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What changed in TOMI Environmental Solutions, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TOMI Environmental Solutions, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+347 added−460 removedSource: 10-K (2026-03-31) vs 10-K (2025-04-14)

Top changes in TOMI Environmental Solutions, Inc.'s 2025 10-K

347 paragraphs added · 460 removed · 102 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn the United States, the EPA, the FDA and other governmental authorities regulate the development, manufacture, sale, and distribution of our products and services. Our international operations also are subject to a significant amount of government regulation, including country-specific rules and regulations and U.S. regulations applicable to our international operations.
Biggest changeIn addition, we maintain over 200 trademarks registered or pending in multiple classes across the globe, covering chemical formulations, sterilization equipment, services, and training. Government Regulation Our business is subject to government regulations in all countries in which we operate. In the United States, the EPA, FDA, and other authorities regulate the development, manufacture, sale, and distribution of our products.
Information contained on our website is not incorporated by reference unless specifically stated therein. 15 Table of Contents In addition, the SEC maintains a website that contains reports, proxy statements, and other information about issuers, such as TOMI, who file electronically with the SEC. The address of the website is www.sec.gov.
In addition, the SEC maintains a website that contains reports, proxy statements, and other information about issuers, such as TOMI, who file electronically with the SEC. The address of the website is www.sec.gov.
The Surface Unit is sold with a case of BIT Solution of four-gallon bottles. 11 Table of Contents SteraMist Transport The SteraMist Transport unit, an all-in-one dual voltage fogging product designed to treat a wide variety of vehicle sizes with an application time of only 20 minutes per 1,000 cubic feet. Additional features include remote start and cycle notification lights.
SteraMist Transport An all-in-one dual-voltage fogging product for vehicles. Application time of 20 minutes per 1,000 cubic feet. Features remote start and cycle notification lights. Sold with a case of BIT Solution (eight 32-oz bottles).
Item 1. BUSINESS Overview TOMI Environmental Solutions, Inc. (“TOMI,” “we,” “our,” or the “Company”) is a global leader in bacteria decontamination and infectious disease control, offering environmentally friendly solutions for indoor air and surface disinfection and decontamination.
Item 1. Business Overview TOMI Environmental Solutions, Inc. ("TOMI," "we," "our," or the "Company") is a global provider of disinfection and decontamination solutions, offering environmentally friendly products and services for indoor air and surface treatment.
INFORMATION WITH RESPECT TO OUR BUSINESS IN GENERAL Manufacturing We outsource the manufacturing and blending of our SteraMist ® line of equipment and BIT ™ Solution. Our SteraMist ® equipment is manufactured by ISO9001 registered companies with multiple facilities in Pennsylvania, Delaware, New Jersey, North Carolina, California, and Australia.
This multi-channel approach, combined with our qualification services and growing OEM partnerships, creates a durable competitive position that is difficult to replicate quickly. Manufacturing We outsource the manufacturing and blending of our SteraMist® equipment and BIT™ Solution. Equipment is manufactured by ISO 9001 registered companies with facilities in Pennsylvania, Delaware, New Jersey, North Carolina, California, and Australia.
Our flagship product, SteraMist, uses our patented and registered Binary Ionization Technology (“BIT”) to deliver a low-percentage (7.8%) hydrogen peroxide-based fog or mist to affect all indoor environments and surface areas. Developed under a grant from the United States Defense Advanced Research Projects Agency (“DARPA”), SteraMist generates ionized Hydrogen Peroxide (“iHP”) using cold plasma science.
Our flagship product line, SteraMist uses our patented Binary Ionization Technology (“BIT”) to deliver a low-concentration (7.8%) hydrogen peroxide-based fog or mist that effectively treats all indoor environments and surface areas.
SteraMist Surface Unit The SteraMist Surface Unit, the original all enclosed fully portable TOMI product is a handheld, point and spray disinfection decontamination unit intended to provide quick turnover of any affected space. The Surface Unit is sold with a case of BIT Solution of four-gallon bottles.
Sold with a case of BIT Solution (eight 32-oz bottles). SteraMist Surface Unit The original handheld, fully portable unit for quick-turnover disinfection of any affected space. Sold with a case of BIT Solution (four-gallon bottles). SteraMist Environment System (ENV) A transportable, remotely controlled system for complete room disinfection.
Our comparable competitors include companies that market other hydrogen peroxide-based products, such as Steris Corporation (“Steris”), Bioquell, Inc. (“Bioquell”) currently owned by Ecolab, Inc. (“Ecolab”), and The Clorox Company (“Clorox”), miscellaneous hydrogen peroxide products various ultraviolet companies and hundreds of quad ammonia-chemical companies.
Comparable competitors include companies marketing hydrogen peroxide-based products, such as Steris Corporation, Bioquell (owned by Ecolab), and The Clorox Company, as well as numerous ultraviolet and quaternary ammonium chemical companies. Some competitors have longer operating histories, greater name recognition, and substantially greater financial and marketing resources.
Our solution is blended by an EPA approved blender; our blend includes one sole active ingredient, 7.8% Hydrogen Peroxide. TOMI maintains ownership of all the SteraMist ® product lines, including our BIT ™ Solution. Neither our manufacturer nor chemical blender may make modifications to the manufacturing or blending of our products without our request or consent in written format.
Our BIT Solution is blended by an EPA-approved blender using a single active ingredient: 7.8% hydrogen peroxide. TOMI maintains full creative control throughout design and manufacturing, and neither our manufacturer nor blender may modify products without our written consent. Intellectual Property Our intellectual property portfolio is a key strategic asset supporting our global market position.
SteraMist with 7.8% Hydrogen peroxide is not subject to stringent government regulations that usually apply to the transporting chemicals We believe that we are currently compliant in all material respects with applicable regulatory requirements. To date, every registration for our technology we have applied for has been accepted.
We believe we are currently compliant in all material respects with applicable regulatory requirements, and to date, every registration we have applied for has been accepted. 9 Table of Contents Human Capital As of March 20, 2026, we employ 20 full-time executive, operational, and administrative personnel.
Research and development expenses for the years ended December 31, 2024 and 2023, were approximately $291,000 and $492,000, respectively. Government Regulation Our business is subject to various degrees of governmental regulation in the countries in which we operate.
Research and development expenses for the years ended December 31, 2025 and 2024 were approximately $290,000 and $291,000, respectively. In the past, we have made significant strides in expanding our regulatory registrations and efficacy study portfolio to capitalize on new and existing market opportunities.
Additional features include downloadable and printable cycle data in PDF format (lot # of BIT Solution, location identifier, injection/dwell/aeration times, and error notifications) and audit reporting. These features are required for many Life Science facilities. The ENV is sold with a case of BIT Solution of four-gallon bottles.
Supports manual and fogging modes; provides downloadable cycle data and audit reporting required by Life Sciences facilities. Sold with a case of BIT Solution (four-gallon bottles). The fourth-generation ENV, featuring a 24-volt universal outlet model, is now commercially available.
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BIT transforms a sole active ingredient hydrogen peroxide solution into iHP through a high voltage atmospheric cold plasma arc, producing submicron to 3-micron hydroxyl radical particles that effectively treat surfaces and environments with the same velocity and characteristics of a gas.
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Developed under a grant from the United States Defense Advanced Research Projects Agency (“DARPA”), SteraMist generates ionized Hydrogen Peroxide (“iHP”) through a high-voltage atmospheric cold plasma arc, converting hydrogen peroxide solution into submicron hydroxyl radical particles. This process achieves a 6-log (99.9999%) or greater kill rate against a broad spectrum of pathogens, leaving only oxygen and humidity as by-products.
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Our innovative and novel process ensures eradication of pathogens with a 6-log (99.9999%) and greater kill rate, effectively leaving no harmful by-products lingering in the treated area.
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We maintain U.S. Environmental Protection Agency (“EPA”) registration for our BIT solution, along with applicable regulatory approvals in all 50 states, Washington D.C., Canada, and approximately 40 other countries. We serve four primary market divisions: Life Sciences, Hospital-Healthcare, Food Safety, and Commercial.
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SteraMist’s innovative methodology, inspired from atmospheric chemistry, not only guarantees effectiveness but also maintains a commitment to environmental sustainability by ensuring the only by-product from the process is oxygen and humidity, a complete package of benefits unmatched in its industry.
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Within such industries, our revenue is derived from equipment sales, BIT Solution consumables, corporate decontamination services, and Installation/Operational/Performance Qualification (IQ/OQ/PQ) services. Our mission: Innovating for a Safer World®. 2025 Highlights While 2025 presented revenue headwinds, the year was marked by significant commercial momentum, new market entries, product validation across all four divisions, and a strong exit pipeline.
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We attribute our success to the collaborative efforts of Titan Defense and DARPA who uncovered a superior technology that mimics nature’s cleansing mechanism, bringing this natural phenomenon indoors and providing us with a competitive edge in the healthcare disinfection, life sciences decontamination, and food safety sanitization markets. 4 Table of Contents We believe that we possess the best technologies in the world in the disinfection and decontamination space.
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The following summarizes key announcements and milestones during fiscal year 2025: First Quarter On January 10, 2025, we announced support for partners and clients preparing for emerging public health threats, including RSV, Human Metapneumovirus (HMPV), and highly pathogenic Avian Influenza (H5N1), leveraging SteraMist for infection prevention across government agencies, commercial clients, and school districts.
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The needs of the pharmaceutical and vivarium space, as well as experiences with global pandemics and other heath related emergencies, such as the COVID-19 pandemics, has provided us with the opportunity and expertise to implement a clear strategy to develop and manufacture additional products to enhance and improve our portfolio.
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On February 4, 2025, we deployed SteraMist iHP technology to support wildfire recovery efforts in California communities. On February 27, 2025, we achieved compliance recognition on the Avetta vendor management platform, reflecting our commitment to health, safety, and environmental (HSE) excellence. This follows our 2024 Gold Safety Award from Highwire.
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In addition, we continue to market and commercialize our BIT technology as an industry standard in disinfection and decontamination globally, which we believe will lead to increased market share, profitability, and capability strength. Our products are an environmentally friendly solution, and our processes address the concerns of sustainability.
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Affiliations with Avetta, Highwire, and ISNetworld open new avenues for TOMI with a broader network of industry leaders. On March 20, 2025, we deployed SteraMist iHP technology at NASA’s Johnson Space Center, marking our expansion into the aerospace sector. On March 21, 2025, we announced an expansion into aquaculture with new partner Algafeed.
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Customers are requesting and discussing the positive results of our product and the environmentally friendly results compared to the caustic and environmentally unfriendly results of many other disinfectants. SteraMist has established a successful track record in fighting pandemics and outbreaks and implementing SteraMist for emergency preparedness is vital.
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On March 24, 2025, we announced a contract to install a SteraMist iHP Custom Engineered System (“CES”) at a leading university in Rhode Island, valued at approximately $450,000. On March 25, 2025, we announced an OEM partnership with PBSC, a premier manufacturer of high-containment, material decontamination, and cleanroom solutions, integrating iHP into their passthrough hatches and chambers.
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The COVID-19 pandemic took the world by surprise, and history has shown that other pandemics and viruses are likely to follow. Using a proven and trusted disinfectant for emergency outbreaks and daily for preventative maintenance, such as SteraMist, can alleviate the threat of infections from spreading and could stop a possible outbreak.
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Second Quarter On May 30, 2025, the Board of Directors (the “Board”) appointed Mr. David Vanston as Chief Financial Officer of the Company, bringing substantial financial accounting and reporting expertise to support the Company's operations and internal control improvement initiatives.
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The Science Behind the Technology Introducing a revolutionary approach to disinfection and decontamination, our technology offers a streamlined and effective solution. By harnessing the power of atmospheric chemistry, our process converts 7.8% hydrogen peroxide into a plasma-generated hydroxyl radical, achieving a 6-log and greater kill of pathogens leaving only oxygen and humidity as by-products.
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On June 12, 2025, SteraMist was honored with the 2025 “Disinfection and Decontamination Products Company of the Year” award from Medtech Outlook. On June 16, 2025, we announced the first commercial installation of our new SteraMist Integration System – Standalone (“SIS-SA”) with a leading CDMO, marking the commercial launch of this product line.
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It is a simple yet effective solution that sets a new standard for global cleaning disinfection decontamination practices. BIT technology was initially developed in response to weaponized anthrax spore attacks, and detailed testing performed by DARPA demonstrated the success of the technology in neutralizing chemical warfare agents.
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On June 23, 2025, we announced that SteraMist demonstrated efficacy in combating Honeybee Colony Collapse, positioning TOMI to support global food security through environmental biosecurity. 4 Table of Contents Third Quarter On July 16, 2025, we announced the successful SIS-SA installation in the pharmaceutical isolator market.
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BIT, a TOMI patented process aerosolizes and activates a low concentration hydrogen peroxide solution, producing a fine aqueous mist (0.3-3 um in diameter) that contains a high concentration of hydroxyl radicals (“.OH”).
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Since that announcement, we have integrated SteraMist iHP into two additional enclosures with a strong pipeline for further installations. On August 11, 2025, our East Coast distributor Ares Scientific announced an additional win with a new university client using our SIS platform, strengthening our academic vertical.
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The .OH damages pathogenic and resistant organisms (such as bacteria, bacteria spores, viruses, mold spores, other fungi, and yeast) via oxidation of proteins, carbohydrates, and lipids and rendering the building blocks of nature’s amino acids, DNA and RNA inactive – leading to complete cellular disruption.
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On August 12, 2025, we announced a major new customer in the eye health sector, comparable in scale to Pfizer and Merck, who implemented SteraMist iHP at two facilities in under four months and placed open BIT Solution orders for 2026.
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The unique alteration of the chemistry occurs only once BIT solution passes through the atmospheric cold plasma arc, which causes the breaking of the double bond of a hydrogen peroxide molecule and results in an .OH hydroxyl radical known as iHP.
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On September 16, 2025, the Company announced the appointment of Francesco Fragasso to its Board, strengthening TOMI's corporate governance and bringing additional expertise to support the Company's strategic growth initiatives. On September 18, 2025, the FDA broadened the permitted use of hydrogen peroxide as a direct food additive.
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This patented process allows these hydroxyl radicals to exist in high concentrations without rapidly recombining and losing reactivity, while seeking all surfaces within the proximity of the resulting mist or fog. TOMI has and continues to adapt this innovative technology into an everyday solution for use by multiple industries.
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This regulatory change significantly expands the potential application of SteraMist iHP in the food safety market, particularly for ready-to-eat food processing. On September 24, 2025, we onboarded the first of three major commercial service provider companies in Q3, all of which show strong potential for expanded SteraMist iHP adoption through their franchise networks.
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Under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), we are mandated to register our disinfectants with the Environmental Protection Agency (“EPA”) and specific state regulatory bodies. SteraMist BIT was EPA-registered (#90150-2) in June 2015 as a hospital-healthcare and broad-spectrum surface disinfectant for misting/fogging applications.
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Fourth Quarter On October 1, 2025, we announced the appointment of Harold W. Paul to the Company’s Board. On October 1, 2025, we announced the purchase of SteraMist iHP equipment and BIT Solution totaling $175,000 by Trauma and Casualty Team (T.A.C.T.) franchises, a premier provider of decontamination services operating 18 franchises across the United States.
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We achieved a cutting-edge claim on the EPA label and was coined as the first equipment + solution combination hospital-healthcare disinfectant on the market and maintain the claim as the only EPA Registered Solution + Equipment combination that provides the unique technology of hydrogen peroxide ionization.
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T.A.C.T.'s adoption of SteraMist technology represents a key milestone in the Company's commercial growth strategy. On November 5, 2025, the Company entered into an equity line of credit (“ELOC”) pursuant to which the Company has the option to sell, from time to time, up to $20,000,000 shares of its common stock over a 24-month period.
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Today our EPA registered BIT solution is manufactured at an EPA-registered solution blender and our product performance is supported by Good Laboratory Practice (“GLP”) efficacy data which includes mold control and air/surface remediation with claims to combat Staphylococcus, Pseudomonas, MRSA, Salmonella, H1N1, Clostridium difficile spores, and Norovirus.
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The ELOC provides the Company with flexible access to capital on an as-needed basis, subject to applicable Nasdaq listing requirements. On November 10, 2025, we showcased our SIS platform at the AALAS 76th National Meeting in Long Beach, California, a key lead generation event for our animal research vertical.
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In March 2020, our EPA label was updated to include claims against Emerging Viral Pathogens, meeting criteria for both Enveloped and Large Non-enveloped viruses.
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On November 26, 2025, we announced a custom integration pipeline valued at approximately $3 million, with ten active projects across our SIS and CES platforms. Strategic OEM partnerships with ESCO, Steelco, PBSC, Nuaire, and Getinge are driving platform growth and broader distribution.
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In 2021, SteraMist BIT 0.35% hydrogen peroxide received its EPA registration (#90150-3), and on June 2, 2022, SteraMist was added to its seventh EPA’s List, List Q for combating rare or novel viruses like Monkeypox virus and SARS-CoV-2 variants causing COVID-19. TOMI continues to build its portfolio of feasibility studies with renowned and trusted partners. In 2023, the U.S.
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On December 18, 2025, we secured a signed purchase order valued at approximately $500,000 from a global biopharmaceutical leader for the integration of SteraMist iHP into passthrough fill boxes used in sterile manufacturing.
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Department of Defense’s BSAT Biorisk Program Office and the Department of Homeland Security’s Science and Technology Directorate’s Plum Island Animal Disease Center published a report demonstrating that iHP is an effective tool for decontamination of biological toxoids and dangerous pathogens that may disrupt our world. We maintain registrations in all 50 states, Washington D.C., Canada, and approximately 40 other countries.
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On December 22, 2025, we announced the adoption of SteraMist iHP by a leading Cell and Gene Therapy (“CGT”) manufacturer for a commercial-scale pharmaceutical facility, including full IQ/OQ qualification and whole-facility iHP Corporate Service fogging of manufacturing suites, QC labs, and support spaces.
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These endorsements signify our commitment to safeguarding our world against any potential threats. 5 Table of Contents Our Customers We empower our customers to create a healthier and safer world by offering innovative products and services spanning life sciences, healthcare, food safety, and everyday visited facilities.
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We are actively pursuing additional EPA labels and await further acceptance of our food safety label submitted in mid-2025, while preparing to file for a fifth label based on the above referenced studies conducted with Plum Island.
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Our comprehensive solutions encompass a range of capital equipment and services, from mobile sprayers and foggers to fully automated installed systems, alongside routine and emergency deployment, qualification, and validation procedures.
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Sales of our BIT Solution have remained stable, but we are fulfilling open orders and automatic shipments for customers, with a notable increase in demand from food safety clients. The FDA's late 2025 announcement, along with ongoing individual customer studies, has enhanced our visibility and sales in the Food Safety sector.
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We also operate across diverse sectors such as Life Sciences, Hospital-Healthcare, Food Safety, and everyday buildings visited by people, and provide the option for routine and emergency treatment through our service provider membership. Our revenue is derived from a variety of industry groups.
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While we face challenges with some international registrations, we are committed to overcoming these hurdles, which we believe will ultimately drive sales growth for TOMI. Additionally, we continue to invest in safety and compliance recognitions, such as Avetta and ISN, which are increasingly becoming prerequisites for many of our integration projects.
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The life-science industry’s growth trajectory is fueled by various factors including global demographic trends, technological advancements, regulatory requirements, and economic influences. In hospital-healthcare, the rising concern over hospital-acquired infections, coupled with increasing demand for medical procedures and efficiency improvements, drives a demand for our products and services.
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Regarding the referenced $3 million pipeline for integration projects on November 26, 2025, which encompasses our SIS platform, Hybrid, and CES offerings, approximately $1.6 million has been awarded, with $800,000 recognized since the announcement. While the SIS and iHP Passthrough was a success, we have since started our second project with OEM partner, PBSC.
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Food safety regulations mandate strict sanitation practices in food handling and processing facilities to ensure the production of safe and hygienic food products. Sanitation plays a critical role in preventing contamination and the spread of foodborne illnesses. Regulations typically outline requirements for cleaning and disinfecting food contact surfaces, equipment, utensils, and facilities to remove dirt, debris, and harmful microorganisms.
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These projects vary in scope, including manufacturing, installation, and validation requirements, which may extend over multiple quarters depending on customer schedules. We anticipate the remaining pipeline to be awarded in the first half of 2026.
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It is imperative to emphasize the importance of a proactive approach, particularly in disinfection and decontamination. Investing in advanced technology should not solely be reactive to crises but should be seen as an integral part of a robust risk management strategy for any business.
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Additionally, we have identified an extra $1.7 million in projected integration pipeline from bids written specific for iHP technology and from our existing customer and contractor relationships. This of course does not include our entire integration pipeline which stands at $10 million. The Science Behind the Technology BIT technology was initially developed in response to weaponized anthrax spore attacks.
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At TOMI, we are dedicated to modernizing operational efficiencies across diverse industries, including life sciences, hospital-healthcare, food safety, hospitality, and emergency service sectors. By integrating SteraMist iHP technology into facilities proactively, we not only mitigate existing risks but also strengthen defenses against future challenges the world may face.
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It aerosolizes and activates a 7.8% hydrogen peroxide solution through an atmospheric cold plasma arc, producing a fine aqueous mist (0.3–3 μm) with a high concentration of hydroxyl radicals (“OH”). These radicals damage pathogens via oxidation of proteins, carbohydrates, and lipids, rendering DNA and RNA inactive and causing complete cellular disruption.
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Establishing a culture of safety and hygiene through routine cleaning disinfection protocols employers instill confidence among their patients, researchers, employees, students, emergency responders - showcasing a commitment to the well-being of everyone.
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SteraMist BIT was EPA-registered (90150-2) in June 2015 as the first equipment-plus-solution combination hospital-healthcare disinfectant. Our EPA label supports claims against Staphylococcus, MRSA, Salmonella, H1N1, C. difficile spores, Norovirus, and Emerging Viral Pathogens including SARS-CoV-2 variants. In 2021, our 0.35% hydrogen peroxide product received separate EPA registration (90150-3).
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Our system and support team stand ready to provide a solution that ensures a consistently safe and sterile environment, bolstering day-to-day safety maintenance and preventing the escalation of potential health hazards.
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In 2022, SteraMist was added to the EPA’s List Q for rare and novel viruses. GLP efficacy data supports all label claims. 5 Table of Contents Our Customers SteraMist is used by organizations across life sciences, hospital-healthcare, food safety, and commercial sectors.
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Validated and proven effective, SteraMist is being used throughout the world and has been demonstrated to reduce certain resistant problem organisms, such as bacterial spores, Vancomycin-resistant Enterococcus (“VRE”), Clostridium difficile, Middle East Respiratory Syndrome (“MERS”), Ebola (“Ebola”) and SARS CoV-2 the virus that causes COVID-19.
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Our current client roster includes Fortune 100 pharmaceutical and healthcare companies such as Pfizer, Merck, AbbVie, Bausch & Lomb, ThermoFisher Scientific, Eli Lilly and Company, FUJIFILM Diosynth Biotechnologies USA, and Fresenius Kabi, as well as government agencies including the National Institutes of Health (“NIH”), the U.S.
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We now provide a wide array of products and services customized to meet the unique operational needs of our global clientele, providing a customizable approach to our customers and elevating their overall performance. We tackle critical global challenges, delivering real results that reflect our dedication to making a positive impact on employees, customers, investors, and the communities we serve.
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Department of Agriculture (“USDA”), Centers for Disease Control and Prevention (“CDC”), United States Army Medical Research Institute of Infectious Diseases and of Chemical Defense (“USAMRIID” and “USAMRICD”) and NASA’s Johnson Space Center. In food safety, our customers include Nestle, Sensient Technologies Corporation, Mayorga Organics, Lakeview Farms, LLC, Batory Foods, Danone, and Perdue.
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In an industry full of archaic methods and publicized technology, gaining acceptance from all stakeholders is a lengthy process.
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Healthcare customers include Tower Health, Novant Health, Corewell Health, NorthEast Medical Services, St. Jude Children’s Research Hospital, Edgewell Personal Care, and Mass General Brigham. And, we continue to work in tandem with service providers from franchises of DKI, First Onsite, Steri-Clean, Triumvirate Environmental, and Controlled Contamination Services, LLC.
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Today, our impressive roster of clients includes Tower Health, Novant Health, Pfizer, Merck, Fresenius Kabi, DKI, First Onsite, Fleet, Nestle Purina, Simplot, Perdue, and various government agencies such as the National Institutes of Health (“NIH”) and United States Department of Agriculture (“USDA”).
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Our products and services are offered through direct sales, independent representatives, and a global network of distributors and certified service providers operating under the SteraMist Pro Certified (“SPC”) program.
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The Company is equipped for when these esteemed organizations prioritize expanding their use of SteraMist iHP and aligns with our corporate mission: Innovating for a Safer World . Industries & Market Segments SteraMist products are designed to address a wide spectrum of industries using iHP.
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Industries and Market Segments Our operations are organized around four divisions, each targeting specific regulatory and operational requirements: Life Sciences The life sciences sector was among the first to adopt SteraMist iHP, recognizing the limitations of traditional vaporized hydrogen peroxide (VHP) and harsh chemical gaseous methods.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may, however, be unable to adequately preserve such rights due to a number of reasons, including the following: · our rights could be invalidated, circumvented, challenged, breached or infringed upon; · we may not have sufficient resources to adequately prosecute or protect our intellectual property rights; · upon expiration of our patents, certain of our key technology may become widely available; or · third parties may be able to develop or obtain patents for similar or competing technology. 19 Table of Contents Although we devote resources to the establishment and protection of our patents and trademarks, the actions we have taken or will take in the future may not be adequate to prevent violation of our patents, trademarks and proprietary rights by others or prevent others from seeking to block sales of our products as an alleged violation of their patents, trademarks and proprietary rights.
Biggest changeWe may, however, be unable to adequately preserve such rights due to several reasons, including the following: · our rights could be invalidated, circumvented, challenged, breached or infringed upon, · we may not have sufficient resources to adequately prosecute or protect our intellectual property right, · upon expiration of our patents, certain of our key technology may become widely available; or · third parties may be able to develop or obtain patents for similar or competing technology.
For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the availability of certain types of patent rights and enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide only limited benefit or no benefit.
For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the availability of certain types of patent rights and enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide only limited or no benefit.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could decline.
Despite our reasonable efforts, it may not be possible for us to innovate in a way to keep us competitive with other companies due to financial and time constraints which will negatively impact our business. The development and initial production and enhancement of the decontamination systems we produce is often accompanied by design and production delays and related costs.
Despite our reasonable efforts, it may not be possible for us to innovate in a way to keep us competitive with other companies due to financial and time constraints which will negatively impact on our business. The development and initial production and enhancement of the decontamination systems we produce is often accompanied by design and production delays and related costs.
As such, our unfilled orders and previously completed sales should not be relied on as a measure of anticipated demand or future revenue. Our agreements with restoration industry specialists are not exclusive, which may allow for our competitors to sell their products and services to such specialists.
As such, our unfilled orders and previously completed sales should not be relied on as a measure of anticipated demand or future revenue. Our agreements with restoration industry specialists are not exclusive, which may allow our competitors to sell their products and services to such specialists.
We intend to fund ongoing activities by utilizing our current cash on hand, the cash generated from operations, and by raising additional capital through equity or debt financings. We continue to pursue various options to raise capital to enhance our cash position, including more recently by issuing convertible notes to accredited investors.
We intend to fund ongoing activities by utilizing our current cash on hand, the cash generated from operations, and by raising additional capital through equity or debt financing. We continue to pursue various options to raise capital to enhance our cash position, including more recently by issuing convertible notes to accredited investors.
Despite our current hiring efforts for non-management employees and redefining of job descriptions, we have a limited management team size. This limited management team may reduce our ability to effectively manage our business as it grows or respond to significant demand from customers. As we expand, we expect to increase the size of our management team.
Despite our current hiring efforts for non-management employees and redefining job descriptions, we have a limited management team size. This limited management team may reduce our ability to effectively manage our business as it grows or responds to significant demand from customers. As we expand, we expect to increase the size of our management team.
Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost and reduces our control over the manufacturing process. We rely upon third parties to supply us with our products.
Our reliance upon third-party contractors, suppliers and manufacturers for the manufacture of our products increases the risk that we will not have enough of our products or such quantities at an acceptable cost, and reduces our control over the manufacturing process. We rely upon third parties to supply us with our products.
As disclosed in Item 9A of this Form 10-K , we concluded that as of December 31, 2024, material weaknesses existed because (I) There are limited resources within the finance and accounting departments with sufficient knowledge and experience in applying U.S.
As disclosed in Item 9A of this Form 10-K, we concluded that as of December 31, 2025, material weaknesses existed because: (I) there are limited resources within the finance and accounting departments with sufficient knowledge and experience in applying U.S.
We also have agreements with our employees and consultants that obligate them to assign their inventions to us. It is possible that technology relevant to our business will be independently developed by a person that is not a party to such an agreement.
We also have agreements with our employees and consultants that oblige them to assign their inventions to us. It is possible that technology relevant to our business will be independently developed by a person that is not a party to such an agreement.
These include: risks associated with currency exchange rate fluctuations; requirements or preferences for domestic products or solutions, which could reduce demand for our products; difficulties in enforcing agreements and collecting receivables through some foreign legal systems; unexpected legal or regulatory changes; enhanced credit risks in certain countries and emerging market regions; significant variations in tax rates among the countries in which we do business, and tax withholding obligations in respect of our earnings; exchange controls or other trade restrictions including, constraints on our supply chain and the industries in which we operate; customs clearance and shipping delays; general economic and political conditions in countries where we operate or where end users of our products are situated; natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions affecting our ability to manufacture or sell our products; difficulties associated with managing a large organization spread throughout various countries; difficulties in enforcing intellectual property rights or weaker intellectual property right protections in some countries; and difficulties associated with compliance with a variety of laws and regulations governing international trade.
These include: risks associated with currency exchange rate fluctuations; requirements or preferences for domestic products or solutions, which could reduce demand for our products; difficulties in enforcing agreements and collecting receivables through some foreign legal systems; unexpected legal or regulatory changes; enhanced credit risks in certain countries and emerging market regions; significant variations in tax rates among the countries in which we do business, and tax withholding obligations in respect of our earnings; exchange controls or other trade restrictions including, constraints on our supply chain and the industries in which we operate; customs clearance and shipping delays; general economic and political conditions in countries where end users of our products are situated; natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions affecting our ability to sell our products; difficulties in enforcing intellectual property rights or weaker intellectual property right protections in some countries; and difficulties associated with compliance with a variety of laws and regulations governing international trade.
Our success depends on our ability to adequately protect our intellectual property. Our commercial success depends, in part, on our ability to obtain, maintain, defend, file new or enforce our existing patents, trademarks, trade secrets and other intellectual property rights covering our technologies and products throughout the world.
Our commercial success depends, in part, on our ability to obtain, maintain, defend, file new or enforce our existing patents, trademarks, trade secrets and other intellectual property rights covering our technologies and products throughout the world.
To the extent that we have obtained or are able to obtain patents, trademarks or other intellectual property rights in any foreign jurisdictions, it may be difficult to stop the infringement of our patents, trademarks or the misappropriation of other intellectual property rights.
To the extent that we have obtained or are able to obtain patents, trademarks or other intellectual property rights in any foreign jurisdiction, it may be difficult to stop the infringement of our patents, trademarks or the misappropriation of other intellectual property rights.
In addition, if we decrease our headcount and expenses, we may be unable to support our continued product development and planned growth, and we may not be able to achieve profitability. Our SteraMist ® family of products currently accounts for the majority of our revenue, and our success is almost completely dependent on the success of our SteraMist ® brand.
In addition, if we decrease our headcount and expenses, we may be unable to support our continued product development and planned growth, and we may not be able to achieve profitability. 10 Table of Contents Our SteraMist® family of products currently accounts for the majority of our revenue, and our success is almost completely dependent on the success of our SteraMist® brand.
The shareholder vote requirement is in addition to any shareholder vote required under any other section of the FBCA or our articles of incorporation, as amended. The concentration of our common stock ownership with our executive officers, directors and affiliates will limit your ability to influence corporate matters.
The shareholder vote requirement is in addition to any shareholder vote required under any other section of the FBCA or our articles of incorporation, as amended. 18 Table of Contents The concentration of our common stock ownership with our executive officers, directors and affiliates will limit your ability to influence corporate matters.
Provisions of our articles of incorporation, as amended, and amended bylaws as well as provisions of Florida law could discourage, delay or prevent a merger, acquisition or other change in control of our company, even if such change in control would be beneficial to our shareholders.
Provisions of our articles of incorporation, as amended, and amended by laws as well as provisions of Florida law could discourage, delay or prevent a merger, acquisition or other change in control of our company, even if such change in control would be beneficial to our shareholders.
Third-party suppliers may not be able, or fail, to comply with applicable regulatory requirements, which could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls, operating restrictions and criminal prosecutions, any of which could significantly and adversely harm our business and results of operations.
Third-party suppliers may fail, or be unable, to comply with applicable regulatory requirements, which could result in sanctions being imposed on us or our suppliers, including fines, injunctions, civil penalties, delays, suspension or withdrawal of regulatory approvals, seizures or recalls, and operating restrictions, any of which could significantly and adversely harm our business and results of operations.
Violations of those laws and regulations could have material negative consequences for us including large fines, criminal sanctions, prohibitions on participating in certain transactions and government contracts, sanctions on other companies if they continue to do business with us and adverse publicity. Failure to comply with the U.S.
Violations of those laws and regulations could have material negative consequences for us including large fines, criminal sanctions, prohibitions on participating in certain transactions and government contracts, sanctions on other companies if they continue to do business with us and adverse publicity.
Risk Related to Our Company and Business We have a history of losses and may not be able to achieve profitability in the future. We generated a net loss of approximately $4.5 and $3.4 million for the years ended December 31, 2024 and 2023, respectively. We also had an accumulated deficit of $54.3 million as of December 31, 2024.
Risk Related to Our Company and Business We have a history of losses and may not be able to achieve profitability in the future. We generated a net loss of approximately $3.7 million and $4.5 million for the years ended December 31, 2025 and 2024, respectively. We also had an accumulated deficit of $58.1 million as of December 31, 2025.
Factors that may affect the volatility of our stock price include the following: · anticipated or actual fluctuations in our quarterly or annual operating results; · our success, or lack of success, in developing and marketing our products and services; · changes in general economic, political and market conditions in or any of the regions in which we conduct our business; · changes in financial estimates by us or of securities or industry analysts; · the issuance of new or updated research reports by securities or industry analysts; · the announcement of new products, services, or technological innovations by us or our competitors; · the announcement of new customers, partners or suppliers; · the ability to collect our outstanding accounts receivable; · changes in our executive leadership; · regulatory developments in our industry affecting us, our customers or our competitors; · competition; · actual or purported “short squeeze” trading activity; and · the sale or attempted sale of a large amount of common stock, including sales of common stock following exercises of outstanding warrants.
Factors that may affect the volatility of our stock price include the following: · anticipated or actual fluctuations in our quarterly or annual operating results; · our success, or lack of success, in developing and marketing our products and services; · changes in general economic, political and market conditions in either of the regions in which we conduct our business; · changes in financial estimates by us or of securities or industry analysts; · the issuance of new or updated research reports by securities or industry analysts; · the announcement of new products, services, or technological innovations by us or our competitors; · the announcement of new customers, partners or suppliers; · the ability to collect our outstanding accounts receivable; · changes in our executive leadership; · regulatory developments in our industry affecting us, our customers or our competitors; competition; · actual or purported “short squeeze” trading activity; and · the sale or attempted sale of a large amount of common stock, including sales of common stock following exercises of outstanding warrants. 16 Table of Contents We do not intend to pay dividends for the foreseeable future.
If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed. Our sales to foreign entities are subject to far reaching and complex export control laws and regulations in the United States and elsewhere.
If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed. Our sales to foreign entities are subject to far-reaching and complex export control laws and regulations.
A material weakness is a deficiency, or a combination of deficiencies, in the internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
A material weakness is a deficiency, or combination of deficiencies, in internal controls such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
We outsource the manufacturing of our SteraMist ® line of equipment to two manufacturing companies and use contract manufacturers to build our BIT-based systems, as we do not maintain our own manufacturing facilities.
We outsource the manufacturing of our SteraMist® line of equipment to a single manufacturing company and use contract manufacturers to build our BIT-based systems, as we do not maintain our own manufacturing facilities.
As a result, we are exposed to competitive price pressures on every order, and our agreements with customers do not provide assurance of future sales. Our customers are not required to make minimum purchases and may cease purchasing our products at any time without penalty.
Our contracts and purchase commitments with customers may be canceled under certain circumstances. As a result, we are exposed to competitive price pressures on every order, and our agreements with customers do not provide assurance of future sales. Our customers are not required to make minimum purchases and may cease purchasing our products at any time without penalty.
As of December 31, 2024, we had approximately $665,000 of cash and cash equivalents and an accumulated deficit of $54.3 million. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.
As of December 31, 2025, we had approximately $88,000 of cash and cash equivalents and an accumulated deficit of $58.1 million. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.
Our executive officers, directors and owners of 5% or more of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate approximately 24.2% of our outstanding common stock as of March 10, 2025. This percentage includes outstanding shares of common stock, convertible preferred stock, warrant and stock options that are vested and exercisable as of that date.
Our executive officers, directors and owners of 5% or more of our outstanding common stock and their respective affiliates beneficially owned, in the aggregate approximately 22.8% of our outstanding common stock as of March 11, 2026. This percentage includes outstanding shares of common stock, convertible preferred stock, warrant and stock options that are vested and exercisable as of that date.
Further, if one or more competitors successfully develops a decontamination product that is more effective, better tolerated, results in a better customer experience, is easier to use or otherwise more attractive than our products, our ability to continue to commercialize our products could be significantly and adversely affected due to a lack of ability to compete, which would have a material adverse effect on our business, financial condition and results of operations.
Further, if one or more competitors successfully develops a decontamination product that is more effective, better tolerated, results in a better customer experience, is easier to use or otherwise more attractive than our products, our ability to continue to commercialize our products could be significantly and adversely affected due to a lack of ability to compete, which would have a material adverse effect on our business, financial condition and results of operations. 14 Table of Contents If the quality of our products do not meet the expectations of our customers, then our brand and reputation or our business could be adversely affected.
Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.
Any failure to maintain effective internal controls could severely inhibit our ability to accurately report our financial condition, results of operations, or cash flows.
If we fail to maintain relationships with our current suppliers, we may not be able to effectively commercialize and market our products, due to risks including increased product costs, limited inventory that is not capable of meeting demand and the possible misappropriation of our proprietary information, such as our trade secrets and know-how.
If we fail to maintain our relationship with our current primary manufacturer, we may not be able to effectively commercialize and market our products due to risks including increased product costs, limited inventory, and the possible misappropriation of our proprietary information, such as our trade secrets and know-how.
However, there can be no assurance that we will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to us, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance.
However, the availability of ELOC and our ability to sell stock depends substantially on the trading price and volume of our stock, which may materially limit our ability to utilize the ELOC to raise capital. 11 Table of Contents There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us, as our ability to raise capital may be affected by various factors, including general market conditions, volatility of our stock price, investor interests and expectations, and our financial performance.
The decontamination and environmental infectious disease control industry is extremely competitive. The competition includes remediators and disinfection/decontamination companies such as Steris, Bioquell (Eco-lab) and Clorox, various miscellaneous hydrogen peroxide companies, ultraviolet companies and hundreds of quad ammonia-chemical companies.
The competition includes remediators and disinfection/decontamination companies such as Steris, Bioquell (Eco-lab) and Clorox, various miscellaneous hydrogen peroxide companies, ultraviolet companies and hundreds of quad ammonia-chemical companies.
There is substantial doubt about the company’s ability to continue as a going concern. For the years ended December 31, 2024 and 2023, our net loss was approximately $4,477,000 and $3,403,000, respectively, and the cash used in operations was approximately $1,440,000 and $3,599,000, respectively.
There is substantial doubt about the Company’s ability to continue as a going concern. For the years ended December 31, 2025 and 2024, our net loss was approximately $3.7 million and $4.5 million, respectively, and the cash used in operations was approximately $1.2 million and $1.4 million, respectively.
The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
As part of our growth strategy, we are continuing to expand our operations internationally. The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
We do not have long-term contracts with any of our customers, and our sales history or backlog cannot be relied upon as a future indicator of our revenues. Our contracts and purchase commitments with customers may be canceled under certain circumstances.
We do not have long-term customer contracts, and our sales history or backlog cannot be relied upon as an indicator of our future sales. We do not have long-term contracts with any of our customers, and our sales history or backlog cannot be relied upon as a future indicator of our revenues.
Despite these efforts, such events could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. We may be unable to enforce our intellectual property rights throughout the world. As part of our growth strategy, we are continuing to expand our operations internationally.
Despite these efforts, such events could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. We may be unable to enforce our intellectual property rights throughout the world. Our ability to protect our intellectual property rights internationally is also subject to significant uncertainty.
The stock markets generally have experienced, and will probably continue to experience, extreme price and volume fluctuations that have affected the market price of the shares of many small-cap companies.
Risk Related to Our Securities Our stock price is volatile and there is a limited market for our shares. The stock markets generally have experienced, and will probably continue to experience, extreme price and volume fluctuations that have affected the market price of the shares of many small-cap companies.
GAAP, including but not limited to developing appropriate accounting estimates, reserves, and allowances in a timely manner and to maintain proper segregation of duties; and (II) Policies and procedures with respect to the review, supervision and monitoring of our accounting and SEC reporting functions were either not designed and in place or not operating effectively, For a detailed description of such material weaknesses, please see Item 9A Control and Procedures.
GAAP, including developing appropriate accounting estimates, reserves, and allowances in a timely manner and maintaining proper segregation of duties; and (II) policies and procedures with respect to the review, supervision, and monitoring of our accounting and SEC reporting functions were either not fully designed and in place or not operating effectively.
In addition, during times of lower trading volume, a shareholder who desires to sell a large number of shares of common stock may need to sell the shares in increments over time to mitigate any adverse impact of the sales on the market price of our stock.
In addition, during times of lower trading volume, a shareholder who desires to sell a large number of shares of common stock may need to sell the shares in increments over time to mitigate any adverse impact of the sales on the market price of our stock. 17 Table of Contents If our shareholders sell, or the market perceives that our shareholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could fall.
There is no guarantee that we will be able to regain compliance with the Bid Price Requirement by the Compliance Date, and failure to do so may subject us to delisting proceedings of NASDAQ.
There is no guarantee that we will be able to regain compliance with either requirement within the applicable timeframes, and failure to do so may subject us to delisting proceedings.
If the quality of our products does not meet the expectations of customers, then our brand and reputation, and our ability to receive referral customer business, could be adversely affected.
In addition, even in the absence of quality issues, we may be subject to claims and liability if the performance of products do not meet the expectations of our customers. If the quality of our products does not meet the expectations of customers, then our brand and reputation, and our ability to receive referral customer business, could be adversely affected.
Accordingly, we currently intend to retain earnings, if any, for use in the business and we do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable future.
We have not paid dividends on our common stock since inception. The continued operation and expansion of our business will require substantial funding. Accordingly, we currently intend to retain earnings, if any, for use in the business and we do not anticipate that we will pay any cash dividends on shares of our common stock at this time.
The misuse of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
As a result, an unsuccessful defense of a product liability or other claim could have a material adverse effect on our financial condition, results of operations and cash flows. 15 Table of Contents The misuse of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
We are subject to a variety of risks associated with doing business internationally. We maintain significant international operations, including operations in the U.S., Canada, Mexico, Europe, Asia Pacific and Latin America. As a result, we are subject to a number of risks and complications associated with international manufacturing, sales, services, and other operations.
We are subject to a variety of risks associated with doing business internationally. We sell our products internationally through exclusive and non-exclusive sales representatives and distributors in Canada, Mexico, Europe, Asia Pacific and Latin America. As a result, we are subject to a number of risks and complications associated with international sales and other operations.
Additionally, supply chain disruptions and access to materials have impacted our suppliers’ ability to deliver products to us in a timely manner. 18 Table of Contents Because of our reliance upon third parties to supply us with our products, we do not have control over the manufacturing process of our third-party suppliers and are dependent on such third-party suppliers for compliance with the regulations applicable to our products.
Because of our reliance upon third parties to supply us with our products, we do not have control over the manufacturing process and are dependent on such suppliers for compliance with all regulations applicable to our products.
Our BIT technology as a Hospital-Healthcare disinfectant is relatively new, having received full Hospital registration for Clostridium difficile spores from the EPA in mid-2017. Our sales are dependent upon broad market acceptance of our technology that replaces long-standing failing manual cleaning techniques such as quaternary ammonium compounds and bleach for disinfection, with our no-touch mechanical process.
Our sales are dependent upon broad market acceptance of our technology that replaces long-standing failing manual cleaning techniques such as quaternary ammonium compounds and bleach for disinfection, with our no-touch mechanical process.
If the quality of our products do not meet the expectations of our customers, then our brand and reputation or our business could be adversely affected. In the course of conducting our business, we must adequately address quality issues that may arise with our products, including defects in third-party components and inventory.
In the course of conducting our business, we must adequately address quality issues that may arise with our products, including defects in third-party components and inventory. We may not be able to eliminate or mitigate occurrences of these issues and associated liabilities.
The recent imposition by the United States of tariffs, sanctions or other restrictions on goods exported from the United States or imported into the United States, or countermeasures imposed in response to such government actions, could increase the cost of goods for our products or reduce our ability to sell products globally, which may adversely affect our operating results and financial condition. 17 Table of Contents In late February 2022, Russia launched a large-scale military attack on Ukraine, amplifying already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including the United States, and resulting in global sanctions against Russia by various countries, including the United States, the United Kingdom, and European Union.
The recent imposition by the United States of tariffs, sanctions or other restrictions on goods exported from the United States or imported into the United States, or countermeasures imposed in response to such government actions, could increase the cost of goods for our products or reduce our ability to sell products globally, which may adversely affect our operating results and financial condition.
These include: maintaining authorized but unissued shares of our capital stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; no provision for the use of cumulative voting for the election of directors; maintaining a staggered board, limiting the speed at which our shareholders may replace our entire Board, and limiting the ability of our shareholders to call special meetings. 25 Table of Contents In addition, Florida Business Corporation Act, or FBCA, § 607.0902 generally provides that shares acquired in excess of certain specified thresholds, without first obtaining the approval of our Board, will not possess any voting rights unless such voting rights are approved by a majority of our disinterested shareholders.
These include: maintaining authorized but unissued shares of our capital stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; no provision for the use of cumulative voting for the election of directors; maintaining a staggered board, limiting the speed at which our shareholders may replace our entire Board, and limiting the ability of our shareholders to call special meetings.
In addition, future changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and products and the enforcement of intellectual property. 20 Table of Contents We face significant competition in our industry, some of which have longer operating histories, more established products or greater resources than we have currently.
In addition, future changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and products and the enforcement of intellectual property rights.
If we are unable to develop and maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results in a timely manner Our management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S.
Our management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with U.S. GAAP.
If we fail to meet these continued listing requirements, our common stock may be subject to delisting, which could materially impact the liquidity of our common stock making it more challenging to buy and sell shares of our common stock.
As a listed company on Nasdaq, we are required to meet certain financial, public float, bid price, and liquidity standards on an ongoing basis. If we fail to meet these continued listing requirements, our common stock may be subject to delisting, which could materially impact its liquidity and make it more challenging for shareholders to buy and sell our shares.
If our sales representatives do not achieve the productivity levels, we expect them to reach, our revenue will not grow at the rate we expect, and our financial performance will suffer. 16 Table of Contents We do not have long-term customer contracts, and our sales history or backlog cannot be relied upon as an indicator of our future sales.
Furthermore, the use of our products will often require or benefit from direct support from us. If our sales representatives do not achieve the productivity levels, we expect them to reach, our revenue will not grow at the rate we expect, and our financial performance will suffer.
Further, as we maintain a limited number of manufacturers for our SteraMist ® line of equipment and blenders for our SteraMist ® solutions, alternative production facilities may not be available in the event of a disruption, or if alternative production facilities are available, the number of third-party suppliers with the necessary manufacturing and regulatory expertise to produce our products at their current quality level is limited, and it could be expensive and take a significant amount of time to arrange for and qualify alternative suppliers, which could have a material adverse effect on our business.
Alternative production facilities may not be available in the event of a disruption. The number of third-party suppliers with the necessary manufacturing capability, regulatory expertise, and quality standards to produce our products is limited.
While we experienced an increase of our revenue and net income in 2020, primarily due to a significant increase of demand for our products as protective measures against the spread of the COVID-19 disease during the pandemic, such demand subsided in 2021 as the pandemic gradually came under control, which caused us to incur a net loss in 2021 and such trend has continued, and there is no guarantee that any similar pandemic or global health crisis will emerge.
Prior to 2020, we did not generate any profit from our business operations. The increase in our revenue and net income during 2020 was primarily due to a significant increase in demand for our products as protective measures against the spread of the COVID-19 disease during the pandemic.
For more information, please see risk factor above entitled “If we are unable to develop and maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results in a timely manner” As a result of disclosure of information, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.
If we are unable to develop and maintain an effective system of internal controls over financial reporting, or if the requirements of being a public company strain our resources, we may not be able to accurately report our financial results in a timely manner.
On March 28, 2025, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying us that, for the preceding 30 consecutive business days, the closing bid price for the Company’s common stock, par value $0.01 per share (the “Common Stock”) was below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).
We are currently subject to two concurrent Nasdaq deficiency proceedings. On November 17, 2025, we received a deficiency notice that our closing bid price had been below the minimum $1.00 per share requirement (Nasdaq Listing Rule 5550(a)(2)) for 30 consecutive business days.
Removed
Prior to 2020, we had not generated any profit from our business operations.
Added
Such demand subsided in 2021 as the pandemic gradually came under control, which caused us to incur a net loss in 2021 and such trend has continued.
Removed
Furthermore, the use of our products will often require or benefit from direct support from us.
Added
Our BIT technology as a Hospital-Healthcare disinfectant has been proven successful in reducing infections in hospital ICU, BIT having received full Hospital registration for Clostridium difficile spores from the EPA in mid-2017.
Removed
In addition, the Israel-Hamas War and wider Middle East geopolitical developments may negatively impact regional and global economic markets (including Europe and the United States), companies in other countries (particularly those that have done business with Russia, Ukraine, or Israel) and on various sectors, industries and markets for securities and commodities globally.
Added
In November 2025, we entered into an ELOC, pursuant to which we have the right, but not the obligation, to sell up to $20,000,000 of shares of our common stock over a 24-month period subject to certain conditions.
Removed
Accordingly, the actions discussed above and the potential for a wider conflict could increase financial market volatility, cause severe negative effects on regional and global economic markets, industries, and companies and have a negative effect on the Company’s performance.
Added
We are subject to risks associated with international conflicts, geopolitical instability, and related economic disruptions . Our business and operations may be adversely affected by geopolitical events and international conflicts, including armed conflicts, wars, terrorism, and political instability in regions where we operate or where our customers, suppliers, or distributors are located.
Removed
The extent and duration of these military actions or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted. These and any related events could have a significant impact on the Company’s performance.
Added
Such events can cause significant disruptions to global supply chains, energy markets, financial markets, and international trade, any of which could adversely affect our ability to source products, serve international customers, and operate our business.
Removed
Foreign Corrupt Practices Act (“FCPA”), and similar laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences. Failure to comply with the FCPA, and similar laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences.
Added
Current and ongoing geopolitical tensions, including conflicts in the Middle East and Eastern Europe, the imposition of economic sanctions, trade restrictions, and countermeasures by affected nations, have contributed to elevated energy costs, supply chain disruptions, and financial market volatility.
Removed
We face significant risks if we fail to comply with the FCPA and other anti-corruption laws that prohibit improper payments or offers of payment to foreign governments and political parties for the purpose of obtaining or retaining business.
Added
The duration, scope, and ultimate resolution of these conflicts and related diplomatic and economic measures cannot be predicted, and the consequences for global commerce, energy supply, and financial stability remain uncertain. These and any related geopolitical events could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
Removed
In many foreign countries, particularly in countries with developing economies, it may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other applicable laws and regulations.
Added
Climate-related risks, evolving environmental regulations, and increased focus on environmental, social and governance matters could adversely affect our business, financial condition and results of operations. Our operations and those of our customers and suppliers may be subject to increased regulatory requirements related to climate change, greenhouse gas emissions, and environmental sustainability.
Removed
Any violation of the FCPA or other applicable anti-corruption laws could result in severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracting, which could have a material and adverse effect on our reputation, businesses, financial conditions, operating results and cash flows.
Added
Federal, state and foreign governmental authorities continue to consider and implement new or more stringent environmental regulations, including potential requirements relating to carbon emissions, energy consumption, chemical usage, and product lifecycle impacts.
Removed
Our operations are subject to environmental laws and regulations that may increase costs of operations and impact or limit our business plans. We are subject to environmental laws and regulations affecting many aspects of our present and potential future operations, including a wide variety of EPA labeling and other state regulatory agency requirements.
Added
Compliance with any such new or expanded regulations could increase our operating costs, require modification of our manufacturing or distribution processes, or require changes to our product formulations, any of which could have a material adverse effect on our business, financial condition and results of operations.
Removed
For example, under the Federal Insecticide, Fungicide, and Rodenticide Act, we are required to register with the EPA and certain state regulatory authorities as a seller of disinfectants, and we are subject to EPA labeling requirements for each use that SteraMist ® is intended to address.
Added
Also, natural disasters, extreme weather events, floods, droughts and other disruptions — could adversely affect our operations, our suppliers' ability to deliver materials and components in a timely manner, and our customers' ability to operate their facilities.
Removed
Compliance with these laws and regulations may result in increased costs and delays as a result of administrative proceedings and certain reporting obligations. Public officials and entities may seek injunctive relief or other remedies to enforce applicable environmental laws and regulations.
Added
Such disruptions could reduce demand for our products, impair our supply chain, or require us to incur additional costs to maintain business continuity. 12 Table of Contents Separately, investors, customers, regulators and other stakeholders are increasingly focused on environmental, social and governance (“ESG”) matters.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors.” Governance; Board Oversight The Audit Committee of our Board provides direct oversight over cyber security risk and provides updates to the Board of Directors regarding such oversight, when and if appropriate. Management provides periodic updates to the Audit Committee regarding cyber security matters including significant new cyber security threats or incidents, when and if appropriate.
Biggest changeManagement provides periodic updates to the Audit Committee regarding the state of our cybersecurity program, including material developments reported by our third-party IT provider, any significant threats or incidents, and any recommended changes to our cybersecurity posture. The Audit Committee reports to the full Board on cybersecurity matters as appropriate.
Item 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cyber security threats, as such term is defined in Item 106(a) of Regulation S-K.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying and managing material risks to our business associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. To address these risks, we have engaged a qualified third-party information technology and cybersecurity services provider to manage and oversee our cybersecurity program.
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We have established internal procedures for assessing, identifying and managing cyber security risks, which are built into our overall information technology function and are designed to help protect our information assets and operations from internal and external cyber threats, and protect employee information from unauthorized access or attack, as well as secure our networks and systems.
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We believe that outsourcing these functions to a dedicated third-party provider allows us to access cybersecurity expertise and capabilities that are commensurate with the risks we face, notwithstanding our size and resources as a smaller reporting company.
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Such processes include physical, procedural and technical safeguards and routine review of our policies and procedures to identify risks and refine our practices. We consider the internal risk oversight programs of third-party service providers before engaging them in order to help protect us from any related vulnerabilities.
Added
Our third-party IT and cybersecurity provider is responsible for the day-to-day management of our cybersecurity risk program, which includes the following principal elements: Risk identification and assessment.
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We have not encountered cyber security challenges that have materially impaired our operations or financial condition. Additional information regarding risks from cyber security threats is provided at “Item 1A.
Added
Our third-party provider conducts ongoing monitoring and periodic assessments of our information technology environment to identify cybersecurity vulnerabilities and threats, including risks arising from our use of cloud-based platforms, remote access systems, and third-party software applications. Assessments consider both internal risks and external threat intelligence relevant to our industry and operational profile. Technical and procedural safeguards .
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Our third-party provider has implemented and maintains a combination of technical controls, including access controls, network monitoring, endpoint protection, data backup and recovery procedure, and procedural safeguards governing acceptable use, credential management, and data protection. Our provider periodically reviews and updates these controls as our technology environment and the broader threat landscape evolve. Third-party and vendor risk.
Added
Our third-party IT provider assists us in evaluating the cybersecurity practices of vendors and service providers that have access to our systems or data prior to engagement.
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We seek appropriate representations from key service providers regarding their security practices; however, we may have limited ability to verify such representations or to compel remediation in the event a third-party provider experiences a security incident that affects our data or operations. Incident response. Our third-party IT provider maintains incident response procedures designed to detect, contain and remediate cybersecurity events.
Added
These procedures include defined escalation protocols to ensure that any significant cybersecurity incident is promptly communicated to our senior management and, where appropriate, to the Audit Committee of our Board. We have not experienced any cybersecurity incidents that have materially impaired our operations or financial condition.
Added
However, there can be no assurance that we will not be subject to such incidents in the future, including incidents affecting our third-party IT provider or other vendors. Our reliance on a third-party provider means that we are dependent on that provider's continued performance, financial stability and operational integrity.
Added
A failure by our third-party IT provider to adequately perform its responsibilities, or a cybersecurity incident affecting the provider itself, could expose us to risks that we may not be able to detect or remediate in a timely manner.
Added
Additional information regarding risks arising from cybersecurity threats is provided under the risk factor captioned "The risk of loss of the Company's intellectual property, trade secrets or other sensitive business information or disruption of operations could negatively impact on the Company's financial results" in Item 1A of this Annual Report. 19 Table of Contents Governance; Board Oversight The Audit Committee of our Board is responsible for oversight of cybersecurity risk as part of its broader risk oversight function.
Added
At the management level, our senior management team maintains primary responsibility for our relationship with our third-party IT and cybersecurity provider, including reviewing the scope of services provided, evaluating the provider's performance, and ensuring that cybersecurity matters are escalated appropriately within the organization.
Added
While we do not employ a dedicated Chief Information Security Officer, we rely on the expertise of our third-party provider to supply the specialized knowledge and experience necessary to manage our cybersecurity risks effectively.
Added
We periodically assess whether the scope and capabilities of our third-party provider remain appropriate given the evolution of our business and the threat environment, and we engage additional specialists on an as-needed basis to address specific risks or conduct targeted assessments.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs the company keeps up with the demand for SteraMist ® , there is a dedicated quality control room to allow our service engineers to work on machines for quick and efficient service to our customers. The lease for our U.S. headquarters has a 10-year term and provides for annual rent of approximately $165,000.
Biggest changeAs the company keeps up with the demand for SteraMist ® , there is a dedicated quality control room to allow our service engineers to work on machines for quick and efficient service to our customers. The lease for our U.S. headquarters has a 10-year term and provides for annual rent of approximately $169,000 with approximately three years remaining.
The new warehouse is significantly larger than our previous headquarters, allowing TOMI to store its new product lines and stock a greater variety of inventory–quickly delivering a customer purchase. The training room is integrated with the newest technology to be able to present SteraMist ® virtually around the world.
The warehouse is significantly larger than our previous headquarters, allowing TOMI to store its new product lines and stock a greater variety of inventory–quickly delivering a customer purchase. The training room is integrated with the newest technology to be able to present SteraMist ® virtually around the world.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+6 added−1 removed0 unchanged
Biggest changeOur policy is to retain all earnings, if any, to provide funds for operation and expansion of our business. The declaration of dividends, if any, will be subject to the discretion of our Board, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others. Recent Sales of Unregistered Securities None.
Biggest changeOur policy is to retain all earnings, if any, to provide funds for operation and expansion of our business. The declaration of dividends, if any, will be subject to the discretion of our Board, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is currently listed on Nasdaq Capital Market under the symbol “TOMZ.” Shareholders As of April 9, 2025, there were 67 record holders of our common stock; however, we believe we have approximately 5,000 stockholders, including those held in street name.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is currently listed on Nasdaq Capital Market under the symbol “TOMZ.” Shareholders As of March 11, 2026, there were 67 record holders of our common stock; however, we believe we have approximately 5,000 stockholders, including those held in street name.
On April 9, 2025, the last reported sale price of our common stock on the Nasdaq was $0.78 per share. Dividends We have not paid and do not currently intend to pay cash dividends on our common stock in the foreseeable future.
On March 11, 2026, the last reported sale price of our common stock on the Nasdaq was $0.67 per share. Dividends We have not paid and do not currently intend to pay cash dividends on our common stock in the foreseeable future.
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Issuer Repurchases of Equity Securities None. Equity Compensation Plan Information For information about our equity compensation plans and other related stockholder matters see Item 12 of Part III of this Annual Report on Form 10-K.
Added
Recent Sales of Unregistered Securities During the year ended December 31, 2025, we entered into Securities Purchase Agreements (the “2025 SPA”) with certain accredited investors pursuant to which we agreed to sell and issue to certain Investors in a private placement transaction, pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in one or more closings up to an aggregate principal amount of $3,000,000 of Convertible Notes (the “2025 Notes”).
Added
Pursuant to the 2025 SPA and as of December 31, 2025, we sold and issued $535,000 in convertible promissory notes initially convertible into 428,000 shares of common stock at a conversion price of $1.25 per share. As of December 31, 2025, approximately $2,465,000 remains available for issuance under the 2025 SPA, subject to the terms and conditions thereof.
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The 2025 Notes mature and are due on the fifth anniversary of the respective issuance dates in 2030. The 2025 Notes bear simple interest at a rate of 12% per annum, payable in equal monthly installments.
Added
The 2025 Notes are convertible into shares of our Common Stock, at the option of the holder, at a conversion price of $1.25 per share, which shall not exceed $1.55 per share.
Added
In addition, we can require the Investors to convert the 2025 Notes at the then current conversion price at any time after 90 days from the issue date if the Common Stock has a closing bid price of $1.55 per share or higher on any twenty (20) days within a thirty (30) day period of consecutive trading days, or if a “fundamental change” occurs (as defined in the 2025 SPA).
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The 2025 Notes are unsecured and senior to other indebtedness subject to certain exceptions. Interest expense related to the 2025 Notes for the year ended December 31, 2025 was $44,675. Issuer Repurchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

27 edited+107 added−154 removed2 unchanged
Biggest changeWe record an allowance for estimated losses when the facts and circumstances indicate that particular inventories may not be usable or realized when comparing our current inventory levels to anticipated demand for our product Long-Lived Assets Including Acquired Intangible Assets We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset.
Biggest changeLong-Lived Assets Including Acquired Intangible Assets We assess long-lived assets, including property and equipment and acquired intangible assets, for potential impairment at the end of each fiscal year or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimation process requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain.
GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimation process requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain.
To determine revenue recognition for contracts with customers we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligation(s).
To determine revenue recognition for contracts with customers we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as we satisfy the performance obligations.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations relates to the years ended December 31, 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations relates to the years ended December 31, 2025 and 2024.
Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates.
GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying consolidated financial statements and notes. Actual results could differ materially from these estimates.
Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when the control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for the products and services. We also record an estimated allowance for anticipated product returns.
Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for those products and services.
At contract inception, we assess the goods or services promised within each contract, assess whether each promised good or service is distinct and identify those that are performance obligations. 39 Table of Contents We must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above for each distinct performance obligation identified in step (ii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above.
We must use judgment to determine: (a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; (b) the transaction price under step (iii) above; and (c) the stand-alone selling price for each performance obligation for the allocation of transaction price under step (iv) above.
On an ongoing basis, we evaluate our estimates, including those related to allowance for credit losses, inventory, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others.
On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses, inventory obsolescence reserves, allowances for sales returns, the fair value of stock-based awards, the realizability of deferred tax assets, the useful lives of intangible assets and property and equipment, and contingent liabilities.
Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC, Topic 606”), Revenue from Contracts with Customers.. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
Shipping and handling costs charged to customers are included in Product Revenues. The associated expenses are treated as fulfillment costs and are included in Cost of Revenues. Revenues are reported net of sales taxes collected from customers. Product revenue includes sales from our standard and customized equipment, solution and accessories sold with our equipment.
Title and risk of loss generally pass to our customers upon shipment. Shipping and handling costs charged to customers are included in product revenues, and the associated expenses are treated as fulfillment costs included in cost of revenues. Revenues are reported net of sales taxes collected from customers.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. 40 Table of Contents Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
This discussion and analysis should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K.
This discussion and analysis should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report on Form 10-K. Business Highlights and Recent Events Fiscal year 2025 was a year of meaningful commercial progress for TOMI Environmental Solutions, Inc.
This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.
This ASU requires disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation and amortization, within relevant income statement captions, and also requires disclosure of total selling expenses and their definition. The ASU is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.
We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the years ended December 31, 2024 and 2023.
These assumptions are based on our historical experience, industry data, and management's expectations about future business conditions. We noted no long-lived asset impairment charges for the years ended December 31, 2025 and 2024.
Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. We enter into contracts that can include various combinations of products and services, which are primarily distinct and accounted for as separate performance obligations.
We enter into contracts that can include various combinations of products and services, which are primarily distinct and accounted for as separate performance obligations. This is particularly the case for our SIS and CES, which may involve equipment supply, installation, validation services and ongoing maintenance components.
Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products. Service and training revenue include sales from our high-level decontamination and service engagements, validation of our equipment and technology and customer training.
Product revenue includes sales from our standard and customized equipment, BIT Solution and accessories. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive.
The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.
The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.
These factors raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements in this Form 10-K are issued.
Under ASC 205-40, management is required to evaluate whether there is substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued.
A breakdown of our statement of cash flows for the year ended December 31, 2024 and 2023 is provided below: For the Year Ended December 31, 2024 2023 Net Cash (Used) in Operating Activities $ (1,440,000 ) $ (3,599,000 ) Net Cash (Used) in Investing Activities $ (262,000 ) $ (217,000 ) Net Cash Provided By Financing Activities: $ 27,500 $ 2,288,000 37 Table of Contents Operating Activities Cash used in operating activities for the years ended December 31, 2024 and 2023 was $1,440,000 and $3,599,000, respectively.
A breakdown of our statement of cash flows for the year ended December 31, 2025 and 2024 is provided below: Cash flows for the year (in thousands) 2025 2024 Change Net cash used in operating activities $ (1,197 ) $ (1,440 ) $ 243 Net cash used in investing activities (136 ) (262 ) 126 Net cash provided by financing activities 755 28 727 Net decrease in cash $ (578 ) $ (1,674 ) $ 1,096 Operating Activities Net cash used in operating activities was $1,197,000 for the year ended December 31, 2025, an improvement of $243,000, or 17%, from $1,440,000 in 2024.
The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted.
The ASU is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.
We use a specific identification method based on subsequent product return activity and historical average calculations to estimate the allowance for sales returns.
We also record an estimated allowance for anticipated product returns, determined using a specific identification method based on subsequent return activity and historical average calculations. 27 Table of Contents Use of Estimates The preparation of consolidated financial statements in conformity with U.S.
The Notes are due on the fifth anniversary of the issuance date of the Notes and bear simple interest at a rate of 12% per annum, payable in equal monthly installments.
The notes bear interest at 12% per annum, are convertible at the option of the holder at $1.25 per share and mature on the fifth anniversary of their respective issuance dates.
This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU. 41 Table of Contents Recently adopted accounting pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280).
We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements. Recently adopted accounting pronouncements In December 2023, FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740).
For the years ended December 31, 2024 and 2023, our net loss was approximately $4,477,000 and $3,403,000, respectively, and the cash used in operations was approximately $1,440,000 and $3,599,000, respectively. As of December 31, 2024, we had approximately $665,000 of cash and cash equivalents and an accumulated deficit of $54.3 million.
For the year ended December 31, 2025, we incurred a net loss of $3.7 million and used $1.2 million of cash in operating activities. Our accumulated deficit as of December 31, 2025 is $58.1 million.
Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted.
The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied either a prospective or a retrospective approach. Early adoption is permitted.
In estimating this reserve, management considers factors such as historical collection experience, customer creditworthiness, specific customer risk, and current and expected general economic conditions For those customers to whom we extend credit, in accordance with the Current Expected Credit Loss (CECL) model, we make a risk-based evaluation at the point of sale which is further reviewed on both an individual and collective (pool) basis during each reporting period based on ASC 326.
We make a risk-based evaluation of collectability at the point of sale, which is further reviewed on both an individual and collective basis during each reporting period. As of December 31, 2025, net accounts receivable totaled $689,153 compared to approximately $1,881,000 as of December 31, 2024.
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). In January 2025, ASU No. 2025-01 was issued to clarify the effective date for all public business entities. The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions.
Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), subsequently clarified by ASU No. 2025-01 issued in January 2025.
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Annual and Quarterly Highlights Business Update For the year ended December 31, 2024, we increased our year-over-year annual revenue by 5%, continued to expand our customer base, diversify our product line, and secured significant agreements and new partnerships which will enhance our ability to distribute the SteraMist brand of products and services on a global scale, aiding in the utilization of iHP technology across all divisions worldwide.
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Despite a revenue[DV1] decline driven primarily by the timing of large equipment purchases that occurred in the prior year, the Company advanced its strategic platform across multiple fronts: launching new product lines, securing landmark customers, establishing OEM partnerships with global manufacturers, and entering new markets including aerospace, aquaculture, cell and gene therapy.
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In 2024, we expanded many existing relationships and established new key contacts. Formally, we contracted with six different partners across various regions, including Malaysia, India, Canada, Korea, and the United Kingdom. These collaborations span focused industries such as pharmaceuticals, vivarium, emergency services, and general disinfection and cleaning.
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Our SteraMist® iHP™ technology is now protected by more than 30 utility and design patents through 2038 and is deployed in over 40 countries across our four divisions: Life Sciences, Hospital-Healthcare, Food Safety, and Commercial.
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We are committed to nurturing these partnerships alongside our other 30 partners to further develop and strengthen the SteraMist brand in the global market. 27 Table of Contents In 2024, the service decontamination sector in the Life Sciences witnessed significant shifts among key competitors domestically, creating numerous opportunities for our Company.
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In a significant expansion of our technology platform into the medical device sector, the heart monitoring device project is nearing completion and is scheduled for Factory Acceptance Testing ("FAT") in the near term.
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On March 7, 2024, we announced the expansion of SteraMist iHP Corporate Service, with customers securing contracts for routine business through 2026. This growth accelerated through the second and third quarters of 2024, culminating in a record-breaking revenue performance in quarter 3 2024.
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This initiative — developed collaboratively with a strategic partner utilizing our SIS iHP product platform — reflects our ability to design and deploy iHP technology within highly regulated medical device environments and underscores our commitment to advancing healthcare through innovation.
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Our commitment to supporting our clientele, including Pfizer, Inc. and Thermo Fisher Scientific facilities, remains strong, while we successfully onboarding new customers, including multiple smaller engagements within the Food Safety sector. These new relationships are expected to drive future sales across both capital equipment and routine service contracts.
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Upon successful FAT completion, we intend to submit our iHP device for U.S. market clearance through the 510(k) premarket notification pathway, a well-established regulatory route for medical devices of this classification.
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This positive trend is already evident in 2025, with Quarter 1 showing a 41% increase in iHP Corporate Service revenue compared to Quarter 1 2024. The addition of these customers further solidifies iHP’s position as a market leader in advanced decontamination solutions, serving corporate clients across life sciences and adjacent industries.
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We view this milestone as a meaningful step in positioning iHP as a platform technology across the broader medical device industry, and we look forward to progressing this opportunity alongside our core decontamination business.
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To enhance our market presence in the western United States, we formed a strategic partnership with EMAQ in the second quarter of 2024. EMAQ has made a significant investment exceeding $1,000,000 in SteraMist iHP equipment and will act as our regional partner to expand iHP services in this area.
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The SteraMist Integration System ("SIS"), launched in the second half of 2024, achieved its first commercial installation in Q2 2025 at a leading CDMO and has since been adopted across pharmaceutical isolators, biosafety cabinets, and OEM-integrated enclosures,reflecting the growing adoption of iHP as the preferred decontamination solution in advanced life sciences manufacturing environments.
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This collaboration is expected to drive substantial growth in solution sales, leveraging our razor-and-blade business model—where SteraMist delivery systems represent the razor, and our proprietary BIT Solution serves as the razor blade that is designed to generate ongoing revenue. The partnership is progressing well, with both companies effectively combining strengths and resources to build business and expand opportunities.
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This momentum is underpinned by a powerful macro tailwind: announced U.S. onshoring investments in pharmaceutical manufacturing now exceed $370 billion in aggregate commitments from major drugmakers, driving sustained demand for validated decontamination systems that integrate seamlessly with new facility construction. By year-end, we had 10 active integration projects with a combined pipeline valued at approximately $3 million.
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In 2024, we made the decision to declassify the TOMI Service Network (TSN) to incorporate other industries outside of remediation; however, we remain committed to supporting all our service providers that joined as TSN members.
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In December 2025, we secured a signed purchase order of approximately $500,000 from a global biopharmaceutical leader for iHP integration into sterile manufacturing passthrough fill boxes, and a leading Cell and Gene Therapy manufacturer adopted SteraMist iHP as a commercial-scale pharmaceutical facility.
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Our focus extends not only to our current partners but also to onboarding additional providers who can offer their customers the fast, harsh chemical free SteraMist iHP disinfection decontamination technology.
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We note that the conversion of certain CES projects to recognized revenue has been subject to timing delays, as pharmaceutical facility construction and capital deployment decisions in the United States were affected during 2025 by uncertainty surrounding tariff policy and its downstream impact on equipment costs, materials procurement, and supply chain planning.
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A notable example of this is our collaboration with Triumvirate Environmental, a respected leader in Environmental, Health, and Safety (EHS) services since 1988, specializing in the life science, healthcare, higher education, and advanced manufacturing industries.
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Management views this as a timing issue reflecting broader macroeconomic conditions rather than a change in underlying customer demand, and industry forecasters project that pharmaceutical manufacturing construction activity will recover and accelerate through 2026–2027 as policy clarity improves. 21 Table of Contents Our OEM partnership strategy gained significant momentum during 2025.
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We are excited about the opportunity to work with Triumvirate Environmental and anticipate forming a robust partnership in the eastern United States as they become familiar with our innovative technology and many applications. In November 2024, Bonneville Joint School District No. 93, located in Bonneville County, Idaho integrated SteraMist technology into its cleaning protocols.
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Partnerships with PBSC (formalized March 2025), ESCO, Steelco, Nuaire, and Getinge are embedding iHP directly into cleanroom enclosures, passthrough hatches, and biosafety cabinets at the point of manufacture, opening a scalable distribution channel that extends our reach without proportional increases in direct sales cost.
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This adoption underscores the district’s commitment to prioritizing the health and safety of its students and staff through advanced disinfection measures and demonstrates the versatility of our SteraMist technology and products to serve educational institutions. Many industries within our four key divisions prioritize ease of use and automation, seeking repeatable, validated, and thoroughly tested disinfection and decontamination solutions.
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In the Commercial division, T.A.C.T. franchises purchased $175,000 of SteraMist equipment and BIT Solution in Q4 2025, and our expanding relationships with franchise networks Steri-Clean (approximately 60 locations) are building a recurring BIT Solution revenue stream consistent with our razor-blade revenue model. Regulatory developments during 2025 further validated and broadened our platform across multiple new verticals.
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TOMI dedicated significant resources to developing a variety of options tailored to meet diverse budgetary requirements in response to this market demand. Among our offerings, the Custom Engineered System (CES) remains a favored choice, bolstered by a strong pipeline. However, for customers with budget constraints, our Hybrid solutions and the newly introduced SteraMist Integrated System (SIS) have become preferred alternatives.
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In September 2025, the FDA expanded the permitted use of hydrogen peroxide as a direct food additive, significantly extending the application of SteraMist iHP to food contact surfaces and ready-to-eat food processing, a market where we have demonstrated efficacy against foot-and-mouth disease virus, African Swine Fever, and mycotoxins.
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It is important to clarify that the revenue recognition and timing of completion do not directly correlate with the progress of our projects. In 2024, we actively worked on and supported in some fashion seven (7) different custom projects, many of which have been previously reported on. We have secured our first 2025 CES deal.
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In Q1, we deployed iHP at NASA's Johnson Space Center, marking our entry into aerospace, and in August we announced a new major customer in the eye health sector implementing iHP across two facilities.
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Collectively, these eight (8) deals are valued at approximately $3.7 million. Additionally, we are pleased to announce that we have secured contracts for three (3) more SIS offerings this year, totaling approximately $575,000 in sales..
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SteraMist was recognized as the 2025 "Disinfection and Decontamination Products Company of the Year" by Medtech Outlook, affirming the competitive differentiation of our technology across an expanding range of industries and applications. Notwithstanding this commercial progress, the Company recorded a net loss of approximately $3.7 million for fiscal year 2025, compared to $4.5 million in 2024.
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As these customers complete their internal evaluations and activate these iHP automated systems, we expect a significant boost in our BIT Solution sales, further enhancing our razor-and-blade business model. With the successful completion of each project, our iHP technology is rapidly gaining popularity as the preferred decontamination solution for pharmaceutical and biotech companies.
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Management continues to pursue additional financing through equity and convertible debt instruments, including the $20 million ELOC entered into with Hudson Global Ventures in November 2025, and remains focused on converting its strong commercial pipeline into recognized revenue in 2026. The financial results of operations are discussed in detail in the sections that follow.
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Further, as we continue to install our technology to these projects, the product line evolves into a comprehensive turnkey solution. To enhance our turnkey solutions, the end of 2024 and the beginning of 2025 marked a significant shift in our relationships with Original Equipment Manufacturers (OEMs).
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The following overview summarizes key factors affecting the Company’s financial performance for the year ended December 31, 2025 compared to the prior year and should be read in conjunction with the selected financial metrics presented below.
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By officially partnering with PBSC and collaborating with other industry players, TOMI is now equipped to offer a comprehensive range of iHP solutions tailored for customers requiring enclosures for controlled environments. This development not only expands our SIS offerings but also creates an additional revenue stream for TOMI.
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Financial Operations Overview (in thousands) 2025 2024 Change Cash and cash equivalents $ 88 $ 665 $ (577 ) Accounts receivable, net $ 689 $ 1,881 $ (1,192 ) Inventories, net (Note 3) $ 2,926 $ 3,578 $ (652 ) Working capital $ 1,024 $ 3,772 $ (2,748 ) Total shareholders’ equity $ 589 $ 4,099 $ (3,510 ) Total debt (convertible notes) $ 2,912 $ 2,360 $ 552 The following table summarizes selected financial metrics for the years ended December 31, 2025 and 2024 and provides a high-level overview of the Company’s operating performance.
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We are eager to see how these partnerships evolve throughout 2025. 28 Table of Contents TOMI will soon begin a project with a major conglomerate focused on the decontamination of heart monitoring devices. This initiative exemplifies our strengthened relationships with OEMs and highlights the capabilities of our SIS product offerings.
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Key financial metrics (in thousands, except per share data) 2025 2024 Change Revenue $ 5,636 $ 7,739 $ (2,103 ) Gross profit $ 3,077 $ 3,557 $ (480 ) Operating expenses 6,931 7,662 (731 ) Loss from operations $ (3,854 ) $ (4,105 ) $ 251 Net loss $ (3,749 ) $ (4,477 ) $ 728 Basic and diluted loss per share $ (0.19 ) $ (0.22 ) $ 0.03 The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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Additionally, this project aligns with our goals to advancing healthcare initiatives. We would also like to emphasize that we are fully aware of the numerous challenges currently impacting the food market. In response, we have proactively engaged with key industry players to offer our solutions and support.
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The following table presents our results of operations for the years ended December 31, 2025, and 2024, together with the changes between the periods. The discussion below addresses the significant factors contributing to the changes in our results of operations.
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We are steadily increasing our presence in the food safety marketplace primarily from tradeshows we attended in the past. As stated, we must demonstrate that we are a viable solution for this industry, and we are currently conducting numerous feasibility studies with both small and large companies.
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Results of operations (in thousands) 2025 2024 Change Revenue $ 5,636 $ 7,739 $ (2,103 ) Cost of sales 2,559 4,182 (1,623 ) Gross profit $ 3,077 $ 3,557 $ (480 ) Operating expenses: Professional fees 743 597 146 Depreciation and amortization 271 297 (26 ) Selling expenses 775 1,128 (353 ) Research and development 290 291 (1 ) Consulting fees 318 226 92 General and administrative 4,534 5,123 (589 ) Total operating expenses $ 6,931 $ 7,662 $ (731 ) Loss from operations $ (3,854 ) $ (4,105 ) $ 251 Other income (expense) 105 (372 ) 477 Net loss $ (3,749 ) $ (4,477 ) $ 728 22 Table of Contents Revenue by type (in thousands) 2025 2024 Change Product revenue $ 3,965 $ 6,035 $ (2,070 ) Service revenue 1,671 1,704 (33 ) Total revenue $ 5,636 $ 7,739 $ (2,103 ) Revenue decreased $2.1 million, or 27%, to $5.6 million for the year ended December 31, 2025 compared to $7.7 million in the prior year.
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In 2024 we entered the coffee industry with Mayorga Coffee and Organea Terra SRL, the desserts and ice cream industry with Lakeview Farms and Crank and Boom, egg white food manufacturing, pet food production and packaging, and a few agribusinesses have joined in adding iHP SteraMist to their sanitization standard operating procedures.
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The decrease was primarily attributable to the timing of certain customer equipment purchases that occurred in the prior year period. Service revenue remained relatively consistent, reflecting ongoing demand for the Company’s decontamination and service solutions. The Company continues to engage with existing and new customers regarding installations and service engagements across its target markets.
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To further highlight the effectiveness of SteraMist iHP technology in the food industry, TOMI announced several collaborative efforts with prominent organizations on new studies exploring expanded applications and benefits of SteraMist iHP. These partnerships have also opened doors to additional opportunities through introductions to their suppliers.
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Geographic revenue (in thousands) 2025 2024 Change United States $ 4,011 $ 6,098 $ (2,087 ) International 1,625 1,641 (16 ) Total $ 5,636 $ 7,739 $ (2,103 ) Domestic revenue declined primarily due to lower equipment sales, while international revenue remained relatively stable year over year, including sales of our product into various countries, including Canada, the UK and Europe.
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One of these collaborations involves a leading producer of health, hygiene, and nutrition products, where we are developing a specialized application for spraying conveyor belts to streamline the decontamination process for packaged goods, targeting pathogens such as Salmonella and Listeria.
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Cost of sales and gross profit (in thousands) 2025 2024 Change Revenue $ 5,636 $ 7,739 $ (2,103 ) Cost of sales 2,559 4,182 (1,623 ) Gross profit $ 3,077 $ 3,557 $ (480 ) Gross margin 54.6 % 46.0 % - Gross margin improved to 54.6% in 2025 from 46.0% in 2024, despite a 27% decline in revenue.
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This initiative represents a significant addition to our client portfolio, aligning with market trends driven by growing health awareness and increasing demand for sustainable, premium products. We maintain an active focus on digital marketing initiatives and business development plans with existing customers.
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The improvement was primarily driven by the Company recording an allowance for inventory reserve of approximately $1.1 million in 2024. Further details of the reserve movement are set out in Note 3. Excluding reserve movements, underlying gross margin was relatively stable year over year, with a modest decline reflecting reduced fixed cost absorption on lower overall sales volume.
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In an effort to optimize our budget, we reduced our participation in tradeshows and redirected resources towards more effective lead generation strategies such as referrals and references. While tradeshows offer valuable networking opportunities, we have found that for the short-term TOMI SteraMist’s strong reputation generates sufficient interest through other channels.

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