TOMI Environmental Solutions, Inc.

Good day, ladies and gentlemen. Welcome to the TOME Environmental Solutions First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be provided at that time. I would now like to turn the call over to your host, John Nesbitt, with IMS Investor Relations. Mr. Nesbitt, you may begin.

Good afternoon, and thank you for joining us today for TOME Environmental Solutions Investor Update Conference Call. On today's call is TOME's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane, TOME's Chief Operating Officer, E.J. Shane, and TOME's Chief Financial Officer, Nick Jennings. Dr. Shane will provide an overview of recent business highlights, E.J. will report on the company's growth and latest trends, and Nick will review the financial performance for the most recent quarter before addressing any questions you may have. A telephone replay of today's call will be available through May 29, 2023, the details of which are included in the company's press release dated May 15, 2023. A webcast replay will also be available at TOMI's website, www.tomimist.com. Please note information contained within this presentation is relevant only to the date of which it is recorded, May 15, 2023, and you are therefore advised that time-sensitive information may no longer be accurate at the time of any replay. Certain written and oral statements made by management of TOME may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause actual results to differ materially from our anticipated results. The information provided in this conference call is based upon the facts and circumstances known at this time. The company takes no obligation to update these forward-looking statements after the date of this call. In addition, Tomei will discuss certain non-GAAP financial measures during this call. The company uses non-GAAP measures because it believes they provide useful information about the operating performance that should be considered by investors in conjunction with the GAAP measures. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release dated May 15th We now turn the call over to Tomi's Chairman and Chief Executive Officer, Dr. Halton Shane. Please go ahead.

Thank you, John. Hello. Welcome to Tomi Environmental Earning Call. Today we'll be presenting the company's operating and financial results for the first quarter of 2023, along with positive updates of our current initiatives. Thank you all for joining us this afternoon. Our first quarter revenue was impacted by revenue recognition rules and customer-imposed delivery restrictions for equipment and CES orders. Our recognized revenue and our customer sale backlog for the three months ended March 31st, 2023 together was approximately $3,129,000, which was comprised of the recognized revenue of $1.5 82,000, and a customer sales backlog of approximately 1,547, 1,547,000. We anticipate improved results for the second quarter and the remainder of the year. We are very optimistic about our performance going forward with our sales backlog, expanding distribution network, and robust sale pipeline, particularly for our CES products, We anticipate in reporting improved financial results for the remainder of calendar 2023. Our market positioning and model remains very strong. From a market positioning standpoint, there are some industry trends as well as regulations that are opening up some massive market opportunities for the company. One of the largest opportunities that's unfolding is that the EPA has proposed cutting ethylene oxide emissions by 80% at approximately 86 commercial sterilization locations in the United States. This could create a significant market void for the chemical disinfectant used for sterilizing medical devices and equipment. TOMI's solution utilizing ionized hydrogen peroxide has been identified as a viable alternative that leaves no residue and has decontamination efficacy upwards of 99.9999% compared to ethylene oxide. Sterimus products are non-toxic, non-corrosive, do not cause temperature damage to medical equipment or devices. Sterimus' superior solution offers a perfect alternative, giving it is faster, more environmentally sustainable, and has no carcinogenic risk to site workers and those living close by. From a business model standpoint, our business reported a high gross margin of 59.9%, even with lower than anticipated revenue in the quarter. Finally, while still a relatively low portion of overall sales, higher margin solution sales are growing, and with our strong pipelines of CNS sales, solution sales should become increasingly more predictable. We are optimistic about achieving better outcomes for the company as we have taken several measures to strengthen our market position. One key initiative is that we have proactively expanded our distribution networks and manufacturing representatives. In the first quarter of 2023, we welcomed and executed agreements with Jans Corporation, PennCare, New England Scientific Associates, or NESA by Baker, Aries Scientific, Crow Food Safety, and Technomont Systems. A U.S.-based medical supplier and distributor holds government contracts to provide medical and health products to various agencies, presenting an opportunity for us to expand our reach into the already familiar government sector. PennCare, an emergency medical service provider, will help us strengthen our presence in said markets throughout the United States. NESA by Baker is a leading manufacturer of biotechnology and research equipment and will act as a new independent manufacturing representative for TOMI, while ARIS Scientific has evolved in its service model and now serves as a new distributor of TOMI products. Furthermore, Crow Food Safety will help us expand our global footprint in the food safety and hygiene markets. with a distribution focus on South Africa, Sub-Saharan Africa, representing our first venture into that part of the region. Lastly, Tecnamount Systems, a highly reputable manufacturer and distributor, will serve us as an exclusive distributor of our Sturimus IHP technology to the emergency medical service industries throughout Canada, further expanding our presence in this key market. Our expansion efforts in Africa extend beyond our recently added distributor in the food and hygiene market. To establish solid engagement in a larger market, such as South Africa, Kenya, Uganda, Ghana, Senegal, Egypt, and Nigeria, we have donated four Steripaks for various government agency-backed labs in Africa, including the Department of Defense, the DOD. By partnering with local governments and healthcare organizations, we are working to implement effective and sustainable disinfection protocols to help protect vulnerable populations from the spread of diseases such as malaria, Ebola, monkeypox, and tuberculosis. Research universities remain a key stable market for us and have proven to be a faster sales process and we're pleased to have onboarded the University of Hawaii and Oregon State University in the first quarter of 2023. As this is a market space where everyone knows each other, positive references and customer satisfaction is key. The Dana-Farber Cancer Institute, the location in which one of our original CES systems was continues to create referrals and sales opportunities for us in the marketplace. One of these said opportunities is Orna Therapeutics, a leading biotechnology company located in Massachusetts, who we recently delivered a one applicator custom engineered system to. That's our CES. During the first quarter, we also entered into a service agreement with LFB USA, a subsidiary of LFB Group, a European biopharmaceutical company specializing in development and manufacturing of innovative biotherapies. The agreement commits LFB to engage TOMI for a high-level disinfection of one or more facilities. Ongoing studies remain a focus as we continue to grow internationally and domestically. For example, we received final acceptance after executing an extensive material study in Germany to prove the efficacy of Sterimist against all germs of all categories, spores, gram-positive bacteria, gram-negative bacteria, fungi. found directly on specific materials in clean rooms, laboratories. Thus adhering to the industry's strict regulations and guidelines, all runs showed a significant log reduction and was a pass. The German biotechnology is a substantial opportunity for TOMI in the future and we will keep you appraised. In the United States, we're working with the government and Tomi Service Network members to prove and demonstrate Sturimus efficacy against ricin and fentanyl, which is critically needed in this country. It has been publicly announced that Sturimus has proven successful as a direct spray on cannabis flowers to combat common molds and fungi without affecting the quality of the oil or plant. We are currently in the process of registering Sturimus state by state to ensure that our future customers in this rapidly growing cannabis industry can choose Sturimus as their trusted decontamination solution with confidence. The cannabis opportunities continue to positively evolve for us. Vertical crop consultants. A food safety independent sales representative partner to Tomi as of late last year was onboarded as a formal customer during the first quarter of 2023. Vertical Crop has generated interest in the industry during their short time with Tomi and now as a customer completed this joint study with an American seed company and head breeder for one of the world's most famous cannabis strains. This third-party study found Sterimist to be effective in eliminating aspergillus and powdery mildew while protecting cannabis growth and without affecting quality. Each phase of the study proves Sterimist IHP can be a consistent solution to prevent spores at every stage of the growing process, a huge savings for the industry. Plum Island Animal Disease Center, owned and operated by the USDA, is a high security laboratory facility that conducts research in animal diseases that pose a threat to agriculture and public health, and is one of the few facilities in the world equipped to study highly infectious diseases that affect animals. And they have chosen to partner with TOMI in a GLP study on hand, foot, and mouth disease, or HFMD, a highly contagious viral infection that commonly affects infants and young children. We anticipate successful results on combating this virus, which can lead to viral meningitis, inflammation of the brain and spinal cord, and even paralysis. TOMI may begin work with the EPA once again to update its label with HFMD, TB, and other recent claim accomplishments in due time. Finally, we've just launched our new website and domain, Steramist.com, S-T-E-R-A-M-I-S-T.com. The Tomi marketing team has been working diligently to create a fresh, modern, and user-friendly online experience that accurately reflects our company's values and mission, innovating for a safer world. This new website will enhance our customers' and partners' ability to engage with us and find the information they need quickly and efficiently. The new site was launched this morning, so please visit steramist.com. S-T-E-R-A-M-I-S-T.com, and share your thoughts with us. At this point, I'd like to hand the call over to Tomi's COO, Elisa Shane, who will provide you with an overview of the company's upcoming plans and objectives for the rest of the year. Thank you. EJ?