Good afternoon. Welcome to the TOMI Environmental Solutions Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode and the floor will open up questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, John Nesbett of IMS Investor Relations. Sir, the floor is yours.

Thank you for joining us today for the TOMI Environmental Solutions investor update conference call. On today's call is TOMI's Chief Executive Officer and Chairman, Dr. Halden Shane; and Nick Jennings, TOMI's Chief Financial Officer. 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 call will be available through November 26, 2021, the details of which are included in the company's press release issued this morning. A webcast will also be available at TOMI's website www.tomimist.com. I'll remind that during this conference call, we will make certain forward-looking statements including discussions of the business outlook and financial projections. These forward-looking statements are based on management's current expectations and involve risk and uncertainties that could cause the actual results differ materially from such expectations. For a more details descriptions of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligation to update the information provided in today's call. Please also note that during this call, we will discuss certain non-GAAP financial information, because we believe they provide useful information about our operating performance that should be considered by investors together with the GAAP measures that we provide. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release. I will now give the call over to TOMI's Chief Executive Officer and Chairman, Dr. Halden Shane. Go ahead, doctor.

Thank you. And welcome to TOMI Environmental Solutions’ third quarter 2021 earnings call. We appreciate you taking time away from your schedule to join us this afternoon. And I apologize for the timing of the call on a Friday, as the company is involved in a very important trade show on Monday, which requires my attendance. The third quarter saw a strong 50% sequential growth from the second quarter. The launch of an exciting new product that has been well received the opening of a brand new direct-to-consumer distribution channel through Amazon and significant progress improving logistics and quality control. As we move into the post-pandemic world, a focus on the growth and market opportunities during 2021, we continue to partner with premier quality customers that expand the use of our technology. Our reputation as a leading decontamination solution is validated by many referrals we receive from our existing customers. Pfizer and Merck are on track to become TOMI's top expansion customers to name a few. LabCorp, Icahn School of Medicine Mount Sinai, St. Jude Children's Research Hospital, and the Department of Homeland Security's National Lab at Plum Island Animal Disease Center. All are nice additions to our premier customer list. These new customers along with our long-term customers, partnerships around the world should enable us to continue to obtain referrals to our SteraMist brand, but SteraMist to become the standard in its industry. It's important for us to continue educating the world on quick, non-caustic, environmentally friendly proper disinfection and decontamination protocols and procedures, and validation from our customer base along with their referrals are critical to achieving our market position and growth. We believe that our long-term orientated partnership will boost revenue and growth across all our company divisions. We are excited about the launch of the SteraPak,…

Good afternoon, and thanks for joining us today I'll be providing a brief overview of our financial results for the third quarter of 2021, compared to the prior second quarter of the current year. Since 2020 was an outlier year due to the COVID outbreak, I want to focus on our growth strategy as we move into the post-pandemic world. Therefore, I'll be discussing and comparing our third quarter 2021 to our second quarter 2021 to better illustrate our financial results in sequential growth. We are pleased with our strong fiscal third quarter 2021 performance compared to the second quarter of 2021. Our consolidated net sales for the third quarter were 2.2 million, a 50% increase from the 1.5 million reported in the second quarter. Our SteraMist based product revenue increase 0.7 million or 70% to 1.7 million, compared to 1 million in the second quarter. iHP service third quarter revenues were 0.5 million, 25% growth over our second quarter of 0.4 million. iHP service revenue benefited from our broad based increase in demand for our corporate managed services and professional services, which include project based services, as well as staff augmentation. Consolidated gross profit increased 44% to 1.3 million in the third quarter from 0.9 million, compared to the second quarter. Consolidated gross margin increased 1 basis point to 60%, compared to 59% for the second quarter. Consolidated operating expenses were down 16% to 1.8 million due to a decline in salaries and variable compensation and other G&A expenses. Our consolidated net loss of 0.5 million or $0.03 per diluted share decreased 42% or $0.02 per diluted share compared to 0.8 million or $0.05 per diluted share in the second quarter. Adjusted EBITDA loss per share was down 50% to $0.02 per diluted share compared to $0.04 loss per…

Thanks, Nick. The SteraMist product and iHP technology 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. We all know the world has changed, which has disrupted lead generation via the means of trade shows over the last 18 months. The core of TOMI's new customers include demonstrations and in-person trade shows were key to demonstrating and bringing awareness to the capabilities of our product and our market position. Despite the impact of the pandemic on trade shows, we were able to make significant progress in our marketing efforts to generate new leads. Now for the good news, the TOMI’s sales team did just attend Interfax last month, which was well received and generated interest for our legacy SteraMist environment systems and iHP corporate service products. We expect to see results in sales in the first half of 2022 from prospects who attended this show. Is SteraMist sales team? Yes, including myself will be attending ISSA, the International Sanitary Supply Association which opens to the largest cleaning market in the world. The trade shows being hosted in Las Vegas next week and TOMI anticipates a positive turnout. This will be the debut of the long-awaited cost competitive SteraPak. As part of our marketing and sales strategy for our product portfolio, we announced the launch to our Amazon store in the U.S. for a SteraPak product line. A leading full-service Amazon agency will build an optimized Tomi's Amazon store and execute advertising initiatives for the product. By adding an optimized digital storefront on the leading e-commerce platform, Tomi is significantly expanding exposure and distribution for the SteraPak. As the most cost-effective SteraMist system, the SteraPak is primed to effectively target both businesses and consumer end…

Your first question is coming from Walter Ballenger from Mayflower.

Could you give us a little more insight in terms of the response you've seen to the initial launch of the SteraPak? And did you have any SteraPak sales during the quarter?

Yes to both questions. The initial interest is high, the response is great. I think everybody that has it in their hands to date is very happy with it and we're getting great reviews from them in using this. It's an amazing instrument and we're very proud to present it. We think it's going to be the number one portable unit for disinfection decontamination around the world. And we're striving for that. It's an amazing piece of goods. As far as sales, we did have some in the third quarter. I believe we sold all that we received which was the last week of the third quarter. And we are expecting new shipments coming in throughout this entire fourth quarter. Q - Unidentified Analyst Okay. And then how should we think about your sales mix between hardware and solution during the quarter and also going forward?

So during the -- I would have to say we're always looking for 15% to 20% mix solution versus technology as solution being 15% to 20%. We have about 1,000 instruments out there in the world. And because of the pandemic, many of them have hoarded large supplies of solution and they're either running out of it if they use it or they're going to be expiring very soon. So we anticipate a big pickup in our solution sales and currently with the SteraPak. It's so easy to use we also anticipate a lot of usage and sales from that going forward. Thank you.

Great. Okay. That's it for me. Thanks for taking my questions.

Your next question is coming from Todd Felte with Advisory Group Equity Services.

Thank you for taking my questions today. I just had a one. If you're able to make an update on your forecast for revenues and a return to profitability going forward.

Thank you, Todd. We don't forecast, we're seeing good growth going into the fourth quarter. We feel, we know we'll have sequential growth. We're hoping to have greater than sequential growth and there are unknowns that I can't control. I mean, for one is like XBRL being done in time from our IDC, but otherwise the queue would have been out, but, yes, outside of any unknown delays, which I think we have pretty much under control at the moment we anticipate good growth, Todd, and definitely a great growth going into ‘22.

That's great to hear. I wasn't sure if you'd given an update on the airline industry earlier in the call, as far as the backpacks, I know that was a big potential customer for you. Do you see a lot of backpacks sales of the SteraMist backpack in Q4 to that industry?

I think we will, um, that EN 17272 test that we passed, was for European airlines to use it. So we're hoping that that along with the ongoing Boeing research of our product, which seems like it's been going on longer than I've been around, we're hoping that we'll have some answers we're going to go ahead and ship them our new backpack. They've been using our surface unit. So we're working on it and these things unfortunately, frustratingly do take a little bit of time, but we are marching ahead with this industry.

Well, thanks for all the updates and I appreciate all the positive commentary. And I look forward to seeing the company turn the corner and continue success.

Thanks so much for your support, Todd. Thank you.

We have no further questions from the lines at this time. I would now like to turn the floor back to management for closing remarks.

Thank you all for your support and for joining us today. And I wish you all a happy Thanksgiving.

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