Blueprint
TOMI ENVIRONMENTAL SOLUTIONS, INC.
REPORTS SECOND QUARTER FINANCIAL RESULTS
BEVERLY HILLS, CA, AUGUST 26, 2019 (BUSINESS WIRE) —
TOMI
Environmental Solutions, Inc.®
(“TOMI”)
(OTCQB:TOMZ), a global company specializing in disinfection and
decontamination utilizing its premier Binary Ionization
Technology®
(BIT™)
platform through the manufacturing, licensing, servicing, and
selling of its SteraMist®
brand of
products - a hydrogen peroxide-based mist and fog, announced its
results for the second quarter of 2019.
TOMI™
Chief
Executive Officer, Dr. Halden Shane stated,
“In the second quarter,
we saw substantial growth in our revenue and improved financial
results resulting from a greater customer base and the adoption of
the SteraMist technology in the marketplace.”
Financial Results for the Three Months Ended June 30, 2019 compared
to 2018
●
Total net revenue was $1,639,000 compared to $1,246,000,
representing an increase of $393,000, or 32%. The increase in sales
in the current year period was attributable to larger equipment
orders from new customers, and steady repeat solution orders from
our existing customer base.
●
Gross margins were 59.5% compared to 55.2%. The increase in gross
profit is attributable to the customer and product mix in
sales.
●
Loss from operations was $535,000 compared to $866,000,
representing a decrease of $331,000, or 38%. The primary reason for
the decreased loss is attributable to the increased revenue, higher
gross profit and lower operating expenses in the current year
period.
●
Net loss was $585,000, or $0.00 on a per share basis, compared to a
net loss of $986,000, or $0.01 on a per share basis, representing a
decrease of $401,000, or 41%.
●
As of June 30, 2019, we had cash and cash equivalents of
approximately $1,632,000. Our working capital before consideration
of the convertible notes payable in April 2020 of $5,000,000 was
$4,225,000.
Current Business Highlights To Date
●
32% growth in revenue for the three months ended June 30, 2019
compared to the same prior year period.
●
13% growth in revenue for the six months ended June 30, 2019
compared to the same prior year period.
●
16% growth in solution revenue on a year to date
basis.
●
4% growth in service revenue on a year to date basis.
●
Cash flow positive for the second quarter of 2019.
●
Brought on nineteen (19) new customers across all our divisions in
Q2 2019. This represents a twenty-seven (27%) percent increase over
the same quarter in 2018.
●
Expansion of customer list to date in 2019 to date with the
addition of thirty-five (35) new customers bringing our list of
users on a worldwide basis to over approximately three hundred and
fifty (350).
●
Added Six (6) high profile universities research facilities in the
U.S. and Canada, bolstering an already robust profile of research
institutions.
●
Added five (5) new facilities in its hospital-healthcare division
in Quarter 2 of 2019. These new facilities had a combined purchase
of eleven (11) units, including our first E-Z SteraMist®
Disinfection Cart sale to a hospital in Perrysburg,
Ohio.
●
The hospital-healthcare division showed a 974% increase in revenue
in second quarter of 2019 when compared to the same quarter last
year, and a 74% increase in revenue for the six months ended June
30, 2019 when compared to the same period in the prior
year.
●
TSN division achieved a 79% increase in growth in second quarter
revenue from 2018 to 2019. The majority of the revenue increase in
this division was comprised of increased equipment and BIT Solution
sales to existing customers.
●
In May 2019, we received our largest order to date for mobile
equipment of over $400,000 for the Kansas Department of Health in
the United States.
●
Announced the implementation of SteraMist® iHP™ Plasma
Decontamination Chamber at the University of Houston and a
partnership with Lynx Product Group. TOMI currently has additional
proposals in review with other universities in the United States,
with the likelihood of two to close by the end of the
year.
●
TOMI has received a notice of allowance to two utility patents. We
had previously reported in 2017 and 2018 the filing of these two
utility patents, and last month received notice that both the
system claims (US15/858,446) and the method claims (US16/127,915)
will be published in the upcoming weeks with the USPTO. The
application for the latter of the two has already been designated a
patent number of 10,391,188 and an issue date of August 27, 2019.
TOMI has submitted these to national stage for protection
internationally and continues to file additional patents, both
utility and design worldwide.
●
TOMI has been actively pursuing registration in mainland China. We
successfully passed the Chinese CDC requirements for registration
and have hired a CDC consultant. In addition, we have strengthened
our intellectual property in the region, submitting trademarks and
patent registrations. We have identified a Chinese customer that we
expect will generate revenue upon receipt of the Chinese CDC
registration in 2019. TOMI successfully passed all eighteen (18)
testing measures required and currently, we are finalizing the
necessary custom declaration forms required for shipment of our
products to the region.
●
Won bid with a niche pharmaceutical company that develops,
manufactures and markets generic and branded prescription
pharmaceuticals as well as animal and consumer health products with
a focus on injectables. The iHP Service team treated the 170,000
cubic foot space, classified and non-classified areas, validating
with chemical and biological indicators in over 300 areas. The
service was a success with all 300 biological indicators passing a
six-log kill, and the company plans for this to be a routine iHP
Service decontamination. Further, this facility is in discussion
over several custom iHP applications for their
facility.
●
Exhibited at the Association of Professionals in Infection Control
(APIC) Annual Conference with its new booth creating the largest
presence TOMI has had at a tradeshow. The E-Z SteraMist Cart was on
display as well as multiple educational presentations to Infection
Preventionists. The show provided many valuable leads and our new
exhibit received considerable praise.
●
In April 2019, after receiving our registration in Israel, TOMI
entered into a distribution agreement with an Israeli company,
CleanCor Technologies Ltd., an advanced solution company for the
industrial cleaning and repair of water and fire damages. CleanCor
has already made immense marketing strategies and has a firm
pipeline in the HealthCare, Food industry, Defense, and Medical
Cannabis verticals. CleanCor’s new division that is using our
BIT technology is registered as CleanBIT and has designed new
mobile vans to commercially deliver our products to the end
user.
●
Continued participation in a large study, a “SHIELD
study”, that compares hospital manual cleans to a
SteraMist® mechanical clean. Preliminary results collected by
the current hospitals in the study is showing a significant
decrease in the transference of pathogens resulting in HAIs and C.
difficile infections in the rooms that used SteraMist® for
their terminal clean, as compared to the rooms that have been
manually cleaned. University of Michigan, a recognized teaching
university hospital, will be joining the California hospitals in
this Shield Study in September 2019, allowing for additional
collection of data to validate the value of SteraMist technology in
hospitals. Future results will be released as obtained from the
study’s lead investigators, which we believe will expand our
presence in the hospital healthcare market.
●
Addition of three new products to our growing line of products; the
first is our single applicator build-in unit for decontamination
chambers and cage washers, which was recently successfully
validated at the University of Houston. The second new product is a
decontamination cart for a Pfizer facility. The third is our
stainless-steel mobile 90-degree applicator and the answer to the
mobile treatment and decontamination of BSC cabinets and
isolators.
●
The 90-degree applicator product has led to a partnership with a
large design and manufacturing company of washing and contamination
control systems. One of our products has allowed TOMI to innovate
an all-in-one efficient and quick decontamination solution for
Gnotobiotic Housings.
●
In July 2019, the author presented, and a poster was shown at the
International Association of Food Protection (IAFP). This was a
successful introduction of SteraMist to this audience and many are
interested in further testing and research of the technology. The
poster and presentation focused on the urgent need of a
decontamination technology, such as SteraMist to enhance microbial
safety of fresh produce. Greater reductions of Salmonella were
documented when aerosolized hydrogen peroxide was passed through
the plasma arc. TOMI is looking forward to the publication of this
paper this year in a recognized international food safety
journal.
●
TOMI is in the beginning phases of designing, engineering, and
going into production with its partner Arkema and their client a
Global food storage and safety company of a newly designed concept
for treating large industrial food warehouse facilities. The
concept is a six (6) applicator fully automated fogging system
permanently mounted on a hydraulic lift that is capable of coverage
in such high-volume spaces.
●
We continue to conduct such studies with partners and third
parties. TOMI is pursuing studies on resistant TB and C. auris a
deadly Japanese fungus plaguing our healthcare system worldwide. We
currently are registered by the EPA for treatment of rooms infected
with C. auris because of our EPA status on list K and C. diff claim
but many international countries want a specific claim for C.
auris. For our TSN division we are researching mycotoxins the
potential allergen left after treating residential and commercials
building for mold. And for Food safety, we are pursuing the
approval for direct food use. We are registering a lower percentage
hydrogen peroxide product for direct food spray use and continuing
our testing in the cannabis industry to control many of the
pathogens affecting their industry which is quickly becoming a
global industry with plaguing mold issues.
●
Our 90-degree surface mounted applicator device was allowed and
published in the Philippines. We have submitted this design patent
in multiple countries and expect the others to follow shortly in
publication. This additional design patent adds nicely to our other
design patents, including our permanent modular applicator,
decontamination cart, and our two decontamination
chambers.
TOMI™ Environmental
Solutions, Inc.: Innovating for a safer world®
TOMI™ Environmental
Solutions, Inc. (OTCQB: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 referred to as 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, American Seed Trade
Association and The Restoration Industry
Association.
For additional information, please visit http://www.tomimist.com/ or
contact us at info@tomimist.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
Certain written and oral statements made by us may constitute
“forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995 (the “Reform
Act”). Forward-looking statements are identified by such
words and phrases as “we expect,” “expected
to,” “estimates,” “estimated,”
“current outlook,” “we look forward to,”
“would equate to,” “projects,”
“projections,” “projected to be,”
“anticipates,” “anticipated,” “we
believe,” “could be,” and other similar phrases.
All statements addressing operating performance, events, or
developments that we expect or anticipate will occur in the future,
including statements relating to revenue growth, earnings,
earnings-per-share growth, or similar projections, are
forward-looking statements within the meaning of the Reform Act.
They are forward-looking, and they 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 document is based upon the facts and circumstances
known at this time. We undertake no obligation to update these
forward-looking statements after the date of this
release
TOMI ENVIRONMENTAL SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
|
ASSETS
|
|
|
|
Current
Assets:
|
June
30,
2019
(Unaudited)
|
|
|
Cash and Cash
Equivalents
|
$1,631,762
|
$2,004,938
|
|
Accounts Receivable
– net
|
1,336,807
|
2,145,622
|
|
Inventories
|
2,502,434
|
2,682,014
|
|
Deposits
|
95,810
|
109,441
|
|
Prepaid
Expenses
|
224,789
|
301,797
|
|
Total
Current Assets
|
5,791,602
|
7,243,812
|
|
|
|
|
|
Property and
Equipment – net
|
1,525,115
|
1,588,591
|
|
|
|
|
|
Other
Assets:
|
|
|
|
Intangible Assets
– net
|
1,051,062
|
1,235,816
|
|
Operating Lease -
Right of Use Asset
|
693,564
|
-
|
|
Capitalized
Software Development Costs
|
125,704
|
-
|
|
Other
Assets
|
118,759
|
11,395
|
|
Total
Other Assets
|
1,989,089
|
1,247,211
|
|
Total
Assets
|
$9,305,806
|
$10,079,614
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$1,009,854
|
$1,133,649
|
|
Accrued
Expenses and Other Current Liabilities
|
398,739
|
415,199
|
|
Accrued
Officers Compensation
|
30,167
|
70,000
|
|
Accrued
Interest
|
66,667
|
66,667
|
|
Customer
Deposits
|
-
|
1,486
|
|
Current
Portion of Long-Term Operating Lease
|
61,006
|
-
|
|
Deferred
Rent
|
-
|
13,215
|
Convertible Notes Payable, net of discount of $0
|
|
|
at
June 30, 2019
|
5,000,000
|
-
|
|
Total
Current Liabilities
|
6,566,433
|
1,700,216
|
|
|
|
|
|
Long-Term
Liabilities:
|
|
|
|
Long-Term
Operating Lease, Net of Current Portion
|
1,071,333
|
-
|
|
Deferred
Rent and Tenant Improvement Allowances
|
-
|
401,734
|
Convertible Notes Payable, net of discount of $17,534
at
|
|
|
December
31, 2018
|
-
|
4,982,466
|
|
Total
Long-Term Liabilities
|
1,071,333
|
5,384,200
|
|
Total
Liabilities
|
7,637,766
|
7,084,416
|
|
|
|
|
|
Commitments
and Contingencies
|
-
|
-
|
|
|
|
|
|
Shareholders’
Equity:
|
|
|
|
Cumulative
Convertible Series A Preferred Stock;
|
|
|
|
par
value $0.01 per share, 1,000,000 shares authorized; 510,000 shares
issued
and
outstanding at June 30, 2019 and December 31, 2018
|
5,100
|
5,100
|
Cumulative
Convertible Series B Preferred Stock; $1,000 stated
value;
|
|
|
7.5%
Cumulative dividend; 4,000 shares authorized; none
issued
and
outstanding at June 30, 2019 and December 31, 2018
|
-
|
-
|
|
Common
stock; par value $0.01 per share, 200,000,000 shares
authorized;
124,700,418
and 124,290,418 shares issued and outstanding
at
June 30, 2019 and December 31, 2018, respectively.
|
1,247,004
|
1,242,904
|
|
Additional
Paid-In Capital
|
43,136,683
|
42,948,705
|
|
Accumulated
Deficit
|
(42,720,747)
|
(41,201,511)
|
|
Total
Shareholders’ Equity
|
1,668,040
|
2,995,198
|
|
Total Liabilities
and Shareholders’ Equity
|
$9,305,806
|
$10,079,614
|
TOMI ENVIRONMENTAL SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
|
|
For The Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales,
net
|
$1,638,674
|
$1,246,472
|
$2,891,332
|
$2,558,938
|
|
Cost
of Sales
|
663,362
|
557,810
|
1,156,672
|
1,049,469
|
|
Gross
Profit
|
975,312
|
688,662
|
1,734,660
|
1,509,469
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
Professional
Fees
|
108,923
|
85,714
|
214,404
|
192,172
|
|
Depreciation
and Amortization
|
179,535
|
152,468
|
356,380
|
315,206
|
|
Selling
Expenses
|
518,546
|
431,655
|
960,216
|
635,660
|
|
Research
and Development
|
68,659
|
109,823
|
161,236
|
242,310
|
|
Equity
Compensation Expense
|
6,116
|
-
|
87,033
|
12,685
|
|
Consulting
Fees
|
20,261
|
38,352
|
55,267
|
73,378
|
|
General
and Administrative
|
608,605
|
736,919
|
1,303,485
|
1,400,806
|
|
Total Operating
Expenses
|
1,510,645
|
1,554,930
|
3,138,021
|
2,872,217
|
|
Loss from
Operations
|
(535,333)
|
(866,268)
|
(1,403,361)
|
(1,362,749)
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
Amortization
of Debt Discounts
|
-
|
(7,904)
|
(17,534)
|
(15,941)
|
|
Induced
Conversion Costs
|
-
|
(57,201)
|
-
|
(57,201)
|
|
Interest
Income
|
629
|
1,751
|
1,659
|
2,949
|
|
Interest
Expense
|
(50,000)
|
(55,878)
|
(100,000)
|
(115,878)
|
|
Total Other Income
(Expense)
|
(49,371)
|
(119,232)
|
(115,875)
|
(186,071)
|
|
|
|
|
|
|
|
Net
Loss
|
$(584,704)
|
$(985,500)
|
$(1,519,236)
|
$(1,548,820)
|
|
|
|
|
|
|
|
Loss Per Common
Share
|
|
|
|
|
|
Basic
and Diluted
|
$(0.00)
|
$(0.01)
|
$(0.01)
|
$(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted
Weighted Average Common Shares Outstanding
|
124,699,539
|
123,457,386
|
124,679,534
|
122,847,063
|
INVESTOR RELATIONS CONTACT
Harold Paul
hpaul@tomimist.com