TOMI Environmental Solutions, Inc. Reports Third Quarter 2017 Results

BEVERLY HILLS, Calif., Nov. 14, 2017 (GLOBE NEWSWIRE) — TOMI Environmental Solutions, Inc. (“TOMI™”) (OTCQX:TOMZ), a global decontamination company that specializes in disinfection/decontamination sales and services, including SteraMist™, a hydrogen peroxide-based mist/fog registered with the U.S. Environmental Protection Agency (“EPA”) for use as a hospital-healthcare disinfectant, announces its financial results for the third quarter of 2017.

Dr. Halden Shane, TOMI’s Chief Executive Officer, stated: “Consistent with our expectations we continue to see improved trends going forward into 2018. This is driven by our focus on both customer satisfaction and client retention. We continue to attract new clients with revamped marketing, new corporate infrastructure, new sales and new service innovation. During the third quarter our revenue was essentially flat over same quarter of 2016. In addition, our efforts to streamline the business and more effectively manage our costs structure resulted in an operating loss improvement of $539,000 from the third quarter of 2016. TOMI is still waiting for all the efforts put into the regulatory approvals in the Asian markets to reach materiality.”

Dr. Shane continued, “Our strategy remains to take advantage of the positive business momentum and strong sales pipeline emerging in 2018. Our operational results are not reflective of the true momentum of our business.  We anticipate improving our financial results going into next year by focusing on exceeding customer expectations while attracting new clients to our technology by using our marketing, sales and innovative capabilities.” 

Financial Results for the Three Months Ended September 30, 2017 Compared to 2016

  • Net revenue was $1,030,000, compared to $1,092,000.
  • Gross margins were 62.0%, compared to 60.5%.
  • Loss from operations was $396,000, compared to $935,000.
  • Net loss was 457,000, or $0.00 on a per share basis compared to a net loss of $935,000 or $0.01 on a per share basis.
  • At September 30, 2017, cash and cash equivalents were $5,270,000 and working capital was $4,721,000, compared to $948,000 and $5,716,000, respectively, at December 31, 2016.

Third Quarter: Recent & Current Business Highlights

  • Settlement of suit initiated against Astro Pak Corporation to protect intellectual property rights resulted in the assignment of the iHP trademark and a favorable cash settlement on July 26, 2017.
  • The custom build-in system that was designed and installed into a vivarium facility was featured in the August 2017 publication of ALNmag.  
  • Expansion of EPA label to include efficacy against Salmonella and Norovirus was secured on July 27, 2017.
  • Continued expansion of sales force in Life Science Division with addition of an internal sales manager, manufacturing representatives and comprehensive on-boarding and training offered for deeper penetration in this market with current and viable sales leads provided.
  • Further support of TOMI Divisions was evidenced by attendance and presence at industry leading conferences, AALAS, APIC Divisions, AHE, ISSA, ABRA, and ABSA which generated hundreds of leads for future sales.
  • Recently received registration in Canada which allows back-log of sales leads and requests for service to be fulfilled, and create new opportunities for growth with potential service providers.
  • TOMI Service Network(TSN) has been provided significant increase in corporate support and marketing / sales / advertising efforts to encourage recruitment of new providers and develop business leads.
  • Significant spike in recent months of requests for proposals for both build-in systems and service opportunities.
  • Recently accepted into leading GPO’s supplier list (Premier) comprised of thousands of hospitals nationwide. Additional research to submit to more GPOs underway and remains a focus now and into the future.
  • Design patent for Taiwan and China was accepted/approved/awarded for decontamination cart and rigid decontamination chamber, and the USPTO accepted applications for the rigid and flexible decontamination chambers, both of which were used for TOMI’s USAid Ebola grant.
  • Recently hired a consulting firm to further efforts to improve upon GxP requirements in the pharmaceutical and food safety industries which will support another potential revenue stream moving forward.
  • Entered into distribution agreement with Protak Scientific Ltd., a United Kingdom-based company that manufacturers enzyme indicators for hydrogen peroxide for a quick (less than 90 second) decontamination performance validation.  Pursuant to the agreement, TOMI  will distribute Protak’s enzyme indicators as well as use the product in our service engagements.
  • Continued expansion into Europe through execution of a sales and distribution agreement with Westbury Decontamination Ltd., a United Kingdom-based service and distribution company.

About TOMI Environmental Solutions, Inc.
TOMI Environmental Solutions, Inc. (OTCQX:TOMZ) is a global decontamination and infection prevention company, providing environmental solutions for indoor surface disinfection through manufacturing, sales and licensing of its premier Binary Ionization Technology® (BIT™) platform, which was invented under a defense grant in association with the Defense Advanced Research Projects Agency (DARPA) of the U.S. Department of Defense. BIT™ uses a low percentage Hydrogen Peroxide as its only active ingredient to produce a hydroxyl radical (OH ion), represented by the TOMI™ SteraMist™ brand of products, which produces a germ-killing aerosol that works like a visual non-caustic gas.

TOMI’s 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 (when not in operation), military barracks, police and fire departments, and athletic facilities. TOMI’s products and services have also been used in single-family homes and multi-unit residences.

TOMI also develops training programs and application protocols for its clients and is a member in good standing of 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 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:      
  September 30, 2017 (Unaudited) December 31, 2016
Cash and Cash Equivalents $   5,270,313     $   948,324  
Accounts Receivable – net   1,603,481       1,521,378  
Inventories (Note 3)   4,420,448       4,047,310  
Deposits on Merchandise (Note 10)     –        147,010  
Prepaid Expenses   278,701       104,448  
Total Current Assets   11,572,942       6,768,469  
       
Property and Equipment – net (Note 4)   653,656       611,807  
       
Other Assets:      
Intangible Assets – net (Note 5)     1,640,909       1,918,040  
Security Deposits     4,700       4,700  
Total Other Assets   1,645,609       1,922,740  
Total Assets $   13,872,207     $   9,303,016  
       
  LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Current Liabilities:      
  Accounts Payable $   1,349,648     $   735,879  
  Accrued Expenses and Other Current Liabilities (Note 11)     227,058         278,413  
  Accrued Interest (Note 6)     20,000         –   
  Customer Deposits     7,487         30,120  
  Deferred Rent   2,721       8,541  
  Convertible Notes Payable, net of discount of $54,730
   at September 30, 2017 (Note 6)   5,245,270         –   
  Total Current Liabilities   6,852,185       1,052,953  
       
  Convertible Notes Payable, net of discount of $4,592     695,408         –   
   at September 30, 2017 (Note 6)
Total Long-term Liabilities     695,408         –   
Total Liabilities   7,547,593       1,052,953  
       
 Commitments and Contingencies          
       
 Shareholders’ Equity:      
Cumulative Convertible Series A Preferred Stock;
 par value $0.01, 1,000,000 shares authorized; 510,000 shares issued
 and outstanding at September 30, 2017 and December 31, 2016   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 September 30, 2017 and December 31, 2016          
  Common stock; par value $0.01, 200,000,000 shares authorized;
   122,049,958 and 120,825,134 shares issued and outstanding
   at September 30, 2017 and December 31, 2016, respectively.   1,220,499       1,208,251  
  Additional Paid-In Capital   41,726,260       41,367,946  
  Accumulated Deficit     (36,627,244 )       (34,331,234 )
  Total Shareholders’ Equity     6,324,615         8,250,063  
Total Liabilities and Shareholders’ Equity $   13,872,207     $   9,303,016  
       

TOMI ENVIRONMENTAL SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
                   
    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
      2017       2016       2017       2016    
                   
  Sales, net $   1,030,095     $   1,092,332     $   3,508,748     $   4,527,840    
  Cost of Sales     389,170         431,621         1,318,021         1,886,193    
  Gross Profit     640,925         660,711         2,190,727         2,641,647    
                   
Operating Expenses:                
  Professional Fees      72,197         101,428         738,918         374,609    
  Depreciation and Amortization      145,760         148,347         453,834         427,377    
  Selling Expenses      319,807         283,515         870,287         1,153,178    
  Research and Development      79,747         92,847         128,512         120,345    
  Equity Compensation Expense (Note 7)     (20,597 )       85,322         223,300         542,291    
  Consulting Fees     63,293         49,734         180,405         280,795    
  General and Administrative     696,028         834,872         2,078,252         2,506,456    
  Other     (319,388 )       –         (319,388 )       –    
Total Operating Expenses     1,036,848         1,596,064         4,354,121         5,405,051    
Loss from Operations     (395,923 )       (935,353 )       (2,163,394 )       (2,763,404 )  
                   
Other Income (Expense):                
  Amortization of Debt Discounts     (1,688 )       –          (2,582 )       –     
  Gain on Disposition of Property and Equipment     –          –          –          12,000    
  Grant     –          –          –          202,451    
Interest Income     585         –          1,221         –     
  Interest Expense     (60,000 )       –          (131,256 )       –     
Total Other Income (Expense)     (61,103 )       –          (132,617 )       214,451    
                   
Net Loss $   (457,025 )   $   (935,353 )   $   (2,296,010 )   $   (2,548,953 )  
                   
Loss Per Common Share                
  Basic and Diluted $ (0.00 )   $ (0.01 )   $ (0.02 )   $ (0.02 )  
                   
                   
Basic and Diluted Weighted Average Common Shares Outstanding    121,567,328       120,763,449       121,144,339       120,467,106    
                   
       


MEDIA RELATIONS CONTACT

Juliana deRosa
Executive Administrator
jderosa@tomimist.com