TOMI Environmental Solutions Inc Stock price
Is TOMI Environmental Solutions Inc a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $12.05m | Revenue (TTM) = $6.93m
Market Cap = $12.05m | Estimated Revenue = $12.18m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $14.68m | Revenue (TTM) = $6.93m
Enterprise Value = $14.68m | Forward Revenue = $12.18m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
TOMI Environmental Solutions Inc Stock Analysis
Analyst Opinions
7 Analysts have issued a TOMI Environmental Solutions Inc forecast:
Analyst Opinions
7 Analysts have issued a TOMI Environmental Solutions Inc forecast:
TOMI Environmental Solutions Inc Events
Past Events
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AUG
14
Q2 2026 Earnings Call
about one month ago
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MAY
8
Q1 2026 Earnings Call
5 months ago
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MAR
31
Q4 2025 Earnings Call
6 months ago
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NOV
14
Q3 2025 Earnings Call
11 months ago
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SEP
16
IAccess Alpha Virtual Best Ideas Fall Conference 2025
about one year ago
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StocksGuide Free
TOMI Environmental Solutions Inc — Q2 2026 Earnings Call
1. Management Discussion
Good day, everyone, and welcome to the TOMI Environmental Solutions, Inc. Second Quarter 2026 Financial Results Conference Call. [Operator Instructions]
It is now my pleasure to hand the floor over to your host, John Nesbett. Sir, the floor is yours.
Thank you for joining us today for TOMI Environmental Solutions Investor Update Conference Call. On today's call is TOMI's Chief Executive Officer and Chairman, Dr. Halden Shane; Chief Operating Officer, EJ Shane; and Interim Chief Financial Officer, Niro Srirathan. A telephone replay of today's call will be available through August 21, 2026, the details of which are included in the company's press release. A webcast replay will also be available at TOMI's website, www.steramist.com.
Certain written and oral statements made by management of TOMI 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 on this conference call is based upon the facts and circumstances known at this time. Please refer to our filings with the Securities and Exchange Commission for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call.
I will now turn the call over to TOMI's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.
Thank you, John, and thank you all for joining us today. Since signing our definitive agreement with Carbonium Core at the end of June, we have stayed closely engaged with their company. The integration of these 2 complementary technologies, each delivering exceptional performance in its respective markets continue to advance as planned. But first, let me start with this. TOMI's SteraMist decontamination business has now delivered growth for 3 consecutive quarters.
Our second quarter 2026 results reflect another healthy quarter for TOMI with continued positive momentum for the strategic initiatives we have implemented. And as always, we remain committed to keeping shareholders informed as these efforts progress. In the second quarter of this year, we saw growth across 4 key metrics compared to both the first quarter of this year and the second quarter of last year. Those 4 areas were BIT Solution sales, mobile equipment, single applicators, which is where TOMI's patented iHP intellectual property resides and support services, including qualifications, acceptance testing and training programs. The increase in applicator sales and support services stem directly from initiatives introduced in late 2024 and early 2025, further validating our strategic focus. We continue to pursue new opportunities and additional growth strategies throughout 2026 without interruption.
Our second quarter results demonstrated a revenue increase of 118% year-over-year and 36% sequentially from the first quarter of 2026. BIT Solution sales exceeded $700,000 for the first half of the year and continue to trend upward, which we believe positions us to finish the year with higher sales than in each of the prior 2 years, reaffirming our full year revenue guidance. On the cost and cash front, our disciplined overhead management drove a 10% year-over-year reduction in quarterly operating expenses to $1.63 million, led by significant savings across general and administrative costs.
This cost discipline, combined with $1.92 million in net proceeds raised through our equity line of credit, strengthened our balance sheet, expanding our working capital to $1.82 million and increasing cash and cash equivalents to $322,000 at quarter end. Additionally, we continue to make substantial operational progress towards remediating our historic material weakness. During the quarter, we strengthened our finance leadership with dedicated CPA oversight, formalized close and revenue recognition procedures and instituted rigorous inventory and treasury controls. These proactive actions reflect our strong commitment to full remediation, operational discipline and robust financial reporting.
The ongoing health of the company continues to be reflected in a growing sales backlog. At the end of last year, TOMI reported a backlog of $1.6 million that grew to $1.7 million by year-end of this year's first quarter, then $2.2 million by the end of the second quarter and currently stands at $2.6 million. This steady expansion in our sales backlog reflects the strength of our automated integrated system and the expanded service offerings we have implemented. The backlog continues to grow even as we fulfill existing orders, demonstrating both sustained demand and strong execution across our sales efforts.
We are pleased to report the delivery of SteraMist iHP chambers to a Fortune 500 medical device manufacturer, marking an important milestone. This represents our first fully designed, manufactured and assembled chamber engineered specifically for integration with our SteraMist stand-alone system, part of our integrated SIS platform. This is different from the pass-through system announced last year. This chamber is a distinct advancement in our technology platform and enables us to formally advance our 510(k) submission process with the FDA.
Achieving 510(k) clearance would authorize the marketing of our technology for specific medical device applications in the United States, significantly expanding our addressable market, enhancing regulatory credibility and opening new commercial opportunities in the health care and life science sector. In parallel, we've been actively collaborating with 2 additional partners to develop a next-generation, all-in-one fully autonomous iHP chamber. This system is designed for the decontamination of medical devices, electronics recycling, pharmaceutical components, laboratory equipment, biotech materials, food packaging, aerospace components and other high-value items requiring reliable enclosed decontamination. This new chamber is more intelligent than our original SteraBox and operates without the need for a separate mobile equipment attachment, offering a streamlined, fully integrated solution. One partnership is focused on serving our international customers, while the other targets the domestic market, allowing us to grow both sectors in tandem.
April began on a strong note with a significant win in INTERPHEX, where we secured a new partnership with a top-tier American health company renowned for its innovative premixed ready-to-use medication formulations. We have since joined forces with this organization on a range of projects and collaborations, closing the quarter with additional sales. The customer purchased equipment at the show, and they've continued to expand its requirements throughout the implementation of the project as it moved forward. While we are unable to share further details at this time, we anticipate this company will become one of our top customers.
In addition, one of their senior technical leaders has joined TOMI in an advisory capacity, lending their expertise on the scientific and engineering front. We look forward to leveraging this individual's expertise across multiple integration projects for similar customers seeking to implement SteraMist iHP technology within their proprietary mechanical systems. Also in April, we completed the installation of a SteraMist hybrid system at a highly respected private research university on the East Coast. The customer has already placed a second order scheduled for next year. In May, one of our newly associated government agencies purchased significant amount of accessories in preparation for the deployment of their environment system. Also during that same month, we onboarded several new food safety customers using the SteraPak.
Moving to June, it continued this positive momentum with additional government orders from the Department of Health, expanded iHP adoption among existing food safety customers and the installation of another fully automated custom system in the United Kingdom, the second pharmaceutical company in the region to implement our CES product line. We expect our U.K. partner, TCA, to drive further adoption in the near term across markets. Also in June, we expanded our domestic distribution network by adding new partners with established relationships and familiarity with our technology. This includes a distributor specialized in emergency services, contacts on the East Coast and on the West Coast, our iHP corporate service partner secured a meaningful opportunity in health care sector and expanded its arsenal of iHP equipment and BIT Solution.
In the health care sector, we have seen growing adoption of iHP technology by special pathogen units throughout the first half of this year with additional opportunities developing for the second half of the year. These special pathogen units manage high consequence infectious diseases and require rapid, validated and comprehensive decontamination of rooms, equipment and personal protective equipment. They require a solution that delivers broad spectrum efficacy against resilient pathogens and reduces manual intervention while maintaining the highest safety standards, capabilities that align directly with the strengths of our SteraMist iHP platform.
We also secured a purchase from a health care facility for our first NV+ all-in-one stainless steel cart featuring a rotating applicator, integrated lights and full automation, which is scheduled for delivery by the end of the third quarter. It continues to be an active period on the registration and regulatory front. TOMI's innovative disinfection product is now approved for use in Austria, Italy, the Netherlands, Belgium, Denmark, Germany, Hungary, Spain, Great Britain, Northern Ireland and Ireland. We have also added Switzerland through an amendment, and we expect additional approvals for France, Poland, Portugal and Romania.
NSF is rewriting the rules on biosafety cabinet decontamination. TOMI played a key role in advancing this decision at the NSF meeting in June. The industry is shifting away from listing legacy known methods and brands such as paraformaldehyde and moving towards strict performance-based criteria focused on efficacy, validation and material compatibility, areas where SteraMist iHP technology excels. We continue to strengthen our intellectual property portfolio, submitting 4 new utility patent applications in the second quarter, giving us additional worldwide protection for our technology.
This month, the EPA has granted a new unconditional registration for AgriMist, TOMI's fourth EPA label. This expanded label significantly broadens our approved use sites to include a wide range of food safety applications. The registration authorizes direct application of iHP to indoor grown plants and fruits such as avocados for the prevention, control and suppression of common plant pathogens. The label also permits applications up to and including the day of harvest, a key advantage consistently identified by cultivators.
I will now turn the call over to our Interim Chief Financial Officer, Niro, for a review of TOMI's SteraMist Q2 financial results.
Thank you, Dr. Shane. Our complete financial statements are included in our Form 10-Q filed with the SEC and detailed in today's press release. I will now walk through our key financial and operational metrics for the 3 months ended June 30, 2026, comparing our results to the prior year period. Revenue for the second quarter of 2026 was $2.25 million, representing a 118% increase compared to $1.03 million in Q2 2025. And a 36% sequential increase over Q1 2026 revenue of $1.65 million.
Revenue and commercial performance. Our top line acceleration was driven by growth across both our product and service divisions. Product revenue reached $1.86 million for the quarter, a 42% sequential increase over Q1 2026 and a 185% increase or approximately $1.2 million compared to Q2 2025. This growth was fueled by strong demand for capital equipment, Custom Engineered Systems, or CES and expanding adoption of our SteraMist applicators. Service revenue also saw gains across both comparative periods, reaching $389,000 up 13% sequentially from $344,000 in Q1 2026 and up 3% year-over-year compared to $378,000 in Q2 2025. Geographically, U.S. revenue expanded 132% year-over-year to $1.91 million, while international revenue grew 62% to $339,000, bolstered by new customers onboarding in the U.K.
Gross margin. Gross profit for Q2 2026 more than doubled to $1.39 million, up 105% compared to $677,000 in Q2 2025. Gross margin was strong at 61.7%, representing an increase from 50.3% in Q1 2026, while remaining healthy compared to 65.7% in Q2 2025. The sequential expansion was driven by higher revenue volume and an optimal mix of equipment deployments alongside high-margin BIT Solution consumables. Applicator sales reached $355,000 for the quarter, up from $13,000 in Q2 2025, validating the momentum of our high-margin recurring razor and blade model.
Operating expenses and operating loss. Total operating expenses for Q2 2026 were $1.63 million, a reduction of approximately $180,000, or 10%, compared to Q2 2025. This reduction reflects our continued overhead discipline across general and administrative costs, offset slightly by transaction-related professional and consulting fees associated with our strategic growth initiatives, including our reverse stock split, Schedule 14C filings and the pending merger.
Our loss from operations for Q2 2026 improved by 78% to approximately $244,000 compared to an operating loss of approximately $1.13 million in Q2 2025. This approximate $889,000 year-over-year reduction in operating loss demonstrates meaningful operating leverage and puts us within clear striking distance of operating breakeven. G&A savings were further supported by improving -- by improved collection activity and a credit loss reserve benefit of approximately $144,000 during the quarter.
Net loss and transaction impact. Net loss for the second quarter of 2026 improved by 69% to approximately $382,000 or $0.05 per basic and diluted share compared to a net loss of approximately $1.24 million or $0.19 per share in Q2 2025. On a 6-month basis, net loss improved 20% to approximately $1.19 million compared to $1.49 million in the prior year period. All share and per share figures retroactively reflected our 1-for-3 reverse stock split effected on July 20, 2026. It is worth noting that Q2 2026 operating expenses included approximately $300,000 in elevated advisory, legal and diligence costs tied to the signing of the Carbonium Core agreement and plan of merger. Excluding these transaction-related expenses, our core operating performance underscores the solid trajectory of our underlying SteraMist business, cash flow, balance sheet and capital access.
We ended Q2 2026 with $322,000 in cash and cash equivalents, up from $88,000 at December 31, 2025. Working capital expanded to $1.82 million compared to $1.02 million at year-end 2025, while stockholders' equity increased significantly to $1.43 million, up from $589,000. As of June 30, 2026, we maintained approximately $18.1 million in remaining contractual capacity under our ELOC facility. Following majority shareholder approval in June to waive the exchange cap under relevant NASDAQ rules, the ELOC remains an available tool to support ongoing working capital requirements. Additionally, post-quarter on August 12, 2026, we entered into an omnibus amendment with holders of our 2023 convertible notes, lowering the fixed conversion price from $3.75 to $1.50 per share, subject to adjustment in accordance with the terms of the notes and as adjusted for the reverse stock split. As of today, we believe we have met the NASDAQ stockholders' equity requirement.
Backlog and forward guidance. Looking ahead, our financial visibility remains robust. Our total sales order backlog stood at $2.2 million at quarter end and has expanded to $2.6 million post quarter. Booked orders and expected completions before year-end exceed $6.2 million, supporting an active integrated project pipeline of $4.3 million across 13 projects and a broader commercial sales pipeline of approximately $35 million. Based on this visibility and our second half trajectory, we comfortably reaffirm our full year 2026 revenue guidance of at least $12 million.
Furthermore, our agreement and plan of merger executed on June 29, 2026, with Carbonium Core includes a $10 million minimum concurrent financing condition prior to closing, which we expect will transform the combined company's balance sheet and growth trajectory. Investors are encouraged to review our quarterly report on Form 10-Q in full, including the risk factors and notes to the condensed consolidated financial statements.
I will now turn the call over to our Chief Operating Officer, EJ Shane, for an update on what to expect in the upcoming months and rest of the year.
Thank you, Niro, and good afternoon, everyone. TOMI's sales pipeline remains robust with the total identified interest currently standing at approximately $35 million. Of this amount, $8.6 million is in its advanced stages and are expected to close in 2026, assuming there is no material shifts in customer budgets. Several high-quality opportunities within this pipeline show the strength of our competitive positioning.
A large-scale custom engineered system or CES project that is currently out for bid is valued at approximately $1 million. Originally anticipated to reach a decision in June, the time line has now shifted to September. This opportunity involves an existing customer, one that prioritize innovation and quality over lower-cost alternatives, and we believe the opportunity is well positioned for a favorable outcome. This remains the only project included in our previously communicated integration projections.
New additions to the pipeline include another $1 million project that was initiated in the second quarter. This is the one Dr. Shane mentioned earlier, involving the installation of 4 applicators per proprietary machine line at a major multinational health care manufacturer. Additionally, we have one of our Canadian partners who has secured access to a bid for a potential order of 8 hybrid systems.
The hybrid system has proven to be a highly successful product development initiative. An early semi-hybrid configuration delivered to a customer in 2020 prior to the full commercialization of our latest hardware and software platform continues to generate strong reoccurring demand. That customer routinely purchases 2 full pallets of BIT Solution twice per year and is now planning a purchase of a second system and upgrade their previously purchased hybrid to the latest configuration. The core advantage of the hybrid platform lies in its flexibility, not only in the underlying science and technology, but also in the expanded product ordering options we have developed over the past 2 years, giving our customer base greater adaptability to meet their operational needs.
TOMI continues to expand its presence in the defense sector, having recently received approvals from defense contractors in Korea and defense agencies in Canada. While confidentiality agreements limit the disclosure of specific details, these relationships represent multiyear efforts with a significant long-term potential. We have developed a very detailed strategic plan specific to these 2 accounts, which we have been in contact with for years. TOMI has also authorized a local representative to distribute to the Defense Logistics Agency, or DLA, which manages the global defense supply chain for the U.S. military services and allied partners. This partnership established in the second quarter is expected to streamline and accelerate government procurement of SteraMist iHP technology.
In one of our largest markets, life sciences, we have received approval for one site of a long-standing global pharmaceutical partner for approximately $500,000 in SteraMist systems with delivery scheduled for later this year. TOMI's iHP corporate service is also experiencing an increase in new opportunities. While year-over-year results to date are slightly lower due to a production change at a large customer that no longer requires decontamination services, TOMI has partially offset this impact and is actively expanding service opportunities. We are now developing pathways to deliver direct corporate services internationally to end users, building on our strong domestic relationships. We look forward to sharing additional updates on this initiative in the coming periods.
TOMI's recent expansion of SteraMist registrations across the EU and United Kingdom has significantly strengthened our established European network. In Poland, through our partnership with Medline, we expect to be able to sell SteraMist under the DeconLine brand once mutual recognition is approved. Additionally, TOMI has deepened its commercial pipeline through dedicated partners in Germany, the United Kingdom and the Netherlands, many of whom bring well-established commercial, life sciences, health care and military networks.
In the Americas, TOMI has added a new strategic partner to capture growth in life sciences and industrial sectors. Located in Puerto Rico, Integrated Services for Productivity and Validation, or ISPV, is focused on driving adoption within the region's strong life sciences and food manufacturing industries. In Argentina and surrounding markets, TOMI is collaborating with new partners to pursue shared opportunities with major global accounts, including Pfizer, Fresenius Kabi and Merck. This expansion complements our long-standing partnership with Bacteria Free in Chile, which is now extending its reach from life sciences into the food safety sector.
I would like to reiterate the strong signal that the SteraMist applicator purchases send. Year-to-date, applicator sales alone totaled nearly $400,000, representing approximately a 1,100% increase year-over-year, a trend we never needed to capture before. This growth clearly demonstrates that customers are expanding their deployment of our patented cold plasma technology. The applicator is a critical component that enables iHP cold plasma technology to be utilized, whether paired with a mobile delivery system or installed in a permanent or semi-permanent configuration. We only began emphasizing the strategy less than 2 years ago, and it builds on our consumable-driven model.
In many ways, the applicator functions as a second razor in a razor-and-blade framework. It carries a longer replacement cycle than pure consumables such as our BIT Solution, yet it has a significantly shorter sales cycle than full capital equipment when integrated accordingly. This allows TOMI to capture meaningful revenue and margin today while simultaneously locking in long-term reoccurring BIT Solution demand. We continue to make progress on the regulatory front through additional approvals, we still require to fully unlock the opportunities tied to these requirements. Our food contact notification, FCN, efforts with the FDA, both broadly and specifically for baby formula production remain ongoing. We secured a significant win in June with NSF Standards Department for Biological Safety cabinets and are targeting a second milestone in October.
On the FDA 510(k) medical device pathway, we advanced, as Dr. Shane referenced and are now focused on compiling the necessary studies. Meanwhile, EU registrations continue to come in. Collectively, these initiatives hold substantial potential given current market demands. The food safety sector remains promising, and we expect the approval of the -4 EPA label to accelerate sales in this division. Through further progress, we depend on ongoing regulatory developments. Nestle's planned expansion, for example, is contingent on securing additional international registrations beyond the EU and on updating EU registration requirements to include an alternate class. These efforts remain actively underway. However, Nestle has now also added specific South American registrations to their original international requests, and our new partners referenced earlier are assisting with them.
In summary, we see our strategies are working. We are actively supporting the resources required to advance our integration pipeline across all products, not solely the CES, along with our services offerings and growing momentum we are seeing from partners, both domestically and internationally. This is in addition to the regulatory advancements already underway. And while I shared only a high-level view earlier, we are currently conducting numerous additional use site scenario tests that we expect will further unlock value. I thank you all for your time today. We hope this provides useful insight into the continued direction and opportunity ahead for the SteraMist iHP brand.
I will now return the call back to our CEO, Dr. Halden Shane.
Thank you, EJ and Niro. Before we open the call to questions, I want to leave you with a bigger picture. SteraMist isn't a story about potential anymore. It's a story about proof, 3 consecutive quarters of growth, a backlog that keeps expanding even as we fulfill it.
Our regulatory footprint already spans a wide range of countries now across Europe, and we're continuing to add to it, an expected pipeline of $35 million and growing faster and a technology platform that is now trusted in some of the most demanding, highest consequence environments on the planet, from operating rooms and clean rooms to national labs and next-generation energy infrastructure. Every division, every geography, every product line I've walked you through today is moving in the same direction forward. We are investing in people, partners and product needed to meet the demand.
I am also very happy to announce the improved financial performance this quarter and the recent agreement with certain noteholders to convert approximately $2.3 million of their outstanding convertible notes into shares. We believe we will be able to regain compliance with stockholder equity requirements under NASDAQ's continuing listing rules subject to final review and approval by the NASDAQ hearing panel.
In reference to Carbonium Core potential merger on August 7, President Donald Trump convened a historic roundtable at the State Department with over 200 mining executives and university officials to announce $3 billion in federal investment aimed at securing U.S. critical mineral supply chains and reducing reliance on China. Trump declared the initiative a step towards reclaiming America's status as a "mineral superpower," emphasizing that these resources are essential for national defense, advanced weaponry and economic independence. Carbonium Core will produce nuclear graphite and lithium.
Based on President Trump's coalition founding principles and recent U.S. investment announcements under the Trump administration, the scope explicitly includes battery and energy minerals, lithium, cobalt, nickel, graphite, magnesium and silicon. The combined value pegged by independent valuations companies between Carbonium Core and TOMI is $180 million. Carbonium Core has a valuation of $120 million and TOMI has a valuation of $60 million, thus the combined value of $180 million.
As far as SteraMist, we will be building a better, bigger company, hiring more personnel, expanding our product line to deploy for preventive disinfection using robotics for autonomous vehicles, along with drones for biosecurity. My take on the current worldwide view on preventive preparedness for the future is everyone has a fear of infection. As AI can simply produce a blueprint for biological weapons, the fear is worth being prepared. Then to be prepared for the next release of a biological weapon is going to be key to surviving in the future in the world that we all live in. SteraMist is your go-to biodefense weapon for survival.
I want to take a moment to thank our investors, both old and new, for their continued support of TOMZ. All of you have been amazing. Last but not least, our amazing small team of 20 in Frederick and our partners around the world. We hope this team will grow to 200 in the next 3 years. However, the 20 has kicked some a** to get us in the direction we're going in.
Operator, please open the call.
[Operator Instructions] Your first question is coming from Amit Dayal from H.C. Wainwright.
2. Question Answer
Congrats on all the progress on many different fronts. Question around the AgriMist offering. Is this -- is any of this part of the pipeline? Or will this add to the pipeline when you start commercializing this product?
It's going to add to the pipeline. Everything discussed thus far does not include the AgriMist potential.
Understood. And then with respect to the medical device clearance, what are the next milestones on that front?
So it's all going to be related around studies with this one customer base. So now that it's delivered and installed, we have to create protocols and then establish and then conduct them and then report them to the FDA. So there's still some time ahead of us.
Is this like a 12-month, 18 months or less sort of time line?
Give me another quarter, and I'll have a better idea for you.
Okay. And then with respect to the Carbonium deal, I mean, at what state of diligence are we? And what are the next milestones on that front?
So we are -- we really have 2 levels of completion that need to occur. One is for NASDAQ to go ahead and give us a clean bill of health in relationship to listing. I believe we've been well over $1 for the last 4 weeks, and I believe we're in compliance with that. And just recently, we went ahead and created enough shareholder equity. I believe it's a little over $3.3 million at this moment, provided the notes that have converted or are in the process of converting. So I think that's one aspect. And the other aspect is raising $10 million for the joint companies, and we're still in negotiations with doing that.
And then from the diligence you've done so far, Doc, on Carbonium, are they already sort of positioned to generate revenues in the near term? Or is the company still in sort of product development phase?
So I think that they are going through their prototype, which is going to be underway shortly. The contract between Oak Ridge Nuclear and Carbonium Core is in its final stages. Also, I believe there's a contract between the Department of Energy and Carbonium Core that's in its final stages. Once that occurs, the prototype will produce, I believe, enough graphite to create revenue. I am not sure the exact timing. I think a lot of the specifics would be terrific to have the CEO of Carbonium Core on a call or a fireside chat with you guys, and we can go over some information.
[Operator Instructions] Your next question is coming from John Nelson.
Congratulations on delivering a terrific quarter and to you and your team. I have several questions. The -- you had just kind of wrapped up with some comments on SteraMist and the biodefense sector of the government, how would you envision SteraMist could be used in biodefense?
Well, for one, a lot of equipment, both military and nonmilitary is having increased demands put on it for disinfection and decontamination. So that's where the concept of the drone program would come in where the drones are equipped with our unit, kind of similar to the backpack, and they're able to decontaminate large pieces of equipment aerially and up close.
Okay. And then in the news, at least one area of news, where I always think about how useful SteraMist would be is in the FEMA disaster area, especially with the floods in Indiana, for example, and other parts of the country. Have you been able to make any inroads with FEMA as far as supplying them with SteraMist for treatment of things like mold and other contaminations that come along with the disasters that they've had to deal with?
So I'll let EJ answer that. But like -- take Kansas, I know in Kansas, the state has our equipment. Whether they use it or not in mold post disaster, I'm not positive. But maybe EJ has some more information about federal disasters managed by FEMA.
Yes, of course. I mean, as Doc said, Department of Health own our equipment for emergency response to their individual counties and states. But yes, FEMA has been a long-term customer of TOMI. We're just not allowed to share everything that they use our equipment for, but they have quite a few of our foggers.
Question -- tariffs. Have tariffs had any effect on TOMI's income statement or balance sheet? And are you paying tariffs now? Or when would you expect any refunds from tariffs?
Niro?
Yes, I'm not aware of any tariffs at the moment. Yes, something we need to look into. But yes, I don't think we are paying any tariffs.
Okay. Can you give us shareholders a little more details on the hybrid system that you've developed and what it can do?
Of course. So the hybrid system, John, is a mix of our mobile fogger and permanent applicators. So the whole strategy behind the last 1.5 years or so has been allowing the customer to decide how and when they want to use the equipment. So it's just the purchase of applicators and BIT Solution. Those are the 2 musts in any sort of delivery system of their choice that can mix and match for their budgets. So they're allowed to use it throughout their facility. It's to gauge facility-wide use versus just one-off purchasing.
Okay. And is the cart applicator part of that hybrid type system?
No. So the cart is our NV+. That's all-encompassing. So there's no detachments to that individual product. So this is a big win for us because we see the strategy behind that cart really good for health care facilities, and it was a health care facility that purchased. So we're interested to deliver that by the end of September and hopefully, many more after.
Okay. And who makes your applicator products? Do -- who is your supplier for that -- for those?
We actually have moved the applicators to in-house assembly.
Okay. Let's see. The -- you mentioned the AgriMist products, AgriMist product [indiscernible]. And the EPA registration for SteraMist AgriMist across post-harvest agriculture, cannabis and hemp. The -- and you mentioned the use on things like avocados. Would it take an FDA ruling to get it approved for fresh produce and/or pre-bagged produce products?
I don't think so.
So no, the -4 label with the EPA, what it does is it opens us up to allow the facility to decide. So we still have FDA clearance based on a letter of a little over a year ago, which allows our type of hydrogen peroxide, our CAS number to be used direct on food contact surfaces and food areas. So when it comes to the facility, they can either choose to follow on the FDA ruling based on that or now with the EPA -4 label, the instructions and guidance for that agency because it does -- one of the key conversations we always have with end users is who are they regulated by. And sometimes it's both, and that gets a little tricky. But now we're covered either way.
Okay. And then just watching another timely news article item that made me think of TOMI and its potential use by the military is the consternation over the extended period of time for the aircraft carrier USS Lincoln in the Middle East and the problems that seem to be breaking out there. The -- have you explored with the Defense Department the potential use of SteraMist as far as the naval involvement?
We haven't. It's a great idea, but we haven't. We've been so busy doing what we're doing now. It's something that they should consider. And the question would be how to go ahead and write the protocols quick enough to get it over there. I'm not too sure, though hopefully won't be there too much longer.
And -- the same, I know you're limited as far as the resources for developing new markets is -- but it seems like SteraMist would also be very useful for the U.S. government programs that are funded in helping countries in Africa deal with the Ebola outbreak.
Yes, that's true. We were -- we handled the Ebola outbreak in Western Africa when it first occurred years ago. And we're always ready to help and assist on the current one, which seems to be growing. So they're well aware of us and the World Health Organization is well aware of us and has used us in the past.
Okay. And then a market that was discussed maybe a year or 2 ago was the ethylene oxide replacement use in medical instruments, sterilization. Has there been any progress or changes in that particular type of market?
There are a lot of companies looking to get out of using ethylene oxide. The question where the 501(k) (sic) [ 510(k) ] comes in to help us is it shows that we're able to confirm taking that market away from chemicals like that. So as we come closer and as EJ was talking about the 501(k) (sic) [ 510(k) ] and this major company, they will be establishing data on our product, and that data will be utilized to progress the 501(k) (sic) [ 510(k) ] forward. So once we do get that, I think those markets will open up fairly quickly.
Okay. And then the -- your CFO mentioned that TOMI was within striking distance of breakeven. Do you have any comments to share with us on the time line or path to profitability for TOMI?
Yes. So yes, based on our sort of sales trajectory, we're planning on hitting the $12 million mark this year on revenue. And yes, that will definitely cover our operating expenses and help us break even. So yes, from the way we are going, looking at cost cutting as well and revenue increasing, I think by Q4, we'll be hitting that breakeven mark comfortably.
Okay. And then big increase quarter-over-quarter or I should say, quarter over prior year in the professional and consulting fees. Do you think that they will continue at the current level, increase or decrease over the next couple of quarters?
No, I think most of it has to do with the Carbonium Core merger. So a good part of them. I think that once that merger is finished, those fees will decrease, right, Niro?
That's correct. Yes. We spent close to $300,000 this quarter due to the merger deal. So once that goes through, that professional fees will start dropping.
Okay. Great. All right. And then since this is a public forum, I'm the third largest shareholder, and I have been steadily adding to my position over the last quarter, and I'm enthusiastic about TOMI and their future, whether or not the Carbonium Core merger goes through or not. So excellent work. Keep it up. Thank you.
Thank you. That concludes our Q&A session. I'll now hand the conference back to Dr. Halden Shane for closing remarks. Please go ahead.
I want to thank everybody again for joining and hope wherever you are in the world, you have a pleasant day and evening. Thank you.
TOMI Environmental Solutions Inc — Q1 2026 Earnings Call
1. Management Discussion
Good day, everyone, and welcome to the TOMI Environmental Solutions, Inc. First Quarter 2026 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to hand 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; E.J. Shane, our Chief Operating Officer; and our Chief Financial Officer, David Vanston, A telephone replay of today's call will be available through May 15, the details of which are included in the company's press release. A webcast rep will also be available on Tony's website, www.steramist.com. Certain written and oral statements made by management of TOMI 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. Please refer to our filings with the Securities and Exchange Commission for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now turn the call over to Tony's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.
Thank you, John, and thank you all for joining us today. Q1 2026 marked a healthy start to the year, highlighted by a pivotal strategic development for TOMI. Our first quarter results demonstrated significant momentum across key metrics. Revenue increased by 5% year-over-year and 67% sequentially. from Q4 of 2025. Notably, applicator sales in Q1 alone surpassed our total applicator sales for the entire year of 2025, representing a remarkable 139% year-over-year growth. .
This success underscores the effectiveness of our razor, razor blade consumable model as we expand our installed base. Additionally, Bit Solutions sales have consistently grown by 21% annually since 2024 and remained above the 2025 levels in Q1 of 2026. We also achieved a 15% reduction in operating expenses compared to Q1 of 2025, while maintaining our full capacity. The company also generated positive operating cash flow of $296,000, which is a $572,000 improvement over the same period last year.
A notable trend this year is strengthening and dynamic nature of our integrated project pipeline, which continues to demonstrate meaningful momentum. This is the pipeline the company has highlighted since November of 2025 and which evolves as we advance or complete contracts. The expansion of this pipeline aligns closely with growth in our backlog, and we are disclosing only opportunities that suppliers have indicated are near signing.
These opportunities tend to involve longer sales cycles. While near-term closings are communicated as they firm up, they do not represent our entire potential opportunity. The trend is reflected in our backlog of orders. At year-end of 2025, TOMI reported $1.6 million in backlog, which grew by $0.5 million by the close of Q1 2026 and is currently at $2.2 million. This steady backlog expansion underscores the strength of our automated integrated system and the many service offerings we implemented.
Critically, backlog growth continues even as we fulfill existing orders, illustrating demand and execution across sales. At the end of quarter 1, TOMI received 440,000 annual purchase orders for recurring decontamination services with a leading global medical technology company. This contract involves quarterly professional iHP decontamination services for critical clean room and laboratory environments, aligning perfectly with our strategy to build a high-margin repeatable revenue model in addition to increasing the backlog order number.
In Q1, we achieved several of the notable milestones, a private East Coast research university purchased and installed a SteraMist hybrid system for high-level decontamination of reusable medical equipment. We also sold a custom engineered system in the U.K. to an international pharmaceutical manufacturer, which was integrated into total Clean Air's modular clean room platform and we established total Clean Air as our preferred European partner for SteriMist-IHP technology when the U.K. health and safety executive granted regulatory authorization for a bit solution and serious IHP products.
The food safety sector is gaining real traction. We launched an important case study that demonstrated up to 95% reduction in sanitization testing costs for an egg food manufacturer. Our long-standing partner, disinfect care, secured a service contract at a major Mexican dairy facility where rigorous testing highlighted sterisIHP's efficacy while preserving private quality.
Further, the end user is looking to expand its use of stories IHP in Mexico to its other facilities. There are other positive food safety tests that the company has received to be discussed at a later date. This is all exciting stuff for us.
Regulatory advancements have also played a critical role in our progress in February. We received official authorization from the U.K. health and safety executive for our bid solution and stereos IHP products for use in Great Britain and Northern Ireland. In March, we secured product authorization from the Dutch regulatory authority, making our first product approval within an EU member state and facilitating a streamlined recognition pathway across the EU.
And this past week, we received notification of further approvals in Germany Belgium, Denmark and Hungary. We anticipate many other regulatory wins in the near future. On April 30, 2026. We executed a nonbinding letter of intent to merge with Carmbonium Inc, a U.S.-based producer of nuclear grade graphite for advanced reactor technologies and AI data center infrastructure. Carbone and core boost a vertical integrated production platform and exclusive purification technology developed with Oak Ridge National Laboratory.
This merger targets a specialty market currently dominated by foreign supply, coinciding with increasing domestic demand for non-Chinese origin graphite due to new U.S. [indiscernible] regulations and federal support for advanced nuclear energy.
To be clear, with this transaction, our country will become the leader in Generation 4 nuclear reactors class of advanced nuclear systems designed to offer significantly improved safety, efficacy and sustainability compared to current commercial plans. These reactors are characterized by their ability to operate at [indiscernible] a much higher temperature, gas cooled reactor, pebble bed module, recognizes the world's first operational generation 4 reactor.
These systems aim to overcome limitations of current technology by producing more fuel than they consume and ensuring that severe accidents resulting in radioactive relief are physically impossible. Under the terms of the LOI, Carboni an Core would become a wholly owned subsidiary of TOMI. Former stockholders would receive TOMI common stock equal to 19.99% of shares outstanding prior to the merger, along with shares of a newly created series of convertible preferred stock, implying an enterprise valuation of $120 million.
We aim to finalize definitive agreements by May 30, 2026 with a 45-day exclusivity period in place. The strategic rationale for this transaction is compelling, It aims to diversify TOMI's business by merging a domestic platform focused on advanced nuclei grade graphite, graphene and lithium materials with our existing SteriMyste contamination business. This integration has the potential to unlock significant long-term value for our shareholders while enhancing and expanding the SteraMist brand.
Please note that the LOI is nonbinding and the completion of the transaction is subject to definitive agreement, due diligence and customary closing conditions, including stockholder approval. I'll now turn the call over to our Chief Financial Officer, David Vanston, for a review of our Q1 financial results.
Thank you, Dr. Shane. Our complete financial statements are in our Form 10-Q filed with the SEC and in today's press release. I will walk you through the key metrics for the 3 months ended March 31, 2026. compared to the same period in 2025. Revenue for Q1 26 was $1.6 million, a 5% increase from $1.5 million in Q2 '25 and a 67% sequential increase over Q4 '25. Product revenue increased $300,000 or 31% driven by higher equipment and CES related sales.
Service revenue decreased by $234,000 or 41%, reflecting the timing of decontamination project completions and service engagements in the period, which management views as temporary. Gross profit was $832,000 or approximately 50% of revenue compared to $952,000 or approximately 6% of revenue in Q1 '25. The decrease in profit margins reflects strategic price discounts to drive equipment adoption and an unfavorable product mix shift towards lower-margin equipment sales. Management views these factors as temporary as growth in high recurring margin BT solution consumables and applicaales, is expected to support margin recovery in future periods.
Total operating expenses were $1.48 million, a reduction of $248,000 or 15% and compared to $1.7 million in Q1 2025, reflecting lower general and administrative, selling, professional and consulting costs across the board. The loss from operations was $626,000, an improvement of $128,000 compared to a loss of $754,000 in Q1 25. The net loss was $811,000 or $0.04 a share per basic and diluted compared to a net loss of $256,000 or $0.01 per share in Q1 '25.
It is important to note that Q1 25 net loss included a nonrecurring employee retention credit of $535,000 and related interest of $83,000. Excluding these onetime items, Q1 '25 adjusted net loss would have been approximately 874%, making Q2 [ '21 ] a meaningful year-over-year operating improvement. -- cash flows. Our net cash provided by operating activities was $296,000 for Q1 26, an improvement of $572,000 and from the 276,000 used in Q1 '25, primarily driven by improved working capital management and growth in deferred revenue from customer deposits.
Net cash used in investment activities was $5,000. The net cash and financing activities was $98,000, reflecting $192,000 in repayments on the agile capital sale of future receipts agreement. Partially offset by 94,000 in net e-lock proceeds. We ended the Q1 with cash of $280,000 and working capital of approximately $394,000 compared to a cash of $88,000 and working capital of $1 million at year-end '25. The $630,000 decline in working capital reflects the net loss incurred during the period. Accounts receivable increased by $73,000 on higher revenue and inventories remained relatively flat. On the liability side, our accounts payable and accrued expenses increased by $993,000 and deferred revenue increased by 177,000, reflecting our deposit policy on customer orders.
Our accumulated deficit as of March 31, 2026, is $58.9 million. During Q1, we raised $149,000 in gross proceeds through the issuance of 336147 shares of common stock under our $20 million equity line of credit. I encourage investors to review our Form 10-Q in full, including the Risk Factors and notes to financial statements. I will now turn the call over to our Chief Operating Officer, E.J. Shane, for an update on what we expect in the next upcoming months and the rest of the year.
Thank you, David, and good afternoon, everyone. As Dr. Shane referenced, applicator sales increased at 139% year-over-year. This is a strong signal that customers are expanding their appointment of our patented cold plasma technology. The applicator is a critical component that enables our IHP to be used more broadly. This growth is a game changer. It shows customers are increasing their utilization of our tech. Customers who already own mobile fogging systems are expanding their use of IHP across additional areas within their facilities by acquiring more applicators, permanent or semi-permanent driving higher sales of bit solution, our consumable product.
The Serums Integrated System Platform, or SIS, hybrid and our original Custom Engineered System, or CES, are essential to our integration pipeline. Collectively, it is these offerings that are expected to significantly boost Fit solution revenues. Our current immediate integration sales and pipeline is currently at $4 million across 14 customers and 7 separate orders received with the remaining projects awaiting capital approvals.
This is an update that reflects changes since our last call. Some customers have been removed due to completed sales in quarter 1, while 3 new customers have been added and 2 additional contracts have been secured. The 7 orders mentioned are all in various stages of manufacturing and delivery, which will impact revenue time lines. The full company sales pipeline opportunities for all our offerings from mobile off-the-shelf capital equipment, automated integrated custom designs and IHP corporate service deployment is projected to be between $22 million and $33 million.
This is the complete opportunity list. It includes interested parties who have received quotes or planned implementation and/or installations of IHP technology across all our industries. States are not yet set, but these are parties have expressed strong interest in Steris IHP.
Of this list, $9 million is categorized as active, approved or anticipated for purchase this year based on customer requests or the progression of the sales process. $4 million is allocated to automated integration orders, an additional $5 million is attributed to mobile off-the-shelf capital equipment, support service contracts and IHP corporate deployment.
Based on the latest reports and trends that I just referenced, TOMI generated approximately $1.7 million in revenue in quarter 1, currently holds the backlog of $2.2 million. This includes only some of our integration automation pipeline, which stands at a total of $4 million. with a potential $5 million in mobile equipment sales. Conservatively, we anticipate $2 million in consumables and other smaller revenue streams. Taken together, this yields a credible path for Tomy to achieve its projected 2026 revenue target.
Our strong base of high-quality, large customer base has been the key driver for these trends. These customers have helped in this potential growth through referrals, relocating projects and expanding SteraMist iHP adoption at their new facilities as well as expanding usage after initial purchases. A concrete example is Merck. Currently has approximately $1.2 million in open estimates across 5 different locations. While Merck is not included in the near-term numbers I cited earlier, due to their longer decision cycles, they remain an active partner and are captured in the full opportunity pipeline. Additionally, 1 of our first large pharmaceutical clients is approaching a decision on their CES proposal, which could represent the largest such installation to date and an uplift to future revenues for TOMI.
On January 6, we announced that a private East Coast research university purchased and installed a SteraMist hybrid system. In this past week, we just received notification that we won a second award with them. And for my last example, the third site in Berlin, Germany is set to begin trials in June for an eye health customer that we onboarded in quarter 1 of last year. This customer is also utilizing an open monthly bit solution order. -- aligning perfectly with our business model.
Furthermore, none of this reflects opportunities tied to additional regulatory requirements. Our efforts regarding food contact notification with the United States Food and Drug Administration NSF Standards Department for Biological Safety Cabinets, the FDA 510(k) medical devices and further European Union registrations, all of which hold substantial potential based on the current market demands. On May 1, we officially opened a task group with NSS, cleaning and sterilizing the biological safety cabinet sector. We want to be added to their informational NXG so that our partners are deploying Stermus-IHP to outperform legacy decontamination methods, including sporins, formaldehyde and BHP.
Ultimately, our goal is to enable the service providers worldwide to compete effectively by incorporating IHP into their offerings for BSCs, which allows them to complete more treatments in a single day compared to the older technologies referenced. The food safety sector remains promising. The progress will depend on ongoing regulatory developments. For example, Nestle's planned expansion is contingent on obtaining additional international registrations beyond the European Union and on updating EU registration requirements to include an alternate class. We are engaging with 3 large customers who have expressed strong interest in our [indiscernible] for baby formula to deploy IHP technology.
In parallel, we are conducting internal testing on derived ingredients for a current customer who already owns our handheld devices. and exploring a scaled deployment. This testing phase aims to validate performance and readiness for a broader rollout. Last month, we attended Interfax in New York City, one of the premier trade shows in the pharmaceutical, biotechnology and medical device industries. And at the show, we finalized the sale of a prominent American healthcare company, renowned for its innovative medications and premix ready-to-use formulations. In summary, we maintain that with a broader and more diverse range of SteraMist delivery systems, this growing integration pipeline, expanded support services designed to accelerate IHP qualification.
And ongoing referrals and expansions from our existing customer base, that Tomi is well positioned to shift revenue mix positively and enhance profitability. I thank you all for your time and attention, and I hope this provides a clear sense of the progress and initiatives that we are pursuing. I will now turn the call back to our CEO, Dr. Halden Shane.
Thank you, A.J. So as a special note, I want to talk about the United States of America is very hungry for rare earth minerals and materials that are mined and/or synthetically produced in America. The synthetic production of nuclear-grade graphite and the conversions of these technologies, whether it be nuclear-grade graphite, graphene or lithium present a transformative opportunity to address critical global challenges. TOMI's future is in an advancement of Ortigas systems AI-powered robotics, or SteraBot register, of course, and specialized disinfection drone technology manufactured with lightweight strong graphing shelves and plenty of battery power will enable proactive solutions for logical stability, logistics efficacy and public safety. -- a special concern of mine is the honeybee industry. It is in dire straits. The association is seeing a lot of viral losses now, not just from the formed wing virus or DWV.
But real losses and fees because of what the industry refers to as dead outs. -- where the home gets a virus and kills all the Bs -- since 2007, there has been an 80% decline in the populations. It could be devastating because it's not just concerning the DWD virus and its variants, but additional viruses. -- such as chronic be paralysis and Israeli acute paralysis. The IHP Micro miss can reach the entirety of the home, including the nooks and crannies without leaving any damage to the wax currently the only available product in the market to alleviate these viruses is very expensive gamma irradiation process.
The comes are very expensive, thus keep is on to dispose of the cone or use gamma irradiation. And IHP disinfecting drone would certainly help save the pollinators of the world and ultimately, the world. This is what we do innovating for a safer world. Thank you all, and thank my small team for all the great work that they do. So looking ahead, Tomy enters Q2 of 2026 and with strong commercial momentum and expanding recurring revenue base and a transformative strategic transaction underway.
Our focused strategy for the balance of the second quarter is to advance the Cambonium core transaction towards definitive agreement and closing. -- drive recurring revenue growth through increased bit solution sales, open order policies and expanded IHP Corporation service contracts and strengthen balance sheet flexibility through our e-lock and additional financing initiatives.
With that, operator, please open the call to any questions.
[Operator Instructions] Your first question is coming from Amit Dayal from H.C. Wainwright.
2. Question Answer
Thank you. Good afternoon, everyone, and great to see all the developments underway at the company. My first question was on the gross margin side. It was a little bit softer, I guess, because of some discounts on offerings. Just wanted to see how this will bounce back? And would you potentially need to continue providing those discounts at least for the hardware side of things to get initial orders with customers going? .
No. I know they will bounce back, and we don't plan on providing these types of discounts again. .
Okay. Understood. And then the pipeline looks pretty robust, at least $4 million in sort of certain orders, it looks like sequentially, do you think we should expect revenues to grow from here through 2026? Or should we expect some lumpiness in how revenue is recognized?
No. Most definitely, we should see growth through 2026 and into '27 and beyond. .
Okay. Any traction from these recent news flow around antivirus, et cetera. Has there been any follow-up with companies or customers from those developments for you guys?
Not at the moment, but as you know, I mean, the antivirus is -- it's not close to us as where the ship is located -- the interesting part about this is that they've let a lot of people off the ship and there's usually like an 8-week period before you test positive for this. So we're prepared and ready to help and assist in any way. But at the moment, we haven't heard from anyone and we can get our equipment into the area quick enough to help the ship because, first of all, I mean, all the passages, most of them have been just embarked.
Okay. Understood. Just last 1 from me on this transaction with Carbonium. How is the diligence going so far? And do we have the expertise to sort of properly investigate the technology these folks are offering? And then just a follow-up on that 1 is, will this be sort of a development stage entity you are acquiring? And how much more investments do you think it would need if you were to close the deal to progress that company to commercialization? .
There's a lot of questions. Yes, it's in its early stages. We are performing a committee in the early part of next week to help with the due diligence. And again, we're aiming towards getting a definitive agreement and doing our due diligence. We're aware of the technology and its ability and with Oak Ridge and some I don't want to get too ahead of Carboni and release certain things, but we're pretty secure that this will go forward. And -- as far as investments, that's something that needs to be determined. We haven't quite yet come out with any numbers like that, and you can understand this is just the very early stages of this potential merger.
Your next question is coming from Todd Felte from StoneX Wealth Management. .
Congratulations on a good quarter and on the Carbone merger. I know I'm excited to see how that progresses. I did have 2 questions on it. The first is after the merger is approved and closed, I know there was a 19.9% shares of common stock that are going to them in addition to the convertible preferred if all that convertible preferred was converted to common at $1, what would be the total shares outstanding?
It's a good question. Probably somewhere in the neighborhood of $30 $2 million, maybe $31 million. We haven't really done the back pro forma on that yet, but I would have to say that would be the amount.
Okay. And then second of all, I listened to a television interview that you had done with Sandor, the Head of Carbonium, and he was projecting revenues in 2028 of billion to $1.5 billion. Is that correct? Or did I hear that wrong?
No. You heard that correct. This is a huge industry. And they have the ability to capture it from the synthetic nuclear graphite end. And again, I don't want to get ahead of the curve with him, but what he said is $1.4 billion, $1.5 billion .
Okay? And finally, outside of getting shareholder approval, are there any other major opcoes assuming that your committee checks out on all the due diligence? Are there any other major obstacles on getting this to the closing line?
There shouldn't be. Again, it's a deal. It's early, and you never know what obstacles get thrown at you, but we're hoping there aren't, and we're able to complete this in a relatively timely manner. .
[Operator Instructions]
Your next question is coming from John Nelson. Congrats on the quarter and progress being made on the TOMI business and also the potential from the Carbonium merger for the combined company.
Thank you, John. First question is I saw the slide show from your 8-K on Carbonium core, and they're projecting profitability, I believe, next year according to the slides. Is that -- am I correct on that?
That's what I understand. .
Yes, which would be phenomenal for them to get out of the gate this fast and stone and be profitable almost immediately. So anyway, thanks for confirming that. The other thing was in the slides was an independent valuation -- do you know who did that independent valuation evaluation of the -- of CarboniumCore? It was done by professional valuation service.
I don't know if I can I'd rather not publicly say until they approve it, but it was a very large 47 page evaluation. -- and covered everything that we would want to see in it. So -- going forward...
Yes. Do you think that they can -- after -- if you complete the merger, do you think they can release that or you can release that as a share holders? .
Yes. Yes, I would think we would be able to once this happens. Yes. .
Excellent. The other questions relate to the Home business. The -- on the honeybee industry, you talked extensively about the concerns and how SteraMist can remedy significant amount of problems that the industry is facing, how do you plan to go after that market?
Well, currently, I think I've mentioned this on prior calls, I have been trying to contact the association. I end up joining the association and I follow everything that goes on in it. We recently, our marketing department reached out to an administrator, and they would like to do a study, so now I'm really excited that we got their attention. And hopefully, they'll be able to do this study fairly quickly. I know the industry is in dire straits to eliminate the effects of all these viruses, which are going ahead and causing death to the deals, which I mean, I don't think we want our kids to grow up in a world that doesn't have pollinators.
Yes. We definitely need it. So I was curious as to how quickly a study might be able to be accomplished and I would think that the behind come people, it would be extremely happy to get something that would help preserve their lives.
Yes. I mean I think the real answer that they've been going with in the past is very expensive. And I think, an irradiation it gives you a new high, I guess, but most Beekeepers have that type of money where our solution would be fairly inexpensive for them to eliminate the nights, the viruses in the cone and to go ahead and protect it going forward. So -- that would be great to have this technology, which was innovative for the beginning to be able to protect the honeybee population around the world. .
Definitely. Then do you have any specific goals as to timing, to reach either profitability or positive cash flow over the next...
Yes. I think within this year, we'll be profitable.
Okay. Good. .
And then you mentioned in a previous press release the -- going after the robo taxi market. And do you see that as being addressed by a just this service handheld units? Or do you think that there might be a possibility of actually kind of installing fixed unit within the cab that could dispense serum is on a regular basis after every ride, for example?
Yes, I think the I think it's too early. What our plan is initially is to mold our backpack using the existing humanoid-type robotics and we know we can handle the software adaptation of it and go ahead and put our applicator in the left-hand replace the hand and put the applicator in there or trigger the hand to push the applicator and have the right hand to move objects or to move doors or open things and things like that.
So I think that's going to be the fastest to market -- there are a lot of companies, not just Tesla and not just Waymo, but there are 5 or 6 companies worldwide that are starting to put out robo taxis. And as the world evolves, this seems this autonomous vehicle seems like something that's going to be around forever. So they do have to clean them, and our technology would be the fastest and quickest way to get that done. As far as an installation, I don't know if the cost is going to be practical for them. It certainly would work for us. And they would need some time between each ride to disinfect or decontaminate the space -- and I don't know if their model is set up to wait because I'm in West Hollywood L.A. area, and I use Waymo a lot, and they're always running 2 or 3 minutes late. -- because they're dropping someone off. So it's possible that they could maybe if we could get the time down to, let's say, three minutes or five minutes that they could sterilize them between the routes. I mean, it's anything possible to...
Okay. And I'm -- with regards to use of SteraMist in closed spaces. The -- it would seem like Steris would be perfect for decontamination of airlines and cruise ships and even military vessels. -- because of the risk of contamination infection. Is there -- is it just that, that market takes -- what kind of explanation do you have for the time lines of penetrating those kinds of enormous markets. .
So I think we'd have to be a much bigger company and to get grant writers to write grants for the markets, especially now, they're building ships under the current administration, and it would be an ideal time to start implementing the technology you're putting in into ships I'm not sure what the stress test would be to see what stays in place in rough waters versus smooth waters and things like that.
So I mean it's all possible, and I foresee in the future this is happening, same way with aircraft. What I'm really more excited about is unmanned aircraft. As we all know and we see in the military budget, there's $70 billion being put aside for drones when the technology started when I bought it from the defense contractor and the initial data project, it was for the use of unmanned plans that were returned to earth or return to ground or return to ship. And that's what it was used for. So with the drone market blowing up like it has all over the world, this is the product to be used for the disinfection decontamination of unmanned aircraft around the world.
Are you working with any particular companies, even if you can name them at this time regarding...
Not at this time that I'm aware of. And I don't know if we can sit, A.J., do you have more unclassified answer to that?
SP-8 Not at this time, Mr. Shao, I don't -- sorry, update.
Thank you. Appreciate it. And let's see, is there anything else that has changed as far as the applicators or the equipment in terms or any new ways to use Cerumist either in commercial or retail type settings.
I'll let Jay answer it. I just tried it on my dog and he stopped barking, so that was positive. .
Yes. No, -- there's no -- there's not been any changes to the applicators itself. We just changed the way in terms of how we sold it with the integration projects and the stand-alone system. So there's multiple different versions of the applicators that we can now offer regardless of the industry you're referring to. So that's been helpful. yes.
Okay. That was a good one. Thank you.
Thank you. We've reached our allotted time for Q&A. I'll now hand the conference back to management for closing remarks.
Well, I just want to thank everybody. for joining and for continuing the voyage with us and this amazing product in this amazing world. Have a great day, wherever you might be. Thank you.
Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.
TOMI Environmental Solutions Inc — Q4 2025 Earnings Call
1. Management Discussion
Good day, and welcome to the TOMI Environmental Solutions, Inc. 2025 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Zach Nevas from IMS Investor Relations. Zach, 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 CEO and Chairman, Dr. Halden Shane; E.J. Shane, our Chief Operating Officer; and our Chief Financial Officer, David Vanston. A telephone replay of today's call will be available until April 7, 2026, the details of which are included in the company's press release dated March 31, 2026. A webcast replay will also be available at TOMI's website, www.steramist.com.
Certain written and oral statements made by TOMI 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 our actual results to differ materially from anticipated results.
The information provided in this conference call is based on the facts and circumstances known at this time. Please refer to our filings with the SEC, including our 10-K for the year ended December 31, 2025, for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call.
I will now turn the call over to TOMI's CEO and Chairman of the Board, Dr. Halden Shane.
Thank you, Zach, and thank you for joining us for our 2025 earnings report today. I am pleased to share our full year 2025 results and more importantly, our perspective on where TOMI Environmental Solutions is headed. While 2025 was a year that tested our patience, it was also a year that validated our technology, deepened our customer relationships and positioned us to execute on a meaningful revenue opportunity in 2026 and beyond. I want to walk you through the highlights with optimism I generally feel as I review the progress our team has made.
The SteraMist Integration System, which is our SIS platform, achieved its first commercial installation at a leading CDMO in June of 2025. The milestone proved our concept and by year-end, we had 4 fully operational SIS enclosure installations. We closed the year with a signed purchase contract of $500,000 for a global biopharmaceutical leader in December for integration into sterile manufacturing pass-through fill boxes. In the same month, a leading cell and gene therapy manufacturer adopted SteraMist iHP for a commercial scale pharmaceutical facility, a landmark win in one of the fastest-growing sectors of life sciences manufacturing.
We were selected by NASA Johnson Space Center for a biosecurity operation, and they have continued to express satisfaction with our technology's performance. We deployed critical resources to support wildfire recovery efforts in the California communities, demonstrating both our civic commitment and our operational agility. We secured a bid from a leading university in Rhode Island for our CES technology. That project has been completed and awaits factoring testing.
In the eye health sector, one of our most prominent new platinum customers onboarded in Q1 2025 has grown to 2 active facilities, each using 5 SteraMist machines for sterilization procedures. A third site in Berlin, Germany is set to commence trials in June of 2026. This customer also operates under an open monthly BIT Solution order, exactly the recurring revenue model we are building.
Our OEM partnership strategy is gaining serious momentum. Relationships with PBSC, ESCO and Steelco are embedding iHP directly into clean room enclosures, pass-through hatches and biosafety cabinets at the point of manufacture, creating a scalable distribution channel that expands our reach without proportionately increasing our direct sales cost.
We successfully completed our first collaboration project with partner PBSC, the iHP pass-through, which exceeded decontamination cycle speed expectations and generated strong customer feedback. We have already begun a second PBSC project. We expanded into the agriculture industry through our partnership with Algafeed, who has committed to acquiring additional handheld units before the end of 2026 in food safety. The FDA's late 2025 approval of hydrogen peroxide as a direct food additive for multiple uses, including as an antimicrobial and bleaching agent is a watershed regulatory moment for us. We are now engaged with significant partners, including Danone and Nestle and are actively winning bids, both directly and through service providers.
SteraMist iHP is demonstrating real-world efficacy across a wide range of food processing environments. We are actively pursuing a food contract notification or FCN and have identified 2 specific opportunities to enhance our efforts on a tailored FCN for powdered infant formula, which comes at the request of an existing customer. Additionally, we are awaiting approval of our -4 label from the EPA for our cannabis industry and other requested markets in our Food Safety division. We also plan to submit a -5 EPA label based on the studies conducted with Plum Island as previously announced. A landmark USDA study confirmed BITs efficacy against the formed wing virus for agricultural biosecurity in honeybees.
In 2025, SteraMist was honored with the Disinfection Decontamination Products Company of the Year Award by MedTech Outlook. We achieved compliance, recognition across 3 safety vendor management platforms and are in the process of adding a fourth to support 2 ongoing integration projects at a well-known Baltimore hospital.
Our customer service team is actively transitioning our larger base to open order policies for support service offerings and BIT Solution orders. The backlog of our orders for support services is up 16%, and BIT Solution is up 24% in the first quarter of 2026 compared to the same period last year, providing early and compelling indicators of increasing recurring revenue trajectory we are building.
To our long-term supporters of our technology and company, we are pleased to announce that we're finally receiving approvals from the HSE and the BPR submissions, we are now officially recognized in the United Kingdom, including Wales and Northern Ireland as well as in the Netherlands. The recent approval in the Netherlands strengthens our confidence that other EU countries will soon follow suit.
Our heart monitoring device project is nearing completion and is scheduled for factory testing next month. We are preparing to introduce our iHP device to the U.S. markets through the appropriate regulatory pathways, including the FDA 510(k) premarket notification process once testing is finalized. The success of receiving the FDA 510(k) means that we'll finally be able to go after the entire ethylene oxide sterilization market. The global ethylene oxide market was a $5.29 billion market last year. Key growth factors is a rising demand for sterilized medical consumables and improved healthcare infrastructure, particularly for hospital, labs and surgery centers. Our technology is protected by more than 30 utility and design patents through 2038, and is deployed in over 40 countries.
We are entering 2026 with operational momentum, growing recurring revenue and expanding global customer base and a clear strategy to drive sustainable growth. Our focus remains on execution, converting our pipeline into recognized revenue while continuing to advance the technology platform that makes all of this possible. The pipeline that we have is the strongest we've ever had. Our first quarter 2026 revenue is greater than our first quarter of 2025. I will discuss some details in my conclusion today, but our entire opportunity book for integration projects remains at $16 million. The entire SteraMist iHP opportunity book is currently at $20 million. However, first, I will now hand the call over to our Chief Financial Officer, David Vanston, who will provide an overview of the financial results for the full year ended December 31, 2025, compared to the same period in 2024. David?
Thank you, Dr. Shane. I will now walk you through our full year '25 financial results. Our complete audited financial statements are included in the Form 10-K we filed with the SEC and in today's press release. Revenue for the year ended December 31, 2025, was $5.6 million compared to $7.7 million in '24. The decline was driven primarily by the timing of customer equipment purchases. Service revenue remained relatively stable year-over-year, which we view as an indicator of the durability of our installed base. Gross margin improved to approximately 55%, up from 46% in '24, reflecting lower cost of sales and a reduction of inventory reserves compared to the prior year.
Total operating expenses were $6.9 million, down approximately 10% from '24, reflecting disciplined cost management. The net loss was $3.7 million or $0.19 per share, an improvement from a net loss of $4.5 million or $0.22 per share in 2024. We ended the year with approximately $88,000 in cash. Working capital was approximately $1 million, and we used $1.2 million in operating cash during '25, an improvement from $1.4 million in '24. We have taken steps to address our liquidity position, including a $535,000 convertible note raise during '25, a $20 million equity line of credit with Hudson Global Ventures entered into November '25, from which we have made our first draw approximately $94,000 in February '26. We've done an effective S3 shelf registration for up to $50 million, and we've engaged Bancroft Capital to explore additional financing options. I encourage investors to review our Form 10-K in full.
I will now turn our call over to our Chief Operating Officer, Shane to discuss upcoming business highlights.
Thank you, David. As Dr. Shane highlighted earlier in the call, we are actively focusing on open BIT Solution orders and annual service offerings, leading to a higher open sales book metric. This initiative stems from our growth in personnel and operations, along with our enhanced comprehensive training program that prioritizes continuous recertification. This strategy not only elevates customer standards for implementation and safety, but also has the potential to drive additional revenue and foster deeper product adoption in the future.
The sales performance of support services and BIT Solutions sales are expected to exceed 2025 levels as evidenced by the increase of 16% in the backlog of orders for TOMI Support Services and an increase of 24% in BIT Solution backlog of orders for the first quarter of 2026 compared to the same period last year.
Dr. Shane also provided updated information on 2025 announcements for just a handful of customers. This includes anticipated orders from our aquaculture customer, a completed Custom Engineered System, or CES, for the Rhode Island University, 2 iHP chambers for the biopharmaceutical partner, a second order with our partner in Malaysia, and a third location in Berlin, Germany for the eye health company, which we expect will proceed with the same standard operating procedures as the first 2 sites.
We anticipate approximately $3 million in sales among these 5 customers and the trends in support services and BIT Solutions sales for 2026. It's important to note that this projected $3 million in revenue includes approximately $920,000 that overlaps with the $3 million integration pipeline announced on November 26, 2025. When factoring in our iHP deployment services, which generates over $1 million consistently, we can confidently state $6 million in revenue just among 5 customers and 3 revenue streams for 2026.
To date, approximately $800,000 has been recognized from the November 2025 $3 million integration pipeline. This amount originates from 10 distinct customer orders. Of these 10, 7 customers have formally placed the order. We anticipate final approvals from the remaining 3 accounts, and we have added 4 more integration projects moving towards CapEx approvals since the November announcement, which is anticipated to contribute another $2.3 million to our active immediate integration project pipeline.
Our East Coast distributor, ARES Scientific, has been instrumental in securing multiple university wins for our SIS platform. We're actively collaborating with VWR, Avantor, engaging with all case managers and overhauling marketing initiatives with them. We are prioritizing the ongoing education and engagement of our international partners, investing in them to promote their own long-term customer base instead of expanding into new regions. This strategic focus, coupled with recent regulatory approvals, is expected to support our growth and positively influence our revenue. For example, we have successfully received HSE approval and announced a preferred partnership with Total Clean Air, or TCA in the United Kingdom, where we recently completed factory testing on a custom engineered project that they brought to us. TCA has also invested in mobile equipment in quarter 1, 2026 to support their demonstration and service deployment capabilities.
The food safety sector is also beginning to gain momentum, and we're receiving valuable referrals and case studies from our current clients. This industry uses our SteraPak product or requires custom applications, indicating that we are still in the early stages of realizing significant revenue. Additionally, there remains much work to be done on the regulatory front. For example, Nestle's pending expansion waits for other international registrations outside the ones received in the European Union. One of the most exciting developments comes from our long-standing relationship with Disinfectant Care, which has secured a service contract at a major dairy facility in Mexico. Following customer-specific testing and studies conducted on site, SteraMist iHP not only demonstrated its efficacy, but also showed the preservation of cheese quality, a key finding that strengthens our credibility and served as a valuable referral for other new customers.
In summary, we are now making strides across a diverse range of sectors in the food industry. We are used in cheese, eggs, coffee, ice cream, consumer packaged goods, cannabis, nutrition, vertical farming, pet food, food ingredient suppliers, refrigerated foods and specialty ingredient suppliers. This is broadening of our market presence positions us well in the industry.
Another significant area of focus for us, which we believe is expected to see returns in 2026 is the biological safety cabinet or BSC industry, particularly regarding our service providers and the SIS stand-alone system. We have developed the necessary accessories and protocols for treating all classes of cabinets, a progress required as we prepare for NSF approvals this summer. Currently, we have certified service providers utilizing our SteraMist iHP technology, including [ Triumvirate ] and MarathonLS on the East Coast as well as HEPA in Canada.
On April 2, we conducted a key demonstration with one of the most recognized providers in the industry who operates multiple locations across the United States. Triumvirate hosted a webinar this quarter where they showcased how iHP technology outperforms key competitors in the market, including Spor-Klenz, Formaldehyde, and Vaporized Hydrogen Peroxide. This webinar was well attended attracting approximately 250 participants.
Ultimately, our goal is to enable these service providers to compete effectively by incorporating iHP technology into their offerings for BSCs. They appreciate this innovation because it allows them to complete more treatments in a single day compared to older technologies.
In addition, we maintain a robust intellectual property portfolio, CE and UL listings and are preparing to pursue USP 1072 material efficacy, which will expedite our sales process in the life sciences market. Furthermore, we are committed and continued to conduct customer-specific studies that help us secure contracts and maintain the client roster we hold, such as those highlighted today.
I will now return the call back to our CEO, Dr. Halden Shane.
Thank you, EJ. I want to take a moment, maybe even more of a moment and express deep appreciation to the majority of our shareholders who supported us and have believed in our mission through our highs and lows. You are the majority and our long-term investors. Thank you for supporting our team and most importantly, believing in our technology and products. I believe at the start, we all knew this was not going to be easy because we're creating a new standard in many industries, and it's very hard to accomplish being undercapitalized makes it even harder. But we are on the verge of accomplishing the impossible.
To the handful of naysayers, we believe we'll be able to earn your support, and we continue to execute a deliberate strategy to expand our operations and improve our financial performance. If not, then maybe it's the wrong company or you need to see a professional.
It was a tough year for us from the financial perspective, but we remain focused the whole time on the future. In my eyes, there are no excuses, but were definitely roadblocks. Those roadblocks included DOGE, tariffs, working capital and recently the war. We chose to become the standard in the pharmaceutical, life science and university vivarium market. Unfortunately, some of the negatives of becoming a standard in that market is the perfect storm that occurred in 2025. Like there was panic buying behind the 2020 COVID, there was a lack of buying in the 2025 due to the reasons I stated above.
Just recently received an e-mail from a major university that everybody knows on the West Coast of the United States. They were putting off a purchase until the end of 2026. The reason they had to postpone the purchase was because of DOGE, tariffs and political uncertainty, including the war. Also, that person stated there was an uncertainty maybe about her job. But no matter, we are a team, and we can overcome situations like that. And I can assure it's all temporary. The university will purchase this year even if it's a new professional in that job position.
I did a review of our stock over the last 10 years. I choose certain points because it was approximately when we received our hospital health care EPA registration and had marketing in place. The key metrics are pretty amazing. In 2014, revenue was about $2.2 million. Our stock price was $2.16. Our major clients was a Panamanian hospital and a group in Mexico trying to sell to Mexican hospitals. In 2020, we had a banner year. Unfortunately, it was due to the pandemic. We did $25 million, demonstrated that we're capable of handling that volume of business. It did take away from the focus on the life science industry, pharmaceuticals, et cetera, but most of that was temporary panic buying. Our stock price was $4.57. In 2024, our revenue was approximately $7.7 million. Our client list was pretty impressive compared to 2014, and our stock price ended up at $1.05. The next year, 2025, our sales was $5.6 million. The sales that we could recognize as revenue, obviously, as you know, the sales were much higher, as we stated, provided in our pipeline with open significant orders for the first time moving across into 2026.
As stated previously, we were confronted with tariffs, DOGE, political uncertainty. We closed the year with a stock price of $0.78. Now we're in 2026. It looks like our first quarter, which includes recognized revenue and open orders, could be $3 million or higher. Not sure how this ends up playing out later today. But for sure, we're beating our first quarter 2025 revenue in the first quarter of 2026.
Our stock price is around $0.55. We estimate our revenue for this year will be around $12 million, bearing any unknowns. In 2020, we did a reverse split. Today, that $0.55 comes out to be about $0.0688 pre-split.
So here's a short list of our current clients. Pfizer, Merck, Thermo Fisher, Fresenius Kabi, [ Allogene ], Boehringer Ingelheim, Catalent, CSL, [ Seqirus ], ITH Pharmaceuticals, Nestle Purina, Mead Johnson, [ Ziegler ], Simplot, Perdue AgriBusiness, Kindred Health, Mercy Health, Novant Health, St. Jude Children, Gila River Health Care, FDA, USDA, CDC, NIH, DHS, USAMRIID, [ Armitron ], ESCO, [ Telestar ], ServiceMaster, First Onsite, Avantor, Tecumseh. In retrospect, do you think a company like TOMI with that list is worth $0.0688 only?
My point here is our stock price was $2.14 when we had 2 customers, 1 in Panama and 1 in Mexico. I remember a statement from a very successful person, Warren Buffett, "be greedy when others are fearful." That statement couldn't be true today about our company.
I choose to run this company making a decision that many CEOs will never make. And that's because it hurts before it pays. I stop relying on easy sales and onetime equipment and build something from a more potent recurring control over how customers operate. The shift does not show up cleanly on quarterly charts. It shows up as a service revenue climbs and consumables replace capital purchases. Our customers stop buying, they start attending. That is where the game changes. We are not growing very fast, but we are growing very smart.
Our company has moved from episodic revenue to embedded revenue before a deal closes, the relationship reset. Not every deployment creates a tail, more usage, more replacement, more service. This is not a product business anymore. It's a system. Recurring revenue isn't about stability. It's about control. Most executives say they want predictable revenue. What they actually want is predictable revenue without sacrifice. We took the hit upfront. Volatility increased, revenue looked uneven. Margins had to be rebuilt. But underneath the engine changed. Short-term policy facility is often the price of long-term dominance. Instead of building expensive infrastructure scale globally, we use distribution channels and partnerships to expand and reach without expanding costs. International revenue became a large slice of the pie without dragging down the balance sheet. That's not expansion. That's leverage we used.
Scale without cost is the cleanest form of growth. At the same time, we wanted the business towards higher-margin solutions and service -- services. That's our razor-razor blade model, not louder, not last year, just better economics.
The following current numbers could possibly change, but the point I want to make is that at this moment, our economics, of course, is first based on sales of equipment revenue, but our scaling and cleanest form of growth is solution sales, support service and iHP in-house service.
Quarter 1 of 2025, we did $299,000 change in solution sales. In quarter 1 of 2026, at this moment, our solution sales are $429,413. As far as support services in quarter 1 of 2025, we had 73,279. Currently, in the first quarter of 2026, we have 253,390. In support services, these are such things as training, certifications, qualifications, validation cycle developments, installations, et cetera.
And the third part, iHP service. In the first quarter of 2025, we had $439,386. Currently, with invoice and open orders, we have a total of $729,440. Margins improved, mix improved, the business became more resilient without announcing it. We were able to figure out how to achieve success by having money actually compound. Do you keep chasing revenue to reset every quarter? Or do you endure short-term pain to build revenue that compounds without permission. That decision defines whether you're playing offense or playing survival. We didn't eliminate risk. We repositioned it. In doing so, we created something more valuable than growth. We created dependency in a world chasing speed. We chose structure and structure wins.
I can't take the credit for all this writing. I want to thank [ Joel Block ] for understanding how we have created this company and understanding the suffering we've gone through.
Once again, I want to thank everyone for their long-term commitment and support and for a small team of 20 working endlessly to achieve all the goals. I also want to thank our creditors who've been super as we go through the stage of growth. At the end, the warriors that have helped us achieve success.
Also, I'd like everybody to pray for our brave soldiers that are in difficult situation. To all that are listening, we're excited about what's ahead.
Operator, let's open the call to questions.
[Operator Instructions] And the first question today will be from [ Carl Wright from Lonetown Capital ].
2. Question Answer
So first question, could you provide some more insight into the global opportunities you mentioned in the quarter?
Yes. Hi, Carl. Certainly. So the first of the EU registrations on the submission we did came in, so we expect many other EU states to follow suit within the next upcoming months. And with that, we have been positioned with current relationships and distributors from Poland, Germany, Netherlands that have been around our technology and really educated to be able to take on the opportunities that have been waiting for just that registration. So just as the U.K. did once the HSE came through earlier in this quarter with bringing on TCA and quickly being able to fulfill our first custom engineered system, I see that happening with the other regions in the EU.
Got it. And then congratulations on bringing down operating expenses by 10%. Could you provide a little more color about how we should think about operating expenses in the business just going forward?
Sure. David, go ahead.
Sure. I think the -- again, as Dr. Shane mentioned earlier, as we grow, we will have to invest into our operating expenses, but we already have leverage in it. So we do not expect to see a significant jump in our operating expenses. You should -- if you're going to model it, you would model it as a percentage of revenue growth. But I would say it would slightly decrease as we grow as a percentage.
[Operator Instructions] The next question is coming from John Nelson. John is a private investor.
Several questions. First one, I'm one of those long-term investors that...
I know you are.
Is -- confident that over the years you're going to deliver. So thank you. Thank you for your...
And I thank you for your help.
First question is, you mentioned in the press release in '25 versus '24 revenues, customers deferring, capital expenditure, projects due to uncertain economic environment with the impact of tariffs and Middle East crisis. Are you seeing any signs of -- and you must be seeing some signs of it improving because of your first quarter comments. But are you seeing any of those customers that were deferring CapEx projects starting to move on them?
We are.
Okay. And then the BIT Solution revenues for '25 versus '24. Can you provide any details on the comparisons there?
Sure. Are you talking '24 versus '25 or '25 versus '26?
No, '24 versus -- '25 versus '24.
Okay. EJ?
Yes. There's an increase in the solution between '24 and '25, and we're seeing that continue into '26. A lot of it has to go in with Dr. Shan's closing and this moved into open orders. And this came in tandem. About 1.5 years ago, we mentioned a big push on different support services. And having us be able to go on site and speed up the use of our technology and qualify different areas, we're able to predict how much solution they're going to be able to use. So that, in essence, is now finally starting to pay off with them purchasing the orders that they need in advance and just get into more of an auto shipment. So that's the goal, and it's starting to come into play. It started at the end of 2025, and it's moving into this year as well. So that's the big difference. And the 2, why it's referenced in the script that way is because they go in hand. Our support services and our BIT Solution are definitely together in trends.
Okay. And then are most of your customers in '25 using more -- significantly more BIT Solution than they did the prior year?
Yes, definitely. I mean there's always some fluidity to it because you'll have our service provider shift -- if there's -- the fires produced a lot of solution in Q1, different decommissioning of buildings if they get large -- large service contracts, then this definitely increases our solution. So that's a little harder to predict. But when we're able to go in and qualify different spaces or similar to the eye health company where we know how and exactly where they're using the equipment, that's a little easier. But the Q1 of last year certainly was due to some emergency use. So there's definitely an increase in solution.
Okay. And then on -- can you provide any more detail as far as how the application would be used to deal with the wing syndrome for honeybees?
So we do -- we have the study, and we've done a few other lab type studies, and it's definitely a good use, and we're looking and are still speaking with a local university on trying to get live use case. Once we're able to reestablish that and actual application use, it will proceed from there.
So John, I've reached out to the associations, the honeybee associations, domestic, globally. I've reached out to the Board, and I've yet to get a reply and with overwhelming evidence of what we can do and how we can help the pollinators around the world. And right now I'm reaching out to the Department of Agriculture to see if they can help or at least get this technology in front of somebody that wants to make a change.
Okay. And then you had mentioned briefly the use for treating marijuana plants?
Right.
Is it mites -- or is it for the powdery mildew?
It's for powdery mildew funguses on the plants. We have an EPA label we're trying to get from the EPA just for that. Is that - 4, EJ?
Yes, that's correct.
Okay. And -- but currently, you're not getting any revenues yet from that particular type of usage, correct, because of the need for the EPA label?
I think, EJ, you can answer that. I think there were some...
There's a handful of customers. With them, it's scaling up. And right now, they're doing a lot of handheld treatments, but we do have a good partner that is promoting our product and even some international interest on the treatment. But we do have some wide use, which is great, and that usually is the first step.
Okay. Good. And then one thing that I've been curious about is and whether you've explored or thought about exploring it is uses of SteraMist in the military. And I was thinking about it with regards to the Middle East crisis with all of the Navy ships and the -- in the Gulf and how people are crowded together. It's got to be a potential breathing around for germs and potential infections transfer. So has that -- have you explored that at all or ever talked to the Navy about possible usage of SteraMist?
So the Navy has been -- are they still a customer, EJ?
No. Well, are they -- if they are a customer, that's new to me, but have you explored uses with it? And if you have, what response have you gotten from the military?
I think we're a little too small and overwhelmed with everything to go after that at the moment. But I believe there was a testing center that the Navy was involved with. It's a great idea and especially with the new COVID variant that seems to be running around and came from the Netherlands to the U.S., I'm sure that you're right of the close proximity on these ships, they do need to get a disinfectant. And I think this is something that we're going to go look into immediately.
And we have completed some request for information on the grant government site for military vehicles and how to best implement SteraMist. So they are creating information that way, but that does take quite a bit of time. But we do complete those on a regular basis to get the [indiscernible] out there.
Okay. And I don't know if there is a particular certification required, but I was thinking the same thing about SteraMist application possibilities for military hospitals or the VA, which, as we know, has a number of problems with infectious disease transfers.
I think they're waiting for me to answer, John.
Sorry, I don't -- not anything specific. I think [ almost ] to that. We do have a closed service provider been into military housing, but too early to speak about.
Okay. And my -- one of my final questions was going to be on scale up. If you do get a significant amount of new orders, how easy or difficult that would be for you?
Well, it's -- again, we probably need to raise some capital to scale up significantly. The 20 people we have do a hell of a job as a team. We were able to handle COVID pretty much with the same amount of employees, and we did really well. So I think we could handle the immediate scale up depending upon the equipment, but we definitely need to go ahead and increase the size of the company going forward in lots of divisions.
Okay. Good. And then last question was a number of -- have you actually total them up as far as the number of new customers added net in '25 versus '24?
I haven't -- David, EJ, have any of you done that?
No.
Not based on new customers, no. Definitely -- individual orders between the years, but...
I think we'll do that, John, and I'll talk about it on the call coming up soon in 6 weeks.
Okay. I mean you definitely have listed a number of new names that I hadn't heard on previous calls. So -- but I was just curious about...
Yes, I know. And I left out half of them, too, but it was impossible to go through them all. It's just frustrating to see what happens to the stock and what occurs with the difference. So the point, I think, was well made, and we'll see what goes on.
Okay. And then as far -- you've done an excellent job of adding significant distributors, both domestically and internationally. Do you -- is that still a significant part of efforts going forward to add even more distributors?
Absolutely. We're in talks right now with many.
There are no other questions at this time. I would now like to turn the call back to Dr. Halden Shane for closing remarks.
Okay. I just want to thank everybody again and wish everybody a happy Passover and happy Easter. Thank you, operator.
Thank you. This does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.
You too. Thank you.
TOMI Environmental Solutions Inc — Q3 2025 Earnings Call
1. Management Discussion
Good afternoon, and welcome to the TOMI Environmental Solutions, Inc. Third Quarter 2020 Financial Results Conference Call. [Operator Instructions]. Please note, this conference is being recorded.
I will now turn the conference over to your host, Mr. John Nesbett of IMS Investor Relations. Sir, the floor is yours.
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 Chief Executive Officer and Chairman, Dr. Halden Shane; E. J. Shane, our Chief Operating Officer; and our Chief Financial Officer, David Vanston.
A telephone replay of today's call will be available through November 28, 2025, the details of which are included in the company's press release issued today. A webcast replay will also be available on TOMI's website at www.steramist.com.
Certain written and oral statements made by management of TOMI 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 our 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. Please refer to our filings with the SEC, including our 10-Q for the quarter ended September 30, 2025 for a discussion of these risk factors.
The company undertakes no obligation to update these forward-looking statements after the date of this call.
I will now turn the call over to Tomi's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.
Thank you, John. Good morning, afternoon or evening to everyone listening from around the world. Thank you for joining us for TOMI Environmental Solutions Third Quarter Earnings Call.
Today, we will share our third quarter 2025 results, along with key updates and reasons we believe TOMI is on the cusp of a breakout. After a challenging start of the year, the third quarter marked a decisive turning point. We delivered a 95% sequential revenue increase driven by expanding recurring revenue streams and deeper customer engagement
A key takeaway from our third quarter performance is the increase in capital purchases of our mobile equipment as our service provider partners grew in number. This includes both well-known industry leaders and smaller long-term players who are increasingly recognizing the value of clean tech and the superior advantages of our SteraMist iHP technology.
Our vision remains steadfast: a future where sales of mobile capital equipment, iHP corporate service, our custom integration platforms and, of course, our core BIT Solution business model all grow in tandem.
A new growth engine, recurring revenue, that's the theme. Building on the momentum, our third quarter revenue reached $2 million marking a 95% increase over quarter 2. This growth was driven by strong equipment sales and most notably, recurring BIT Solution sales which have risen 21% year-to-date.
In 2025, we placed significant emphasis on our existing customer base, ensuring implementation, usage and tailored protocol development for customers across all our industries. This focus has positively affected BIT Solution sales, which has seen stable and increased sales in each quarter.
By sustaining this momentum, while ramping up capital equipment sales and successfully closing project bids for our automation solutions will not only achieve our overall growth objectives. But also enhance predictability, which is essential for scaling the business effectively.
Another theme, momentum builds expanding pipeline and backlog. Our sales order backlog was $0.9 million at the quarter end and grew further to $1.3 million by October 31, with approximately $3 million in pending SteraMist Integration Contract expected to close before year-end.
Our active pipeline surpassed $15 million, encompassing both domestic and international customers across the industries we currently serve as well as emerging sectors showing strong interest. These figures are more than just metrics. They signaled the business opportunities we anticipate in the coming quarters and extending into 2027.
Another theme, visionary markets beyond traditional boundaries, we are doubling down on investments in innovation and customer success. Our SteraMist iHP continues to gain industry recognition. This year being named the disinfection and decontamination products company of the year 2025. Our platinum customer roster includes top-tier leaders across every sector we serve, further validating our solutions and positioning TOMI as a trusted partner in global health and safety.
Regulatory developments are opening new markets. The FDA's broadened approval of hydrogen peroxide and our breakthrough demonstration of SteraMist efficacy against Honeybee Colony collapse, position us to serve not only life sciences and health care but also agriculture, food processing and environmental biosafety.
The opportunity before us is vast, expanding the relevance and impact of SteraMist on a global scale.
Strategic execution laying the groundwork for 2026. To maintain and accelerate this momentum, as stated earlier, we are intensifying customer outreach through personalized engagement strategies, deploying targeted marketing campaigns that highlight real-world success stories and forging deeper partnerships with key industry players.
Our SteraMist PRO certified program and learning management system are empowering the market with essential education while onboarding specialized service providers. We are also in the process of updating, improving and adding to our training programs across all delivery systems.
Looking ahead, heading into 2026. TOMI is sharpening its focus on biosecurity advancements that address evolving global challenges from climate-driven health risks to supply chain vulnerabilities. We will prioritize scaling our automation integrations for high efficacy environments. Exploring untapped opportunities in sustainable agricultural and public infrastructure and fostering collaborative R&D with academic and industry partners.
This will empower us to deliver solutions that enhance environmental resilience, safeguard communities worldwide and drive sustainable returns ultimately positioning TOMI as the go-to innovator in a rapidly changing world.
I will now hand the call over to our Chief Financial Officer, David Vanston, who will provide a brief overview of our financial results for the third quarter of 2025 compared to the same period last year. David?
Thank you, Dr. Shane. In the third quarter of 2025, our revenue was $2 million, a decline from $2.5 million in Q3 '24, representing a 24% decrease in sales. This was primarily driven by a timing reduction in the quarter of iHP services sales from a key customer who reorganized its operations. This impact is expected to be temporary, and the customers' operations and related service activity are expected to resume to a normal level in the near future.
Importantly, year-to-date service demand remains robust with close activity and pipeline volume up approximately 35% year-over-year in the life sciences and food safety area. This trend supports our expectation for continued growth in the fourth quarter and beyond.
For the 9 months ended September 30, '25, Solution revenue was $760,000, an increase of 21% year-on-year as early as stated by Dr. Shane compared to the same period in '24. As we continue to drive recurring sales of solution within our customer base. A positive point was our gross profit margins remain strong at 61% as a percentage of sales, for the 3 months ended September 30, 2025 and for the same period last year. The consistency of our gross profit margin underscores the resilience of our product mix and disciplined cost management.
The 3 months ended September 30, '25, we experienced an operating loss of approximately $320,000 compared to an operating income of $149 million in the same period last year. Our net loss for the 3 months ended September 30, 2025, was approximately $450,000 or $0.02 a share compared to a net income of $58,000 or 0 compared to the same period last year.
As of September 30, 2025, our financial position includes cash and cash equivalents of approximately $190,000, working capital of $2.5 million and a share held equity of $2.2 million.
I will now turn the call over to our Chief Operating Officer, E.J. Shane to discuss the upcoming business highlights.
Thank you, David. Our previously announced active projects are currently on schedule for delivery by the end of the year, and we are currently negotiating an additional $3 million in custom and integrated contracts with this expected to close before the year-end. 2025 showcased TOMI's evolution into a trusted technology partner for regulated industries, implementing SteraMist with agencies such as NASA and [indiscernible] alongside repeat orders from global leaders underscores SteraMist's position as a gold standard for contamination control. With major pharma companies investing in the United States onshoring and sectional facilities, TOMI's ideally positioned to capture expanded opportunities in sterile automation systems.
Automated, repeatable and validated decontamination rooms and chambers remain in high demand as the pharmaceutical industry evolves. We believe our iHP technology is emerging as a benchmark for sterile environment as evidenced by its adoption this year with SteraMist Companies. As of the third quarter, the onshoring of pharmaceutical production positions us favorably, specifically in Virginia for the next few years, particularly with major commitments from Merck, Eli Lilly and AstraZeneca, who are establishing new production sites.
As we build on the strong momentum we've shared today, the key question is obvious. How will we keep driving growth in bit solution sales, iHP service, capital equipment and custom integrations. As Dr. Shane noted earlier, our BIT solution gains come from growth in personnel and operations and better training for our current customers. We will keep this going to drive study adoption and stronger reach in key sectors. We are nearly complete on updated training documents rolling out a more comprehensive program that emphasizes ongoing recertification.
This approach not only raises customer standards for implementation and safety, but also may generate additional revenue and deeper product adoption, strengthening TOMI's role as an essential partner. Quarter 3 of 2025 unfolded an essential chapter in TOMI's journey marked by breakthroughs that not only validated our recent innovations, but also directly fit our pipeline of opportunities. It began in July with the installation and commissioning of our SIS-SA for a neighboring pharmaceutical company which falls under our SteraMist Integrated System or SIS platform offerings targeting the pharmaceutical isolator market. A milestone that led to successful integrations into additional enclosures for Virginia Commonwealth University and the University of Miami and a promising wave of future installations with both existing and prospective manufacturing partners.
In the life sciences and manufacturing sectors, we see a powerful shift toward continuous bioprocessing, flexible facilities and AI-enabled operations. These advancements demand be contamination solutions that integrate effortlessly with automation while minimizing downtime, precisely where a custom-engineered system, or CES excels, offering rapid, efficient sterilization to support production and operational efficiency. While our CES remains in demand due to its tailor capabilities, we recognize that its extended time line from initial interest to full commissioning can be expensive.
As the CES pipeline continues to expand, we are strategically prioritizing our hybrids and SIS products, which offer faster close rates and quicker integration and implementation within facilities. This balanced approach ensures that all our custom automated offerings advance at a comparable pace with the hybrid and SIS line serving as the ideal solution for automated integration segment, driving quicker revenue realization than the CES.
Building on our Q3 momentum, August marked a significant step forward on our East Coast distributor, Ares Scientific, who helped us secure a new university client for our SIS platform. solidified our presence in the academic vertical and opening doors to specialized applications and research environments. This progress carried into this week's last conference, where we collaborated closely with Ares on promising upcoming projects and showcased our advanced product lineup alongside our enhanced engineering capabilities and programming end design.
By engaging manufacturers of case washers, decontamination chambers and biological safety cabinets or BSCs, we are expanding our partnership options for future integrations. Strengthening our pipeline with diverse choices while positioning these collaborators as valuable resources to expand the SteraMist iHP brand and technology into high potential sectors such as government agencies, universities and animal research.
Additionally, our discussion today included a new potential representative company for the West Coast as well as opportunities for complementary products that could generate fresh revenue streams by paring seamlessly with our core technology. Stay tuned for updates on these developments as they may diversify our pipeline in heading into next year. In health care, new initiatives like the Joint Commission accreditation 360 program, set to launch in 2026, we open new revenue streams for TOMI as well. The program will create a growing need for verifiable, audible disinfection data, which SteraMist delivers through its advanced logging and reporting features, helping providers meet stringent standards and enhance patient safety.
In quarter 3, we celebrated landmark addition to our roster of customers with a major player in the eye health industry. Bausch & Lomb rapidly adopted our mobile handheld surface units in 2 facilities in under 4 months and committed to open bit solution orders for 2026, promising sustained revenue streams in the sector and need for advanced sterility.
In September, we made significant strides in capital equipment segments by onboarding a specialized service provider focused on health care and mold remediation, quickly followed by sterile and tap purchasing mobile systems with the latter expanding SteraMist line with foggers. We continue to speak with these 3 and other larger franchise service providers for a widespread adoption of SteraMist iHP technology their networks.
Our highly regarded SteraMist certified or SPC program continues to nurture a dynamic environment of partners and customers, enhance the implementation and long-term usage. Large contract cleaning, bioremediation and restoration firms such as [indiscernible] Tech are scaling up their offerings to handle complex, high-margin jobs and biohazard mold and microtoxin cleanup using our advanced technology. This year has brought the transformative shift in our business development approach with initial purchases of 1 or 2 units at select locations inspiring broader rollouts across entire organization. a pattern that is starting to play out successfully in both the life sciences and commercial industry.
To sustain this menu, we continue developing these organic expansions, which is key to scaling our business and of course, its model. A prime example is our growing relationship with Nestle, which is gaining traction, and they have expressed a strong desire to establish our technology as the global standard across their nutritional facilities worldwide. We have already deployed multiple streaks to various branches internationally, setting the stage for substantial reoccurring revenue and further international growth.
We continue to pursue the cannabis market under our Food Safety division and quarter 3 sparked some significant interest domestically and internationally, opening doors to promising new partnership discussions. Our current distributor, Sterile Grill, continues to market and fully gain traction, adding to the referral base and efficacy use data for the market. We have an officially entered a collaboration with Smithers the largest testing lab in the United States, which we expect to yield lead referrals soon and will soon begin a study in Morocco that positions us for entry into the European and African medical cannabis markets. A key quarter 3 highlight pertains to a regulatory change. The FDA's final order amending regulations to permit hydrogen peroxide as a safe disinfectant oxidizer and bleaching agents in food for human consumption, while removing sulfur dioxide restrictions. This ruling is game-changing for SteraMist, validating our bid solutions food grade hydrogen proxie as the sole active ingredient and providing a clear regulatory framework with a competitive edge in the multimillion-dollar food safety market. By expanding applications beyond environmental disinfection to direct food-related protocols such as in the ready-to-eat or RTE industry, where convenience foods like prepackaged meals and salad demand pathogen control, it positions TOMI to capture a significant share across the supply chain. With no residual concerns, due to SteraMist iHP breakdown and to oxygen and humidity. We can now disinfect equipment processing lines and facilities and food present environments to target threats like salmonella, listeria and ecoli. Decontaminate packaging and storage areas for contamination and sanitize transportation vehicles for end-to-end hygiene. This broadens our addressable market and drives revenue growth in high demand sectors. Thank you. And I will return the call over to Dr. Shane for his closing statements.
Thank you, E. J. we remain focused on strengthening our organizational foundation, enhancing our C-suite, management and division leadership, building out our sales and technical teams and expanding our network of global distributors. The third quarter marked a notable period of recovery and reaffirmed the soundness of our strategy. We are seeing steadily improvement financially, operationally and strategically.
Our team is dedicated to driving growth and innovation across all divisions, leveraging our expanding portfolio of products and services. We are encouraged by the opportunities that lie ahead. Our sales backlog remains strong, and the sales strategy implemented at the end of last year is beginning to deliver promising results. We are motivated by the progress in our strategic partnerships and the growing interest from clients seeking to improve their operations with our solutions. With continuous investment in infrastructure, technical expertise and a stronger sales strategy, we believe we are well positioned for a successful fourth quarter with momentum carrying into 2026.
I'd like to highlight a recent strategic milestone that positions us for sustained growth. On November 5, we entered into an equity purchase agreement with Hudson Global Ventures, giving us the flexible right but not the obligation to sell up to $20 million in common stock over a 24-month period. Full details are in our Form 8-K filing. The agreement provides the flexibility for on-demand access to capital without upfront commitments or heavy dilution, helping us fund the strategies, goals and momentum. We have described today, including our business development needs, hiring customer service specialists, technicians and programmers trainers and operational support to accelerate our pace while maintaining our strong reputation with customers across the industries we serve.
It will also enable us to expand on key initiatives, such as advancing R&D, regulatory pursuits and market expansion ensuring we seize opportunities in clean tech and biosecurity while creating long-term value for shareholders. Thank you for your continued support as we unlock TOMI's next era of growth. We're excited about what's ahead. Now operator, let's open the call to questions.
Our first question is coming from Sameer Joshi with H.C. Wainright.
2. Question Answer
Really good quarter. Congratulations on the nice turnaround and progress. One of the clear things I think you announced was the FDA approval or clearance for the hydrogen peroxide usage. It opens the food RTE and prepackaged as E.J. outlined. What is -- what are your sales and marketing efforts towards this? And have you identified initial targeted customers that you would pursue?
So it's relatively new, this approval. And we foresee that the food industry in itself, both whether it's in processing, storage packaging, transportation, et cetera, can be a key marketing vertical for us. And -- and I'm really excited about it because, especially our type of technology does not have any residue. And it's going to be a game changer. But in order to go ahead and tell you how much and who it's a little too early, I think. And I find that a lot of the food companies themselves are not aware of the change. But things are changing in this industry. They're leaning away from old established disinfection and parasitic acids and things like that and dips, et cetera, that they've been using. And our technology is a definite should be on top of their list as a choice.
Yes. No, it certainly makes sense what you're saying. And I'm sure it will open up a big, big market for you. On the 3Q performance, again, as I said, congrats under nice turnaround. The operating expenses were also contained despite the nice revenue increase. Should we expect these operating expenses at the operating expense level as well as the gross margin level to continue to sort of improve financially?.
So for your model, I think your expenses are going to increase. And I think they're going to be positive in relationship to revenue. David might have something to add to this, if you'd like, David. Yes. I think for the gross margin, I think you may get 1% or 2%, but nothing significant. You've already seen that over the year-on-year, we're holding around the 60% margin. I mean that helps us with the continuing solution sales that come in. So I don't expect our margin to be under too much pressure.
But as Doc pointed out, if we're going to scale up, I would expect PAUSE the revenue line will go up at the same time, but a percentage of the total. The operating expenses as a percentage of our total revenue will not be the company.
Yes, that is what I was driving it because you did outline the R&D efforts and initiatives. So they will increase, but not -- but you will still have leverage and revenues are probably going to increase faster.
Yes. Correct. Got it. Last question. On the international front, I think you did mention Morocco, Africa. What kind of sales effort is in place? Do you have representatives in these countries, how should we think about how the sales are going to be realized?
So we have different distributors in some of these countries that are focused in them. I think that a lot of our global partners, where we mentioned 1 in the food industry on the call earlier. PAUSE -- is going in implementing this in many of their facilities globally. Similar to that, the other types of partners that we have that have global footprint in various countries that are interested in increasing their demand and use for stories going forward?
May I squeeze in one more because I think you had pointed out that your capital equipment sales increased. I think that bodes well for solution sales in coming quarters. Do you have visibility on what kind of solutions sales you will see in the coming quarters?
I don't. We -- again, I think the first half of the year, we had about a 41% -- 40% increase in solution sales over 25And in the third quarter, we were down to about -- I believe it was in the mid-21%. So it averaged down a little bit. I think by the end of the fourth quarter, our recurring sales should pop up again because people wanting to get the solution in by end of year. And I think that's the key to this whole call is we get more technology out there. We do it by manufacturing, but via by also increasing our sales and our sales strategies in these areas and more equipment lead to more solution sales, which is the model that would drive a very successful business going forward.
[Operator Instructions] Our next question is coming from John Nelson, who is a private investor.
and congrats to you and the TOMI team on the enhanced momentum that the company seems to be generating right now. I have continue to steadily add to my stock position since my latest 13G amended filing in July. So I'm very pleased with on your results. And I know the efforts are superlative. Questions. In the -- is there anything updates you can give me on the -- what's going on with servicing are trying to service the military and defense markets?.
I don't have one. Maybe E.J. has something to say about that.
Yes. This past quarter, a lot of our service was directly attributed to one key site. I can't really go into too much detail, but they are looking to replace formaldehyde and have been, and we're working with them. We did quite a few studies with them in Q3. We went there 8 or 9 times and had positive results. I don't expect that one to show a close before the end of the year, but we are definitely expecting it to be a pretty big deal in 2023.
Good. Any updates on the CAR T cell disinfection business. P.J.?
I don't think we have anything. Okay. The -- you mentioned in the press release that you've now onboarded all 3 of the top major service provider companies in health care mold remediation. And I was curious as to any expectations that we should have on rapid versus slow rollout by these parties?
So yes, and I know you've been asking it wasn't ServiceMaster, but bringing on steric intact and the other group was definitely a big deal especially with their quick assessments to add more units pretty quickly thereafter their initial buy. They do have a focus more in biohazard and microtoxin remediation, and we expect to really keep working with them and gain live case studies to be able to bring on the rest of their facilities and then, of course, additional franchises. So I do see a dramatic shift in our service provider ship. I think it's the way we've now outlined the way we train and support them with the program and the learning management system that we offer to them. and we're a little more aggressive in the correspondence and staying up to date with everything they're doing.
So it is proving a good outcome and expect more.
Okay. Great. The PAUSE a lot of attention is being paid and a lot of dollars is going to the data center market, Google just announced the thing we're planning on investing $40 billion in new data centers in Texas. So could you comment at all on any plans to try to penetrate the disinfection market for those types of facilities?
Sure, John. That's one of our reasons that we are expanding and want to expand our sales teams in multiple verticals, and that's one that makes a huge amount. Interest and potentially success for us because they do need disinfections, they're large facilities, and we will handle their materials tremendously. So we are going to work on that. We just do not have the employees at the moment to focus on that.
And that's one of the reasons for capital needs and to increase our existing sales force.
Got it. And besides the data centers in planning stages for being developed, there's also the current existing market and many of them are crypto data centers that are being basically converted to use by the magnificent 7.
That's true.
Last question is the FDA broadening the permitted use of hydrogen peroxide in the food industry. And I was wondering if you could maybe give us a few more details on how your increasing your awareness for that.
We are doing it on social media, and we do have plans to increase it further. Lot, like I said earlier with the call from the analysts, we know who they are that need our product. And sometimes, they don't even know they can use our products. So in smarter education will move at the moment. But I think that also in the medical supply medical sterilization and of medical materials, medical processing, sites that have huge ethylene oxide sterilization our products and grade replacement.
So there's a lot of work, a lot of low picking fruit for us to work at in those areas and those verticals. And as the team gets bigger and moves forward, we will be focused on them.
Okay. And in marketing, are you targeting the companies that have had problems in the past?
E. J.?
Are you targeting companies first that have had problems in the past with infections and.
We are, John. But we did start our initial beginning point was to start with our current database and the correspondence that we have had with food safety customers probably about 1.5 years or 2 that could come on board because prior to the ruling, it was -- had different restrictions for the ETA legal. So we're now in correspondence with those with the new FDA petition and reaching out how to create protocols under that guideline. So we did start with individuals that we were already talking with.
Okay. Good. And then one more that I just thought about is any progress or developments the use of SteraMist for replacing ethylene oxide in the medical instrument sterilization market?
Yes. I mean those kind of in hand with under both accounts in food and in medical device treatment. The other partnerships that we're starting to build in device manufacturing will also lead to that replacement being able to have iHP streamlined into different closures to decontaminate these devices and other large machinery that's used in both industries.
So it's definitely all being high prioritized in discussion.
Ladies and gentlemen, this does conclude our question-and-answer session. So I would like to turn the call back over to Dr. Shane for any closing remarks.
I just want to thank everybody for joining us today and for the continued support, and we will be speaking at our next earnings call. Many thanks. Have a wonderful day or evening, wherever you might be. Thank you, operator. Thank you.
And thank you, ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.
TOMI Environmental Solutions Inc — IAccess Alpha Virtual Best Ideas Fall Conference 2025
1. Management Discussion
Good day, and welcome to the IAC Alpha Virtual Best Ideas for Investment Conference 2025. The next presenting company is TOMI Environmental Solutions. [Operator Instructions]. I'd now like to turn the floor over to today's host, Dr. Halden Shane, CEO and Chairman of TOMI Environmental Solutions. Over to you.
Thank you, and thank you all for joining our presentation from wherever you are in the world. TOMI, as a product [ of ] SteraMist. We are a leading disinfection decontamination product. Our slogan is innovating for a safer world, and we are certainly doing that. The next slide, you see is a forward-looking statement. I'm sure we've seen many of these. And if you want to take a moment and read it, if not, I will go on to Slide 3.
Vision and value proposition. That's where we are. we're faster, we're safer, we're eco-friendly and we're revolutionizing cleaning and disinfection by providing a disruptive, easier and safer way to disinfect. Compared to our competitors, we're much faster, we're safer. There's no residue. The only residue is eco-friendly, oxygen, humidity and our efficacy is broad where we get 6 log and greater pill. Some of our premier clients -- some of our premier clients will demonstrate to you our growing momentum and our sustainable growth. We have an excellent list of clients that are constantly reordering our product and helping with the mission of making sturdiness is standard in the disinfection decontamination space.
As you can see, some of them are Pfizer, Merck, Thermo Fisher, Francis Kabi, NIH, USDA, FDA, NASA, et cetera. This shows you how accepted our product is becoming and how useful it is in many verticals, which I will go into in a moment. What is SteraMist? How does it work? SteraMist takes a very low percentage hydrogen peroxide 7.8%. It takes us peroxide and puts it through a cold plasma arc, which was developed by DARPA it alters the structure of the hydrogen peroxide into hydroxratical, which makes it faster, doesn't require wipe, a rinse and it's portable and it creates a contact to viruses, bacteria, other organisms, including recognized types of materials and causes an oxidative burst, which leads to destruction or death of a bacteria, bacteria spore and/or neutralization of the virus.
Moving right along, DARPA, who has designed this initially for weaponized anthrax. TOMI acquired the patent rights and expanded the registrations worldwide. Where currently, we have 32 granted patents, over 200-plus trademarks registered in 50 states and over 30 countries. The market opportunity is unbelievable. It's billions of dollars in relationship to the biotechnology market, the food and beverage market, commercial services and health care. And this slide will show you a little bit of breakdown of that market and how many trillions of dollars worldwide over a period of years, you can see that's available to be brought in as potential revenue. Currently, the way the company set up, we have 5 divisions. The first is biotechnology or life sciences.
These are the pharmaceuticals or the variants basically laboratories, tissue banks, government, a cold cell and gene therapy food and beverage, anything from manufacturing to packaging, to processing, transportation, grocery stores, meat and poultry vertical farming, honeybee survival which I'll talk to you in a little bit and prepared food. Our commercial services covers everything from hospitality to education, to mass transit aviation any way you can think of a potential use of this product would be covering any vertical that you can really think of. Health care, whether it's in ICU, if it's in just general operating use inside office use for medical devices, nursing homes, EMS, transportation, et cetera.
And it's utilized in surface [ decon ] area decontamination, mold remediation, mill remediation crime scene biohazard and the list really does go on. If you look at the advantages of our product as it stands out among the leader in the disinfection decontamination space, you'll see that we get 6-log kill greater. That's the level of sterilization. A rapid kill in some situations in 5 seconds. The material compatibility compared to our competitors, no way, no mixing, there is no residue, which will be really important in relationships to the Food and Drug Administration.
Submicron particle, we're able to have a small particle to get around the virus or bacteria and to create the option to burst that basically kills enter neutralizes it. Again, as I stated, broad efficacy, it moves like a gas. So if you're treating a room, you open up a draw. Having it, it will go everywhere and just imagine the gas, and that's where it will go and disinfect or decontaminate. It's very cost effective, and it's daily use for preventive measures is outstanding. The business model involves recurring bit solution. It's a razor/razor blade type model, equipment sales, we install a base, and we have a recurring base. The consumables quarter 1 of 2020, versus quarter 1 of 2024 showed an increase of 40% with a gross margin of about 60% we have an integrated platform and OEM partners. These partnerships have been put in place in the last half of last year 2024. They're helping and building our $21 million integration and build in pipeline, shortening of a sales cycle of our equipment.
These partnerships will create the ability to have our products have SteraMist, integrated into things like isolators, sterilizers, catches biosafety cabin, its material transfers, RDSs, et cetera, mostly in the life science and the Varian fields. Why SteraMist? We do it all from start to finish and endless markets, consumable business model and demand their preparedness and emergency is and should always be there. Product overview. We have our SteraPark and our surface unit. They are basically the spray some that are portable, 5 seconds per square feet. We have whole room fogging for advanced fogging for both air and surfaces, these are in the environment system, our new stereos transport for ambulances EMS bus and our MVPs.
Also, our custom integration, which is an extreme demand is bogging this enhanced and fully integrated into a room, a building, a system and it involves our serines hybrid custom engineered system for our SteraMist integrated SIS system. We have platform options, whether it be stand-alone for pharmaceutical manufacturing for data centers, supertight, unbelievable applications for this wonderful DARPA created product. This slide here will give you an example of all our units. And not to take up much time, you can pretty much see what they look like and any more details, obviously, we'll be able to answer that later. Razor/Razorblade model, the equipment out there that's basically the razor. The razor blade is a proprietary solution. It comes in 32 ounce, 1 gallon, 5-gallon, 55-gallon drums. It gives us our highest margin. We've had a 40% growth in the first 6 months of 2025 compared to that same period of '24 previously mentioned that.
From concept to commission, designed in-house, deployed services, qualification and validation, we offer 24/7 service for outbreak response and ongoing contracts. Custom integration, we started out with the concept back in 2021. We started to go ahead and create a few of these the -- we closed the pitching in '23. It takes sometimes years to get together with the architects, the engineers and the building owners to go ahead and create the model to build it as it gets in there. As you can see in '24, we launched our SIS, and now you can see that in '24 compared to '25, we already have as many in, as we did in 2024 that are ready to be installed.
Our current pipeline is $15 million of open produces with 7 million in active specific designs happening at this moment. The life science market, they're shifting away from ethylene oxide, ETO. This is going to open up a huge market for us. BSL 4s and 3s are expanding. There was a lot of capital restraints early part of this year and the last part of last year. We're finding now that these restraints are being lifted and the market itself is interested in our product. And there's a high containment labs, especially in North America, Europe and Asia. That's showing that these labs post COVID are ready to go into new equipment, and we're there to fill their needs. an EMA compliance, USP 797 as guidelines.
As a case study is Philips, the medical market is about $27 billion in 2024. Our goal, once again, our goal is to go ahead and use the data coming out of Philips for an FDA Class II medical device for recycling it, disinfecting it, repacking it, replacing manual wiping going into automated stereo systems partnershipping with many people, including ESCO and enclosure since the last part of '24 and the complete of the Philips project and their continued usage and data collection list with our FDA 510(k) submission. This is very. The food safety market is also huge as it's restricting the use of ethylene oxide going to safer, eco-friendly products similar to SteraMist. Couple of case studies, Nestle using this currently, I believe, in 4 of their foodies in Arizona, in Germany, Switzerland, South Africa. We have many more we're expanding into.
Egg Life is another case study that we're using where they purchased a number of them to date. They have a 456% increase in sales. Health care industry can be challenging. COVID really knock them out. Nobody is that interested in new infectious control products. However, we have quite a few health care facilities using our product. And once we're able to handle some capital restraints and hire various people in this industry, we feel we will be back and be a leader in it. But we have some studies where C. diff affects 0.5 million people. Annually, and 30,000 of them will die. And we do have an EPA registration.
Moving rapidly along to Slide 23, Trinity Health, St. Francis, did a case study. It showed basically that the total facility C. diff cases when we began the study was in the teens and after they use it, it was a single case, very impressive. It shortens the amount of time to do a terminal clean in a facility, and we have other studies to show that. Commercial industry, our PR certified. This is a teaching it's biohazards, environmental remediation and other professional remediators. It's ongoing I recommend anyone out there in the biohazard remediation field or emergency preparedness, take our product, make it one of the only Tools and it's tool chest.
And this industry is going to be in the forefront and the lead to helping in preparedness and advancement of outbreaks, whether endemic or pandemic or just a localized outbreak? Revenue growth, as you can see, over pre-COVID levels were at plus 38%. David, do you want to spend a couple of minutes on this.
Yes, absolutely. I think the key to remember is we are a disruptive technology with long lead times. And so we have a lumpy revenue and we're subscale. But if you look at our -- just so everyone is aware that the blue boxes, as I call that, is pre-COVID. So exclude the COVID here. And then the orange or the brown -- orange brown box is after, and you can see that we went from 5.6% to 7.8%, which is 38%. But impressively, we've grown both within the product revenue and the service revenue. Back to you, Doug.
So also the fact it's some really important or Tier 1 customers of our disruptive technology and long lead times. Currently, our pipeline with our integrated mobile and our service is around $21 million. Service and support expansion. As you can see, we have growth in all those areas, specifically our IHP service. It accounts for 70% to 90% of total service revenue. Annually, it's about 1.3 of 1.7 in 2024. And to date, we have support services and 203,000 versus only 105,000 in 2024. So overall stability in our services have gone from $897,000 in 2017 to 1.7 million in 2024 and increasing in 2025. And Sustainable growth drivers, our pipeline year-over-year, sometimes it's seasonal. We're able now to get past our 18 Months, focused expanded product lines and services to address new applications of our technology, accelerating momentum we're seeing across all areas.
And IP has key traction scaling in key markets. We have a clear road map to capitalize on market opportunities. We're executing now with people, increasing our sales team enhancing our KOL network, technically improving our service, expanding our R&D protocols to existing members and clients we're training people. We're improving in our regulatory and an increase in our social marketing, our public relations and expansion in press releases, as we can see with the participation in little seminar here. Our growth drivers and pipeline, again, I'll go over a pipeline $21 million, active design, $7 million for '26 and '27 already. Near term, $5 million and '25, and year-to-date, we've booked about $5 million Return on investment, you can see with about a $12 million breakeven. Gross margins, very nice 62%. Our net income, as you can see, with $12 million is about 2%. Our net income with $18 million is about is about $3.2 million, 18%. Benefits is this razor/razor blade model.
Last slide is increased probability of an outbreak endemic or a pandemic, and you can repaper all over the world. journals, and you'll see that there's a potential impact of economic loss, disruption of global travel and regulatory damages. There's a tenfold increase, at least one of these 13 infectious diseases could end up in a predemic. There's 44 countries right now around the world that are experienced issues. And some of these are MERS, SARS, Ebola, COVID, influenza, Glass of Fever, Middle East and respiratory resistant TB metals. And invasive bacterial infections. So again, with extreme after cations in our capital, we can go ahead and start covering many of these countries that are experiencing these issues even today.
We are focused also in the future on space travel, on servers, AI, we are the answer. SteraMist is the future of disinfecting and decontaminating space all over the world and in all verticals. And I thank you, and we shall look for any questions. So one of the questions is service revenue grew 30% year-over-year. How repeatable is this growth? And what industry driving the most traction. So the most traction we serve in our in-house service revenue. would be in the life sciences, in the pharmaceutical space. They will have to have a disinfection decontamination process every 6 months, depending upon what country they're in and our revenue should continue to grow year-over-year.
And I think that's going to be one of the hallmarks of our analogy going forward as we keep on signing contracts for service revenue $15 million in opportunities, $7 million high priority. What gives you confidence. On conversion time and win rates. Well, majority of these, we've already won, we're in the middle of doing quotes and it takes years sometimes for them to go ahead and accept while we work with their architects and their engineers in designing this technology. So we have a lot of confidence in the conversion of this at this moment. There's another question up here about the efficacy of your system at decontaminate and measles exposed facility. Your ability to ramp up production. We are able to use our backpack, and we can ramp up production pretty quick with that.
Of course, depending upon the amount would be capital dependent upon how much we have to meet a large, large need. Let's refresh this. So some of the really exciting areas we're working on and current projects, I think, is if you take nothing away from this, Think about this. Recently, after we reviewed the U.S. Food and Drug Administration's final rule that they published September 3, which was 90FR42535, and I'm reading this, amending 21 CFR to broaden the produce the hydrogen peroxide as a secondary direct food additive. This was a stumbling block we had until they did this. So now this is going to be opening up the food market and food production because we don't have any trace residues and we will be able to start doing more work in the verticals as food safety, packaging, transportation, storage, packaging, free and post-service indoor vertical growers, including cannabis.
Another great opportunity we have. We all know how important any these are to look and that the colon is under attack worldwide from the night, which is the most danger damaging on EV tests in the world. The mic leads the destruction of the colony, destroys the body of the bee and weakens it. We have some studies. This is going to be a very pronounced economic impact if it's not treated by the bee keeping industry around the world. We can treat the hive and the bees and avoid damage to the hive by destroying the might with series. Another thing to think about is the global medical device market. I gave you a case study on Philips it's $23.78 billion in last year in '24. And it grows at a CAGR of about 10%. We're currently working with Philips, helping them recycle heart monitors the disinfection with a SteraMist allows repacking them so they can be sent to other patients.
It will replace the manual wiping by using an automated serious system, the completion of their project and the continued usage with data collection will assist with us filing our FDA 510(k) submission, which we are extremely excited about, and it's going to open up many avenues and lots of revenue to our growing company. And with that, I would thank you all for listening.
Thank you very much. That does conclude TOMI Environmental Solutions presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.
Financial data from TOMI Environmental Solutions Inc
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 6.93 6.93 |
11%
11%
100%
|
|
| - Direct Costs | 3.26 3.26 |
8%
8%
47%
|
|
| Gross Profit | 3.67 3.67 |
38%
38%
53%
|
|
| - Selling and Administrative Expenses | 5.62 5.62 |
16%
16%
81%
|
|
| - Research and Development Expense | 0.26 0.26 |
10%
10%
4%
|
|
| EBITDA | -2.60 -2.60 |
44%
44%
-38%
|
|
| - Depreciation and Amortization | 0.24 0.24 |
14%
14%
3%
|
|
| EBIT (Operating Income) EBIT | -2.84 -2.84 |
42%
42%
-41%
|
|
| Net Profit | -3.45 -3.45 |
26%
26%
-50%
|
|
In millions USD.
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TOMI Environmental Solutions Inc Stock News
Company Profile
TOMI Environmental Solutions, Inc. provides disinfection and decontamination essentials under the brand name SteraMist. It operates through the following division: Hospital-HealthCare, Life Sciences, TOMI Service Network, and Food Safety. The company was founded by Halden S. Shane on September 18, 1979 and is headquartered in Beverly Hills, CA.
StocksGuide Premium
| Head office | United States |
| CEO | Dr. Shane |
| Employees | 20 |
| Founded | 1979 |
| Website | www.steramist.com |
