UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 17, 2021

 

TOMI Environmental Solutions, Inc.

(Exact name of registrant as specified in its charter)

 

Florida		000-09908		59-1947988
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

9454 Wilshire Boulevard, Penthouse

Beverly Hills, CA 90212

(Address of principal executive offices) (Zip Code)

 

(800) 525-1698

(Registrant's telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company                                                      ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Item 2.02 Results of Operations and Financial Condition.

 

On May 17, 2021, TOMI Environmental Solutions, Inc. issued a press release regarding its financial results for the first quarter ended March 31, 2021. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1. No additional information is included in this Current Report on Form 8-K.

 

The information included in this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed “filed” for purposes of, nor shall it be deemed incorporated by reference in, any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press release issued May 17, 2021

  

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	TOMI ENVIRONMENTAL SOLUTIONS, INC.
Dated: May 17, 2021	By:	/s/ Halden Shane
		Halden Shane
		Chief Executive Officer

 

 

 

EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press release issued May 17, 2021

 

 

  Exhibit 99.1

 

 

TOMI ENVIRONMENTAL SOLUTIONS, INC. REPORTS FIRST QUARTER 2021 FINANCIAL RESULTS

 

FREDERICK, MD, May 17, 2021 (BUSINESS WIRE) — TOMI Environmental Solutions, Inc.® (“TOMI”) (NASDAQ:TOMZ), a global company specializing in disinfection and decontamination utilizing its premier Binary Ionization Technology (BIT) platform through its SteraMist brand of products, today announced its financial results for the first quarter 2021.

 

TOMI Chief Executive Officer, Dr. Halden Shane stated, “Our first quarter 2021 revenues had a steep comparison to last year’s first quarter, when the onset of COVID-19 pandemic created an unprecedented demand in the marketplace for disinfection and decontamination solutions, including demand for our products. While the economy has begun to reopen, this year’s first quarter results reflect headwinds from the impact of many of our customers’ continued remote work environment as well as delays in capital expenditure projects across our customer base. As a result, it has been difficult for us to fully implement our strategies to generate sustained growth following the spike of demand we experienced in 2020. For example, our in-person demos with potential customers remained suspended in the quarter and many custom engineered systems (CES) were postponed. That said, we made considerable progress advancing key building blocks for our long term growth, including expanding our internal sales force and continuing the development of three exciting new products. We are particularly excited about the upcoming launch of our SteraPak product, a much anticipated offering which further differentiates our 6-log kill solutions in the marketplace and better position us to continue our mission to make the world a safer place.”

 

Dr. Shane continued, “The pandemic accelerated the introduction of our product to a broader, highly satisfied customer base, many of whom ordered our hardware and solution quickly at the outset of the pandemic and are beginning to integrate our solution into their ongoing disinfection procedures. This pandemic has truly changed how people think about proactive decontamination and we are optimistic about our ability to capitalize on that new thinking as we continue to execute our long term plan to become the standard in decontamination worldwide. We believe these factors will drive sustained, higher margin sales at levels above pre-pandemic levels as more businesses reopen and commercial activites accelerate.”

 

 

Financial Results for the Three Months Ended March 31, 2021 compared to March 31, 2020

 

Balance sheet highlights as of March 31, 2021

 

 

 

Current Business Highlights To Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conference Call Information

 

TOMI will hold a conference call to discuss first quarter 2021 results at 4:30 p.m. ET today, May 17, 2021.

 

To participate in the call by phone, dial (877) 545-0320 and entry code 408875 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0016 and entry code 408875. To access the live webcast or view the press release, please visit the Investor Relations section of the TOMI website at:

http://investor.tomimist.com/TOMZ/webcasts_and_events/2145

 

A replay of the teleconference will be available until May 28, 2021 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use replay access code: 41341 A replay of the webcast will be available for at least 90 days on the company’s website, starting approximately one hour after the completion of the call.

 

TOMI™ Environmental Solutions, Inc.: Innovating for a safer world®

TOMI™ Environmental Solutions, Inc. (NASDAQ: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 [email protected].

 

Forward-Looking Statements

 

This press release contain forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management’s judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, statements relating to anticipated financial performance and operating results; upcoming launch of new products; expected growth in sales and market demand; timing and process relating to research studies and testing; impact of COVID-19 pandemic on our business operation; and our ability to execute sale strategies. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, the impact of COVID-19 pandemic on our business and customers; our ability to maintain and manage growth and generate sales, our reliance on a single or a few products for a majority of revenues; the general business and economic conditions; and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed by us with the SEC and other periodic reports we filed with the SEC. The information provided in this document is based upon the facts and circumstances known at this time. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today’s date, unless otherwise stated, and we undertake no duty to update such information, except as required under applicable law.

 

 

Use of Non-GAAP Financial Measures

 

To supplement our unaudited consolidated financial statements presented on a basis consistent with U.S. GAAP, we disclose certain non-GAAP financial measures for our historical performance, including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. We define EBITDA as net income (loss), adjusted to exclude: interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure and is intended to serve as a supplement to our results provided in accordance with GAAP. We define Adjusted EBITDA as net income (loss), adjusted to exclude: interest, taxes, depreciation and amortization; stock-based compensation expense. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We believe that these historical non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. In addition, our management uses non-GAAP measures to evaluate our performance internally and to benchmark our performance externally against competitors. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. Although we believe that the use of non-GAAP financial measures enhances its investors’ understanding of its business and performance, our use of non-GAAP financial measures should not be considered an alternative to GAAP basis financial measures and should be read in conjunction with the relevant GAAP financial measures. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. Because of these limitations, the non-GAAP financial measure used in this release should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP as set forth below. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures.

 

 

ASSETS
Current Assets:
Current Assets:	March 31, 2021 (Unaudited)	December 31, 2020
Cash and Cash Equivalents	$3,945,658	$5,198,842
Accounts Receivable - net	3,743,430	3,716,701
Other Receivables	-	198,951
Inventories	4,765,455	3,781,515
Vendor Deposits	146,130	388,712
Prepaid Expenses	316,439	421,305
Total Current Assets	12,917,114	13,706,027
Property and Equipment – net	1,235,483	1,298,103
Other Assets:
Intangible Assets – net	720,494	722,916
Operating Lease - Right of Use Asset	619,989	631,527
Capitalized Software Development Costs - net	41,902	52,377
Other Assets	516,230	358,935
Total Other Assets	1,898,614	1,765,755
Total Assets	$16,051,211	$16,769,885

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$2,046,667	$1,501,469
Accrued Expenses and Other Current Liabilities	629,797	501,849
Customer Deposits	28,949	118,880
Current Portion of Long-Term Operating Lease	83,768	81,223
Total Current Liabilities	2,789,181	2,203,421
Long-Term Liabilities:
Loan Payable	410,700	410,700
Long-Term Operating Lease, Net of Current Portion	931,697	953,190
Total Long-Term Liabilities	1,342,397	1,363,890
Total Liabilities	4,131,577	3,567,311
Commitments and Contingencies	-	-
Shareholders’ Equity:
Cumulative Convertible Series A Preferred Stock;
par value $0.01 per share, 1,000,000 shares authorized; 63,750 shares issued
and outstanding at March 31, 2021 and December 31, 2020	638	638
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, 2021 and December 31, 2020	-	-
Common stock; par value $0.01 per share, 250,000,000 shares authorized;
16,811,513 and 16,761,513 shares issued and outstanding
at March 31, 2021 and December 31, 2020, respectively.	168,115	167,615
Additional Paid-In Capital	52,369,899	52,142,399
Accumulated Deficit	(40,619,018)	(39,108,078)
Total Shareholders’ Equity	11,919,634	13,202,574
Total Liabilities and Shareholders’ Equity	$16,051,211	$16,769,885

 

 

	For The Three Months Ended
	March 31,
	2021	2020 (1)
Sales, net	$2,073,455	$7,053,418
Cost of Sales	838,297	2,565,410
Gross Profit	1,235,158	4,488,008
Operating Expenses:
Professional Fees	173,493	136,125
Depreciation and Amortization	83,449	171,909
Selling Expenses	474,389	378,645
Research and Development	195,620	59,458
Equity Compensation Expense	-	182,772
Consulting Fees	106,174	81,545
General and Administrative	1,712,366	818,145
Total Operating Expenses	2,745,491	1,828,599
Income (loss) from Operations	(1,510,333)	2,659,409
Other Income (Expense):
Interest Income	427	542
Interest Expense	(1,035)	(40,689)
Total Other Income (Expense)	(608)	(40,147)
Income (loss) before income taxes	(1,510,940)	2,619,261
Provision for Income Taxes	-	-
Net Income (loss)	$(1,510,940)	$2,619,261
Net income (loss) Per Common Share
Basic	$(0.09)	$0.17
Diluted	$(0.09)	$0.14
Basic Weighted Average Common Shares Outstanding	16,805,402	15,850,352
Diluted Weighted Average Common Shares Outstanding	16,805,402	18,117,710

 

(1) Share amounts with respect to the common stock and Convertible Series A Preferred Stock have been retroactively restated to reflect the reverse split thereof, which was effected as of the close of business on September 10, 2020.

 

 

The following is a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA (in thousands, except percentages; unaudited):

 

	For The Three Months Ended
	March 31,
	2021	2020
	(Unaudited)	(Unaudited)
Net income (loss)	$(1,510,940)	$2,619,261
Interest Income	(427)	(542)
Interest Expense	1,035	40,689
Depreciation and Amortization	83,449	171,909
Other	-	-
EBITDA	$(1,426,883)	$2,831,317
Equity Compensation Expense	-	182,772
Adjusted EBITDA	$(1,426,883)	$3,014,089
Net revenue	$2,073,455	$7,053,418
Adjusted EBITDA Margin	(69)%	43%

 

   

INVESTOR RELATIONS CONTACT:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

[email protected]