TOMI Environmental Solutions, Inc. (TOMZ) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of TOMI Environmental Solutions. It is 1:00 p.m. Eastern Time, and on behalf of the Board of Directors of the company, I'll call the meeting to order. I am Dr. Halden Shane, Chief Executive Officer and Chairman of the Board of the company. I will be acting as Chairman of this meeting and Harold Paul, our outside counsel, will act as Secretary of this meeting. I will now introduce the other directors and officers of the company, who are virtually present. Attending today are our other directors: Dr. Lim Boh Soon, Mr. Walter Johnsen, Elissa Jessica Shane and Ms. Kelly J. Anderson. Don Methfessel from Rosenberg Rich Baker Berman & Company, the company's independent registered public accounting firm, is also attending this meeting and will be available to respond to appropriate questions. The Board of Directors has appointed Stacy Aqui from Continental Stock Transfer & Trust, to act as Inspector of Elections. Ms. Aqui has taken the oath as Inspector of Elections and the oath will be filed with the minutes of this meeting. The polls for voting are currently open, and you may vote for the proposals, which are to be presented and discussed today online at any time during this meeting, until the polls are closed. Any shareholder, who has previously given his or her proxy, need not vote unless he or she desires to revoke the proxy and vote today at this meeting. Shares represented by proxy, where no vote is specified, will be voted in accordance with the recommendations of the Board of Directors. If you did not vote by proxy or if you wish to change your vote, you may vote at any time, while the polls are open. The Board of Directors set August 18, 2023, as the record date for this Annual Meeting of Shareholders. We have at this meeting, a record of our shareholders as of this date. Mr. Paul will now present the affidavit of mailing of the notice of meeting and report on the existence of a quorum for this meeting.

Thank you, Doc. I present the affidavit of mailing of Continental Stock Transfer & Trust, which states that the notice of meeting and accompanying proxy materials and annual report were mailed on or about August 25, 2023, to shareholders of record as of August 18, 2023. As of the close of business on August 18, 2023, the company had outstanding 19,823,955 shares of capital stock and 63,750 shares of Series A preferred stock entitled to vote, each of which is entitled to 1 vote. At least 11,156,823 shares of such voting stock, which is greater than 1/2 of the company's total voting stock, are represented virtually or by proxy at today's meeting. Thus, a quorum is present, the meeting is duly constituted and the business of the meeting may proceed.

The report on the existence of the quorum is accepted, and I direct that the affidavit of mailing be made part of the minutes of this meeting. Because holders of a majority of shares entitled to vote at this meeting are virtually present or by proxy, I declare that this meeting is duly convened for purposes of transacting such business, as many may properly come before it. I will now discuss each matter to be acted on at this meeting. At the conclusion of the discussion of all items, we will take the vote. There are 5 items of business on today's agenda: one, the election of the company's Class III directors for a period of 3-year term that will expire at our 2026 Annual Meeting of Shareholders; two, the ratification of appointment of Rosenberg Rich Baker Berman & Company, as the company's independent registered public accounting firm for the fiscal year ending December 31, 2023; three, the approval to authorize the company's Board of Directors to amend the company's articles of incorporation as amended; four, the approval of compensation of the company's named executive officers; and five, the recommendation regarding the frequency of future adversary votes on named executive officer compensation. Additionally, any other business as may properly come before this meeting and any adjournment, therefore, may be transacted. Mr. Paul, were there any other shareholder nominations or proposals for business for this meeting that were timely and properly filed with the company?

No, there were no other shareholder nominations or proposals for business at this meeting.

Then, the business of this meeting is limited to the 5 matters on the agenda. The first item of business today is the election of the company's Class III directors. The nominee with the most 4 votes will be elected to hold office until the company's 2026 Annual Meeting of Shareholders, and each will serve until his or her respective successor is duly elected and qualified or his or her earlier resignation or removal. The Board of Directors nominated Dr. Halden S. Shane for reelection as the company's Class III director. Information concerning the nominee's principal occupation, service with company and other matters, which may be of interest, are contained in the proxy statement. No nominations may be made at this meeting. So therefore, I declare nominations to be closed. The second matter being submitted to shareholders for action, is the ratification of the appointment by the Audit Committee of the Board of Directors of Rosenberg Rich Baker Berman & Company as the company's independent registered public accounting firm for the fiscal year ending December 31, 2023. The votes cast at this meeting favoring the matter must exceed the votes cast opposing the matter in order to ratify the appointment of Rosenberg Rich Baker Berman & Company. I now call upon Ms. Kelly Anderson, Chairperson of the Audit Committee, for the recommendation of the Board of Directors in this regard. The third matter being submitted to shareholders for action is the approval to authorize the company's Board of Directors to amend the company's articles incorporation, as amended, to effect a reverse stock split of the company's common stock at a ratio in the range of 1-for-3 if the Board of Directors determined it is necessary to regain compliance with a $1 minimum bid price continued listing requirement of the NASDAQ Capital Markets. The affirmative vote of majority of shares entitled to be cast at the annual meeting is required for approval of the amendment of the company's articles of incorporation, as amended, to effect the reverse stock split. The fourth matter being submitted to shareholders for action is the approval of the compensation of the company's named executive officers. The votes cast at this meeting favoring the matter must exceed the votes cast opposing the matter in order to approve, on an advisory basis, the compensation of our named executive offices. The fifth matter being submitted to the shareholders for action is the approval of the frequency for future advisory votes on named executive officer compensation. The frequency of holding future advisory votes on named executive officer compensation will be the choice which receives the affirmative vote of a majority of vote cast by the shareholders present in person, virtually or represented by proxy at the meeting.

The Board of Directors recommends that shareholders vote for the approval of the appointment of Rosenberg Rich Baker Berman & Company as the company's independent registered public accounting firm for the fiscal year ended December 31, 2023.

Because no further business is scheduled to come before the shareholders, I will now address any relevant questions that have been asked regarding previously discussed proposals. We don't see any questions. So without any further questions, I'll now direct that shareholders who wish to vote on the 5 matters submitted to the shareholders for a vote, and who have yet to do so either virtually today or by proxy, to please vote now as the polls will be closing momentarily. [Voting]

Because no further business is scheduled to come before the shareholders, I'll now address any relevant questions regarding the previously discussed proposals. There were none. There is no voting. So I now declare the polls closed for the matters voted upon at this meeting as of 10:11 30 seconds, Pacific Time or 1:11 30 seconds Eastern Time, September 12, 2023. The Inspector of Elections will now tally all votes. Once we have definitive results, the meeting will resume. Will the Secretary of the meeting please report the results of the voting?

We have been informed by the Inspector of Elections that the ballots have been counted and the following person has received the most votes by the holders of the company's voting stock virtually present at the meeting or by proxy, Dr. Halden Shane. Accordingly, Dr. Shane has been elected as a Class III Director of the company to serve for a term expiring on the date of the company's 2026 Annual Meeting of Shareholders and until his respective successor is duly elected and qualified or his earlier resignation or removal. I've been advised that the votes cast at the meeting in favor of the ratification of the appointment of Rosenberg Rich Baker Berman & Company, to act as the company's independent registered public accounting firm for the fiscal year ending December 31, 2023, exceeded the votes cast opposing the matter, and that accordingly, the ratification of the appointment of the auditing firm has been approved. I've been advised that there has been an affirmative vote of a majority of the shares entitled to be cast at the annual meeting in favor of the authorization of the company's Board of Directors to amend the company's articles of incorporation, as amended, and that accordingly, the reverse stock split proposal has been approved. I've been further advised that the votes cast at the meeting in favor of the compensation of the company's named executive officers exceeded the votes cast opposing the matter and that accordingly, the compensation of the company's named executive officers has been approved. Finally, I've been advised that the choice, which received the affirmative vote of a majority of the votes cast by the shareholders for the frequency of future advisory votes on named executive officer compensation, is once every 3 years.

Ms. Aqui, the Inspector of Elections, will furnish a written report of the final vote count with respect to matters voting on today. And Mr. Paul, as Secretary of the meeting, will also include the report and minutes of the meeting. Thank you for virtually attending today's meeting. The meeting is adjourned. I want to thank all of you for your continuing support of TOMI. We will now proceed to answer any questions. As noted in the proxy statement, shareholders could submit questions before and during the annual meeting. We will take some time to answer those questions that are germane to the meeting. Any matter of individual concern may be discussed with the company representative at a convenient time, following this meeting. If you wish to ask a question at the meeting, but have not yet to submit one, please submit a question virtually over the next few minutes. Since there are no questions submitted, that concludes our question-and-answer session. Thank you again for your participation and support.