you understand. When we sell a device, we sell it with training, and there's a revenue derived from that training. But we don't necessarily train that person at that time. It takes time to ship out the product, and it takes time to go through the training process. So some people who have bought products in the second quarter are getting trained now. So you cannot relate that.

So I can't look at the training aspect of your revenue stream as an indicator of how your company is being successful in the following quarters that -- which -- none would seem to lead to the other, and that's what I'm trying to get at. How do I look at this as the growth that I'm expecting it to be? Because I'm not seeing that.

So I think you have to look at what our quarter-over-quarter results are and our year over quarter. Again, we're a company that goes on a 12-month basis, and we compare our 2019 quarters to our 2020 quarters and so forth. And you'll be seeing the next, our 2019 performance compared to our 2020 performance. Look for press releases. Look for significant ways of...

Well, I've been looking daily for that kind of education, and I'm just not seeing it. Am I missing something?

Yes, we're not -- yes, you're missing the fact that we're not a company that goes out there and just gives press releases to give that.

I don't expect you to be. But I -- over the course of, say, from June through today, there has been very little or the report of -- since the press -- the conference call of the second quarter, there's been very little disclosure in terms of what's going on with the company. And that -- and I need some further clarity on that.

Okay. You have my e-mail, send it to me, we'll try to answer it. Will you...

I've sent it to you. I've sent it to your -- to Mr. Paul, and I don't ever hear anything back. Hello?

Next, Anthony?

Your next question is coming from [ Jordan Cox ].

Can you -- Dr. Shane, you mentioned something about possibly your budget being $38-plus million next year. Can you kind of talk about what has to happen between now and then for you to achieve those kind of results? What kind of mix between equipment sales and BIT Solution sales may be incorporated into that possible budget? And then secondly, I guess I'm real interested in the USDA aspect of your product in combating listeria and all kinds of other things. Can you give me a little bit of update on how that's going as well, please?

Sure. So I think we're basing our revenue on what I can project and see in our pipeline, along with the fact that we're assuming, and this is an assumption, and don't forget our budgets, we don't submit to the Board probably until late December, I'm saying that we will begin to start to travel again. So hoping either the virus subsides and/or the vaccine is taken or restrictions are lifted. And that's going to get us out there to complete a lot of the large jobs that we know the industry divisions want to help go ahead and complete, et cetera. Plus, based on our projections, our pipeline and a beefed-up sales force, which is extremely important to us, try to remember that we've been doing most of this all internally. We're just recently starting to develop a sales force where we have directors of each division and people that are earmarked to handle various products and upcoming products. So taking in consideration what we plan on doing as a company going forward, I feel comfortable in making those statements.

Okay. And then can you give -- go ahead.

Go ahead. No, go...

No. Go, please.

The second question about the FDA and food, it's always been a favorite of mine, the food safety, because I feel once it gets going, it should be one of the biggest of our divisions. We are in front of the EPA right now with a new product and a new label. We've been in front of it for some time. We're anticipating a PRIA decision, which is their decision of going forward, in December. So once we get that and concluding some of the initial studies we're doing, we should have a lot more color on that in the following calls or on press releases as soon as that happens. Julian?

Your next question is coming from [ Julian Garza ].

Dr. Shane, first off, new investor, but I want to thank you and your team for everything that you do. The work that you guys have out there right now is significant. So thank you very much for everything that you guys are doing. You mentioned something earlier about a premier client that's being ready to be announced and onboarded. And I know that if you're in negotiations, you got to be very cognizant of what you say. But are you able to elaborate a little bit more just on what industry or just any kind of details that can be shared?

Yes. It's in the food safety end, but I really can't elaborate any further. Thank you for your question. All right. We got one more out there, and that's it. Anthony?

[ Anthony Blazi ], your line is live.

So sorry if I missed this, but could you talk more about just your near-term pipeline? And you talked about your inability to travel and train your customers. Has this led to TOMI either missing out on business or having to push it out? I just think there might be some confusion about your sales cycle with them.

Yes. No, sure, I can, Anthony. So the travel restrictions have hindered us, there's no question, because our product requires to be shown, to be seen and to be demonstrated and to be trained. And that's what I think everybody needs to understand about it. So that has hindered it. Our pipeline is very, very strong. It's getting stronger each day as if you're listening on the call in relationship to people who are starting to leave some of these electrostatic sprayers and less-expensive products. So I anticipate this coming to an end where we will soon -- and I don't know what soon is. I can't define that. You know as much as I do about that part of it in relationship to being able to travel. And we have new materials going out. We have a lot of people that are very much interested in our new product, the SteraPack, and we're in the final phases of development in that. And I think that's going to make a big difference going forward in this type of market where you're looking for a product that's not as expensive as our life science, health care products that we currently have and one or more reasonably priced backpack that will be able to give them the security and the good feeling that what their spraying is getting killed on all surfaces, electronics and all materials without having any caustic results or having any excessive health risks to the user. So I hope that answers it, and thank you.

Can I actually ask one more question? Am I still live?

You're still live for about 10 seconds. Go ahead.

All right. I appreciate that, and I'm not trying to take too much of your time. Could you just talk about M&A? Do you guys have any opinion on M&A and if you were to get approached and would you tend to sell the company?

We don't comment on that, Anthony. But thank you for the questions. And I hope everybody that's listening still has a safe day, and thank you for joining us. We're very excited here at TOMI. Thank you all.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.