Business Context and Reporting Period
Company: TOMI Environmental Solutions, Inc. (TOMZ)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: TOMI provides disinfection and decontamination solutions using patented Binary Ionization Technology (BIT). The company operates in Life Sciences, Hospital-Healthcare, Food Safety, and Commercial sectors. Revenue is derived from equipment sales, consumables (BIT Solution), and decontamination services.
Subsequent Event: On July 20, 2026, the company effected a 1-for-3 reverse stock split to regain compliance with Nasdaq listing requirements. All share data in this report is retroactively adjusted.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $2,246,909 | $1,031,115 | $3,901,136 | $2,607,673 |
| Gross Profit | $1,385,306 | $677,124 | $2,217,082 | $1,628,869 |
| Gross Margin | 61.7% | 65.7% | 56.8% | 62.5% |
| Net Loss | $(382,299) | $(1,237,516) | $(1,192,945) | $(1,493,109) |
| Loss Per Share (Basic/Diluted) | $(0.05) | $(0.19) | $(0.17) | $(0.22) |
| Cash and Equivalents (End of Period) | $321,899 (as of June 30, 2026) | |||
| Working Capital | $1,818,385 (as of June 30, 2026) | |||
| Total Debt (Convertible Notes) | $2,949,022 (Net carrying value) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 118% year-over-year in Q2 2026, driven primarily by a 183% increase in product revenue (equipment and CES-related sales). Service revenue remained relatively flat.
- Operating Expenses: Total operating expenses decreased by 10% ($180,000) in Q2 2026 compared to the prior year, largely due to a $375,000 reduction in General and Administrative expenses. This was partially offset by a $158,000 increase in professional fees related to the merger and stock split.
- Accounts Receivable: Net accounts receivable increased significantly from $689,153 at year-end 2025 to $1,890,105 at June 30, 2026, reflecting higher sales volume.
- Debt Repayment: The company fully repaid its "Sale of Future Receipts" agreement with Agile Capital Funding during the six months ended June 30, 2026.
Guidance, Outlook, and Risks
Management Commentary and Outlook
- Going Concern: The filing includes a "Going Concern" warning. Management has concluded that substantial doubt exists regarding the company's ability to continue as a going concern within one year due to recurring losses and an accumulated deficit of $59.2 million.
- Liquidity Plan: To address liquidity, management is utilizing a $20 million Equity Line of Credit (ELOC) with Hudson Global Ventures (approx. $18.1 million remaining capacity), a $50 million shelf registration, and cost management initiatives.
- Pipeline: As of June 30, 2026, the sales pipeline totaled approximately $35 million, with a backlog of $2.2 million (subsequently increased to $2.5 million).
- Merger: On June 28, 2026, the company entered into a merger agreement with Carbonium Core, Inc. The transaction is contingent on raising at least $10 million in financing prior to closing.
Risks and Contingencies
- Nasdaq Delisting: The company received a delisting notice from Nasdaq for failing to meet the minimum bid price ($1.00) and minimum stockholders' equity ($2.5 million) requirements. An appeal is pending before the Nasdaq Hearings Panel.
- Internal Controls: Management identified a material weakness in internal controls over financial reporting due to limited resources and insufficient segregation of duties. Remediation is in progress but not yet complete.
- Customer Concentration: Two customers accounted for approximately 33% of revenue in Q2 2026.
- Convertible Debt: The company has $3.135 million in principal convertible notes outstanding at 12% interest. A subsequent amendment in August 2026 lowered the conversion price of the 2023 notes from $3.75 to $1.50 per share.
Investor Verification Checklist
- Merger Status: Verify the progress of the $10 million financing condition required to close the Carbonium Core merger.
- Nasdaq Compliance: Monitor the outcome of the Nasdaq Hearings Panel decision regarding the delisting appeal.
- Liquidity Runway: Assess the utilization rate of the ELOC and the timing of future equity raises given the $322k cash balance.
- Debt Conversion: Review the impact of the August 2026 amendment lowering the convertible note conversion price to $1.50 on potential dilution.
- Internal Controls: Confirm the timeline for remediation of the material weakness in financial reporting controls.