TOMI Environmental Solutions, Inc.® (“TOMI”) (NASDAQ: TOMZ), a
global company specializing in disinfection and decontamination
utilizing its premier Binary Ionization Technology (BIT) platform
through its SteraMist brand of products, today announced its
financial results for the third quarter of 2023.
TOMI Chief Executive Officer, Dr. Halden Shane, stated, “During
the third quarter of 2023, we continued to expand our sales
channels and business development initiatives, collaborate with key
customers, and diversify our product line to support our expanding
customer base and increasing utilization of our SteraMist
technology. While we saw a quarter over quarter decline in revenue,
our revenue has grown over 5% for the nine months ended September
30, 2023, when compared to the prior year period.
“Subsequent to the close of the third quarter of
2023, we agreed to sell and issue convertible notes in a private
placement in one or more closings up to an aggregate principal
amount of $5,000,000. As of November 7, 2023, we sold and
issued an aggregate of $2,600,000 to a group of institutional and
accredited investors, most of whom are new investors in the
company’s securities. The Notes contain no restrictive
covenents or restrictions that may impose burdens or limitation on
our operations. We intend to use the net proceeds from this
offering for working capital, expansion of our existing Frederick
facility and other general corporate purposes, including
expanding our sales channels through the addition of distributors,
outside sale representatives, internal sales staff, and external
consultants.
“We continue to focus on expanding our sales channels and have
made good progress this year in expanding our sales infrastructure
both internally and through external partnerships, which positions
us well as we close the current year and head into 2024.
We’ll continue to look to further build out our sales team and
expand business development initiatives. We anticipate improved
financial results in the fourth quarter and in 2024.”
Financial Results for the Three Months Ended September
30, 2023 compared to September 30, 2022
- Total net revenue was $1,470,000 compared to $1,760,000.
- Gross margin was 55% compared to 61%. The decrease in gross
profit was attributable to product mix in sales.
- Operating loss was ($901,000) compared to
($654,000).
- Net loss was ($901,000) or ($0.05) per basic and diluted share,
compared to ($653,000) or ($0.03) per basic and diluted share.
- Adjusted EBITDA was a loss of ($807,000) compared to
($571,000). A table reconciling EBITDA to the appropriate GAAP
financial measure is included with the Company’s financial
information below.
Financial Results for the Nine Months Ended September
30, 2023 compared to September 30, 2022
- Total net revenue was $5,827,000 compared to $5,527,000.
- Gross margin was 59% compared to 62%. The decrease in gross
profit was attributable to product mix in sales.
- Operating loss was ($2,178,000) compared to ($2,176,000).
- Net loss was ($2,177,000) or ($0.11) per basic and diluted
share, compared to ($2,175,000) or ($0.11) per basic and diluted
share.
- Adjusted EBITDA was a loss of ($1,746,000) compared to
($1,631,000). A table reconciling EBITDA to the appropriate GAAP
financial measure is included with the Company’s financial
information below.
Balance sheet highlights as of September 30,
2023
- Cash and cash equivalents were approximately $1.4 million.
- Working capital was $6.9 million.
- Shareholders’ equity was $9.5 million.
Recent Business Highlights:
- Revenue for the nine months ended September 2023 was
$5,827,000, which represents over 5% growth when compared to the
prior year period.
- SteraMist iHP Service revenue grew 59% quarter over quarter for
the three months ended September 30, 2023, compared to the same
prior year period.
- Subsequent to the close of the third quarter of 2023, we issued
a convertible note with an aggregate principal amount of $2,600,000
which will be used for working capital and other general corporate
purposes.
- Delivered three (3) applicator CES systems to Ragon Institute
of MGH, MIT and Harvard for implementation in their research and
clinical lab located in Cambridge, MA.
- Continued collaboration with Cellares to integrate SteraMist
ionized Hydrogen Peroxide (iHP) technology into a revolutionary new
cell therapy manufacturing solution, the Cell Shuttle, designed and
produced by Cellares.
- Pfizer Rocky Mount engaged TOMI’s iHP service team to conduct
emergency decontamination within their facility, which suffered
substantial damage due to a tornado. TOMI continues to perform
decontamination service twice a year at the Pfizer Rocky Mount
facility.
- Partnered with Colcom, Inc. to offer SteraMist iHP products as
part of Colcom’s life sciences and healthcare portfolio of
products. Colcom, Inc. is a trusted supplier of high-quality
clinical and laboratory equipment with an established customer base
and extensive expertise in the decontamination industry.
- Entered into an agreement with Patty Olinger, the Founder of
BEAMS, LLC who specializes in Public Health Preparedness. Patty is
also a Director of Frontline Foundation dedicated to protecting
American citizens from bioterror threats. In the past she was
Assistant Vice President of the Office of Research Administration,
and Executive Director of Environmental Health and Safety Office of
Emory University Hospital System and most recently the Executive
Director of Global Biorisk Advisory Council, a division of ISSA.
Patty will assist in strengthening and expanding the TOMI SteraMist
Network and increasing business development in the commercial
market. Patty Olinger brings over 20 years’ experience establishing
executive strategic vision and direction of large institutions and
companies spanning multiple industries, including higher education,
not-for-profit, healthcare, consultancy, hospitality, and
pharmaceutical sectors.
- Entered into a sales representative agreement with Universal
Disinfection to better facilitate growth in the European region in
the commercial, aviation, and life science markets.
- Entered into a business development consulting agreement with
DAR, Inc., a company specializing in food safety and food
processing spaces, to expand TOMI’s sales channels and customer
bases in the food safety markets.
- Introduced two new products, the SteraMist Hybrid and SteraMist
Transport, to support superior disinfection decontamination
solutions for our growing customer base.
- Completed a study funded by the United States Department of
Agriculture (USDA) and the National Institute of Food and
Agriculture (NIFA) which demonstrated SteraMist iHP as an effective
treatment of deformed wing virus (DWV) contaminated hive
substrates.
- Attended and presented our SteraMist brand of products at the
following tradeshows: The Experience Convention and Tradeshow,
National Cancer Institute/Frederick Lab – Tech Showcase, NCAB AALAS
Seminar, OR Manager, EMS World and Vizient Connections Summit.
Conference Call Information
TOMI will hold a conference call to discuss Third Quarter 2023
results at 4:30 p.m. ET today, November 14, 2023.
To participate in the call by phone, dial (877) 545-0523
approximately five minutes prior to the scheduled start time and
reference the participant access code 618115 or request the "TOMI
Environmental Solutions third quarter earnings call." International
callers please dial (973) 528-0016. To access the live webcast or
view the press release, please visit the Investor Relations section
of the TOMI website or register at the following link:
https://www.webcaster4.com/Webcast/Page/2262/49445.
A replay of the teleconference will be available until Tuesday,
November 28, 2023, and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
replay access code: 49445. A replay of the webcast will be
available for at least 90 days on the company’s website, starting
approximately one hour after the completion of the call.
TOMI™ Environmental Solutions, Inc.: Innovating for
a safer world®TOMI™ Environmental Solutions, Inc.
(NASDAQ:TOMZ) is a global decontamination and infection prevention
company, providing environmental solutions for indoor surface
disinfection through the manufacturing, sales and licensing of its
premier Binary Ionization Technology® (BIT™) platform.
Invented under a defense grant in association with the Defense
Advanced Research Projects Agency (DARPA) of the U.S. Department of
Defense, BIT™ solution utilizes a low percentage Hydrogen
Peroxide as its only active ingredient to produce a fog of ionized
Hydrogen Peroxide (iHP™). Represented by the SteraMist® brand
of products, iHP™ produces a germ-killing aerosol that works
like a visual non-caustic gas. TOMI products are designed to
service a broad spectrum of commercial structures, including, but
not limited to, hospitals and medical facilities, cruise ships,
office buildings, hotel and motel rooms, schools, restaurants, meat
and produce processing facilities, military barracks, police and
fire departments, and athletic facilities. TOMI products
and services have also been used in single-family homes and
multi-unit residences.
TOMI develops training programs and application protocols
for its clients and is a member in good standing with The American
Biological Safety Association, The American Association of Tissue
Banks, Association for Professionals in Infection Control and
Epidemiology, Society for Healthcare Epidemiology of America,
America Seed Trade Association, and The Restoration Industry
Association.
For additional information, please
visit http://www.tomimist.com/ or contact us
at info@tomimist.com.
Forward-Looking Statements
This press release contain forward-looking statements that are
based on current expectations, estimates, forecasts and projections
of future performance based on management’s judgment, beliefs,
current trends, and anticipated product performance. These
forward-looking statements include, without limitation, expected
sales pipeline; financial performance and operating results for
2023; upcoming launch of new products; expected growth in sales and
market demand; revenue opportunities of CES products and brand
recognition of our products. Forward-looking statements involve
risks and uncertainties that may cause actual results to differ
materially from those contained in the forward-looking statements.
These factors include, but are not limited to, the impact of
COVID-19 pandemic on our business and customers; our ability to
maintain and manage growth and generate sales, our reliance on a
single or a few products for a majority of revenues; the general
business and economic conditions; and other risks as described in
our SEC filings, including our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 filed by us with the SEC and
other periodic reports we filed with the SEC. The information
provided in this document is based upon the facts and circumstances
known at this time. Other unknown or unpredictable factors or
underlying assumptions subsequently proving to be incorrect could
cause actual results to differ materially from those in the
forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity,
performance, or achievements. You should not place undue reliance
on these forward-looking statements. All information provided in
this press release is as of today’s date, unless otherwise stated,
and we undertake no duty to update such information, except as
required under applicable law.
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
presented on a basis consistent with U.S. GAAP, we disclose certain
non-GAAP financial measures for our historical performance,
including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. We
define EBITDA as net income (loss), adjusted to exclude: interest,
taxes, depreciation and amortization (EBITDA) is a non-GAAP
financial measure and is intended to serve as a supplement to our
results provided in accordance with GAAP. We define Adjusted EBITDA
as net income (loss), adjusted to exclude: interest, taxes,
depreciation and amortization; stock-based compensation expense. We
define Adjusted EBITDA margin as Adjusted EBITDA divided by net
revenue. We believe that these historical non-GAAP financial
measures provide useful information to both management and
investors by excluding certain items and expenses that are not
indicative of our core operating results or do not reflect our
normal business operations. In addition, our management uses
non-GAAP measures to evaluate our performance internally and to
benchmark our performance externally against competitors. Our use
of non-GAAP financial measures has certain limitations in that such
non-GAAP financial measures may not be directly comparable to those
reported by other companies. Although we believe that the use of
non-GAAP financial measures enhances its investors’ understanding
of its business and performance, our use of non-GAAP financial
measures should not be considered an alternative to GAAP basis
financial measures and should be read in conjunction with the
relevant GAAP financial measures. Other companies may use the same
or similarly named measures, but exclude different items, which may
not provide investors with a comparable view of our performance in
relation to other companies. Because of these limitations, the
non-GAAP financial measure used in this release should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP. We seek to compensate for the
limitation of our non-GAAP presentation by providing a detailed
reconciliation of the non-GAAP financial measures to the most
directly comparable U.S. GAAP as set forth below. Investors are
encouraged to review the related U.S. GAAP financial measures and
the reconciliation of these non-GAAP financial measures to their
most directly comparable U.S. GAAP financial measures.
TOMI ENVIRONMENTAL SOLUTIONS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
ASSETS |
|
|
|
Current
Assets: |
|
|
|
September 30, 2023 (Unaudited) |
December 31, 2022 |
Cash and Cash Equivalents |
$ |
1,410,697 |
|
|
$ |
3,866,733 |
|
Accounts Receivable - net |
|
2,368,043 |
|
|
|
2,772,340 |
|
Other Receivables |
|
164,150 |
|
|
|
164,150 |
|
Inventories |
|
4,481,644 |
|
|
|
4,495,999 |
|
Vendor Deposits |
|
89,860 |
|
|
|
447,052 |
|
Prepaid Expenses |
|
442,303 |
|
|
|
388,359 |
|
Total Current Assets |
|
8,956,697 |
|
|
|
12,134,633 |
|
|
|
|
|
Property and Equipment –
net |
|
1,138,287 |
|
|
|
1,335,331 |
|
|
|
|
|
Other Assets: |
|
|
|
Intangible Assets – net |
|
1,014,416 |
|
|
|
1,025,736 |
|
Operating Lease - Right of Use
Asset |
|
483,884 |
|
|
|
528,996 |
|
Other Assets |
|
596,164 |
|
|
|
475,103 |
|
Total Other Assets |
|
2,094,464 |
|
|
|
2,029,835 |
|
Total Assets |
$ |
12,189,448 |
|
|
$ |
15,499,799 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
Current Liabilities: |
|
|
|
Accounts Payable |
$ |
1,248,936 |
|
|
$ |
1,761,750 |
|
Accrued Expenses and Other Current Liabilities |
|
674,367 |
|
|
|
728,703 |
|
Deferred Revenue |
|
- |
|
|
|
699,732 |
|
Current Portion of Long-Term Operating Lease |
|
112,460 |
|
|
|
100,282 |
|
Total Current Liabilities |
|
2,035,763 |
|
|
|
3,290,467 |
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
Long-Term Operating Lease, Net of Current Portion |
|
672,510 |
|
|
|
761,132 |
|
Total Long-Term Liabilities |
|
672,510 |
|
|
|
761,132 |
|
Total Liabilities |
|
2,708,273 |
|
|
|
4,051,599 |
|
|
|
|
|
Commitments and
Contingencies |
|
- |
|
|
|
- |
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
Cumulative Convertible Series A Preferred Stock; |
|
|
|
par value $0.01 per share, 1,000,000 shares authorized; 63,750
shares issued |
|
|
and outstanding at September 30, 2023 and December 31, 2022 |
|
638 |
|
|
|
638 |
|
Cumulative Convertible Series B Preferred Stock; $1,000 stated
value; |
|
|
7.5% Cumulative dividend; 4,000 shares authorized; none issued |
|
|
and outstanding at September 30, 2023 and December 31, 2022 |
|
- |
|
|
|
- |
|
Common stock; par value $0.01 per share, 250,000,000 shares
authorized; |
|
|
19,823,955 and 19,763,855 shares issued and outstanding |
|
|
|
at September 30, 2023 and December 31, 2022, respectively. |
|
198,240 |
|
|
|
197,640 |
|
Additional Paid-In Capital |
|
57,882,792 |
|
|
|
57,673,559 |
|
Accumulated Deficit |
|
(48,600,495 |
) |
|
|
(46,423,637 |
) |
Total Shareholders’ Equity |
|
9,481,175 |
|
|
|
11,448,200 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
12,189,448 |
|
|
$ |
15,499,799 |
|
|
|
|
|
|
TOMI ENVIRONMENTAL SOLUTIONS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
For The Three Months Ended |
|
For The Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Sales, net |
|
$ |
1,470,019 |
|
|
$ |
1,759,620 |
|
|
$ |
5,826,890 |
|
|
$ |
5,526,598 |
|
Cost of Sales |
|
|
661,087 |
|
|
|
688,633 |
|
|
|
2,376,442 |
|
|
|
2,113,624 |
|
Gross Profit |
|
|
808,932 |
|
|
|
1,070,987 |
|
|
|
3,450,448 |
|
|
|
3,412,974 |
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
Professional Fees |
|
|
207,673 |
|
|
|
106,411 |
|
|
|
456,518 |
|
|
|
391,737 |
|
Depreciation and Amortization |
|
|
93,929 |
|
|
|
82,619 |
|
|
|
273,265 |
|
|
|
247,662 |
|
Selling Expenses |
|
|
283,054 |
|
|
|
365,054 |
|
|
|
1,160,752 |
|
|
|
1,271,788 |
|
Research and Development |
|
|
76,339 |
|
|
|
118,182 |
|
|
|
220,587 |
|
|
|
254,608 |
|
Consulting Fees |
|
|
44,355 |
|
|
|
43,012 |
|
|
|
188,722 |
|
|
|
145,757 |
|
General and Administrative |
|
|
1,004,618 |
|
|
|
1,009,229 |
|
|
|
3,328,726 |
|
|
|
3,277,485 |
|
Total Operating
Expenses |
|
|
1,709,968 |
|
|
|
1,724,507 |
|
|
|
5,628,570 |
|
|
|
5,589,037 |
|
Loss from
Operations |
|
|
(901,036 |
) |
|
|
(653,520 |
) |
|
|
(2,178,122 |
) |
|
|
(2,176,063 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense): |
|
|
|
|
|
|
|
|
Interest Income |
|
|
256 |
|
|
|
370 |
|
|
|
1,264 |
|
|
|
1,048 |
|
Total Other Income
(Expense) |
|
|
256 |
|
|
|
370 |
|
|
|
1,264 |
|
|
|
1,048 |
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
|
(900,780 |
) |
|
|
(653,150 |
) |
|
|
(2,176,858 |
) |
|
|
(2,175,015 |
) |
Provision for
Income Taxes (Note 16) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net Loss |
|
$ |
(900,780 |
) |
|
$ |
(653,150 |
) |
|
$ |
(2,176,858 |
) |
|
$ |
(2,175,015 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
Per Common Share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.05 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
Diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
Basic Weighted
Average Common Shares Outstanding |
|
|
19,823,955 |
|
|
|
19,758,520 |
|
|
|
19,818,241 |
|
|
|
19,736,666 |
|
Diluted Weighted
Average Common Shares Outstanding |
|
|
19,823,955 |
|
|
|
19,758,520 |
|
|
|
19,818,241 |
|
|
|
19,736,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of net income (loss) to EBITDA
and Adjusted EBITDA:
|
|
|
For The Three Months Ended |
|
For The Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Net income
(loss) |
|
$ |
(900,781 |
) |
|
$ |
(653,150 |
) |
|
$ |
(2,176,859 |
) |
|
$ |
(2,175,015 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest Income |
|
(256 |
) |
|
|
(370 |
) |
|
|
(1,264 |
) |
|
|
(1,048 |
) |
|
Depreciation and Amortization |
|
93,929 |
|
|
|
82,619 |
|
|
|
273,265 |
|
|
|
247,662 |
|
|
Other |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
EBITDA (Loss) |
|
$ |
(807,108 |
) |
|
$ |
(570,901 |
) |
|
$ |
(1,904,858 |
) |
|
$ |
(1,928,401 |
) |
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation
Expense |
|
|
- |
|
|
|
- |
|
|
|
158,833 |
|
|
|
297,766 |
|
|
Other |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Adjusted EBITDA (Loss) |
|
$ |
(807,108 |
) |
|
$ |
(570,901 |
) |
|
$ |
(1,746,025 |
) |
|
$ |
(1,630,635 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
1,470,019 |
|
|
$ |
1,759,620 |
|
|
$ |
5,826,890 |
|
|
$ |
5,526,598 |
|
|
Adjusted EBITDA Margin |
|
|
-55 |
% |
|
|
-32 |
% |
|
|
-30 |
% |
|
|
-30 |
% |
INVESTOR RELATIONS CONTACT:John Nesbett/Roz ChristianIMS
Investor Relationstomi@imsinvestorrelations.com
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TOMI Environmental Solut... (NASDAQ:TOMZ)
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From May 2023 to May 2024