Good afternoon, ladies and gentlemen and welcome to the Surna Inc. Q2 2021 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions after the presentation. It is now my pleasure to turn the floor over to your host, Surna’s CEO, Tony McDonald. Sir, the floor is yours.

Thank you and good afternoon. Welcome to Surna’s second quarter 2021 earnings call. My name is Tony McDonald. I am the company’s Chairman and CEO. And I am joined today by our new Chief Financial Officer, Brian Knaley. Before we begin, please be advised this call may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherit uncertainties in predicting future results and conditions. These statements reflect our current beliefs and a number of important factors could cause actual results to differ materially from those expressed in this call, including the risk factors set forth in our Form 10-K, which we filed with the SEC in March. Please refer to our SEC filings for more detailed discussion of the risks and uncertainties associated with our business. Please note that we filed our quarterly report on Form 10-Q and issued a press release announcing second quarter 2021 results on August 10, 2021. These documents can be found on our website at www.surna.com/investor-relations. If you would like to be on our e-mail distribution list, send an e-mail to investor@surna.com. While we will highlight some key information contained in the press release and the 10-Q, the primary purpose of this call is to provide an update on our recently updated strategic and organic growth plans and our key operating metrics. Let me begin by introducing our new CFO, Brian Knaley who joined us in late June of this year. Brian is multiple times at NASDAQ as CFO with deep experience in all aspects of public company financial management, who also has expertise in mergers and acquisitions, which will be a key part of our growth strategy going forward. Surna has not had a CFO since 2018 and no one is happier to see him on…

Thank you, Tony. We are excited to report that during the second quarter, we had our second best quarter in our history in terms of both revenue and adjusted net income, with $4.5 million and $353,000 respectively. Revenue increased 168% as compared to the second quarter of 2020 and an increase of 91% over the first quarter of 2021. Adjusted net income increased 174% as compared to the second quarter of 2020 and an increase of 154% over first quarter 2021. On a year-to-date basis through June 30, 2021, our revenue was $6.9 million versus $3.5 million for the same period last year, or a 97% increase. Adjusted net loss was $297,000 year-to-date through June 30, 2021. This compares to adjusted net loss of $1.2 million for the same period last year or a 75% decrease year-over-year. Our second quarter 2021 gross profit margin was 28.4% compared to 16.3% for the second quarter of 2020, an increase of 12.1 percentage points. Year-to-date through June 30, 2021, our gross profit margin was 23.7% compared to 20.9% for the same period last year, or an increase of 2.8 percentage points. In the second quarter of 2021, our operating income was $116,000. This compares to an operating loss of $606,000 in the second quarter of 2020 or a 119% improvement. Net income in the second quarter of 2021 was $265,000 as compared to a net loss of $614,000 in the second quarter of 2020 or a 143% improvement. Year-to-date through June 30, 2021, our operating loss was $570,000 compared to $1.6 million for the same period last year, or a 63% decrease. Our net loss year-to-date through June 30, 2021 was $528,000 compared to a net loss of $1.6 million for the same period last year, or a 66% decrease. As of June 30, 2021, our cash, cash equivalents and restricted cash was $1.6 million compared to $2.3 million as of June – as of December 31, 2020. We used $1.1 million and cash flow for our operating activities through the second quarter of 2021. Our second quarter 2021 bookings which we define as a customer order with a signed contract coupled with an initial customer deposit for approximately $1 million. This is net of $219,000 of cancellations. This booking amount represents a 157% increase as compared to the second quarter of 2020 and a 126% decrease as compared to our first quarter and 2021. Our lower bookings in the second quarter when compared to that of the first quarter of 2021 is a result of several significant project timelines delaying into the second half of 2021. In summary, our second quarter improvements as compared to both 2020 and first quarter of 2021 were a result of our continued execution of our organic growth strategy.

Thank you, Brian. The financial results just reported further reinforce the validation of our business model and our market opportunity within CEA. We are confident that our organic growth strategy is gaining traction in the market and will bear fruit in the second half of this year. The Surna team greatly appreciates all of the support from our shareholders. This concludes today’s prepared marks and we will open the floor for questions.

Thank you.

As we wait for people to enter the queue, I will field some questions received via e-mail and the webcast. First question, in previous presentations, there was an annual sales forecast of $20 million to $40 million in revenue. Has that changed for 2021? Answer, we do not and have not provided sales forecasts, but we have previously cited revenue goals for the company and for this year. Our goal is around $15 million of organic revenue. Question, the relationship with our RSX Enterprises was announced earlier this year, has that relationship been productive? Answer, our relationship with RSX has proven to be very productive and several substantial projects have already been realized. We expect this relationship to continue to grow and become even more fruitful for us. Question, since the Anden partnership began, have any new dehumidifier products been developed or is Surna co-branding the current Anden product lineup? Answer, Surna has partnered with the Anden to supply Anden dehumidifiers incorporated into Surna design systems. This partnership does not include co-development. Question, what was the outcome of the recent proxy voting at the annual meeting? Answer, several resolutions were passed, those being the election of our current directors, the appointment of our auditors our performance equity plan, stay on pay in the 3-year advisory on executive pay. Question, what is the status of the proposed increase in common stock authorization and the reverse stock split? Answer, shareholders did not elect to authorize an increase of our common stock or to conduct a reverse split. Question, Surna has addressed its opportunities by updating and expanding its product portfolio. What is Surna’s primary opportunity today? Answer, our primary opportunity and focus is on recurring revenue streams. We have just initiated a preventative maintenance program and are nearly ready to initiate a holistic environmental monitoring program. Finally, we are developing a parts and service business line. That concludes the pre-submitted questions. Operator, are there any questions from the lines at this time?

There were no questions from the lines at this time.

Thank you. Then this concludes today’s conference call. Thank you for your continued interest in Surna.

An audio replay of this call will be available tomorrow on surna.com/investor-relations until August 30, 2021. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.