TOMI Environmental Solutions Q4 2024 Earnings Call Transcript

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Provided by Quartr
April 14, 2025

Key Takeaways

  • One-time noncash expenses in Q4 2024 increased GAAP operating loss, contributing to a GAAP net loss of $4.48 M (vs. $3.40 M in 2023) and cash & cash equivalents of just $0.67 M as of 12/31/2024.
  • The CES, hybrid and SIS pipeline grew to 46 active projects with eight signed deals valued at $3.7 M, and management expects closing five more CES deals in 2025 to generate around $1.4 M in future revenue.
  • Since its October 2024 launch, the SteraMist Integrated System (SIS) platform has built a pipeline exceeding $1 M, booked $575 K in SIS sales and delivered its first system to the University of Virginia.
  • Expanded distribution to 13 global partners in 2024 yielded $930 K in sales, with new relationships in India, Malaysia, South Korea, Italy and Canada positioning TOMI for accelerated international growth.
  • Operational efficiencies drove a 41% reduction in R&D spend, cuts of 17–20% in SG&A lines, and a 42% year-over-year rise in IHP service revenue in Q1 2025, helping achieve positive cash flow in Q3 2024.
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Earnings Conference Call
TOMI Environmental Solutions Q4 2024
00:00 / 00:00

Transcript Sections

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Operator

Greetings. Welcome to the TOMI Environmental Solutions Inc. Fourth Quarter twenty twenty four Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator

Please note this conference is being recorded. I will now turn the conference over to your host, John Nesbitt from IMS Investor Relations. You may begin.

John Nesbett
Founder & President at IMS Investor Relations

Thank you for joining us today. On the call today is TOMI's Chief Executive Officer and Chairman of the Board, Doctor. Halden Shane E. J. Shane, TOMI's Chief Operating Officer and Nick Jennings, Interim Chief Financial Officer.

John Nesbett
Founder & President at IMS Investor Relations

Doctor. Shane will provide an overview of recent business highlights, financials and future plans. EJ and Nick will be available for the question and answers. A telephone replay of today's call will be available through Monday, 04/28/2025 with details of which are included in the company's press release dated April 14. A webcast replay also will be available at TOMI's website, www.SteraMist.com.

John Nesbett
Founder & President at IMS Investor Relations

Please note that information contained within this presentation is relevant only to the day of which it was recorded, 04/14/2025 and you are therefore advised a time sensitive information may no longer be accurate at the time of any replay. Certain written or oral statements made by management of TOMI may constitute forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward looking statements should be evaluated in light of important risk factors that could cause actual results to differ materially from our anticipated results. The information provided in this conference call is based upon the facts and circumstances known at this time. The company undertakes no obligation to update these forward looking statements after the date of this call.

John Nesbett
Founder & President at IMS Investor Relations

In addition, Tomi will discuss certain non GAAP financial measures during this call. The company uses non GAAP measures because it believes they provide useful information about operating performance and should be considered by investors in conjunction with the mandated GAAP measures. A reconciliation of these non GAAP measures to comparable GAAP measures is included in the earnings release dated 04/14/2025. I will now turn the call over to Tony's Chief Executive Officer and Chairman of the Board, Doctor. Alvin Shane. Please go ahead.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Thank you, John, and good afternoon, everyone, and thank you for joining the TOMI Environmental Earnings Call. First of all, I wanted to state that we've been having some very strong earthquakes in Southern California. If there should be an interruption, then the call will be picked up on the East Coast. We recognize the importance of timely reporting, and we apologize for any inconvenience that this extension we filed caused to our investors and stakeholders. We expect to be back on track with timely filings going forward consistent with how we have been over the years.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

During the quarter and the year, we recognized some one time non cash expenses that unfortunately impacted on GAAP results. We reviewed this, but importantly, our business strategy remains on track. Our pipeline is healthy. Our preliminary first quarter results are much improved over the first quarter last year. We are making progress in our key initiatives of expanding the SteraMist IHP brand to the world.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We remain optimistic about our future and are excited to highlight some of the early successes we have achieved in 2025 demonstrating the growth we are experiencing. We've established valuable partnerships in key global markets for our cutting edge technology. And we have a clear path ahead to deliver profitability with the best outcomes for our customers, create new opportunities and enhance value for our shareholders through improved execution and disciplined operational performance. The year 2025 has already demonstrated early wins and progress. Beaming from our 2024 initiatives in product development.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Application usage and the expanded range of services we now offer and have streamlined. Let's highlight some of the accomplishments from 2024, some of which is not fully reflected in our financial results. The disinfection decontamination industry prioritizes ease of use, automation and validated solutions regardless of the industry vertical. It's important to differentiate between our full area custom engineered systems CES and our hybrid projects versus our latest SteraMist integrated system offering. These full automation systems span both categories and this line of products should significantly enhance our bit solution razor razor blade business model.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We have successfully maintained our expanding pipeline for custom engineered systems, while also introducing the hybrid offering to the market. In 2024, we actively worked and supported in some fashion seven different custom projects, many of which have been previously reported on. We have secured our first twenty twenty five CES deal. Collectively, these eight deals are valued approximately 3,700,000.0. Please note that this figure does not represent revenue recognized in any one year or quarter as project completion timing does not directly align with deliverables to each project.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Currently, we are in discussions regarding our CES and hybrid systems across 46 different projects. A record for our company with 12 of these being very active As we finalize timelines, we anticipated closing five of these deals in 2025, which should yield around 1,400,000.0. While this revenue won't be fully recognized in 2025, review these as significant wins for our future. To further invest in turnkey solutions, in October 24, we formally launched the SteraMist Integrated System or SIS platform. Product offerings, which include the SIS standalone or SIS SA.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Since this October launch, the pipeline of opportunities for this project product has grown to over 1,000,000. We successfully delivered our first standard SIS using our legacy SteraMist environment system, collaborating with an OEM from Italy to the University of Virginia at the end of twenty twenty four. This longtime user of SteraMist IHP has already expressed interest in another SIS purchase for early twenty twenty six. Additionally, I'm pleased to announce that we have secured contracts for three more SIS offerings this year, totaling approximately 575,000 in sales. In Q1 twenty twenty five, we established our first formal relationship with the OEM PBSC, biotech, a global company headquartered in Singapore, while continuing to engage with other partners to further enhance our SIS strategies.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

In 2024, we signed six additional partners across various regions, including Malaysia, India, Italy, Canada, South Korea, and The United Kingdom. Notably, our Malaysian partners leading the way in standardizing treatments for Bebo chambers in biosafety level three rooms using our IHP decontamination technology with the new SISSA. We currently have four additional proposals with them with the next set to close this summer. These opportunities average $140,000 per proposal. In 2024, we successfully onboarded a distributor in India, a longstanding goal for TOMI, given the significant growth in genetic drug manufacturing and vaccine supply the region has recently experienced.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

This partner brings a decade of experience in clean room manufacturing and has showcased our SteraMist systems to numerous high interest opportunities. They also design clean room equipment and we will collaborate procuring and supplying turnkey IHP chambers in the future. Additionally, our new partner in Italy shares similar expertise and has supported our existing OEM partnership as stated above. We remain dedicated to these partnerships alongside our other 30 partners worldwide. It's noteworthy that we only established distribution channels in The United States at the end of twenty twenty three.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

In 2024, our distribution arrangements resulted in 13 partners, leading to approximately 930,000 in sales for the year. We anticipate our newer partners achieving similar or greater results, paving the way for substantial future revenue growth for the company. Our IHP corporate service division has strengthened significantly. As we secured contracts extending through 2026, We have retained customers who while not under formal contracts have been using our services for several years. It's important to note that these facilities often change their service deployment plans.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

So maintaining our current customer base is a substantial win, especially with some clients having utilized our service since 2016. In Q3 twenty twenty four, we achieved record breaking performance in the IHP services. And Q1 twenty twenty five is showing a 42% increase compared to the same period last year. To further enhance our presence in IHV service deployment, we partnered with Environment, also known as EMAQ, a longtime user of our technology. They made a significant investment over $1,000,000 into IHP equipment to serve the West Coast Of The United States.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Last year, they purchased $14,000 in BIT solution. And to date this year they have already invested over 8,000 demonstrating their commitment as our partner. We are actively monitoring and addressing many of the challenges faced in the global food market. While we cannot disclose specific company names due to NDAs, I'd like to highlight two examples. An egg white manufacturing company that purchased their first Starry Pack in 2024 has since ordered four additional units in 2025.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Additionally, a multinational food and beverage corporation, one of the largest publicly traded food companies globally, has expressed interest in our SteraMist technology. We've conducted numerous studies and the SteraPack is now in use at their locations in Arizona, Switzerland, Germany and soon South Africa. We're also nurturing interest from a customer for potential expansion into Brazil, Chile and Mexico. While the Steripak technology is cost effective, it does not generate significant revenue individually. However, these sales increase our base and drive our razor razor blade model for high margin solution usage.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Tell me continues to prove the effectiveness of SteraMist IHV technology in the food industry through collaborations with prominent organizations on new studies that explore its expanded applications and benefits. One notable collaboration involves a leading health and hygiene producer, where in 2024, we developed a specialized application for spraying conveyor belts to enhance the contamination processes for packaged goods, targeting pathogens like salmonella and listeria. St. Jude, a customer since 2021 expanded their use of SteraMist surface units in 2024 by purchasing three additional systems to be placed throughout their facility. Power Health purchased Steripax for one Pennsylvania location in 2022 and added two more packs for the second location in 2024.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

In 2025 they are twenty five, In twenty twenty four, Bohlinger Ingham expanded their use from their facility in Georgia in The United States to Mexico. Princess Tabby has a committed customer has been initially purchased in Brazil in 2022 with an additional $200,000 investment for a South African location in Q3 of twenty twenty four. Marketing their fourth site utilizing SteraMist IHP. They plan further expansions in 2025 at both the Brazil and South African facilities.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

And we are continuing discussions with four other locations worldwide as previously reported. In Q4 twenty twenty four, our full room fogger device was integrated into their Switzerland operations of an international firm with the presence across The Americas, Asia Pacific and Europe. This organization's core business spans solutions for semiconductors, life sciences and data centers. We have diversified the TOMI service network, TSN, but continue to support our TSN members now known as general service providers. This change allows us to focus on growth in the commercial industry and enables us to extend our offerings to all service providers interested in delivering our fast non toxic, non corrosive, IHP disinfection technology, positioning ourselves as our service providers as leaders in environmental health and safety services.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We launched SteraMist Pro certified program, a program available to all customers across various divisions, including notable names such as Merck and ServiceMaster. We anticipate by the end of twenty twenty five, this program will greatly enhance our referral database, promote the utilization of SteraMist products, facilitate expansion with current customers, and educate all clientele on the proactive needs for effective disinfection and decontamination and many uses of SteriMist IHP. We have completed studies on foot and mouth disease virus, known as FMDV, and African swine fever with the Department of Homeland Security. This could be very timely as some countries in the EU, specifically Hungary and Slovakia is on high alert as they're dealing with the largest outbreak in fifty years of FMDV, foot and mouth disease virus. This is affecting cloven hooved animals like cattle, sheep, goats, pigs, thus requiring greater disinfection services and more stringent border control disinfection.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Hungarian Prime Minister Victor Orban said, it couldn't be ruled out that the disease has been released in Hungary as a potential biological attack. We are contacting local authorities to offer help if it turns out to be correct, we could be dealing with potential spread to other countries. We also continue to collaborate with the army to minimize emergency respond exposure to synthetic opioids, including fentanyl. And in 2024, we initiated studies on reducing bacterial counts on cannabis flowers with our partner, Sterile Grow, and a globally recognized company with decades of experience in the industry. Additionally, we are addressing mycotoxins, a critical initiative often overlooked in public health discussions.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

In 2024, we significantly expanded our support services for customers offering a comprehensive range of options. From basic training to full validation packages, we are committed to keeping all services in house, creating an additional revenue stream. Customers can choose from one or multiple service packages, totaling 10 distinct offerings to accompany their capital equipment purchases. Reminder that a full comprehensive validation service package starts at $30,000 for a standard full room area fogging. All our services typically offer clearer revenue forecasts, which is becoming evident in 2025.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We are excited to announce several notable clients in 2024. This includes government entities like NASA, its esteemed universities, as Tufts, University of Toronto, Michigan State, Oregon State, University of Pennsylvania. We are also partnering with leading 503B compounding pharmacies, CDMOs and laboratories like Avan Drug Delivery, also known as DiffGen Pharmaceuticals, BioNova Scientific, Denmacus, Nevela Therapeutics and LabCorp. Additionally, we welcome Zotis, the world's largest producer of medicine and vaccinations for pets and livestock. Edgewell Personal Care in consumer care, Nationwide Organ Recovery Transplant Alliance or Nora, an organ and tissue transportation company.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Sensant Technologies and food and beverage and added a well known nationwide service provider StrumVerate. On a GAAP basis, we achieved a 5% year over year revenue growth. Importantly, while auditing expenses rose, we reduced costs across the organization in 2024, which puts us in a stronger position to reach sustained profitability going forward. R and D expenses were reduced by 41%, advertising and sales commissions were reduced by 17, and consulting expenses were reduced by 20%. Cash flow for 2024 was lower than desired.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

However, we anticipate improved collections in 2025 due to better execution and timing of progress payments. Our priority is to operate the company as efficiently as possible. And we are currently reviewing candidates for a permanent CFO position. I also want to thank Nick Jennings for his contributions and assistance as an interim CFO while we seek a qualified candidate to maximize our long term potential and deliver the best value for all involved with TOMI. We achieved positive cash flow in Q3, driven by stronger accounts receivable turnover and tighter expenditure management.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

And we are laser focused on returning to sustainable positive cash flow as soon as possible. I'll now provide a brief overview of our financial results for the full year 2024 compared to the prior year period. Also, a table reconciling non GAAP to the appropriate GAAP financial measures is included with today's press release. Our GAAP revenue rose to 7,739,000 in 2024. That was up from 7,355,000 in 2023, driven by increased demand for our mobile systems and higher IHV corporate service revenue.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Non GAAP revenue was approximately $8,000,000 reflecting nearly a 6% increase over 2023. The difference between GAAP and non GAAP revenue in 2024 was primarily attributed to the allowance for some returns in sales. It's also important to note the $8,000,000 in non GAAP revenue was net of the three orders that we returned in the fourth quarter, which contributed to lower reported revenue. These customers remain in contact with us. The returns were due to changes in the scope of use, and we chose to accommodate our customers.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

One such accommodation has always proven to be a wise decision as we recently received an order for $180,000 which was about $70,000 above original scope of work previously ordered in 2024. Our mobile equipment sales totaled approximately $3,800,000 in 2024, reflecting a 23% growth compared to 2023. Our service generated around 2,000,000, a 23 increase from the previous year. This solution sales reached approximately 900,000, marking 9% growth. Additionally, support and maintenance for current customers saw a notable 28% increase indicating that customers are using our equipment more frequently for regular operations.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Non GAAP gross margins were 60% compared to 59% in the prior year. Our GAAP gross profit was 46% down from 58% primarily due to the increase in our inventory reserves. It's worth noting that our fully assembled equipment really has no end life to it and we consider ourselves an emergency service provider. GAAP operating loss was 4,105,000 compared to 3,349,000 in the prior year. Non GAAP operating loss was 1,678,000 compared to 2,785,000 in the prior year.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

GAAP net loss was 4,477,000 or $0.22 per basic and diluted share compared to 3,403,000 or $0.17 per basic and diluted share. Non GAAP non loss was 2,050,000 or $0.10 per basic and diluted share compared to 2,838,000 or $0.14 per basic and diluted share in the prior year. As of 12/31/2024, cash and cash equivalents stood at approximately 665,000 with a working capital of 3,800,000.0 and shareholder equity of 4,000,000. Looking to 2025, we plan to continue to nurture our pipeline of CES hybrid and SIS sales, enhance our sales infrastructure by establishing new distribution channels, recruit independent representatives, and most importantly, bringing in qualified business developers to manage our growing customer base and support new sales. Positively impacting our revenue in 2025 and beyond, ideally at a faster pace than in 2024.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

TOMI has initiated a project with a major corporation focused on decontamination of heart monitoring devices. This initiative underscores our strengthened relationship with OEMs and showcases the capabilities of our SIS product offerings. Additionally, it aligns with our commitment to advancing healthcare initiatives and meeting regulatory requirements for medical devices, representing another significant market opportunity. This order received this year is valued at approximately $288,000. We are still in the early stages of addressing ethylene oxide.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Our and OEM partnerships developed in 2024 may facilitate the transition away from this highly toxic chemical. With global monitoring of ETH as a potential threat industries, especially in food safety are actively seeking alternatives. The European Union has already banned ethylene oxide in certain applications. We have already collaborated with some partners on trial runs as a replacement for airplane oxide, supporting the shift away from this and other sterilization methods in the medical device industry. We have already expanded into a new market in 2025 with algae feed, addressing protozoan, silate contamination.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We aim to explore further expansion opportunities this year with them and other partners in the agricultural sector. We are exploring a partnership with the University of Iowa again to gather statistical data on SteraMist IHP's effectiveness against Sioris, which we know we can eliminate. But we always aim to expand our study publications with customers. We will continue to seek out strong global partners in 2025, focus on rebuilding our brand in Panama, Nigeria and Israel with new partners, as well as establishing an additional relationship in Australia and adding distributors in Costa Rica and Brazil. We will continue to build on positive trend in BIT solution sales, which is already demonstrating a 200% increase year to date compared to the same period last year.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

A growth that is organic and not driven by contract demands or unnecessary bulk purchases. We will continue to build on positive trends in IHP corporate service deployment, which currently maintains a $1,000,000 pipeline with open proposals for 2025. We will continue to play a role in restoring structures impacted by smoke and hazardous particulates during the California wildfires through our service providers. We will also continue to support the food safety industry by identifying ways that SteraMist IHP can address the significant needs within this vast market. Continue to achieve compliance, recognition and validation by third vendor management and compliance management platforms, such as Aveda, Iwire, ISN NetWorld.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

This will hopefully lead to new avenues for TOMI to engage with broader network of industry leaders and shows our customers TOMI is culture of continuous improvement, enhancing its service and integration offering and staying ahead of evolving industry standards. We will continue to uphold our strong portfolio of intellectual properties, which include over 25 utility and design patents worldwide, extending to 2,038, along with 32 design patents and more than 200 trademarks and trademark applications globally. As we continue to seek acceptance for additional 1% hydrogen peroxide label with the EPA for direct food applications. We are also actively pursuing a separate label that incorporates the reference FMDV and African swine fever studies completed in 2024. Additionally, we are working on obtaining a distinct EPA label to support growth within the cannabis and food safety industries.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

We have already taken steps to prepare for potential price increases in manufacturing our equipment due to tariffs by collaborating with our partners to share the cost of goods rather than absorbing it entirely. Additionally, we are closely monitoring our current customer base that relies on government grant funding to use our equipment, including in the field of oxidation for the use of biofuels. The versatility of our technology and the diverse industries we serve is an important factor. Even in one or two sectors experienced slowdowns, others typically see growth. For instance, our commercial division experienced significant expansion in 2020.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Our goal is to sustain growth across all sectors and with our current offerings, both equipment and services alongside growth in business development, preparing new and maintaining current registrations and intellectual property, building our project management and engineering departments, we can make a meaningful impact for years to come. The SturryMist Pro certified program available to all clients across all industries and countries will empower the usage of SturryMist IHP and educated uses on proper cleaning practices. Earlier this year, we started a strong marketing initiative and are developed comprehensive training courses. Furthermore, we plan on partnering with third party vendors to offer related accessories like monitoring devices and air scrubbers to enhance cleaning protocols. We anticipate this program to grow in membership in 2026.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

The company has made substantial progress in laying the groundwork for future success. And we plan to keep capturing the significant market opportunities before us, leveraging our razor razor blade model with increasing high margin BIT solution and delivering consistent and growing profitability to our shareholders. Date invoiced and open bookings for 2025 total approximately 3,200,000.0. As mentioned earlier, we have observed positive trends in our BIT solution and IHP corporate service revenues. We look forward to showcasing these trends in our customer and integrated projects along with our support service figures throughout the year and beyond.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

SteriMist IHP is transformative technology serves four critical industries supporting everything from routine cleaning and complex clean room decontamination to patient healthcare environments, biohazard managements and border control operations, as well as an educational platform. Our network of domestic international service providers is vital in advancing the mission and expanding our impact across diverse markets for IHP. I want to thank my team. I want to thank EJ and everybody involved from administrative end from TOMI. And I'll now open the call for questions. Thank you.

Operator

Thank you. At this time, we will be conducting a question and answer session. You may press 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.

Operator

Our first question comes from Martin Dyle with H. C. Wainwright. Please proceed.

Analyst

My question how much

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

I can't hear the question, Martin.

John Nesbett
Founder & President at IMS Investor Relations

Seems to be a bad connection. Maybe go to next caller.

Operator

The next question comes from Todd Felt with Stonex Wealth Management. Please proceed.

Todd Felte
Todd Felte
SVP - Branch Manager at StoneX Group

Hey, guys. Congratulations on a good and productive year in the recent contract wins. Know you'd spoke about some of your revenue backlog. Are you able to give any guidance for revenues this year? And I know earnings per share is affected by a lot of things, but maybe some margin information.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Well, think, Todd, I think the margins should remain around what they've been. Nick, is that correct?

Nick Jennings
Nick Jennings
Chief Financial Officer at TOMI Environmental Solutions

Yes.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

As far as guidance, Ejia, you wanted to talk about what we have going to the rest of '25?

Elissa Shane
Elissa Shane
COO & Director at TOMI Environmental Solutions

Sure, as stated on the script, a lot of our goals and initiatives surround this SIS strategy, which is a good mix and counterpart to our CES. So, what's starting to happen is we're able to build the pipeline based on the deliverables of these projects on both the equipment end and the servicing end that occurs thereafter. So we started this year with about four between the CES and SIS big wins that we're working with our OEMs on the chamber part and will be delivered throughout the year up until the end on the last end of the deliverable, which is our servicing. So that's starting to build, we expect additional ones to follow that and keep going throughout the year, moving into 2026.

Todd Felte
Todd Felte
SVP - Branch Manager at StoneX Group

Okay. And as you progress forward and get more and more of these contract wins, do you expect your razor razor blade model margins to be improved and your margins on the bit solution to further increase?

Elissa Shane
Elissa Shane
COO & Director at TOMI Environmental Solutions

Yes, absolutely. And even this year, that alone on bit solution is it's a good mix between our gallons, which support our mobile units, and our build ins with and the 55 gallon drums, which support our build in and custom. So we're starting to see a good mix across all the solution offerings.

Todd Felte
Todd Felte
SVP - Branch Manager at StoneX Group

Okay. And I know the Kennedy Johnson Space Center win was a big one for you Are you making any other inroads, for government contracts? Or, can some of those expand and become much larger?

Elissa Shane
Elissa Shane
COO & Director at TOMI Environmental Solutions

Absolutely, Ken. We're definitely striving towards that, marketing specific to them, under the SerumaSeq Claus brand, and that's just gonna be a good referral for that, and they're willing to work with us on it, which is nice.

Todd Felte
Todd Felte
SVP - Branch Manager at StoneX Group

Okay. I'll hop back in the queue. Congratulations on a great year, guys. Thank you.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Thanks. Thank you so much.

Operator

The next question comes from John Nelson, Private Investor. Please proceed.

Analyst

Hi, everybody.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Hi, John.

Analyst

First question is, you expect any ramifications from the tariff situation to impact your company?

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

I don't think so. You know, we haven't and we are making some deals with keeping prices the way they are. Again, you know, tariffs are unknown and it's obviously a very hot topic and it's a very fluid situation. So, you know, if they do, you know, we'll go ahead and make an announcement for such, but at the moment we're not.

Analyst

Okay. You have a, amazing list of, opportunities, for 2025 that you've listed, in pretty good detail. Is the cash level at the end of the year adequate to address these opportunities?

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Well, we're we're looking to do a raise that we listed in in the k, which just came out. So with the raise and our current book of business along with the cash we have and the existing accounts receivable, we think we will have no problem.

Analyst

Okay. And I haven't seen the 10 k yet. What is the does it give an amount or a vehicle that you're going to be using for this?

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

It's the same it's similar to what we've raised a couple years ago with the convertible notes at 12% and about 3,000,000, 3 and a half million.

Analyst

Okay. Thank you.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

You're welcome.

Analyst

Then let's see. I was also going to ask you if if you've had investigated establishing a credit line, but if you've got the cash lined up, that kind of negates that.

Analyst

Is the scope of the you mentioned that, three orders that were returned. Was that just due to a project getting canceled? Or can you provide any more details on that? And I mean, it sounds like a very unusual onetime event.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Yeah. That the way you see it?

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Absolutely was. We've had no returns to date this year. And it just seemed as if there were some clients that we think very highly of that learned a little bit more about our technology and we wanted to, you know, go ahead and accommodate them. And, one other had to do with the federal grant that, was removed or pulled and, you know, prior to it at that year. So, you know, we're we're comfortable.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

I mean, we had to make, you know, accounting, you know, GAAP accounting, bench policies and and, you know, in the case, you'll see, and, we did what we had to do.

Analyst

Okay. And any sense of you had mentioned they again and divest in the past about the FDA and the 1% solution for treating produce and, other food products. Do you, have any sense as to, how close we might be on any kind of ruling for that? I mean, would you expect some kind of either confirmation or, negation this year, coming in 2020 Yeah,

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

hard to say at the moment because of the administration and all the new changes within the various regulatory agencies like the EPA and the FDA. So, you know, I don't want to, you know, I'll have to Okay. I hate using the term circle back, but I'd have to circle back on that.

Analyst

Okay. And have there been any, further, modifications in SteraPak? Or have you kind of reached a stage where that's kind of the you've reached your gold standard for the SteraPak and that's, what you're, basically going to continue to market without the need for any adaptations? Or are there adaptations that are possible?

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

No. At the moment, we're marketing the SteraPack. It's fairly simple, and it's fairly inexpensive. We are considering doing some upgrades, to our surface units, software basis. So, you know, we're always going ahead and keeping our inventory up to date and ready to be sold.

Analyst

Okay. And just one last comment. I think the growth of your product has always been a matter of gaining awareness throughout the various potential markets. And it sounds like you really are making huge progress on that over the last year and especially over the last quarter. So congrats on that and onward and upward.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Yeah. Definitely. And congratulations, EJ.

Analyst

Thank you. Thanks, EJ. And and Nick too for filling in.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

And thank you. And thank everybody on the team. Appreciate it, John. Thank you.

Analyst

You're welcome. That's it for me.

Operator

We have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.

Halden Shane
Halden Shane
Chairman & CEO at TOMI Environmental Solutions

Well, I just want to thank everybody for hanging in and for listening to the call and look forward to the future and this company continuing to stride in the direction that we just announced on the call. So have a wonderful day, morning, wherever you are, evening, and we'll keep in touch. Thank you.

Operator

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Executives
    • Halden Shane
      Halden Shane
      Chairman & CEO
    • Nick Jennings
      Nick Jennings
      Chief Financial Officer
    • Elissa Shane
      Elissa Shane
      COO & Director
Analysts
    • John Nesbett
      Founder & President at IMS Investor Relations
    • Analyst
    • Todd Felte
      SVP - Branch Manager at StoneX Group
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