TOMI Environmental Solutions Reports 66% Revenue Decline and Increased Operational Losses

TOMI Environmental Solutions, Inc. reported significant financial challenges in its latest quarterly filing, revealing a sharp decline in revenue and increased operational losses. For the three months ending June 30, 2025, the company generated $1.03 million in net sales, a decrease of 66% from $3.01 million in the same period last year. The six-month figures also reflected a downturn, with revenues falling to $2.61 million from $4.13 million, marking a 37% decline. The company attributed this drop primarily to customers delaying capital expenditures amid economic uncertainties, particularly due to tariffs affecting supply chains.

The company's gross profit for the second quarter was $677,000, down from $1.85 million a year earlier, while the gross profit margin improved slightly to 66% from 62%. This increase was attributed to a favorable product mix, including higher sales of service offerings. However, total operating expenses rose to $1.81 million from $1.73 million, driven by increased professional fees and consulting costs, leading to an operating loss of $1.13 million compared to a profit of $122,000 in the prior year.

Operationally, TOMI reported a backlog of sales orders totaling approximately $1.4 million as of June 30, 2025, with expectations of further growth in service revenue driven by increased demand from life sciences customers. The company also noted a 33% increase in service-based revenue for the quarter, reflecting a shift towards more service-oriented offerings. Additionally, TOMI is actively negotiating new contracts valued at around $2 million, which could bolster its revenue in the latter half of the year.

In terms of financial health, TOMI's total assets decreased to $8.48 million from $9.69 million at the end of 2024, while total liabilities increased to $5.82 million from $5.59 million. The company reported a cash balance of $569,000, down from $665,000, and an accumulated deficit of $55.8 million. These figures raise concerns about the company's ability to continue as a going concern, prompting management to explore additional financing options to support operations.

Looking ahead, TOMI aims to leverage its innovative SteraMist technology to expand its market presence, particularly in the life sciences and food safety sectors. The company is also focusing on enhancing its product offerings and exploring new partnerships to drive growth. However, management cautioned that the ongoing economic environment and market conditions could continue to impact performance, and there is no guarantee that the anticipated financing will be secured on favorable terms.