Good afternoon, ladies and gentlemen and welcome to the 2020 Financial Results Conference Event. At this time all participants have been placed on a listen-only mode and we will open the floor to your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jennifer Belodeau. Ma’am the floor is yours..

Thank you. 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.

He will provide an overview of recent provide an overview of recent business highlights for the most recent quarter and Nick Jennings TOMI’s CFO who will discuss critical financial benchmarks before addressing any questions you may have.

A telephone replay of today's call will be available through April 13 2021, the details of which are included in the company's press release of March 24 2021. A webcast replay will also be available at TOMI’s website at www.tomimist.com. Now, let me read the Safe Harbor statements..

Thank you. Thank you for taking your time away from your schedules to join us this afternoon. 2020 was a ground breaking year for TOMI highlighted by record revenues of $25 million and net profit of $4.4 million or $0.23 per diluted share and adjusted EBITDA of $8.4 million.

During the past year, we expanded our customer base, developed and launched new products, and so a heightened recognition of our SteraMist misbranded products as the world got first-hand experience with the importance of effective disinfection and decontaminating processes.

Among the key initiatives, TOMI undertook in 2020, were the strengthening of our sales organization, as well as our quality control measures, the expansion of the SteraMist product line, the addition of a manufacturer to assist with our global outreach, and the filing of new IP protections, both domestically and internationally to secure proprietary design of our superior technology.

Additionally, we added a new division, our commercial division to leverage the increased interest we are seeing in our solution and to better identify and market to potential customers from a broad group of industries.

SteraMist continues to lead the industry with as many competitive advantages, including speed in turnaround time, high efficacy of a six log or higher kill, smallest of industry microns, superior material compatibility, versatility and application and a ready-to-go solution free of harmful chemicals, all which requires no wiping or rinsing and leaves no residue behind..

Good afternoon and thanks for joining us. I'll be providing a brief overview of our financial results for the full year 2020 in the fourth quarter of 2020 compared to the prior year periods. For the full year, December 31 2020 total net revenue was $25 million compared to $6.3 million representing an increase of $18.7 million or 297%.

Gross margins were 60.1% compared to 61.7%, the lower gross profit is attributable to product mix. Operating income was $4.5 million compared to an operating loss of $2.1 million Net income was $4.4 million, or $0.27 per basic and $0.23 per diluted share, compared to a net loss of $2.3 million, or $0.15 on a per share basic and diluted base share.

Adjusted EBITDA was $8.4 million, with an adjusted EBITDA margin of 33% compared to adjusted EBITDA loss of $1.2 million. A table reconciling adjusted EBITDA to the appropriate GAAP measures is included with our press release that was issued earlier today.

Cash provided from operations for the year ended December 31, 2020 was $4.6 million compared to cash used in operations of 814,000 for the year ended December 31 2019. Now, for the fourth quarter, total net revenue was $3.7 million, compared to $1.9 million, an increase of 95%. Gross Margin was 58.9% compared to 56%.

The higher gross margin is attributable to product mix. Operating loss was $2.9 million compared to an operating loss of $0.5 million. The increased loss is attributable to noncash equity compensation expense charge incurred in the fourth quarter in the amount of $2.8 million.

Net loss was $2.9 million or $0.17 per basic and diluted share compared to a net loss of $0.5 million or $0.03 per basic and diluted share. Adjusted EBITDA was $0.1 million compared to adjusted EBITDA loss of $0.3 million.

Looking at a few key balance sheet items, cash and cash equivalents were approximately $5.2 million at December 31 2020 compared $0.9 million at December 31 2019, an increase of $4.3 million. Working capital of $11.5 million at December 31 2020, an increase of $12.3 million compared to 2019..

Thank you, Nick. I'll now review the key parts of our business and strategy in more detail starting with healthcare. In the wake of this pandemic, the healthcare system realized the importance of enhanced disinfection. In 2020 there were large healthcare, multiunit purchases, and the bid solution orders continued to rise.

Northeast medical services purchased 12 surface units and purchases pallets of solution regularly. Yellow River Health Services, their healthcare community regularly with 12 surface units. Merakey Behavioral Health and Greystone Park Psychiatric Hospital each purchased five SteraMist surface units to implement throughout their facilities.

With its ease of use, and abilities contain all aspects to quickly deploy throughout all areas of the facility. The SteraMist disinfection cart, which was launched in 2019, has become a popular package for the healthcare industry. In 2020 St.

Luke’s healthcare systems purchase a cart and publicly praised SteraMist for the quick deactivation of pathogens, with little dwell time, shortening room turnover times. St. Luke’s Boise utilizes SteraMist in their emergency department and patient isolation rooms while planning on expanding to their OR suites, and C.

diff patient rooms in the near future. The Geisinger Health System purchased and deployed eight SteraMist disinfection carts packages, which they deployed throughout different locations in the United States.

SteraMist was a key component, disinfecting triage tents at Geisinger, Similarity Marone County Health and Hospital Corporation utilize SteraMist to disinfect COVID testing tents and later for disinfecting the tents during COVID vaccinations for the first responder.

Bond Secures, Mercy Health with 50 Hospital, 1000 points of care and over 60,000 employees across seven states and two countries they have multiple SteraMist disinfection card packages throughout their operations being used for C. diff isolation discharges ORs, daily terminal cleans and patient rooms as deemed necessary.

Additionally, we see growing demand for senior living facilities as they enhance their disinfection protocols which include adding SteraMist. The Willis senior care community purchase SteraMist to bring back their business after a COVID positive patient identified through contact tracing.

Due to the success of SteraMist of their facility they marketed by highlighting their use of SteraMist disinfection throughout their facility via commercials and billboards.

Another senior living facility, Providence Life Services senior living purchased a SteraMist surface unit in June and due to the success of the unit they later added three more surface units in October of 2020..

Certainly, ladies and gentlemen, the floor is now open for questions. Your first question is coming from Pamela Prime. Your line is live..

Hi, thank you very much. First congratulations on a strong year.

Could you give us a little more insight into how we should think about the razor, razor blade model longer term? Specifically, how should we think about the margins on the equipment versus the SteraMist?.

Sure, Pam. I'll have Nick answer that..

Hi, Pamela. This is Nick. Yes, to answer I guess the second part of your question first really, the margins generated from the sale of our SteraMist BIT solution are stronger than that of the margins that are generated from the sale of our equipment.

So, really, if you're looking at this long term, as we have spoken about in the past too is, as we add customers and more machines in the field being used, our solution revenue will go up.

And really, what we anticipate is our solution revenue as a percentage of the global revenue could increase, and which would lead to potentially larger and better margins than what you would see now..

Also, just to add to that Pamela, we have a lot more equipment in the market, both domestic and globally, that's going to be utilizing a lot more solution going forward. As we develop and put more equipment into the marketplace, solution usage will be much, much greater..

Thank you. One quick follow up, if I can.

How should we think about R&D? Will it stay at similar levels? Or will it come down after you launch the two new products in 2021?.

We probably will be increasing our R&D. We've learned that this technology has an amazing ability to be incorporated into many locations including built-in into complete building, which was the net -- which was the real foundation of where it came from the DARPA program. So, we will be following up with R&D.

We plan on developing our CES, our complete room into various packages that will be readily available to public and private sectors in various divisions, and developing our backpack into many different types of usages for different specific specialties. Thank you..

Thank you. Very good. Appreciate it..

Thank you. Your next question is coming from Alexandra Hicks. Your line is live..

Good evening. It's Alexander Hicks from Harbor Management.

My first question is, what would be the approximate price point on the SteraPack? And how does this compare to the pricing of your current products?.

So, our backpack will be priced competitively. We have not put the exact price. It's somewhere going to be around the $6,000 or under price point, which will be very competitive to the large electrostatic spray in market that has been having issues with consumer recalls, because of backpack -- batteries exploding and fires, et cetera.

So we believe we'll be able to seek and go after that competition with our pricing on that. It compares to our surface unit and environment unit, which will be totally different animals per se, because there for much longer use, greater size of space to be decontaminated and greater applications for multiple verticals.

But it'll be probably about a third of what our current prices on our surface unit..

Great. Thank you. And just one follow up question. International revenue did not see growth as that your domestic revenue did in 2020.

And just do you plan to focus on international expansion going forward?.

Most definitely, we are currently creating service centers both in Europe and Southeast Asia. We are hiring various professionals in different verticals, to represent us as representative for the product, both manufacturing reps, and direct reps in all parts of the world.

Plus we're going for various other types of product registrations in parts of Africa and areas that we haven't normally been in and into South America and Central America. So most definitely our plan is to expand our global footprint going forward in 2021 and beyond..

Perfect. Great. Thank you so much. Perfect. Great. Thank you so much..

Welcome. Thank you..

Thank you. There are no further questions in the queue at this time. I will now turn the floor back to management..

Well, thank you all for joining again, and hope everybody has a wonderful week and holiday. Thank you..

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