TOMI Environmental Solutions(US:TOMZ)2025-08-14 19:12Financial Performance - For the three months ended June 30, 2025, net sales were $1,031,115, a decrease from $3,013,392 in the same period of 2024, representing a decline of approximately 65.8%[18] - Gross profit for the six months ended June 30, 2025, was $1,628,869, down from $2,525,184 in 2024, indicating a decrease of about 35.5%[18] - The net loss for the six months ended June 30, 2025, was $1,493,109, compared to a net loss of $1,279,992 for the same period in 2024, representing an increase in loss of approximately 16.7%[18] - For the six months ended June 30, 2025, the company reported a net loss of approximately $1,493,000, compared to a net loss of $1,280,000 for the same period in 2024, indicating an increase in losses of about 16.67%[81] - For the three months ended June 30, 2025, the net loss attributable to common shareholders was $1,237,516, compared to a net income of $30,198 for the same period in 2024[56] - Net loss for Q2 2025 was $(1,238,000), compared to a net income of $30,000 in Q2 2024, representing a decrease of $1,268,000[167] Revenue Breakdown - Total revenue for the three months ended June 30, 2025, was $1,031,000, a decrease of 65.8% from $3,013,000 in the same period of 2024[62][63] - SteraMist product revenue for the three months ended June 30, 2025, was $653,000, down 76.0% from $2,728,000 in 2024[62] - Service and training revenue increased to $378,000 for the three months ended June 30, 2025, compared to $285,000 in 2024, representing a growth of 32.6%[62] - For the six months ended June 30, 2025, revenue was $2,608,000, down $1,519,000 or 37% from $4,127,000 in the same period of 2024[168] - SteraMist product revenue for Q2 2025 was $653,000, a decrease of $2,075,000 or 76% compared to $2,728,000 in Q2 2024[169] - Service and training revenue increased by $93,000 or 33% in Q2 2025, totaling $378,000 compared to $285,000 in Q2 2024[170] Expenses and Liabilities - Operating expenses for the three months ended June 30, 2025, totaled $1,809,813, an increase from $1,732,704 in the same period of 2024, indicating a rise of about 4.4%[18] - Total liabilities increased to $5,819,120 as of June 30, 2025, compared to $5,594,799 at the end of 2024, marking an increase of about 4%[14] - Total accrued expenses and other current liabilities increased to $736,480 as of June 30, 2025, from $455,675 as of December 31, 2024, representing a rise of approximately 61.6%[119] - Professional fees for Q2 2025 were $184,000, an increase of approximately $100,000 compared to $84,000 in Q2 2024, due to higher filing and audit fees[176] Cash Flow and Assets - Cash and cash equivalents decreased to $569,450 as of June 30, 2025, from $664,879 at the end of 2024, a decline of approximately 14.3%[14] - Cash flow from operating activities showed a net cash used of $463,302 for the six months ended June 30, 2025, a significant improvement from $1,558,173 in the prior year, reflecting a decrease in cash used of approximately 70.3%[24] - Cash and cash equivalents as of June 30, 2025, were $569,000, down from $665,000 as of December 31, 2024[165] - Cash used in operations decreased to $463,000 for the six months ended June 30, 2025, compared to $1,558,000 for the same period in 2024[191] Shareholder Equity and Financing - The total shareholders' equity as of June 30, 2025, was $2,656,830, down from $4,098,939 at the end of 2024, reflecting a decrease of about 35.1%[16] - The company raised $435,000 from the issuance of convertible notes during the six months ended June 30, 2025, compared to $27,500 from the exercise of options in the same period of 2024[24] - The company has convertible notes totaling $2,600,000 issued in October and November 2023, convertible into 2,080,000 shares of common stock at a conversion price of $1.25 per share[99] - As of June 30, 2025, the net amount of convertible notes was $2,781,730, up from $2,360,494 as of December 31, 2024, indicating an increase of about 17.8%[105] Research and Development - Research and development expenses for the three months ended June 30, 2025, were $84,106, compared to $61,614 in the same period of 2024, an increase of approximately 36.3%[18] - Research and development expenses increased by approximately $22,000 or 35% for the three months ended June 30, 2025, while decreasing by approximately $1,000 or 1% for the six months ended June 30, 2025 compared to the same periods in 2024[180][181] Customer Concentration and Contracts - One customer accounted for 10% of net revenue for the three months ended June 30, 2025, while two customers accounted for 54% of net revenue for the same period in 2024, indicating a shift in customer concentration[125] - The company announced a significant contract valued at approximately $450,000 for a SteraMist iHP Custom Engineered System at a leading university in Rhode Island[144] - The deployment of SteraMist iHP technology at the NASA Johnson Space Center marks the company's expansion into the aerospace sector[145] - Open opportunities for the SteraMist Integrated System total approximately $15 million, with $7 million designated as high-priority[152] Tax Credits and Other Income - The company recorded refunds from Employee Retention Credits during the six months ended June 30, 2025, recognized as Other Income, indicating a non-recurring benefit[129] - For the six months ended June 30, 2025, the company recorded $534,912 in employee retention credits and $81,887 in related interest[130] - Other income was approximately $535,000 for the six months ended June 30, 2025, attributed to employee retention tax credits received in the current year period[186] Accounting Policies - The company recognizes revenue in accordance with ASC Topic 606, reflecting the consideration expected in exchange for goods or services[206] - Product revenue includes sales from standard and customized equipment, recognized upon transfer of control to customers[209] - Service revenue encompasses high-level decontamination, equipment validation, and customer training, recognized as services are rendered[210] - Estimated allowances for sales returns are recorded as sales are recognized, using historical average calculations[211] - Costs to obtain a contract with a customer are generally expensed as incurred, particularly sales commissions with an amortization period of one year or less[212]