Good day, ladies and gentlemen, and welcome to the TOMI Environmental Solutions Inc., First Quarter 2021 Financial Results Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Dr. Halden Shane; and Nick Jennings, after brief introduction from John John Nesbett. John, please go ahead.

Good afternoon and 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 Chief Financial Officer. Dr. Shane will provide an overview of recent provide an overview of recent business highlights and discuss critical financial benchmarks for the recent quarter before addressing any questions you may have. A telephone replay of today's call will be available through May 24 2021, the details of which are included in the Company's press release of May 17, 2021. A webcast replay will also be available at TOMI’s website at www.tomimist.com.

Thank you and welcome everyone for joining TOMI Environmental Solutions' first quarter 2021 earnings call. For those new institutional and private investors to TOMI, our technology was invented under a defense grant in association with DARPA, the U.S. Defense Advanced Research Projects Agency. That is a division of the Department of Defense is responsible for emerging technologies. That is registered with the United States Environmental Protection Agency and uses a low percentage hydrogen peroxide as its only active ingredient to produce a fog composed mostly of hydroxyl radicals, known as ionized hydrogen peroxide or iHP. Represented by the SteraMist brand of products, iHP produces a germ killing aerosol that works like a visual, non-caustic gas. SteraMist Disinfection has been used to fight multiple pandemics and weaponized chemical threats including anthrax, Ebola, MERS, COVID and latest pandemic coronavirus SARS-CoV-2. As we update you today, I think we can all agree that, it is reassuring to see the progress being made, on this pandemic from both a public health and economic standpoint, now that many therapies and vaccines are widely available. As a company that focuses on safety, we are very glad to see things improving. With that being said, our first quarter, 2021 performance had a steep comparison to last year's first quarter. When the pandemic was beginning and TOMI benefited from tremendous increased demand in the marketplace for disinfection, decontamination solutions. The 2020 pandemic unquestionably brought disinfection worldwide to the forefront and drove a significant sales increase for TOMI because. One, our disinfectant is an EPA registered mechanical disinfectants and on the EPA list and for SARS-CoV-2 with a five second spray and an amazing consistent six log kill. And two, customers were looking for products that would aid in their ability to keep their businesses open.

Good afternoon and thanks for joining us. I'll be providing a brief overview of our financial results for the first quarter of 2021 compared to the prior year period. Total net revenue was $2.1 million, compared to 7.1 million, a decrease of 70%. Gross margin was 59.6% compared to 63.6%. The lower gross margin is attributable to product mix. Operating loss was 1.5 million compared to operating income of 2.7 million. Net loss was 1.5 million or $0.09 per basic and diluted share compared to net income of 2.6 million or $0.17 per basic share. EBITDA was a loss of 1.4 million compared to EBITDA of 2.8 million. Adjusted EBITDA was a loss of 1.4 million, compared to adjusted EBITDA of 3 million. Looking at a few key balance sheet items, cash and cash equivalents were approximately $3.9 million at March 31, 2021 compared to $5.2 million at December 31, 2020, a decrease of 1.3 million. Working capital was 10.1 million at March 31, 2021. Shareholder equity of 11.9 million at March 31, 2021 compared to 13.2 million at December 31, 2020, a decrease of $1.3 million. Now, I'll turn it back over to Dr. Shane.

Thanks Nick. I would now like to take a minute to discuss our new product initiatives. First, we are particularly excited about the upcoming launch of SteraPak product, a much anticipated offering which further differentiates our six-log kill solutions in the marketplace and better position us to continue our mission to make the world a safer place. SteraPack is an AC-DC backpack unit with the same proprietary BIT technology available in our surface units. We have developed a SteraPack to compete in the marketplace against electrostatic sprayers, which became very popular during the 2020 for service cleaning providers and the commercial industry. We started accepting preorders and have seen high interest across all markets for this lighter more mobile distribution method. We don't have a specific release date yet as we continue to refine the development to bring to the market a sleek, easy to use backpack that is in alignment with our TOMI Stera brand that our customers expect. Assuming the supply chain cooperates, I expect that we'll be selling the product, delivering it in, commencing in Q3. We are also excited about the prospects for our robotic application, the SteraBot, which remains in testing in international hospitals and commercial sites. Finally, we're seeing a great deal of interest for the SteraBot, primarily from our life science and the hospital healthcare customers. This SteraBot is purchased only with our SteraMist Select unit or SteraMist Environment System, and a 90-Degree Stainless Steel Applicator. We are actively quoting on this product and awaiting approval from our customers. With our existing products and the addition of these new offerings, our focus in 2021 is on working with our customers to be their safety resource as they return to work. Our core customers in life sciences, commercial and healthcare are gradually returning to work and we expect to see increased demand for our products and services in the latter half of 2021. SteraMist is a broad spectrum disinfectant solution that can be used in response to and for the remediation of mold spores and common healthcare outbreaks such as C-diff. and C-auris to the everyday disinfection of germs in your home or office space, as well as mitigating cross contamination of the most hazardous of pathogens around the world. So, our product has broad appeal in a variety of settings, and we remain focused on growing our brand recognition as the gold standard in disinfection and decontamination. To that end, the Company is building a sales team. We have hired sales vice presidents to our divisions and plan to increase our inside team to assist these VPs. We have added six independent manufacturing representatives, bringing the total to 40 representatives across all our divisions.

Thank you. Ladies and gentlemen, the floor is now open for questions. And the first question is coming from . Walter, your line is live.

Hey, thanks guys for taking my questions. So during the peak of the pandemic, there was obviously a large amount of solution sales. How should we think about the timing of customers restocking this inventory SteraMist?

Thanks for the question, Walter. It's correct. We had a lot of SteraMist solutions sales specifically in the first half. Much of it with pandemic -- and ammonia, they were buying lots of solution. In fact, they were hoarding solution, I think because they were afraid that either we would run out or be able not to produce enough of it. And we're starting to see that the hoarding from all of our users that we're doing this is running out and they're starting to put in orders, new orders for solution going forward, which is a positive sign for us, because that's basically what our model is based on solution usage. And we're happy to see these people that were ordering large amounts during the pandemic are now continuing to order on a more realistic amount.

Okay. And so, how should we think about, the competitive positioning of the SteraPack product? What's unique about the product that gives you confidence that it will help drive sales?

Great question. So, this product is a concept to take our amazing technology our six log ability and put it into a backpack that can either be plugged in or be battery operated depending upon the location of use. And the competitors have been using electrostatic type sprayers, fairly inexpensive sprayers that have been many of them in fact, 417,000 of them have been recalled by the consumer safety board because of various explosions and fires. So, we feel our pricing will bring us down to the competitive pricing of these electrostatic sprayers and the backpack version. And we'll be extremely -- it'd be a great position for us to be in as a company because we'll be able to open up and help to drive sales into areas that we've not been able to get into in the past, which has been cleaning companies, the professional restoration companies, and some cleaning companies that are larger we're in right now. But because of the entry price of our current products, the surface unit and the environment units, we believe that the SteraPak will allow them to buy more and to have more types of companies from ISSA or a cleaning companies enter into the marketplace, and this will help to drive our sales. And again, go back to our solution usage for using our BIT solution.

Okay. Thank you. And then kind of same sales vein, what percentage of your sales are international and how should we think about the international opportunity going forward for TOMI?

So percentage wise, we have a lot of international interests, we've always had out there. We're registered in probably north of 30 countries around the world. Again, the problem has been recently, we've noticed a decrease in international sales. I think it's because; number one is, many of the people in international markets that use our product have been shutdown and have been sequestered to their homes and businesses like the United States have not been functional in that way. Number two, we feel that the entry price has been a problem internationally and that's another reason, another great reason for the production of our SteraPak, which we feel internationally, this will be a forerunner of driving sales, except for those professional of biotech, bio safety pharmaceutical companies that are going to always use our main product or a surface environment unit and built-in systems, that's number two. We'll also soon be able to start traveling a big part of the loss of international revenue is the inability to travel internationally. And now that, things are opening up in some parts of the world, not in all of them, unfortunately. But in some parts of the world, we're beginning to have interest of going out and doing demos and doing bids on our complete engineered system. So, I think you can count on seeing greater international revenue going forward, as this country is opening and as the rest of the world starts to open, and with the release of our new product line.

Thank you. And the next question is coming from from Advisor Group. Todd, your line is live.

Just was revisiting the last conference call. And you had said that a quote, we are targeting 40% to 45% growth in 2021, as compared to 2020, I know the revenue is going to be kind of heavy on the back end. I was just wanted to know if you could provide a little color on that guidance and if you're still standing by that? Thank you.

Thank you. So yes, I think our revenue will grow greater than it grew in 2020. Again, this was a disappointing quarter for me, I understand the reasons why, as so many shareholders, I'm probably more upset because I own more shares than anyone out there. But I think that our revenue is going to be back ended, like I've been saying, reasons, because our sales force, the reasons because what new products that are being introduced, reasons, because the solution usage is starting to pick-up as people start to go to work and return to the verticals that made this company successful for years, which wasn't handling a pandemic, but was life sciences, hospital, healthcare, service industry, commercial now and our TSN. So, we don't give guidance over quarter. I think, sequentially, our second quarter is going to be better than our first quarter. I think that, the 35 range is extremely doable. We need a lot of components to come into play, one being our international sales needs to pick up. We need to get our product out throughout the world, both in Asia, Southeast Asia, and Europe, and in the areas that we currently have in South and Central America. So, without -- I'll reserve the comment until the end of next quarters call, but I think that the future is going to be tremendous. And I think I plan on beating next year's revenue numbers, and I plan on doing that significantly.

That's, that's great to hear that the 35 million range is still doable. So appreciate you adding the color there. Just also wanted to see, if your fine ICF 7 million in cash. Are there any plans out for any equity raises or future dilution? Or do you feel like the current cash position will satisfy the Company needs?

At the moment, I think we're good. As we have a offering out there for 50 million that we're not going to go ahead with at the prices that the stock is currently at. So, the answer to that question, the short answer is no. We're not looking currently at any capital at the existing share price.

Thank you. That now ends our Q&A, and I would now like turn the call back to management for any closing remarks.

Thank you for your support and for joining us today. This pandemic has truly changed how people think about proactive decontamination, and we are optimistic about our ability to capitalize on that new thinking, as we continue to execute our long-term plan to become the standard in decontamination worldwide. The world will inevitably face another pandemic and the cost of preparedness will be dwarfed by the price of disaster. We believe these factors will drive sustained higher margin sales as levels above pre-pandemic levels, and we look forward to speaking with all of you in the next quarter. Stay well and thank you.

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