Financial Performance - Net sales for the three months ended June 30, 2023, increased to $2.77 million, a 90.2% increase compared to $1.46 million for the same period in 2022[21]. - Gross profit for the six months ended June 30, 2023, was $2.64 million, up 12.8% from $2.34 million in the same period of 2022[21]. - The net loss for the three months ended June 30, 2023, was $88,591, a significant improvement compared to a net loss of $862,382 for the same period in 2022[21]. - For the six months ended June 30, 2023, the net loss was $1,276,078, an improvement from a net loss of $1,521,865 in the same period of 2022, representing a decrease of approximately 16%[29]. - Revenue for Q2 2023 was $2,775,000, representing a 90% increase or $1,300,000 compared to Q2 2022[126]. - Revenue for the first half of 2023 was $4,357,000, reflecting a 16% growth over the same period in the prior year[127]. - Loss from operations improved by 90% for Q2 2023 compared to the same period last year[128]. Assets and Liabilities - Total assets decreased to $13.35 million as of June 30, 2023, down from $15.50 million at the end of 2022, representing a decline of approximately 13.8%[15]. - Shareholders' equity decreased to $10.38 million as of June 30, 2023, down from $11.45 million at the end of 2022, reflecting a decline of approximately 9.3%[19]. - Cash and cash equivalents decreased to $1.57 million as of June 30, 2023, from $3.87 million at the end of 2022, a decline of about 59.3%[15]. - Total current liabilities decreased to $2.26 million as of June 30, 2023, down from $3.29 million at the end of 2022, a reduction of approximately 31.2%[17]. - Total inventories as of June 30, 2023, were $4,412,786, a slight decrease from $4,495,999 as of December 31, 2022[83]. - Property and equipment, net as of June 30, 2023, was $1,238,241, down from $1,335,331 as of December 31, 2022[85]. Revenue Breakdown - Total revenue for the three months ended June 30, 2023, was $2,775,000, a 90.4% increase from $1,458,000 in the same period of 2022[65]. - SteraMist product revenue for the three months ended June 30, 2023, was $2,272,000, compared to $1,134,000 in 2022, reflecting a 100.9% increase[65]. - Service and training revenue for the three months ended June 30, 2023, was $503,000, up from $324,000 in 2022, representing a 55.4% increase[65]. - Revenue from the United States for the three months ended June 30, 2023, was $2,602,000, compared to $1,206,000 in 2022, marking a 116.5% increase[66]. Expenses - Total operating expenses for the three months ended June 30, 2023, were $1.79 million, slightly up from $1.78 million in the same period of 2022[21]. - Research and development expenses for the three months ended June 30, 2023, were approximately $74,000, down from $99,000 in 2022, a decrease of 25.3%[79]. - Advertising and promotional expenses for the three months ended June 30, 2023, were approximately $142,000, a decrease from $158,000 in 2022, reflecting a 10.1% reduction[78]. - The company reported a depreciation and amortization expense of $179,336 for the six months ended June 30, 2023, compared to $165,043 for the same period in 2022, reflecting an increase of approximately 9%[29]. Cash Flow - Cash flow from operating activities resulted in a net cash used of $2,198,350 for the six months ended June 30, 2023, compared to $450,954 for the same period in 2022, indicating a significant increase in cash outflow[29]. - The ending cash and cash equivalents as of June 30, 2023, were $1,574,088, down from $4,800,408 at the end of June 30, 2022, reflecting a decrease of approximately 67%[31]. - Net cash used in operations for the first half of 2023 was approximately $2,198,000[200]. Market and Product Developments - The company launched its fourth generation SteraMist Environment System, which operates at 24 volts and features eight outputs, enhancing its efficiency and usability[150]. - The SteraMist BIT solution product line now includes five options, ranging from a 32-ounce bottle to a 55-gallon drum, supporting the company's razor/razor-blade business model[151]. - The company has established partnerships with domestic and international distributors to expand its market reach, including a distributor agreement with Avantor, a Fortune 500 company[140][138]. - The company is focusing on long-term projects and validations in the life sciences sector, with expectations for installations to materially impact results in 2023 and 2024[161]. - The company has maintained relationships with large pharmaceutical companies and has treated four BSL-3 research laboratories recently, indicating growth in its iHP service department[161]. Customer and Sales Insights - Three customers accounted for 57% of net revenue for Q2 2023, highlighting customer concentration risk[120]. - The company has received 15 orders for CES systems since the product launch, indicating strong market demand[134]. - The integration of TOMI's technology into the Cell Shuttle enhances decontamination capabilities, aligning with industry needs[132]. - The total recognized revenue and customer sales backlog for the three months ended June 30, 2023, was approximately $3,261,000, consisting of recognized revenue of $2,775,000 and a customer sales backlog of approximately $486,000[145]. Future Outlook - The company anticipates achieving profitability in Q4 2023, supported by strong second-quarter results[178]. - The company expects new product introductions to positively impact net sales, cost of sales, and operating expenses during the fiscal year[152]. - Recent studies demonstrated SteraMist's effectiveness in reducing microbial contamination in cannabis without affecting potency[195]. - The company is actively pursuing additional EPA registrations to enhance its market presence in the food safety sector[193].
TOMI Environmental Solutions(TOMZ) - 2023 Q2 - Quarterly Report