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8-K - CURRENT REPORT - TOMI Environmental Solutions, Inc. | tomz_8k.htm |
EXHIBIT 99.1
TOMI ENVIRONMENTAL SOLUTIONS, INC. REPORTS SECOND QUARTER 2018
FINANCIAL RESULTS
BEVERLY HILLS, CA, AUGUST 30, 2018 (BUSINESS
WIRE)—TOMI Environmental
Solutions, Inc. (“TOMI”) (OTCQX:TOMZ), a global
provider of infection prevention and decontamination products,
services and research, including SteraMist™,
a hydrogen peroxide-based mist and fog,
announced its results
for the second quarter of 2018.
TOMI™
Chief Executive Officer, Dr. Halden Shane stated “The
SteraMist™
brand, product line, and customer portfolio continues to grow in
2018. We’ve made great strides this year building brand
awareness, adding customers, executing on our R&D strategies,
expanding our sales force and further developing our internal
infrastructure. Through the first six months of the year, we have
allocated a significant amount of our resources into future
projects and innovation of our line of products to better serve our
clients and to further differentiate ourselves from our
competitors.”
Financial Results for the Three Months Ended June 30, 2018 compared
to 2017
●
Net revenue in the first quarter of 2018 was
$1,246,000, compared to $1,380,000 in the first quarter of 2017,
representing a decrease of $134,000 or 10%. The decrease in revenue relates to
product mix in sales as there was an increase in recurring solution
orders in the second quarter of 2018 and less of a concentration in
equipment sales that carry a higher sales
price.
●
Gross margins in the first quarter of 2018
was 55.2%, compared to 62.9% in the second quarter of
2017. The primary reason for the
decrease in our gross margins was attributable to our customer and
product mix in sales during the three months ended June 30,
2018.
●
Loss from
operations in the second quarter of 2018 was approximately
$866,000, compared to $1,156,000 in the second quarter of 2018,
representing a decrease of $290,000 or 25%. Our loss from
operations improved in the current period as a result of lower
operating costs.
●
Net Loss in the
second quarter of 2018 was approximately $986,000, or $0.01 on a
per share basis, compared to a net loss in the first quarter of
2017 of $1,213,000, or $0.01 on a per share basis, representing a
decrease of $227,000 or 19%. The decrease in our net loss is
attributable to our lower loss from operations, offset by the
induced conversion costs we incurred in connection with the
conversion of the 700,000 convertible note payable.
●
At June 30, 2018,
cash and cash equivalents were $3,336,000 and working capital was
$2,618,000.
Current Business Highlights
●
Execution of lease
and near completion of our new 9,000 square foot facility in
Frederick Maryland to accommodate our expanding operations. The new
space will have additional office and warehouse space, a dedicated
laboratory, larger research and development space and will feature
its own permanently installed
SteraMist™
Complete Room System. This
SteraMist™
Complete Room will demonstrate to prospective clients TOMI’s
patented technology. Allow TOMI to answer the community’s
mobile transportation decontamination needs along with meeting
TOMI’s internal decontamination needs. The facility will be
located at Riverside Corporate Park in the heart of emerging
bio-tech companies and research centers.
●
Expansion of
product line with launch of the EZ
SteraMist™
Disinfection Cart. This is a result of the needs and requests from
USC/LAC Medical Center and two UCLA Hospitals. This all-in-one cart
housing the
SteraMist™
Surface Unit and accompanying supplies making disinfection in
hospitals even faster and more efficient for its EVS cleaning
staff.
●
Expansion of
product line with launch of
SteraMist™
Select Surface Unit. A unit developed for small enclosures
answering the needs of many of our Life Sciences customers and
opportunities. It has features for adjustable fluid and air
control, a programmable timer, and an E-stop and Start
button.
●
Added 36 new
customers continued to see an increase in repeat solution
orders from our existing client base.
●
3% growth in our
revenue for the six months ended June 30, 2018.
●
Continued
participation in a large study that compares hospital manual
cleans to a SteraMist™ mechanical clean using iHP™
disinfecting technology. The study is being conducted at three Los
Angeles Public Hospitals, LAC-USC Medical Center being the largest
along with UCLA Olive View Medical Center, and Harbor-UCLA Medical
Center. Early study details and progress looks very encouraging and
further results will be released as obtained from the study’s
lead investigators.
●
Continued expansion
of sales force devoted to our Hospital-Healthcare division with the
addition of independent sales represantatives. We anticipate by the
end of 2018 to have a base of greater than 40 independent
representatives.
●
Brought on first VA
hospital with the substantial purchase of two (2) Surface Units and
two (2) Environment systems, a new facility that will be among the highest-performing VA
medical centers across all VA missions and once fully
activated, the tertiary care regional referral medical center will
serve a projected 70,000 enrolled Veterans with an anticipated
550,000 annual visits.
●
Swedish American, a division
of University of Wisconsin Health, recently purchased a
significant number of additional SteraMist™
disinfection units for use
throughout its hospital in Rockford, IL. Given the
satisfaction at Swedish American Hospital with the purchase of
their first Surface
Unit, it was determined that expanding
SteraMist use
hospital wide with a purchase of an additional ten (10)
SteraMist™
units would allow the
hospital to disinfect additional departments to proactively
reduce the transference of the harmful pathogens in a variety of
spaces. Planned use sites for the newly purchased systems include
Intensive Care Units, inpatient beds, emergency department and
continued use and expansion in the ORs.
●
Continued growth in
our portfolio of clients in Life Sciences with the addition of 17
new customers in 2018 and further purchases from current Life
Sciences customers, which include multiple facility locations of
some of the largest multinational pharmaceutical companies in the
world and prominent universities.
●
One such new
customer is one of the world’s leading and most-trusted
suppliers to the pharmaceutical, biotech and specialty ingredients
markets who has over 100 facilities worldwide in which TOMI won two
(2) iHP® Service
Treatments.
●
Delivered a
customized nine (9) applicator built-in system to one of our
customers in the United Kingdom, where our technology was built
into the facility to provide automated
decontamination.
●
Added 12 new
members to the TSN network.
●
Expansion of TSN
into Canada with the addition of our first Canadian-based service
provider.
●
Launch a new
subdivision of TSN, Crime Clean Service Network
(“CCSN”). The network will be comprised of service
providers who are certified and specialize in crime scene clean up
and bio recovery. Participating members will receive training,
certification including on how to incorporate our SteraMist™
equipment into their everyday jobs. As part of our near term
launch, we purchased the domain www.crimeclean.com.
●
Presented at the Association for Professionals in Infection Control
(APIC) 2018 annual conference, along with thousands of healthcare
professionals committed to infection prevention from around the
world.
●
Invitation to speak at this year's CBRNe Applied Science and
Consequence World Congress conference in Cavtat, Croatia, September
2-6, 2018.
●
Kimann Engineering Pte. Ltd. converted its $700,000 promissory note
into common shares.
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 and air disinfection
through 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™ is
registered with the U.S. Environmental Protection Agency
(“EPA”) and uses a low percentage Hydrogen Peroxide as
its only active ingredient to produce a fog composed mostly of
hydroxyl radical (.OH
ion), known 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.
Our
products are designed to service a broad spectrum of commercial
structures, including, but not limited to, hospitals and medical
facilities, bio-safety labs, pharmaceutical facilities,
universities and research facilities, vivarium labs, all service
industries including 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 are also used in
single-family homes and multi-unit residences.
Our
mission is to help its customers create a healthier world through
its product line in our divisions ( Healthcare, Life Sciences, TSN
or TOMI Service Network and Food Safety) our motto is
“innovating for a safer world” for healthcare and
life.
TOMI 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.
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CONDENSED
CONSOLIDATED BALANCE SHEETS
|
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|
|
|
ASSETS
|
|
|
Current
Assets:
|
June 30,
2018
(Unaudited)
|
December
31,
2017
|
Cash and Cash
Equivalents
|
$3,335,637
|
$4,550,003
|
Accounts Receivable
– net
|
2,165,014
|
1,835,949
|
Inventories (Note
3)
|
3,012,569
|
3,518,884
|
Deposits on
Merchandise
|
87,213
|
-
|
Prepaid
Expenses
|
361,343
|
270,419
|
Total
Current Assets
|
8,961,774
|
10,175,255
|
|
|
|
Property and
Equipment – net (Note 4)
|
585,974
|
712,822
|
|
|
|
Other
Assets:
|
|
|
Intangible Assets
– net (Note 5)
|
1,363,778
|
1,548,532
|
Deposits
|
90,959
|
4,700
|
Total
Other Assets
|
1,454,737
|
1,553,232
|
Total
Assets
|
$11,002,486
|
$12,441,309
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
Accounts
Payable
|
$665,015
|
$751,730
|
Accrued
Expenses and Other Current Liabilities (Note 10)
|
350,580
|
267,136
|
Accrued
Interest (Note 6)
|
66,667
|
80,000
|
Customer
Deposits
|
1,000
|
3,062
|
Deferred
Rent
|
-
|
781
|
Convertible
Notes Payable, net of discount of $39,684
|
5,260,316
|
-
|
at
June 30, 2018 (Note 6)
|
|
|
Total
Current Liabilities
|
6,343,578
|
1,102,709
|
|
|
|
Convertible
Notes Payable, net of discount of $55,625
|
|
|
at
December 31, 2017 (Note 6)
|
-
|
5,944,375
|
Total
Long-Term Liabilities
|
-
|
5,944,375
|
Total
Liabilities
|
6,343,578
|
7,047,084
|
|
|
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Commitments
and Contingencies
|
-
|
-
|
|
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Shareholders’
Equity:
|
|
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Cumulative
Convertible Series A Preferred Stock;
|
|
|
par
value $0.01 per share, 1,000,000 shares authorized; 510,000 shares
issued
|
|
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and
outstanding at June 30, 2018 and December 31, 2017
|
5,100
|
5,100
|
Cumulative
Convertible Series B Preferred Stock; $1,000 stated
value;
|
|
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7.5%
Cumulative dividend; 4,000 shares authorized; none
issued
|
|
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and
outstanding at June 30, 2018 and December 31, 2017
|
-
|
-
|
Common
Stock; par value $0.01 per share, 200,000,000 shares
authorized;
|
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124,290,418
and 122,049,958 shares issued and outstanding
|
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at
June 30, 2018 and December 31, 2017, respectively.
|
1,242,904
|
1,220,499
|
Additional
Paid-In Capital
|
42,930,773
|
42,139,675
|
Accumulated
Deficit
|
(39,519,869)
|
(37,971,049)
|
Total
Shareholders’ Equity
|
4,658,908
|
5,394,225
|
Total Liabilities
and Shareholders’ Equity
|
$11,002,486
|
$12,441,309
|
The accompanying notes are an integral part of the condensed
consolidated financial statements.
TOMI
ENVIRONMENTAL SOLUTIONS, INC.
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CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
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(UNAUDITED)
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Three Months
Ended
|
Six Months
Ended
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|
June
30,
|
June
30,
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|
2018
|
2017
|
2018
|
2017
|
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Sales,
net
|
$1,246,472
|
$1,379,769
|
$2,558,938
|
$2,478,653
|
Cost
of Sales
|
557,810
|
512,494
|
1,049,469
|
928,851
|
Gross
Profit
|
688,661
|
867,275
|
1,509,469
|
1,549,802
|
|
|
|
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Operating
Expenses:
|
|
|
|
|
Professional
Fees
|
85,714
|
394,710
|
192,172
|
666,721
|
Depreciation
and Amortization
|
152,468
|
148,923
|
315,206
|
308,074
|
Selling
Expenses
|
431,655
|
371,095
|
635,660
|
550,480
|
Research
and Development
|
109,823
|
18,119
|
242,310
|
48,765
|
Equity
Compensation Expense (Note 7)
|
-
|
232,345
|
12,685
|
243,897
|
Consulting
Fees
|
38,352
|
86,060
|
73,378
|
117,112
|
General
and Administrative
|
736,919
|
771,869
|
1,400,806
|
1,382,224
|
Total Operating
Expenses
|
1,554,931
|
2,023,120
|
2,872,217
|
3,317,273
|
Loss from
Operations
|
(866,270)
|
(1,155,845)
|
(1,362,748)
|
(1,767,472)
|
|
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Other Income
(Expense):
|
|
|
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Amortization
of Debt Discounts
|
(7,904)
|
(757)
|
(15,941)
|
(894)
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Induced
Conversion Costs
|
(57,201)
|
-
|
(57,201)
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-
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Interest
Income
|
1,751
|
636
|
2,949
|
636
|
Interest
Expense
|
(55,878)
|
(57,123)
|
(115,878)
|
(71,256)
|
Total Other Income
(Expense)
|
(119,233)
|
(57,244)
|
(186,072)
|
(71,514)
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Net
Loss
|
$(985,502)
|
$(1,213,089)
|
$(1,548,820)
|
$(1,838,986)
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Loss Per Common
Share
|
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Basic
and Diluted
|
$(0.01)
|
$(0.01)
|
$(0.01)
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$(0.02)
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Basic and Diluted
Weighted Average Common Shares Outstanding
|
123,457,386
|
121,032,400
|
122,847,063
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120,929,340
|
The
accompanying notes are an integral part of the condensed
consolidated financial statements.
|
MEDIA RELATIONS CONTACT
Juliana
deRosa
Vice
President Domestic Business Operations
jderosa@tomimist.com