Attached files
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| 8-K - CURRENT REPORT - TOMI Environmental Solutions, Inc. | tomz_8k.htm |
Exhibit 99.1
TOMI ENVIRONMENTAL SOLUTIONS, INC. REPORTS
FIRST QUARTER 2020 FINANCIAL RESULTS
BEVERLY HILLS, CA, MAY 18, 2020 (BUSINESS WIRE) — TOMI
Environmental Solutions, Inc.®
(“TOMI”) (OTCQB:TOMZ), is a global company specializing
in disinfection and decontamination, utilizing its premier Binary
Ionization Technology (BIT™)
platform through its SteraMist®
products - a hydrogen peroxide-based mist and fog composed of
ionized Hydrogen Peroxide (iHP™),
announced
its results for the first quarter of 2020.
TOMI
Chief Executive Officer, Dr. Halden Shane stated, “In the
beginning of 2020 the world saw a surge globally for disinfectants
and an enhanced level of clean to help prevent and mitigate the
spread of the SARS CoV-2 coronavirus, which has put TOMI and its
SteraMist®
line of products front and center in the fight against this global
pandemic.
During
this pandemic our customer base has grown significantly. We remain
committed to keeping up with the increased demand and ensuring that
those fighting against the SARS CoV-2 virus are well-equipped with
our technology and solution. We continue innovating
for a safer world by fighting coronavirus and other known and
emerging pathogens."
Financial Results for the Three Months Ended March 31, 2020
compared to March 31, 2019
●
Total net revenue was $7,053,000 compared to $1,253,000,
representing an increase of $5,800,000, or 463%.
–
SteraMist®
product-based revenues was $6,638,000 and $1,029,000, respectively,
representing an increase of $5,609,000 or 545%.
–
Service-based revenue was approximately $415,000 and $224,000,
respectively, representing a year over year increase of
85%.
–
Domestic revenue was $3,569,000 and $1,136,000, respectively,
representing an increase of $2,433,000, or 214%.
–
International revenue was approximately $3,484,000 and $117,000,
respectively, representing an increase of $3,367,000 or
2,878%.
●
Gross margins were 63.6% compared to 60.6%. The higher gross profit
is attributable to the product mix in sales.
●
Income from operations was $2,659,000, compared to a Loss from
operations of ($868,000), representing an increase of $3,527,000,
or 406%.
●
Net Income was $2,619,000, or $0.02 on a per share basis compared
to a Net loss of ($935,000), or ($0.01) on a per share basis,
representing an increase of $3,554,000, or 380%.
●
Cash provided from operations of $3,316,000, compared to cash used
in operations of ($649,000).
●
EBIDTA was $2,831,000 compared to an adjusted net loss of
($691,000). A table reconciling EBITDA to the appropriate GAAP
measure is included with the Company's financial information
below.
Balance sheet highlights as of March 31, 2020 and December 31,
2019
●
Cash and cash equivalents of approximately $3,756,000 and $897,000,
representing an increase of $2,859,000.
●
Working capital of $6,365,000 and ($1,266,000), representing an
increase of $7,631,000.
●
Conversion
of $4,500,000 in convertible notes into 8,333,332 common
shares.
●
Shareholder equity of $8,324,000 and $890,000, representing an
increase of $7,434,000.
Current Business Highlights To Date
Revenues
●
First quarter revenue of $7,053,000 eclipsed total revenue
generated for the full calendar year of 2019.
●
Year over year growth in overall revenue to date of 496%
(unaudited).
●
Year to date growth in equipment and solution revenue of 485% and
933%, respectively, compared to the same prior year period
(unaudited).
●
Sold 241 machines to date in 2020, representing an approximate 551%
increase over the same prior year period.
●
Sold 16,000 gallons of solution to date, representing a increase of
834% when compared to the same prior year period.
1
Customers
●
Added one hundred and forty-one (141) customers to date in 2020,
representing a 571% increase over the same prior year
period.
●
Added thirty-one (31) new facilities in the hospital-healthcare
division to date in 2020, representing a 94% increase over the same
prior year period.
●
Added fifty-nine (59) new TSN providers to date in 2020,
representing a 1,833% increase over the same prior year period,
creating a total of 161 providers throughout 40 U.S. States and
Canada.
●
Added twenty-nine (29) new customers to our Life Sciences customer
base, representing an increase of 263%.
●
Added one (1) new Food Safety customer who purchased and
implemented our SteraMist®
technology into their facility, bringing to a total of six (6)
customer food safety customers.
Business Highlights
●
As SteraMist®
continues to be used to fight the spread of coronavirus, there has
been an increase in demand for solution orders across the
world.
●
Clean-Bit continues to expand throughout Israel, purchasing
additional SteraMist®
units and BIT™
solution.
●
SteraMist®
Declared Official Decontamination Technology of Seoul City
Metropolitan Transit Systems.
●
Expanded into the private aviation sector in Germany, multiple
market segments in Indonesia and hospital-healthcare, military and
homeland security in Singapore.
●
New channels were opened as decontamination and disinfecting
processes are updated and implemented, including but not limited
to, fire departments, morgues, FAA, police departments, county and
state health departments, cruise ships, infectious disease research
facilities, military and ambulances.
●
Deployment of SteraMist®
to be used around the world to decontaminate N95-equivalent
respirator masks, PAPRs, face shields, and other medical protective
equipment.
●
Binary Ionization Technology®
(BIT™)
Solution qualified to meet the EPA Emerging Viral Pathogen Guidance
for Antimicrobial Pesticides with the SteraMist®
Environment System for room fogging/misting against SARS-CoV-2, the
novel coronavirus that causes COVID-19.
●
Registration of SteraMist®
equipment and BIT™
solution with Chinese Center for Disease Control and Prevention
(China CDC).
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 as its only active
ingredient to produce a fog of 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, America Seed Trade
Association, and The Restoration Industry
Association.
For additional information, please visit http://www.tomimist.com/ or
contact us at info@tomimist.com.
2
TOMI
ENVIRONMENTAL SOLUTIONS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEET
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets:
|
March 31,
2020
(Unaudited)
|
December 31,
2019
|
|
Cash and Cash
Equivalents
|
$3,755,816
|
$897,223
|
|
Accounts Receivable
- net
|
3,146,197
|
1,494,658
|
|
Inventories
|
635,529
|
2,315,214
|
|
Vendor
Deposits
|
1,266,560
|
141,052
|
|
Prepaid
Expenses
|
170,856
|
187,664
|
|
Total
Current Assets
|
8,974,958
|
5,035,811
|
|
|
|
|
|
Property and
Equipment – net
|
1,257,831
|
1,367,864
|
|
|
|
|
|
Other
Assets:
|
|
|
|
Intangible Assets
– net
|
845,663
|
939,010
|
|
Operating Lease -
Right of Use Asset
|
664,198
|
674,471
|
|
Capitalized
Software Development Costs - net
|
83,803
|
94,278
|
|
Other
Assets
|
122,957
|
114,033
|
|
Total
Other Assets
|
1,716,621
|
1,821,792
|
|
Total
Assets
|
$11,949,410
|
$8,225,467
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$832,177
|
$713,222
|
|
Accrued
Expenses and Other Current Liabilities
|
655,736
|
450,112
|
|
Accrued
Officers Compensation
|
30,383
|
-
|
|
Accrued
Interest
|
-
|
66,667
|
|
Customer
Deposits
|
1,017,533
|
-
|
|
Current
Portion of Long-Term Operating Lease
|
73,851
|
71,510
|
|
Convertible
Notes Payable, net of discount of $0
|
|
|
|
at
December 31, 2019
|
-
|
5,000,000
|
|
Total
Current Liabilities
|
2,609,680
|
6,301,511
|
|
|
|
|
|
Long-Term
Liabilities:
|
|
|
|
Long-Term
Operating Lease, Net of Current Portion
|
1,015,465
|
1,034,413
|
|
Total
Long-Term Liabilities
|
1,015,465
|
1,034,413
|
|
Total
Liabilities
|
3,625,145
|
7,335,924
|
|
|
|
|
|
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 March 31, 2020 and December 31, 2019
|
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 March 31, 2020 and December 31, 2019
|
-
|
-
|
|
Common
stock; par value $0.01 per share, 250,000,000 shares
authorized;
|
|
|
|
133,517,083
and 124,700,418 shares issued and outstanding
|
|
|
|
at
March 31, 2020 and December 31, 2019, respectively.
|
1,335,170
|
1,247,004
|
|
Additional
Paid-In Capital
|
47,863,977
|
43,136,683
|
|
Accumulated
Deficit
|
(40,879,982)
|
(43,499,244)
|
|
Total
Shareholders’ Equity
|
8,324,265
|
889,543
|
|
Total Liabilities
and Shareholders’ Equity
|
$11,949,410
|
$8,225,467
|
|
|
|
|
|
|
||
3
|
TOMI
ENVIRONMENTAL SOLUTIONS, INC.
|
||
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
|
||
|
|
||
|
|
|
|
|
|
For The Three
Months Ended
|
|
|
|
March
31,
|
|
|
|
2020
|
2019
|
|
|
|
|
|
Sales,
net
|
$7,053,418
|
$1,252,658
|
|
Cost
of Sales
|
2,565,410
|
493,310
|
|
Gross
Profit
|
4,488,008
|
759,348
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
Professional
Fees
|
136,125
|
105,481
|
|
Depreciation
and Amortization
|
171,909
|
176,845
|
|
Selling
Expenses
|
378,645
|
441,671
|
|
Research
and Development
|
59,458
|
92,577
|
|
Equity
Compensation Expense
|
182,772
|
80,917
|
|
Consulting
Fees
|
81,545
|
35,006
|
|
General
and Administrative
|
818,145
|
694,880
|
|
Total Operating
Expenses
|
1,828,599
|
1,627,377
|
|
Income (loss) from
Operations
|
2,659,409
|
(868,030)
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
Amortization
of Debt Discounts
|
-
|
(17,534)
|
|
Interest
Income
|
542
|
1,030
|
|
Interest
Expense
|
(40,689)
|
(50,000)
|
|
Total Other Income
(Expense)
|
(40,147)
|
(66,504)
|
|
|
|
|
|
Income (loss)
before income taxes
|
2,619,261
|
(934,532)
|
|
Provision for Income
Taxes
|
-
|
-
|
|
Net income
(loss)
|
$2,619,261
|
$(934,532)
|
|
|
|
|
|
Net income (loss)
Per Common Share
|
|
|
|
Basic
|
$0.02
|
$(0.01)
|
|
Diluted
|
$0.02
|
$(0.01)
|
|
|
|
|
|
Basic Weighted
Average Common Shares Outstanding
|
126,802,819
|
124,659,307
|
|
Diluted Weighted
Average Common Shares Outstanding
|
144,941,677
|
124,659,307
|
|
|
|
|
4
|
TOMI ENVIRONMENTAL SOLUTIONS, INC.
|
||
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
||
|
(UNAUDITED )
|
||
|
|
For the
Three Months Ended March 31,
|
|
|
|
2020
|
2019
|
|
Cash
Flow From Operating Activities:
|
|
|
|
Net
Income (Loss)
|
$2,619,261
|
$(934,532)
|
|
Adjustments
to Reconcile Net Income (Loss) to
|
|
.
|
|
Net
Cash Provided by (Used in) Operating Activities:
|
|
|
|
Depreciation
and Amortization
|
171,909
|
176,845
|
|
Amortization
of Lease Liability
|
39,329
|
39,644
|
|
Amortization
of Debt Discount
|
-
|
17,534
|
|
Amortization
of Software Costs
|
10,475
|
-
|
|
Equity
Compensation Expense
|
182,772
|
80,917
|
|
Value
of Equity Issued for Services
|
48,000
|
44,000
|
|
Reserve
for Bad Debt
|
25,000
|
(105,000)
|
|
Inventory
Reserve
|
(100,000)
|
-
|
|
Changes
in Operating Assets and Liabilities:
|
|
|
|
Decrease
(Increase) in:
|
|
|
|
Accounts
Receivable
|
(1,676,539)
|
222,922
|
|
Inventory
|
1,815,942
|
288,827
|
|
Prepaid
Expenses
|
16,807
|
6,792
|
|
Vendor
Deposits
|
(1,125,508)
|
(79,275)
|
|
Other Assets
|
(8,924)
|
(64,914)
|
|
Increase
(Decrease) in:
|
|
|
|
Accounts
Payable
|
118,955
|
(475,851)
|
|
Accrued
Expenses
|
232,813
|
225,072
|
|
Accrued
Interest
|
(66,667)
|
(50,000)
|
|
Accrued
Officer Compensation
|
30,383
|
(40,208)
|
|
Customer Deposits
|
1,017,533
|
(1,486)
|
|
Lease
Liability
|
(35,865)
|
-
|
|
|
|
|
|
Net
Cash Provided By (Used in) Operating Activities
|
3,315,678
|
(648,714)
|
|
|
|
|
|
Cash
Flow From Investing Activities:
|
|
|
|
Capitalized
Software Costs
|
-
|
(125,704)
|
|
Purchase
of Property and Equipment
|
(14,585)
|
(34,582)
|
|
Net
Cash (Used in) Investing Activities
|
(14,585)
|
(160,286)
|
5
|
|
For the
Three Months Ended March
31,
|
|
|
|
2020
|
2019
|
|
Cash
Flow From Financing Activities:
|
|
|
|
Proceeds
from Exercise of Warrants
|
57,500
|
-
|
|
Repayment
of Principal Balance on Convertible Note
|
(500,000)
|
-
|
|
Net
Cash Used in Financing Activities
|
(442,500)
|
-
|
|
Increase
(Decrease) In Cash and Cash Equivalents
|
2,858,594
|
(809,000)
|
|
Cash
and Cash Equivalents - Beginning
|
897,223
|
2,004,938
|
|
Cash
and Cash Equivalents – Ending
|
$3,755,816
|
$1,195,938
|
|
|
|
|
|
Supplemental
Cash Flow Information:
|
|
|
|
Cash
Paid for Interest
|
$107,356
|
$100,000
|
|
Cash
Paid for Income Taxes
|
$-
|
$800
|
|
Non-Cash
Investing and Financing Activities:
|
|
|
|
Accrued
Equity Compensation
|
$27,189
|
$59,845
|
|
Conversion
of Note Payable into Common Stock
|
$4,500,000
|
$-
|
|
Equipment,
net Transferred to Inventory
|
$36,256
|
$-
|
|
Reconciliation of Net Income to EBITDA (Adjusted Net
Loss)
|
|
|
|
|
|
|
|
|
For The Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2020
|
2019
|
|
|
(Unaudited)
|
(Unaudited)
|
|
Net income
(loss)
|
$2,619,261
|
$(934,532)
|
|
|
|
|
|
Interest
Income
|
(542)
|
(1,030)
|
|
Interest
Expense
|
40,689
|
50,000
|
|
Depreciation
and Amortization
|
171,909
|
194,379
|
|
EBITDA (Adjusted
Net Loss)
|
$2,831,317
|
$(691,183)
|
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.
Use of Non-GAAP Measures
The Company has supplemented its reported GAAP (generally accepted
accounting principles) financial information with non-GAAP
measures. EBITDA and Adjusted Net Loss was derived by taking
earnings before interest expense (net), taxes, depreciation and
amortization. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for
results prepared in accordance with U.S. GAAP. The Company believes
this non-GAAP measure is useful to investors as it provides a basis
for evaluating the Company's operating results in the ordinary
course of its operations. This non-GAAP measure is not based on any
comprehensive set of accounting rules or principles. The Company
believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with its results of
operations as determined in accordance with U.S. GAAP and that
these measures should only be used to evaluate the Company's
results of operations in conjunction with, and not in lieu of, the
corresponding GAAP measures. EBITDA are reconciled in the tables
above to the most directly comparable measure as reported in
accordance with GAAP.
INVESTOR RELATIONS CONTACT
Harold Paul
hpaul@tomimist.com
6