TOMZ

Good day, everyone. Welcome to the TOMI Environmental Solutions, Inc. first quarter 2026 financial results conference call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star one on your phone to enter the question queue at any time. We will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, John Nesbett of IMS Investor Relations. Sir, the floor is yours.

Thank you for joining us today for the TOMI Environmental Solutions Investor Update conference call. On today's call is TOMI's Chief Executive Officer and Chairman, Dr. Halden Shane, EJ Shane, our Chief Operating Officer, and our Chief Financial Officer, David Vanston. A telephone replay of today's call will be available through May 15th. The details of which are included in the company's press release. A webcast replay will also be available on TOMI's website, steramist.com. Certain written and oral statements made by management of TOMI may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause actual results to differ materially from our anticipated results. The information provided in this conference call is based upon the facts and circumstances known at this time.

Please refer to our filings with the Securities and Exchange Commission for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now turn the call over to TOMI's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.

Thank you, John, and thank you all for joining us today. Q1 2026 marked a healthy start to the year, highlighted by a pivotal strategic development for TOMI. Our first quarter results demonstrated significant momentum across key metrics. Revenue increased by 5% year-over-year and 67% sequentially from Q4 of 2025. Notably, applicator sales in Q1 alone surpassed our total applicator sales for the entire year of 2025, representing a remarkable 139% year-over-year growth. This success underscores the effectiveness of our razor blade consumable model as we expand our installed base. BIT solution sales have consistently grown by 21% annually since 2024 and remained above the 2025 levels in Q1 of 2026.

We also achieved a 15% reduction in operating expenses compared to Q1 of 2025 while maintaining our full capacity. The company also generated positive operating cash flow of $296,000, which is a $572,000 improvement over the same period last year. A notable trend this year is strengthening and dynamic nature of our integrated project pipeline, which continues to demonstrate meaningful momentum. This is the pipeline the company has highlighted since November of 2025 and which evolves as we advance or complete contracts. The expansion of this pipeline aligns closely with growth in our backlog, and we are disclosing only opportunities that suppliers have indicated are near signing. These opportunities tend to involve longer sales cycles. While near-term closings are communicated as they firm up, they do not represent our entire potential opportunity.

The trend is reflected in our backlog of orders. At year-end of 2025, TOMI reported $1.6 million in backlog, which grew by half a million by the close of Q1 2026 and is currently at $2.2 million. This steady backlog expansion underscores the strength of our automated integrated system and the many service offerings we implemented. Critically, backlog growth continues even as we fulfill existing orders, illustrating demand and execution across sales. At the end of quarter one, TOMI received $440,000 annual purchase orders for recurring decontamination services with a leading global medical technology company. This contract involves quarterly professional iHP decontamination services for critical clean room and laboratory environments, aligning perfectly with our strategy to build a high-margin, repeatable revenue model in addition to increasing the backlog order number.

In Q1, we achieved several other notable milestones. A private East Coast research university purchased and installed a SteraMist Hybrid system for high-level decontamination of reusable medical equipment. We sold a custom-engineered system in the U.K. to an international pharmaceutical manufacturer, which was integrated into Total Clean Air's modular cleanroom platform. We established Total Clean Air as our preferred European partner for SteraMist iHP technology when the U.K. Health and Safety Executive granted regulatory authorization for our BIT solution and SteraMist iHP products. The food safety sector is gaining real traction. We launched an important case study that demonstrated up to 95% reduction in sanitization testing costs for an egg food manufacturer. Our longstanding partner, DisinfectCare, secured a service contract at a major Mexican dairy facility, where rigorous testing highlighted SteraMist iHP's efficacy while preserving product quality.

Further, the end user is looking to expand its use of SteraMist iHP in Mexico to its other facilities. There are other positive food safety tests that the company has received to be discussed at a later date. This is all exciting stuff for us. Regulatory advancements have also played a critical role in our progress. In February, we received official authorization from the Health and Safety Executive for our BIT solution and SteraMist iHP products for use in Great Britain and Northern Ireland. In March, we secured product authorization from the Dutch Regulatory Authority, making our first product approval within an EU member state and facilitating a streamlined recognition pathway across the EU. This past week, we received notification of further approvals in Germany, Belgium, Denmark, and Hungary. We anticipate many other regulatory wins in the near future.

On April 30th, 2026, we executed a non-binding letter of intent to merge with Carbonium Core Incorporated, a U.S.-based producer of nuclear-grade graphite for advanced reactor technologies and AI data center infrastructure. Carbonium Core boasts a vertical integrated production platform and exclusive purification technology developed with Oak Ridge National Laboratory. This merger targets a specialty market currently dominated by foreign supply, coinciding with increasing domestic demand for non-Chinese origin graphite due to new U.S. FEOC regulations and federal support for advanced nuclear energy. To be clear, with this transaction, our country will become the leader in Generation IV nuclear reactors, a class of advanced systems designed to offer significantly improved safety, efficacy, and sustainability compared to current commercial plants.

These reactors are characterized by their ability to operate at a much higher temperature gas-cooled reactor pebble bed module recognized as the world's first operational Generation IV reactor. These systems aim to overcome limitations of current technology by producing more fuel than they consume and ensuring that severe accidents resulting in radioactive release are physically impossible. Under the terms of the LOI, Carbonium Core would become a wholly owned subsidiary of TOMI. Former stockholders would receive TOMI common stock equal to 19.99% of shares outstanding prior to the merger, along with shares of a newly created series of convertible preferred stock, implying an enterprise valuation of $120 million. We aim to finalize definitive agreements by May 30, 2026, with a 45-day exclusivity period in place. The strategic rationale for this transaction is compelling.

It aims to diversify TOMI's business by merging a domestic platform focused on advanced nuclear-grade graphite, graphene, and lithium materials with our existing SteraMist decontamination business. This integration has the potential to unlock significant long-term value for our shareholders while enhancing and expanding the SteraMist brand. Please note that the LOI is non-binding, and the completion of the transaction is subject to definitive agreement, due diligence, and customary closing conditions, including stockholder approval. I'll now turn the call over to our Chief Financial Officer, David Vanston, for a review of our Q1 financial results.

Thank you, Dr. Shane. Our complete financial statements are in our Form 10-Q filed with the SEC and in today's press release. I will walk you through the key metrics for the three months ended March thirty-first, 2026, compared to the same period in 2025. Revenue for Q1 2026 was $1.6 million, a 5% increase from $1.5 million in Q2 2025 and a 67% sequential increase over Q4 2025. Product revenue increased $300,000 or 31%, driven by higher equipment and CES related sales. Service revenue decreased by $234,000 or 41%, reflecting the timing of decontamination project completions and service engagements in the period, which management views as temporary.

Gross profit was $832,000 or approximately 50% of revenue, compared to $952,000 or approximately 6% of revenue in Q1 2025. The decrease in profit margins reflects strategic price discounts to drive equipment adoption and an unfavorable product mix shift towards lower margined equipment sales. Management views these factors as temporary as growth in higher recurring margin BIT solution consumables and applicator sales is expected to support margin recovery in future periods. Total operating expenses were $1.48 million, a reduction of $248,000 or 15% compared to $1.7 million in Q1 2025, reflecting lower general and administrative selling professional and consulting costs across the board.

The loss from operations was $626,000, an improvement of $128,000 compared to a loss of $754,000 in Q1 2025. The net loss was $811,000 or $0.04 a share per basic and diluted compared to a net loss of $256,000 or $0.01 per share in Q1 2025. It is important to note that Q1 2025 net loss included a non-recurring Employee Retention Credit of $535,000 and related interest of $83,000. Excluding these one-time items, Q1 2025 adjusted net loss would have been approximately 874%, making Q2 2021 a meaningful year-over-year operating improvement. Cash flows.

Our net cash provided by operating activities was $296,000 for Q1 2026, an improvement of $572,000 from the $276,000 used in Q1 2025, primarily driven by improved working capital management and growth in deferred revenue from customer deposits. Net cash used in investing activities was $5,000. The net cash in financing activities was $98,000, reflecting $192,000 in repayments on the Agile Capital Funding sale of future receipts agreement, partially offset by $94,000 in net ELOC proceeds. We ended the Q1 with cash of $280,000 and working capital of approximately $394,000 compared to a cash of $88,000 and working capital of $1 million at year end 2025.

The $630,000 decline in working capital reflects the net loss incurred during the period. Accounts receivable increased by $73,000 on higher revenue and inventories remained relatively flat. On the liability side, our accounts payable and accrued expenses increased by $993,000, and deferred revenue increased by $177,000, reflecting our deposit policy on customer orders. Our accumulated deficit as of March 31, 2026 is $58.9 million. During Q1, we raised $149,000 in gross proceeds through the issuance of 336,147 shares of common stock under our $20 million equity line of credit. I encourage investors to review our Form 10-Q in full, including the risk factors and notes financial statements.

I will now turn the call over to our Chief Operating Officer, EJ Shane, for an update on what we expect in the next upcoming months and the rest of the year.

Thank you, David, good afternoon, everyone. As Dr. Shane referenced, applicator sales increased at 139% year-over-year. This is a strong signal that customers are expanding their deployment of our patented cold plasma technology. The applicator is a critical component that enables our iHP to be used more broadly. This growth is a game changer. It shows customers are increasing their utilization of our tech. Customers who already own mobile fogging systems are expanding their use of iHP across additional areas within their facilities by acquiring more applicators, permanent or semi-permanent, driving higher sales of BIT solution, our consumable product. The SteraMist Integrated System platform or SteraMist Hybrid and our original Custom Engineered Systems or CES, are essential to our integration pipeline. Collectively, it is these offerings that are expected to significantly boost BIT solution revenues.

Our current immediate integration sales and pipeline is currently at $4 million across 14 customers and seven separate orders received with the remaining projects awaiting capital approvals. This is an update that reflects changes since our last call. Some customers have been removed due to completed sales in quarter 1, while three new customers have been added and two additional contracts have been secured. The seven orders mentioned are all in various stages of manufacturing and delivery, which will impact revenue timelines. The full company sales pipeline opportunities for all our offerings from mobile off-the-shelf capital equipment, automated integrated custom designs, and iHP Corporate Service deployments is projected to be between $22 million and $33 million. This is the complete opportunity list. It includes interested parties who have received quotes or planned implementation and/or installations of iHP technology across all our industries.

Dates are not yet set, these parties have expressed strong interest in SteraMist iHP. Of this list, $9 million is categorized as active, approved, or anticipated for purchase this year based on customer requests or the progression of the sales process. $4 million is allocated to automated integration orders. An additional $5 million is attributed to mobile off-the-shelf capital equipment, support service contracts, and iHP corporate deployment. Based on the latest reports and trends that I just referenced, TOMI generated approximately $1.7 million in revenue in quarter one, currently holds a backlog of $2.2 million. This includes only some of our integration automation pipeline, which stands at a total of $4 million, with a potential $5 million in mobile equipment sales. Conservatively, we anticipate $2 million in consumables and other smaller revenue streams.

Taken together, this yields a credible path for TOMI to achieve its projected 2026 revenue target. Our strong base of high-quality large customer base has been the key driver for these trends. These customers have helped in this potential growth through referrals, relocating projects, and expanding SteraMist iHP adoption at their new facilities, as well as expanding usage after initial purchases. A concrete example is Merck currently has approximately $1.2 million in open estimates across five different locations. While Merck is not included in the near-term numbers I cited earlier due to their longer decision cycles, they remain an active partner and are captured in the full opportunity pipeline. Additionally, one of our first large pharmaceutical clients is approaching a decision on their CES proposal, which could represent the largest such installation to date and an uplift to future revenues for TOMI.

On January 6th, we announced that a private East Coast research university purchased and installed a SteraMist Hybrid system. This past week, we just received notification that we won a second award with them. For my last example, a 3rd site in Berlin, Germany is set to begin trials in June for an eye health customer that we onboarded in quarter 1 of last year. This customer is also utilizing an open monthly BIT solution order, aligning perfectly with our business model. Furthermore, none of this reflects opportunities tied to additional regulatory requirements. Our efforts regarding the Food Contact Notification with the U.S. Food and Drug Administration, NSF Standards Department for Biological Safety Cabinets, the FDA 510(k) for medical devices, and further European Union registrations, all of which hold substantial potential based on the current market demands.

On May first, we officially opened a task group with NSF, cleaning and sterilizing the Biological Safety Cabinet sector. We wanna be added to their informational Annex G so that our partners are deploying SteraMist iHP to outperform legacy decontamination methods, including sporicides, formaldehyde, and VHP. Ultimately, our goal is to enable these service providers worldwide to compete effectively by incorporating iHP into their offerings for BSCs, which allows them to complete more treatments in a single day compared to the older technologies referenced. The food safety sector remains promising, but progress will depend on ongoing regulatory developments. For example, Nestlé's planned expansion is contingent on obtaining additional international registrations beyond the European Union and on updating EU registration requirements to include an alternate class. We are engaging with three large customers who have expressed strong interest in our SCM for baby formula to deploy iHP technology.

In parallel, we are conducting internal testing on dried ingredients for a current customer who already owns our handheld devices and exploring a scaled deployment. This testing phase aims to validate performance and readiness for a broader rollout. Last month, we attended INTERPHEX in New York City, one of the premier trade shows in the pharmaceutical biotechnology and medical device industries. At the show, we finalized the sale with a prominent American healthcare company renowned for its innovative medications and pre-mixed ready-to-use formulations. In summary, we maintain that with a broader and more diverse range of SteraMist delivery systems, this growing integration pipeline, expanded support services designed to accelerate iHP qualification, and ongoing referrals and expansions from our existing customer base, that TOMI is well-positioned to shift revenue mix positively and enhance profitability.

I thank you all for your time and attention, and I hope this provides a clear sense of the progress and initiatives that we are pursuing. I will now turn the call back to our CEO, Dr. Halden S. Shane.

Thank you, EJ. As a special note, I wanna talk about the United States of America is very hungry for rare earth minerals and materials that are mined and/or synthetically produced in America. The synthetic production of nuclear-grade graphite and the convergence of these technologies, whether it be nuclear-grade graphite, graphene, or lithium, present a transformative opportunity to address critical global challenges. TOMI's future is in an advancement of Autagma's systems, AI-powered robotics. Quote, "Our SteraBot, registered of course, and specialized disinfection drone technology manufactured with lightweight, strong graphene shells and plenty of battery power, will enable proactive solutions for ecological stability, logistics efficacy, and public safety." Of a special concern of mine is the honeybee industry. It is in dire straits.

The association is seeing a lot of viral losses now, not just from Deformed Wing Virus or DWV, but real losses in bees because of what the industry refers to as deadout, where the comb gets a virus and kills all the bees. Since 2007, there has been an 80% decline in bee populations. It could be devastating because it is not just concerning the DWV virus and its variants, but additional viruses such as Chronic Bee Paralysis Virus and Israeli Acute Paralysis Virus. The iHP Micromist can reach the entirety of the comb, including the nooks and crannies, without leaving any damage to the wax. Currently, the only available product on the market to alleviate these viruses is very expensive gamma irradiation process. The combs are very expensive, thus beekeepers do not want to dispose of the comb nor use gamma irradiation.

An iHP disinfecting drone would certainly help save the pollinators of the world and ultimately the world. This is what we do, innovating for a safer world. Thank you all, and thank my small team for all the great work that they do. Looking ahead, TOMI enters Q2 of 2026 with strong commercial momentum, an expanding recurring revenue base, and a transformative strategic transaction underway. Our focus strategy for the balance of the second quarter is to advance the Carbonium Core transaction towards definitive agreement and closing, drive recurring revenue growth through increased BIT solution sales, open order policies, and expanded iHP Corporate service contracts, and strengthen balance sheet flexibility through our ELOC and additional financing initiatives. With that, operator, please open the call to any questions.

Your first question's coming from Amit Dayal from H.C. Wainwright. Your line is live.

Thank you. Good afternoon, everyone, and great to see all the developments underway at the company. My first question was on the gross margin side. You know, it was a little bit softer, I guess, because of some discounts on offerings. Just wanted to see, you know, how this will bounce back, and would you potentially need to continue providing those discounts, at least for the hardware side of things, you know, to get initial orders with customers going?

No, I know they will bounce back, and we don't plan on providing these types of discounts again.

Okay. Understood. You know, the pipeline looks pretty robust, at least $4 million in sort of, you know, certain orders it looks like. Sequentially, do you think, we should expect revenues to grow from here through 2026 or, should we expect some lumpiness in how revenues are recognized?

No, most definitely we should see growth through 2026 and into 2027 and beyond.

Okay. Any traction from these, you know, recent news flow around hantavirus, et cetera? Has there been any follow-up with companies or customers from those developments for you guys?

Not at the moment, but, you know, as you know, I mean, this hantavirus is it's not close to us as where the ship is located. The interesting part about this is that they've left a lot of people off the ship, and there's usually, like, an eight-week period before you test positive for this. We're prepared and ready to help and assist in any way. At the moment, we haven't heard from anyone and, you know, we can't get our equipment into the area quick enough to help the ship because first of all, I mean, all the passengers, most of them have been disembarked.

Okay. Understood. Just last one from me on this transaction with Carbonium. You know, how is the diligence going so far? You know, do we have the expertise to sort of, you know, properly investigate the technology these folks are offering? Just a follow-up on that one is, you know, will this be sort of a development stage, you know, entity you are, you know, acquiring, and how much more investments do you think it would need if you were to close the deal to progress that company to commercialization?

Well, it's a lot of questions. Yes, it's in its early stages. We are forming a committee in the early part of next week to help with the due diligence. Again, you know, we're aiming towards getting a definitive agreement and doing our due diligence. We're aware of the technology and its ability, you know, with Oak Ridge and some I don't wanna get too ahead of, of Carbonium in releasing certain things, but we're pretty secure that this will go forward. As far as investments, that's something that needs to be determined. We haven't quite yet come out with any numbers like that, and you can understand this is just the very early stages of this potential merger.

Okay, Doc, that's all I have. Thank you so much.

Thank you.

Thank you. Your next question's coming from Todd Feltz from StoneX Wealth Management. Your line is live.

Hey, Doc and EJ. Congratulations on a good quarter and on the Carbonium merger. I know I'm excited to see how that progresses. I did have 2 questions on it. The first is, after the merger is approved and closed, I know there's a 19.9% shares of common stock that are going to them in addition to the convertible preferred. If all that convertible preferred was converted to common at $1, what would be the total shares outstanding?

It's a good question. Probably somewhere in the neighborhood of $32 million, maybe $31 million. We haven't really done the per exact pro forma on that yet, but I would have to say that would be the amount.

Okay. Second of all, I listened to a television interview that you had done with Sindor, the head of Carbonium, and he was projecting-.

Yeah

revenues in 2028 of $1.4 billion-$1.5 billion. Is that correct?

Right.

Did I hear that wrong?

No. You heard that correct. This is a huge industry, and they have the ability to capture it from the synthetic, you know, nuclear graphite end. Again, I don't wanna get ahead of the curve with him, but, you know, what he said is $1.4 billion, $1.5 billion.

Wow. Okay. Finally, outside of getting shareholder approval, are there any other major obstacles, assuming that your committee checks out on all the due diligence, are there any other major obstacles on getting this to the closing line?

There shouldn't be. Again, it's a deal. It's early, and you never know what obstacles get thrown at you. We're hoping there aren't, and we're able to complete this in a relatively timely manner.

Okay. Thanks for the questions. I appreciate it.

Thank you, Todd. Yeah.

Really excited about it. Thank you.

Thank you so much. Uh-huh.

Thank you. Once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Please hold while we poll for questions. Your next question is coming from John Nelson. Your line is live.

Hi. Congrats on the quarter and progress being made on the TOMI business and also the potential from the Carbonium merger for the combined company.

Thank you, John.

First, first question is, I saw the slideshow from your 8-K on Carbonium Core, they're projecting profitability, I believe, next year according to the slides. Am I correct on that?

That's what I understand.

Yeah, which would be phenomenal, for them to, you know, get out of the gate this fast and still and be profitable almost immediately. Anyway, thanks for confirming that. The other thing was, in the slides was an independent valuation. Do you know who did that independent evaluation of the Carbonium Core?

It was done by a professional evaluation service. I'd rather not publicly say until they approve it.

Okay.

You know, it was a very large 47 page evaluation.

Okay

It covered everything that we would want to see in it.

Do you think?

Okay. Yeah.

Yeah. Do you think that they can, after, if you complete the merger, do you think they can release that, or you can release that?

I would think so.

To your shareholders?

Yeah. Yeah, I would think we would be able to once this happens. Yeah.

Excellent. Thank you. The other questions relate to the TOMI business.

Mm-hmm. Sure.

On the honeybee industry, you talked extensively about the concerns and how SteraMist can remedy significant amount of problems that the bee industry is facing. How do you plan to go after that market?

Well, currently, I, you know, I think I've mentioned this on prior calls, you know, I have been trying to contact the association. I ended up joining the association, and I follow everything that goes on in it. Recently, our marketing department reached out to an administrator, and they've would like to do a study. Now I'm really excited that we got their attention. Hopefully they'll be able to do this study fairly quickly. you know, I know the industry is in dire straits to eliminate, you know, the effects of the all these viruses, which are, you know, going ahead and causing death to the bees, which, you know, I mean, I don't think we want our kids to grow up in a world that doesn't have pollinators.

Yeah. We definitely need it. I was curious as to how quickly a study might be able to be accomplished. I would think that the beehive.

The comb. Yeah

People would be.

Yeah

Extremely happy to get something that would help preserve their hives.

I mean, I think, you know, the real answer, you know, that they've been going with, you know, in the past is very expensive. I think gamma irradiation, you know, it gives you a new hive, I guess. Most beekeepers don't have that type of money, where our solution would be fairly inexpensive for them to eliminate the mites, the viruses in the, in the comb and to go ahead and protect it going forward. That would be great to have this technology which was innovative from the beginning to be able to protect the honeybee population around the world.

Definitely. Do you have any specific goals as to timing to reach either profitability or positive cash flow over the next-

Well, I think-

quarters or a year?

Yeah. I think within this year we'll be profitable.

Okay, good. And then you mentioned in a previous press release the going after the robotaxi market.

Right.

Do you see that as being addressed by a just the SteraMist handheld units, or do you think that there might be a possibility of actually kind of installing a fixed unit within the cab that could dispense SteraMist, you know, on a regular basis after every ride, for example?

Yeah. Yeah, I think, you know, I think it's too early. What our plan is initially is to mold our backpack, using existing humanoid type robotics. We know we can handle the software adaptation of it.

Yep

go ahead and put our applicator in the left hand, replace the hand and put the applicator in there, or trigger the hand to push the applicator and have the right hand to move objects or to move, you know, doors or open things and things like that. I think that's going to be the fastest to market. There are a lot of companies, you know, not just Tesla and not just Waymo, but there are 5 or 6 companies worldwide that are starting to put out robotaxis. As the world evolves, this autonomous vehicle seems like something that's going to be around forever. They do have to clean them, and our technology would be the fastest and quickest way to get that done. As far as an installation, I don't know if the cost is going to be practical for them.

You know, they would need some time between each ride to disinfect or decontaminate the space. I don't know if their model is set up to wait because, you know, I'm in West Hollywood, L.A. area, and I use Waymo a lot, and they're always, you know, running two or three minutes late because they're dropping someone off. It's possible that they could. Maybe if we could get the time down to, let's say, three minutes or five minutes, that they could sterilize them between the routes. Anything's possible today.

Okay. I'm with regards to use of SteraMist in enclosed spaces, it would seem like SteraMist would be perfect for decontamination of airlines and cruise ships and even military vessels, because of the risk of contamination infection. Is it just that that market takes What kind of explanation do you have for the timelines of penetrating those kinds of enormous markets?

I think, you know, we'd have to be a much bigger company and to get grant writers to write grants for those markets, especially now they're building ships, you know, under the current administration. It would be an ideal time to start implementing the technology or putting it into ships. I'm not sure what the stress test would be to see what stays in place, you know, in rough waters, you know, versus smooth waters and things like that. I mean, it's all possible and, you know, I foresee in the future this happening. Same way with aircraft. What I'm really more excited about is unmanned aircraft. As we all know and we see in the military budget, there's $70 billion being put aside for drones.

When the technology started, when I bought it from the defense contractor and the initial DARPA project, it was for the use of an unmanned planes that were returned to earth or returned to ground or returned to ship. That's what it was used for. With the drone market blowing up like it has all over the world, this is the product to be used for the disinfection decontamination of unmanned aircraft around the world.

Are you working with any particular companies, even if you can't name them at this time, regarding?

Not at this time.

The use of SteraMist?

I'm not at this time that I'm aware of. I don't know if we can say EJ, do you have a more unclassified answer to that?

Not at this time, Dr. Shane. No, I don't. Sorry, John.

Okay. Thanks.

Okay. All right.

I'll keep you updated.

Thank you. Appreciate it.

Of course.

Let's see. Is there anything else that has changed as far as the applicators or the equipment used in SteraMist or any new ways to use SteraMist either in the commercial or retail type settings?

I'll let EJ answer it. I just tried it on my dog, and he stopped barking, so that was positive. EJ?

No, there's not been any changes to the applicators itself. We just changed the way in terms of how we sold it with the integration projects and the standalone system. There's multiple different versions of the applicators that we can now offer regardless of the industry you're referring to. That's been helpful. Yeah.

Okay. That's all my questions.

You know I was kidding, John.

Yes.

Yes.

That was a good one. Thank you.

I don't wanna get a letter from PETA. Thank you, John.

Thank you.

Thank you. We've reached our allotted time for Q&A. I'll now hand the conference back to management for closing remarks.

I just wanna thank everybody for joining and for continuing the voyage with us and in this amazing product and this amazing world. Have a great day wherever you might be. Thank you.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Good day, and welcome to the TOMI Environmental Solutions, Inc. 2025 financial results conference call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Zach Nevas from IMS Investor Relations. Zach, the floor is yours.

Thank you for joining us today for the TOMI Environmental Solutions Investor Update conference call. On today's call is TOMI CEO and Chairman, Dr. Halden Shane, EJ Shane, our Chief Operating Officer, and our Chief Financial Officer, David Vanston. A telephone replay of today's call will be available April 7th, 2026. The details of which are included in the company's press release dated March 31st, 2026. A webcast replay will also be available at TOMI's website, www.steramist.com. Certain written and oral statements made by TOMI may constitute forward-looking statements as defined in Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause our actual results to differ materially from our anticipated results. The information provided in this conference call is based on the facts and circumstances known at this time.

Please refer to our filings with the SEC, including our 10-K for the year ended December 31st, 2025 for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now turn the call over to TOMI CEO and Chairman of the Board, Dr. Halden Shane.

Thank you, Zach , and thank you for joining us for our 2025 earnings report today. I am pleased to share our full year 2025 results, and more importantly, our perspective on where TOMI Environmental Solutions is headed. While 2025 was a year that tested our patience, it was also a year that validated our technology, deepened our customer relationships, and positioned us to execute on a meaningful revenue opportunity in 2026 and beyond. I wanna walk you through the highlights with optimism. I generally feel as I review the progress our team has made. The SteraMist Integrated System, which is our SIS platform, achieved its first commercial installation at a leading CDMO in June 2025. The milestone proved our concept, and by year-end, we had four fully operational SIS enclosure installations.

We closed the year with a signed purchase contract of $500,000 for a global biopharmaceutical leader in December for integration into sterile manufacturing pass-through fill boxes. In the same month, a leading cell and gene therapy manufacturer adopted SteraMist iHP for a commercial scale pharmaceutical facility, a landmark win in one of the fastest growing sectors of life sciences manufacturing. We were selected by NASA Johnson Space Center for a biosecurity operation, and they have continued to express satisfaction with our technology's performance. We deployed critical resources to support wildfire recovery efforts in the California communities, demonstrating both our civic commitment and our operational agility. We secured a bid from a leading university in Rhode Island for our CES technology. That project has been completed and awaits factory testing.

In the eye health sector, one of our most prominent new platinum customers onboarded in Q1 2025 has grown to 2 active facilities, each using 5 SteraMist machines for sterilization procedures. A third site in Berlin, Germany is set to commence trials in June 2026. This customer also operates under an open monthly bid solution order, exactly the recurring revenue model we are building. Our OEM partnership strategy is gaining serious momentum. Relationships with PBSC, ESCO, and Steelco are embedding IHP directly into cleanroom enclosures, pass-through hatches, and biosafety cabinets at the point of manufacture, creating a scalable distribution channel that expands our reach without proportionally increasing our direct sales cost. We successfully completed our first collaboration project with partner PBSC, the IHP pass-through, which exceeded decontamination cycle speed expectations and generated strong customer feedback.

We have already begun a second PBSC project. We expanded into the agriculture industry through our partnership with AlgaFeed, who has committed to acquiring additional handheld units before the end of 2026 in food safety. The FDA's late 2025 approval of hydrogen peroxide as a direct food additive for multiple uses, including as an antimicrobial and bleaching agent, is a watershed regulatory moment for us. We are now engaged with significant partners, including Danone and Nestlé, and are actively winning bids both directly and through service providers. SteraMist iHP is demonstrating real-world efficacy across a wide range of food processing environments. We are actively pursuing a food contact notification, or FCN, and have identified two specific opportunities to enhance our efforts on a tailored FCN for powdered infant formula, which comes at the request of an existing customer.

Additionally, we are awaiting approval of our Dash four label from the EPA for our cannabis industry and other requested markets in our food safety division. We also plan to submit a Dash five EPA label based on the studies conducted with Plum Island, as previously announced. A landmark USDA study confirmed BIT's efficacy against Deformed Wing Virus for agricultural biosecurity in honeybees. In 2025, SteraMist was honored with the Disinfection Decontamination Products Company of the Year Award by MedTech Outlook. We achieved compliance recognition across three safety vendor management platforms and are in the process of adding a fourth to support two ongoing integration projects at a well-known Baltimore hospital. Our customer service team is actively transitioning our larger base to open order policies for support service offerings and BIT Solution orders.

The backlog of our orders for support services is up 16%, and BIT Solution is up 24% in the first quarter of 2026 compared to the same period last year, providing early and compelling indicators of increasing recurring revenue trajectory we are building. To our long-term supporters of our technology and company, we are pleased to announce that we're finally receiving approvals from the HSE and the BPR submissions. We are now officially recognized in the United Kingdom, including Wales and Northern Ireland, as well as in the Netherlands. The recent approval in the Netherlands strengthens our confidence that other EU countries will soon follow suit. Our heart monitoring device project is nearing completion and is scheduled for factory testing next month.

We are preparing to introduce our IHP device to the U.S. markets through the appropriate regulatory pathways, including the FDA 510(k) pre-market notification process, once testing is finalized. The success of receiving the FDA 510(k) means that we'll finally be able to go after the entire ethylene oxide sterilization market. The global ethylene oxide market was a $5.29 billion market last year. Key growth factors is a rising demand for sterilized medical consumables and improved healthcare infrastructure, particularly for hospital, labs, and surgery centers. Our technology is protected by more than 30 utility and design patents through 2038 and is deployed in over 40 countries. We are entering 2026 with operational momentum, growing recurring revenue, and expanding global customer base, and a clear strategy to drive sustainable growth.

Our focus remains on execution, converting our pipeline into recognized revenue while continuing to advance the technology platform that makes all of this possible. The pipeline that we have is the strongest we've ever had. Our first quarter 2026 revenue is greater than our first quarter of 2025. I will discuss some details in my conclusion today, but our entire opportunity book for integration projects remains at $16 million. The entire SteraMist iHP opportunity book is currently at $20 million. However, first, I will now hand the call over to our Chief Financial Officer, David Vanston, who will provide an overview of the financial results for the full year ended December 31, 2025, compared to the same period in 2024. David.

Thank you, Dr. Shane. I will now walk you through our full year 2025 financial results. Our complete audited financial statements are included in the Form 10-K we filed with the SEC and in today's press release. Revenue for the year ended December 31, 2025, was $5.6 million, compared to $7.7 million in 2024. The decline was driven primarily by the timing of customer equipment purchases. Service revenue remained relatively stable year-over-year, which we view as an indicator of the durability of our installed base. Gross margin improved to approximately 55%, up from 46% in 2024, reflecting lower cost of sales and a reduction in inventory reserves compared to the prior year.

Total operating expenses were $6.9 million, down approximately 10% from 2024, reflecting disciplined cost management. The net loss was $3.7 million or $0.19 per share, an improvement from a net loss of $4.5 million or $0.22 per share in 2024. We ended the year with approximately $88,000 in cash. Working capital was approximately $1 million, and we used $1.2 million in operating cash during 2025, an improvement from $1.4 million in 2024. We have taken steps to address our liquidity position, including a $535,000 convertible note raise during 2025, a $20 million equity line of credit with Hudson Global Ventures entered into in November 2025, from which we have made our first draw, approximately $94,000 in February 2026.

We've done an effective S-3 shelf registration for up to $50 million, and we've engaged Bancroft Capital to explore additional financing options. I encourage investors to review our Form 10-K in full. I will now turn our call over to our Chief Operating Officer, Shane, to discuss upcoming business highlights.

Thank you, David. As Dr. Shane highlighted earlier in the call, we are actively focusing on open bid solution orders and annual service offerings, leading to a higher open sales book metric. This initiative stems from our growth in personnel and operations, along with our enhanced comprehensive training program that prioritizes continuous recertification. This strategy not only elevates customer standards for implementation and safety but also has the potential to drive additional revenue and foster deeper product adoption in the future. The sales performance of support services and bid solution sales are expected to exceed 2025 levels, as evidenced by the increase of 16% in the backlog of orders for TOMI support services and an increase of 24% in bid solution backlog of orders for the first quarter of 2026 compared to the same period last year.

Dr. Shane also provided updated information on 2025 announcements for just a handful of customers. This includes anticipated orders from our aquaculture customer, a completed Custom Engineered System, or CES, for the University of Rhode Island, two IHP chambers for the biopharmaceutical partner, a second order with our partner in Malaysia, and a third location in Berlin, Germany for the eye health company, which we expect will proceed with the same standard operating procedures as the first two sites. We anticipate approximately $3 million in sales among these five customers and the trends in support services and BIT Solution sales for 2026. It's important to note that this projected $3 million in revenue includes approximately $920,000 that overlaps with the $3 million integration pipeline announced on November 26, 2025.

When factoring in our IHP deployment services, which generates over $1 million consistently, we can confidently state $6 million in revenue just among five customers and three revenue streams for 2026. To date, approximately $800,000 has been recognized from the November 2025 $3 million integration pipeline. This amount originates from 10 distinct customer orders. Of these 10, seven customers have formally placed the order. We anticipate final approvals from the remaining three accounts, and we have added four more integration projects moving towards CapEx approvals since the November announcement, which is anticipated to contribute another $2.3 million to our active immediate integration project pipeline. Our East Coast distributor, ARES Scientific, has been instrumental in securing multiple university wins for our SIS platform. We're actively collaborating with VWR Vantage, engaging with all case managers, and overhauling marketing initiatives with them.

We are prioritizing the ongoing education and engagement of our international partners, investing in them to promote their own long-term customer base instead of expanding into new regions. This strategic focus, coupled with recent regulatory approvals, is expected to support our growth and positively influence our revenue. For example, we have successfully received HSE approval and announced a preferred partnership with Total Clean Air, or TCA, in the U.K., where we recently completed factory testing on a custom engineered project that they brought to us. TCA has also invested in mobile equipment in quarter one, 2026 to support their demonstration and service deployment capabilities. The food safety sector is also beginning to gain momentum, and we're receiving valuable referrals and case studies from our current clients.

This industry uses our SteraPak product or requires custom applications, indicating that we are still in the early stages of realizing significant revenue. Additionally, there remains much work to be done on the regulatory front. For example, Nestlé's pending expansion waits for other international registrations outside the ones received in the European Union. One of the most exciting developments comes from our long-standing relationship with DisinfectCARE, which has secured a service contract at a major dairy facility in Mexico. Following customer-specific testing and studies conducted on-site, SteraMist iHP not only demonstrated its efficacy but also showed the preservation of cheese quality, a key finding that strengthens our credibility and serves as a valuable referral for other new customers. In summary, we are now making strides across a diverse range of sectors in the food industry.

We are using cheese, eggs, coffee, ice cream, consumer packaged goods, cannabis, nutrition, vertical farming, pet food ingredient suppliers, refrigerated foods, and specialty ingredient suppliers. This broadening of our market presence positions us well in the industry. Another significant area of focus for us, which we believe is expected to see returns in 2026, is the biological safety cabinet or BSC industry, particularly regarding our service providers and the SIS standalone system. We have developed the necessary accessories and protocols for treating all classes of cabinets. Progress required as we prepare for NSF approvals this summer. Currently, we have certified service providers utilizing our SteraMist iHP technology, including Triumvirate and MarathonLS on the East Coast, as well as H.E.P.A. in Canada.

On April 2, we conduct a key demonstration with one of the most recognized providers in the industry who operates multiple locations across the United States. Triumvirate hosted a webinar this quarter where they showcased how IHP technology outperforms key competitors in the market, including Spor-Klenz, Formaldehyde, and Vaporized Hydrogen Peroxide. This webinar was well-attended, attracting approximately 250 participants. Ultimately, our goal is to enable these service providers to compete effectively by incorporating IHP technology into their offerings for BSCs. They appreciate this innovation because it allows them to complete more treatments in a single day compared to older technologies. In addition, we maintain a robust intellectual property portfolio, CE and UL listings, and are preparing to pursue USP 1072 material efficacy, which will expedite our sales process in the life sciences market.

Furthermore, we are committed and continue to conduct customer-specific studies that help us secure contracts and maintain the client roster we hold, such as those highlighted today. I will now return the call back to our CEO, Dr. Halden Shane.

Thank you, EJ. I wanna take a moment, maybe even more of a moment, and express deep appreciation to majority of our shareholders who supported us and have believed in our mission through our highs and lows. You are the majority and our long-term investors. Thank you for supporting our team and most importantly, believing in our technology and products. I believe at the start, we all knew this was not gonna be easy because we're creating a new standard in many industries, and it's very hard to accomplish. Being undercapitalized makes it even harder. We are on the verge of accomplishing the impossible. To the handful of naysayers, we believe we'll be able to earn your support, and we continue to execute a deliberate strategy to expand our operations and improve our financial performance.

If not, then maybe it's the wrong company or you need to see a professional. It was a tough year for us from the financial perspective, but we remained focused the whole time on the future. In my eyes, there are no excuses, but there were definitely roadblocks. Those roadblocks included DOGE, tariffs, working capital, and recently, the war. We chose to become the standard in the pharmaceutical, life sciences, and university vivarium market. Unfortunately, some of the negatives of becoming a standard in that market is the perfect storm that occurred in 2025. Like there was panic buying during the 2020 COVID, there was a lack of buying in the 2025 due to the reasons I stated above. We just recently received an email from a major university that everybody knows on the West Coast of the United States.

They were putting off a purchase till the end of 2026. The reason they had to postpone the purchase was because of DOGE, tariffs, and political uncertainty, including the war. Also, that person stated there was an uncertainty maybe about her job. No matter, we are a team, and we can overcome situations like that, and I can assure it's all temporary. The university will purchase this year, even if it's a new professional in that job position. I did a review of our stock over the last 10 years. I choose certain points because it was approximately when we received our hospital healthcare EPA registration and had marketing in place. The key metrics are pretty amazing. In 2014, revenue was about $2.2 million. Our stock price was $2.16.

Our major clients was a Panamanian hospital and a group in Mexico trying to sell to Mexican hospitals. In 2020, we had a banner year. Unfortunately, it was due to the pandemic. We did $25 million. It demonstrated that we're capable of handling that volume of business. It did take away from the focus on the science industry, pharmaceuticals, etc. Most of that was temporary panic buying. Our stock price was $4.57. In 2024, our revenue was approximately $7.7 million. Our client list was pretty impressive compared to 2014, and our stock price ended up at $1.05. The next year, 2025, our sales was $5.6 million.

The sales that we could recognize as revenue, obviously, as you know, the sales were much higher, as we stated provided in our pipeline with open significant orders for the first time moving across into 2026. As stated previously, we were confronted with tariffs, DOGE, political uncertainty. We closed the year with a stock price of $0.78. Now we're in 2026. It looks like our first quarter, which includes recognized revenue and open orders, could be $3 million or higher. Not sure how this ends up playing out later today, but for sure, we're beating our first quarter 2025 revenue in the first quarter of 2026. Our stock price is around $0.55. We estimate our revenue for this year will be around $12 million, barring any unknowns. In 2020, we did a reverse split.

Today, that $0.55 comes out to be about $0.0688 pre-split. Here's a short list of our current clients. Pfizer, Merck, Thermo Fisher, Franciscan Health, Allergan, Boehringer Ingelheim, Catalent, CSL Seqirus, ITH Pharma, Nestl￩, Purina, Mead Johnson, Ziegler, Simplot, Purdue AgriBusiness, Kindred Healthcare, Mercy Health, Novant Health, St. Jude Children's, Gilleriven Health Care, FDA, USDA, CDC, NIH, DHS, USAMRIID, Amerton, ESCO, Telstar, Tecniplast, ServiceMaster, First Onsite, Avantor, Tecumseh. In retrospect, do you think a company like TOMI with that list is worth $0.0688 only? My point here is our stock price was $20.14 when we had 2 customers, 1 in Panama and 1 in Mexico. I remember a statement from a very successful person, Warren Buffett. "Be greedy when others are fearful." That statement couldn't be truer today about our company.

I choose to run this company making a decision that many CEOs will never make, and that's because it hurts before it pays. I stopped relying on easy sales and one-time equipment and built something from a more potent recurring control over how customers operate. The shift does not show up cleanly on quarterly charts. It shows up as a service revenue climbs and consumables replace capital purchases. Our customers stop buying, they start depending. That is where the game changes. We are not growing very fast, but we are growing very smart. Our company has moved from episodic revenue to embedded revenue. Before a deal closes, the relationship reset. Not every deployment creates a tail. More usage, more replacement, more service. This is not a product business anymore. It's a system. Recurring revenue isn't about stability. It's about control. Most executives say they want predictable revenue.

What they actually want is predictable revenue without sacrifice. We took the hit up front. Volatility increased, revenue looked uneven, margins had to be rebuilt, but underneath the engine changed. Short-term profitability is often the price of long-term dominance. Instead of building expensive infrastructure to scale globally, we use distribution channels and partnerships to expand and reach without expanding costs. International revenue became a large slice of the pie without dragging down the balance sheet. That's not expansion. That's leverage we used. Scale without cost is the cleanest form of growth. At the same time, we wanted the business towards higher margin solutions and services. That's our razor blade model. Not lower, not last year, just better economics.

The following current numbers could possibly change, but the point I want to make is that at this moment, our economics, of course, is first based on sales of equipment revenue. Our scaling and cleanest form of growth is solution sales, support service, and IHP in-house service. Quarter 1 of 2025, we did $299,000 and change in solution sales. In quarter 1 of 2026, at this moment, our solution sales are $429,413. As far as support services in quarter 1 of 2025, we had $73,279. Currently, in the first quarter of 2026, we have $253,390 in support services. These are such things as training, certifications, qualifications, validation, cycle developments, installations, etc.

The third part, IHP service. In the first quarter of 2025, we had $439,386. Currently, with invoiced and open orders, we have a total of $729,440. Margins improved, mix improved. The business became more resilient without announcing it. We were able to figure out how to achieve success by having money actually compound. Do you keep chasing revenue to reset every quarter, or do you endure short-term pain to build revenue that compounds without permission? That decision defines whether you're playing offense or playing survival. We didn't eliminate risk. We repositioned it. In doing so, we created something more valuable than growth. We created dependency. In a world chasing speed, we chose structure, and structure wins. I can't take the credit for all this writing.

I want to thank Joel Block for understanding how we have created this company and understanding the suffering we've gone through. Once again, I want to thank everyone for their long-term commitment and support and for a small team of 20 working endlessly to achieve all the goals. I also want to thank our creditors, who've been super as we go through the stage of growth. At the end, be the warriors that have helped us achieve success. Also, I'd like everybody to pray for our brave soldiers that are in a difficult situation. To all that are listening, we're excited about what's ahead. Operator, let's open the call to questions.

Thank you. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, please press star one on your phone at this time if you wish to ask a question, and please hold while we poll for questions. The first question today will be from Carl Wright from Lone Pine Capital. Carl, your line is live.

Great. Thank you for taking my questions.

Sure.

First question, could you provide some more insight into the global opportunities you mentioned in the quarter?

EJ?

Yes. Hi, Carl. Certainly. The first of the EU registrations on the submission we did came in, so we expect many other EU states to follow suit within the next upcoming months. You know, with that we have been positioned with current relationships and distributors from Poland, Germany, Netherlands, that have been around our technology and really educated to be able to take on the opportunities that have been waiting for just that registration. Just as the UK did once the HSE came through earlier in this quarter with bringing on TCA and quickly being able to fulfill our first custom engineered system, I see that happening with the other regions in the EU.

Got it. Congratulations on bringing down operating expenses by 10%. Could you provide a little more color about how we should think about operating expenses in the business just going forward?

Sure. David, go ahead.

Sure. I think there are again, as Dr. Shane mentioned earlier, as we grow we will have to invest into our operating expenses, but we already have leverage in it, so we do not expect to see a significant jump in our operating expenses. If you're going to model it, you would model it as a percentage of revenue growth. You know, I would say it would slightly decrease as we grow as a percentage.

Gotcha. Okay. That's helpful. Thank you very much for taking my questions.

Welcome. Thank you.

Thank you. Once again, it will be star one on your phone at this time if you wish to enter the queue to ask a question. The next question is coming from John Nelson. John Nelson is a private investor. John, your line is live.

Hi. Thank you. Several questions.

Sure.

First one.

Go ahead, John.

I'm one of those long-term investors that

I know you are.

is confident that over the years you're gonna deliver. Thank you.

I know you are.

Thank you for your efforts.

I thank you for your help.

You're welcome. First question is, you mentioned in the press release, in 2025 versus 2024 revenues, customers deferring capital expenditure projects due to uncertain economic environment with the impact of tariffs and Middle East crisis. Are you seeing any signs of it improving? You must be seeing some signs of it improving because of your first quarter comments. But are you seeing any of those customers that were deferring CapEx projects starting to move on them?

We are.

Okay. The BIT Solution revenues for 2025 versus 2024. Can you provide any details on the comparisons there?

Sure. Are you talking 2024 versus 2025 or 2025 versus 2026?

No, 2024 versus or 2025 versus 2024.

Okay. EJ?

Yes. There is the increase in the solution between 2024 and 2025, and we're seeing that continue into 2026. A lot of it has to go with Dr. Shane's closing and this move into open orders. This came in tandem, you know, about a year and a half ago, we mentioned a big push on different support services. Having us be able to go on site and speed up the use of our technology and qualify different areas, we're able to predict how much solution they're gonna be able to use. That, in essence, is now finally starting to pay off with them purchasing the orders that they need in advance and just get into more of an auto shipment. That's the goal, and it's starting to come into play.

It started at the end of 2025, and it's moving into this year as well. That's the big difference. The two, you know, why it's referenced in the script that way is 'cause they go hand in hand. Our support services and our BIT Solution are definitely together in trends.

Okay. Are most of your customers in 2025 using significantly more BIT Solution than they did the prior year?

Yes, definitely. I mean, you know, there's always some fluidity to it because you'll have, you know, our service providers if there's, you know, the fires produced a lot of solution in Q1, different decommissioning of buildings. If they get, you know, large service contracts, then this, you know, definitely increases our solution. That's a little harder to predict. When we're able to go in and qualify different spaces or similar to the eye health company where we know how and exactly where they're using the equipment, that's a little easier. You know, the Q1 of last year certainly was due to some emergency use. There's definitely an increase in solution.

Okay, can you provide any more detail as far as how the application would be used to deal with the Deformed Wing Virus for honeybees?

You know, we have the study, and we've done a few other lab-type studies, and it's definitely a good use, and we're looking and are still speaking with a local university on trying to get live use case. Once we're able to reestablish that in actual application use, it will proceed from there.

John, I've reached out to the associations, the honeybee associations, domestic, globally. I've reached out to the board, and I've yet to get a reply. You know, right now I'm reaching out to the Department of Agriculture to see if they can't help or at least get this technology in front of somebody that wants to make a change.

Okay. You had mentioned briefly the use for treating marijuana plants?

Right.

Mites. Is it mites, or is it for the powdery mildew?

It's for powdery mildew, funguses on the plants.

Okay.

We have an EPA label we're trying to get from the EPA just for that. Is it dash four, EJ?

Yes, that's correct, Dr. Shane.

Okay. Currently you're not getting any revenues yet from that particular type of usage, correct? Because of your need for the EPA label.

I think EJ can answer that. I think they're strong.

Yeah. We have a handful of customers. With them, it's you know scaling up and you know right now they're doing a lot of handheld treatments. We do have a good partner that is promoting our product and even some international interest on the treatment. We do have some live use, which is great, and that usually is the first step.

Okay, good. One thing that I've been curious about is whether you've explored or thought about exploring it, uses of SteraMist in the military. I was thinking about it with regards to the Middle East crisis with all of the Navy ships in the Gulf and how, you know, people are crowded together. It's gotta be a potential breeding ground for germs and potential infections transfer. Have you explored that at all or ever talked to the Navy about possible usage of SteraMist?

Are they still a customer, EJ?

No. Are they? If they are a customer, that's new to me. Have you explored uses with it? If you have, what, you know, response have you gotten from the military?

You know, I think we're a little too small and overwhelmed with everything to go after that at the moment. I believe there was a testing center that the Navy was involved with. It's a great idea, and especially with the new COVID variant that seems to be running around and came from the Netherlands to the U.S. I'm sure that you're right about the close proximity on these ships. They do need to get a disinfectant, and I think this is something that we're gonna go look into immediately.

Okay.

Yeah. I mean, we have completed some, you know, requests for information on the Grants.gov site for military vehicles and how to best implement SteraMist. They are gaining information that way, but that does take quite a bit of time. We do complete those on a regular basis to get the brand out there.

Okay. I don't know if there's a particular certification required, but I was thinking the same thing about SteraMist application possibilities for military hospitals or the VA, which, you know, as we know, has a number of problems with infectious disease transfers.

I think they're waiting for me to answer, John.

Sorry. Not anything specific I can comment to that.

Okay.

We do have a close service provider looking into military housing, but too early to speak about.

Okay. One of my final questions was gonna be on scale up. You know, if you do get a significant amount of new orders, how easy or difficult that would be for you.

Well, it's, you know, again, you know, we probably need to raise some capital to scale up significantly. The 20 people we have do a hell of a job as a team. We were able to handle COVID pretty much with the same amount of employees, and we did really well. You know, I think we could handle the immediate scale-up depending upon the equipment, but we definitely need to go ahead and increase the size of the company going forward in lots of divisions.

Okay, good. Last question was, have you you know actually totaled them up as far as the number of new customers added net in 2025 versus 2024?

I haven't personally. David, EJ, have any of you done that?

No.

Not based on new customers, no. Definitely.

That might be interesting.

Increased individual orders between the years, but

Right.

Not based on the custom. Yeah.

I think we'll do that, John, and I'll talk about it on the call coming up soon in six weeks.

Okay. I mean, you definitely have listed a number of new names that I hadn't heard.

Sure, sure.

You know, from previous calls. I'm

Yeah, I know.

Curious about-

I left out half of them, too, but it was impossible to go through them all.

Yeah, sure.

It's just, you know, it's just frustrating to see what happens to the stock and, you know, what occurs and with the difference. The point, I think was well made and we'll see what goes on.

Okay. As for you've done an excellent job of adding significant distributors both domestically and internationally. Is that still a significant part of efforts going forward to add even more distributors?

Absolutely. We're in talks right now with many.

Okay. Great. That's all my questions.

Again, thank you again for the support, John.

You are welcome. Thanks very much for all your efforts.

You got it.

Thank you. There are no other questions at this time. I would now like to turn the call back to Dr. Halden Shane for closing remarks.

Okay. I just wanna thank everybody again and wish everybody a happy Passover and Happy Easter.

Thank you, everybody.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.

You too. Thank you.

Good afternoon. And welcome to the TOMI Environmental Solutions, Inc. Third Quarter 2025 Financial Results Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. John Nesbett of IMS Investor Relations. Sir, the floor is yours. Good afternoon. Thank you for joining us today for the TOMI Environmental Solutions Investor Update Conference Call. On today's call is TOMI's Chief Executive Officer and Chairman, Dr. Halden Shane, E.J. Shane, our Chief Operating Officer, and our Chief Financial Officer, David Vanston. A telephone replay of today's call will be available through November 28, 2025, the details of which are included in the company's press release issued today. A webcast replay will also be available on TOMI's website at www.steramist.com. Certain written and oral statements made by management of TOMI may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause our actual results to differ materially from our anticipated results. The information provided in this conference call is based upon the facts and circumstances known at this time. Please refer to our filings with the SEC, including our 10-Q for the quarter ended September 30, 2025, for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. Now, I will turn the call over to TOMI's Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.

Thank you. Thank you, John. And good morning, afternoon, or evening to everyone from around the world. Thank you for joining us for TOMI Environmental Solutions Third Quarter Earnings Call. Today, we will share our third quarter 2025 results along with key updates and reasons we believe TOMI is on the cusp of a breakout. After a challenging start of the year, the third quarter marked a decisive turning point. We delivered a 95% sequential revenue increase driven by expanding recurring revenue streams and deeper customer engagement. A key takeaway from our third quarter performance is the increase in capital purchases of our mobile equipment as our service provider partners grew in number. This includes both well-known industry leaders and smaller, long-term players who are increasingly recognizing the value of clean tech and the superior advantages of our SteriMist IHP technology. Our vision remains steadfast: a future where sales of mobile capital equipment, IHP Corporate Service, our custom integration platforms, and, of course, our core BIT solution business model all grow in tandem. A new growth engine: recurring revenue. That's the theme. Building on the momentum, our third quarter revenue reached $2 million, marking a 95% increase over quarter two. This growth was driven by strong equipment sales and most notably recurring BIT solution sales, which have risen 21% year to date. In 2025, we placed significant emphasis on our existing customer base, ensuring implementation usage, and tailored protocol development for customers across all our industries. This focus has positively affected BIT's solution sales, which have seen stable and increased sales in each quarter. By sustaining this momentum, while ramping up capital equipment sales and successfully closing project bids for automation solutions, we will not only achieve our overall growth objectives but also enhance predictability, which is essential for scaling the business effectively. Another theme: momentum builds expanding pipeline and backlog. Our sales order backlog was $900,000 at the quarter end and grew further to $1.3 million by October 31, with approximately $3 million in pending integration contracts expected to close before year-end. Our active pipeline surpassed $15 million, encompassing both domestic and international customers across the industries we currently serve, as well as emerging sectors showing strong interest. These figures are more than just metrics; they signal the business opportunities we anticipate in the coming quarters and extending into 2027. Another theme: visionary markets beyond traditional boundaries. We are doubling down on investments in innovation and customer success. Our SteraMist IHP technology continues to gain industry recognition, this year being named the Disinfection and Decontamination Products Company of the Year 2025. Our platinum customer roster includes top-tier leaders across every sector we serve, further validating our solutions and positioning TOMI as a trusted partner in global health and safety. Regulatory developments are opening new markets. The FDA's broadened approval of hydrogen peroxide and our breakthrough demonstration of SteraMist efficacy against honeybee colony collapse position us to serve not only life sciences and healthcare but also agriculture, food processing, and environmental biosafety. The opportunity before us is vast, expanding the relevance and impact of SteraMist on a global scale. Strategic execution: laying the groundwork for 2026. To maintain and accelerate this momentum, as stated earlier, we are intensifying customer outreach through personalized engagement strategies, deploying targeted marketing campaigns that highlight real-world success stories, and forging deeper partnerships with key industry players. Our SteraMist Pro Certified program and learning management system are empowering the market with essential education while onboarding specialized service providers. We are also in the process of updating, improving, and adding to our training programs across all delivery systems. Looking ahead, heading into 2026, TOMI is sharpening its focus on biosecurity advancements that address evolving global challenges, from climate-driven health risks to supply chain vulnerabilities. We will prioritize scaling our automation integrations for high-efficacy environments, exploring untapped opportunities in sustainable agriculture and public infrastructure, and fostering collaborative R&D with academic and industry partners. This will empower us to deliver solutions that enhance environmental resilience, safeguard communities worldwide, and drive sustainable returns, ultimately positioning TOMI as the go-to innovator in a rapidly changing world. I will now hand the call over to our Chief Financial Officer, David Vanston, who will provide a brief overview of our financial results for 2025 compared to the same period last year. David?

Thank you. Thank you, Dr. Shane. In 2025, our revenue was $2 million, a decline from $2.5 million in Q3 2024, representing a 24% decrease in sales. This was primarily driven by a timing reduction in the quarter of IronHP services sales from a key customer who reorganized its operations. This impact is expected to be temporary, and the customer's operations-related service activity is expected to resume to a normal level in the near future. Importantly, year-to-date service demand remains robust, with quote activity and pipeline volume up approximately 35% year over year in the life sciences and food safety area. This trend supports our expectation for continued growth in the fourth quarter and beyond. For the nine months ended September 30, 2025, solution revenue was $760,000, an increase of 21% year on year as earlier stated by Dr. Shane, compared to the same period in '24 as we continue to drive recurring sales of solutions within our customer base. A positive point was our gross profit remained strong at 61% as a percentage of sales for the three months ended September 30, 2025, and for the same period last year. The consistency of our gross profit margin underscored the resilience of our product mix and disciplined cost management. For the three months ended September 30, 2025, we experienced an operating loss of approximately $320,000 compared to an operating income of $149,000 in the same period last year. Our net loss for the three months ended September 30, 2025, was approximately $450,000 or 2¢ a share, compared to a net income of $58,000 or 0 compared to the same period last year. As of September 30, 2025, our financial position includes cash and cash equivalents of approximately $190,000, working capital of $2.5 million, and shareholder equity of $2.2 million. I will now turn the call over to our Chief Operating Officer, E.J. Shane, to discuss the upcoming business highlights.

Thank you, David. Our previously announced active projects are currently on track for delivery by the end of the year, and we are currently negotiating an additional $3 million in custom and integrated contracts, with bids expected to close before the year-end. 2025 showcased TOMI's evolution into a trusted technology partner for regulated industries. Implementing experiments with agencies such as NASA and Fort Detrick alongside repeat orders from global leaders underscores SteraMist's position as a gold standard for contamination control. With major pharma companies investing in United States onshoring and sectional facilities, TOMI is ideally positioned to capture expanded opportunities in sterile automation systems. Automated, repeatable, and validated decontamination rooms and chambers remain in high demand as the pharmaceutical industry evolves. We believe our IHP technology is emerging as a benchmark for sterile environments, as evidenced by its adoption this year with premier companies. As of the third quarter, the onshoring of pharmaceutical production positions us favorably, specifically in Virginia for the next few years, particularly with major commitments from Merck, Eli Lilly, and AstraZeneca, who are establishing new production sites. As we build on the strong momentum we've shared today, the key question is obvious: How will we keep driving growth in BIT Solutions sales, IHP service, capital equipment, and custom integrations? As Dr. Shane noted earlier, our BIT solution gains come from growth in personnel and operations and better training for our current customers. We will keep this going to drive steady adoption and stronger reach in key sectors. We are nearly complete on updated training documents, rolling out a more comprehensive program that emphasizes ongoing recertification. This approach not only raises customer standards for implementation safety but also may generate additional revenue and deeper product adoption, strengthening TOMI's role as an essential partner. 2025 unfolded an essential chapter in TOMI's journey marked by breakthroughs that not only validated our recent innovations but also directly fed our pipeline of opportunities. It began in July with the installation and commissioning of our SISSA for a neighboring pharmaceutical company, which falls under our Ceramis Integrated System or SISSA platform of offerings targeting the pharmaceutical isolator market. A milestone that led to successful integrations into additional enclosures at Virginia Commonwealth University and the University of Miami, and a promising wave of future installations with both existing and prospective manufacturing partners. In the life sciences and manufacturing sectors, we see a powerful shift toward continuous bioprocessing, flexible facilities, and AI-enabled operations. These advancements demand decontamination solutions that integrate effortlessly with automation while minimizing downtime, precisely where our custom engineers system or CES excels, offering rapid, efficient sterilization to support production and operational efficiency. While our CES remains in demand due to its tailored approach, we recognize that its extended timeline from initial interest to full commissioning can be extensive. As the CES pipeline continues to expand, we are strategically prioritizing our hybrid and the SIS products, which offer faster close rates and quicker integration and implementation within facilities. This balanced approach ensures that all our custom automated advances at a comparable pace, with the hybrid and SIS lines serving as the ideal solution for automated integration segments, driving quicker revenue realization than the CES. Building on our Q3 momentum, August marked a significant step forward when our East Coast distributor, Aerie Science, helped us secure a new university client for our SIS platform, solidifying our presence in the academic vertical and opening doors to specialized applications in research environments. This progress carried into this week's ALAS conference. We collaborated closely with Aerie on promising upcoming projects and showcased our advanced product lineup alongside our enhanced engineering capabilities in programming and design. By engaging manufacturers of cage washers, decontamination chambers, and biological safety cabinets, or BSCs, we are expanding our partnership options for future integrations, strengthening our pipeline with diverse choices while positioning these collaborators as valuable resources to expand the SteraMist IHP brand and technology into high-potential sectors such as government agencies, universities, and animal research. Additionally, discussions with ALAS included a new potential representative company for the West Coast, as well as opportunities for complementary products that could generate fresh revenue streams by pairing seamlessly with our core technology. Stay tuned for updates on these developments as they might diversify our pipeline heading into next year. In healthcare, new initiatives like the Joint Commission's Accreditation 360 program, set to launch in 2026, may open new revenue streams for TOMI as well. The program will create a growing need for verifiable, auditable disinfection data, which SteraMist delivers through its advanced logging and reporting features, helping providers meet stringent standards and enhance patient safety. In quarter three, we celebrated a landmark addition to our roster of customers with a major player in the eye health industry. Bausch and Lomb rapidly adopted our mobile handheld surface units in two facilities in under four months and committed to open the solution orders for 2026, promising sustained revenue streams in a sector in need of advanced durability. In September, we made significant strides in capital equipment segments by onboarding a specialized service provider focused on healthcare and mold remediation, quickly followed by SteriClean and TAP purchasing mobile systems, with the latter expanding their thermos lines with foggers. We continue to speak with these three and other larger franchise service providers for a widespread adoption of SteraMist IHP technology across their networks. Our highly regarded SteraMist Pro Certified or SPC program continues to nurture a dynamic environment of partners and customers, enhancing implementation and long-term usage. Large contract cleaning, bioremediation, and restoration firms such as DareClean and TAC are scaling up their offerings to handle complex high-margin jobs in biohazard, mold, and mycotoxin cleanup using our advanced technology. This year has brought a transformative shift in our business development approach, with initial purchases of one or two units at select locations inspiring broader rollouts across entire organizations, a pattern that is starting to play out successfully in both the life sciences and commercial industry. To sustain this momentum, we continue developing these organic expansions, which is key to scaling our business and, of course, its model. A prime example is our growing relationship with Nestle, which is gaining traction, and they have expressed a strong desire to establish our technology as the global standard across their nutritional facilities worldwide. We have already deployed multiple Steripox to various branches internationally, setting the stage for substantial recurring revenue and further international growth. We continue to pursue the cannabis market under our food safety division, and quarter three sparked some significant interest domestically and internationally, opening doors to promising new partnership discussions. Our current distributor, Sterile Girl, continues to market and slowly gain traction, adding to the referral base and efficacy use data for the market. We have unofficially entered a collaboration with Smithers, the largest testing lab in the United States, which we expect to yield lead referrals soon and will soon begin a study in Morocco that positions us for entry into the European and African medical cannabis markets. A key quarter three highlight pertains to a regulatory change: the FDA's final order amending regulations to allow the use of hydrogen peroxide in food processing. This ruling is game-changing for SteraMist, validating our BIT Solutions food-grade hydrogen peroxide as the sole active ingredient and providing a clear regulatory framework with a competitive edge in the multibillion-dollar food safety market. By expanding applications beyond environmental disinfection to direct food-related protocols, such as in the ready-to-eat, or RTE industry, where convenience food like prepackaged meals and salads demand pathogen control, it positions TOMI to capture a significant share across the supply chain. With no residual concern due to SteraMist IHP's breakdown into oxygen and humidity, we can now disinfect equipment, processing lines, and facilities in food-present environments to target threats like salmonella, listeria, and E. coli, decontaminate packaging and storage areas to prevent cross-contamination, and sanitize transportation vehicles for end-to-end hygiene. This broadens our addressable market and drives revenue growth in high-demand sectors. Thank you, and I will return the call over to Dr. Shane for his closing statements.

Thank you, E.J. We remain focused on strengthening our organizational foundation, enhancing our C-suite, management, and division leadership, building out our sales and technical teams, and expanding our network of global distributors. The third quarter marked a notable period of recovery and reaffirmed the soundness of our strategy. We are seeing steady improvement financially, operationally, and strategically. Our team is dedicated to driving growth and innovation across all divisions, leveraging our expanding portfolio of products and services. We are encouraged by the opportunities that lie ahead. Our sales backlog remains strong, and the sales strategy implemented at the end of last year is beginning to deliver promising results. We are motivated by the progress in our strategic partnerships and the growing interest from clients seeking to improve their operations with our solutions. With continuous investment in infrastructure, technical expertise, and a stronger sales strategy, we believe we are well-positioned for a successful fourth quarter with momentum carrying into 2026. I'd like to highlight a recent strategic milestone that positions us for sustained growth. On November 5, we entered into an equity purchase agreement with Hudson Global Ventures, giving us the flexible right but not the obligation to sell up to $20 million in common stock over a twenty-four-month period. Full details are in our Form 8-K filing. The agreement provides the flexibility for on-demand access to capital without upfront commitments or heavy dilution, helping us fund the strategies, goals, and momentum we have described today, including our business development needs, hiring customer service specialists, technicians, programmers, trainers, and operational support to accelerate our pace while maintaining our strong reputation with customers across the industries we serve. It will also enable us to expand on key initiatives, such as advancing R&D, regulatory pursuits, and market expansion, ensuring we seize opportunities in clean tech and biosecurity while creating long-term value for shareholders. Thank you for your continued support as we unlock TOMI's next era of growth. We're excited about what's ahead. Now, operator, let's open the call to questions.

Thank you, sir. Ladies and gentlemen, at this time, you'll be conducting our question and answer session. If you would like to ask a question, please press 1 on your telephone. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. Please pick up your handset before pressing the star keys. Thank you. Our first question is coming from Sameer Joshi with H.C. Wainwright. Your line is live.

Hey. Good afternoon. Doc, David, E.J. Really good quarter. Congratulations on the nice turnaround and progress. One of the key things I think you announced was the FDA approval or clearance for the hydrogen peroxide usage. It opens the food, RTE, and prepackaged as E.J. outlined. What are your sales and marketing efforts towards this, and have you identified initial targeted customers that you would pursue?

So it's relatively new, this approval. And we foresee that the food industry in itself, both whether it's in processing, storage, packaging, transportation, etc., can be a key marketing vertical for us. And I'm really excited about it because, especially our type of technology does not have any residue. And it's gonna be a game changer. But you know, in order to go ahead and tell you how much and who, it's a little too early, I think. And I find that a lot of the food companies themselves are not aware of the change. But things are changing in this industry. They're leaning away from old established disinfection and parasitic acids and things like that, and dips, etc., that they've been using. And our technology is definitely should be on top of their list as a choice.

Yeah. No. It certainly makes sense for you. What you're saying. And I'm sure it will open up a big market. On the Q3 performance, again, as I said, congrats on the nice turnaround. The operating expenses were also contained, despite the nice revenue increase. Should we expect these operating expenses at the operating expense level as well as the gross margin level to continue to sort of improve financially?

So for your model, I think your expenses are gonna increase. And, you know, I think they're gonna be positive in relationship to revenue. David might have something to add to this if you'd like, David.

Yeah. I think for the gross margin, you may get one or 2%, but nothing significant. Already seen that over the year on year, we're holding around the 60% margin. I mean, that helps us with the continuing solution sales that come in. So I don't expect our margin to be under too much pressure. But as Doc pointed out, if we're going to scale up, I would expect, you know, the revenue line will go up at the same time, but the percentage of the total operating expenses as a percentage of our total revenue will not significantly change.

Yeah. That is what I was driving at because I did out the R&D efforts and initiatives. They will increase, but you will still have leverage, and the revenues are probably going to increase faster.

Yes. Correct.

Got it. Last question, on the international front, I think you did mention Morocco, Africa. What kind of sales effort is in place? Do you have representatives in these countries? How should we think about how the sales are going to be realized?

So we have different distributors in some of these countries that are focused on them. I think that a lot of our global partners, where we mentioned one in the food industry on the call earlier, is implementing this in many of their facilities globally. Similar to that, you see other types of partners that we have that have a global footprint in various countries that are interested in increasing their demand and use for SteraMist going forward.

Yeah. Hey, Doc. May I squeeze in one more? Because I think you had pointed out that your capital equipment sales increased, I think that bodes well for solution sales in coming quarters. Do you have visibility on what kind of solutions sales you will see in the coming quarters?

I don't. We, you know, again, think the first half of the year, we had about a 41% increase in solution sales over 2024. And in the third quarter, we were down to about, I believe it was in the mid-twenty 1%. So it averaged down a little bit. I think by the end of the fourth quarter, our recurring sales should pop up again because people wanting to get the solution in by end of year. And I think that's the key to this whole call is we get more technology out there. We do it via manufacturing, but also by increasing our sales and our sales strategies in these areas. And more equipment leads to more solution sales, which is the model that would drive a very successful business going forward.

Thanks, Doc. Thanks for taking my question.

Thank you for the questions.

Thank you. As a reminder, ladies and gentlemen, if you do have any questions, please press 1 on your telephone keypad. Our next question is coming from John Nelson, who is a private investor. Your line is live.

Thank you. Hi, Halden, and congrats to you and the TOMI team on the enhanced momentum that the company seems to be generating right now. I have continued to steadily add to my stock position since my latest 13G amended filing in July. So I'm very pleased with your results. And I know the efforts are superlative. So thank you.

Thank you, John. Questions?

Oh, you're welcome. Questions. Is there anything updates you can give me on what's going on with servicing or trying to service the military and defense markets?

I don't have one. Maybe E.J. has something to say about that.

Hey, John. Yes. This past quarter, a lot of our service was directly attributed to one key site. I can't really go into too much detail, but they are looking to replace formaldehyde and have been, and we're working with them. We did quite a few studies with them in Q3. We went there eight or nine times and had positive results. I don't expect that one to show a close before the end of the year, but we are definitely expecting it to be a pretty big deal in 2026.

Okay. Good. Thank you. Any updates on the CAR-T cell disinfection business?

E.J.?

No, Doc. Don't think we have anything, sir.

Okay. You mentioned in the press release that you've now onboarded all three of the top major service provider companies in healthcare mold remediation? And I was curious as to any expectations that we should have for a rapid versus slow rollout by these parties?

So yes, and I know you've been asking. You know, it wasn't ServiceMaster, but bringing on SteraClean and Tact and this other group was definitely a big deal in Q3. Especially with their quick assessment to add more units pretty quickly thereafter their initial buy. They do have a focus more on biohazard and mycotoxin remediation, and we expect to really keep working with them and gain live case studies to be able to bring on the rest of their facilities and then, of course, additional franchises. So I do see a dramatic shift in our service providership. I think it's the way we've now outlined the way we train and support them with the program and the learning management system we offer to them. And we're a little more aggressive in the correspondence and staying up to date with everything they're doing. It is proving good outcome. I'd expect more.

Okay. Great. A lot of attention is being paid, and a lot of dollars is going to the data center market. Google just announced that they were planning on investing $40 billion in new data centers in Texas. So could you comment at all on any plans to try to penetrate the disinfection market for those types of facilities?

Sure, John. That's one of our reasons that we are expanding and want to expand our sales teams. In multiple verticals, and that's one that makes a huge amount of interest and potentially success for us because they do need disinfection. They're large facilities. And we will handle their materials tremendously. So we are gonna work on that. We just do not have the employees at the moment to focus on that. And that's one of the reasons for capital needs and to increase our existing sales force.

Got it. And besides the data centers in planning stages for being developed, there's also the current existing market, and many of them are crypto data centers that are being basically converted to use by the magnificent seven.

Yeah. So that's true. Oh, and last question is, on the FDA, you know, broadening the permitted use of peroxide in the food industry, and I was wondering if you could maybe give us a few more details on how you're increasing your awareness for that market.

So we are doing it on social media. And we do have plans to increase it further. Like I said earlier, with the call from the analysts, we know who they are that need our product, and sometimes they don't even know they can use our product. So it's more in an educational mode at the moment. But I think that, you know, also in the medical supply, medical sterilization end of medical materials, medical processing, sites that have huge ethylene oxide sterilization. Our products are great replacements. So there's a lot of work. A lot of low-picking fruit for us to work at in those areas and those verticals. And as the team gets bigger and moves forward, we will be focused on them.

Okay. And in marketing, are you targeting the companies that have had problems in the past?

Are you targeting companies first that have had problems in the past with infections and disease?

We are, John, but we did start our initial beginning point was to start with our current database and the correspondence that we have had with food safety customers, probably the past year and a half or two that couldn't come on board because, prior to the ruling, it had different restrictions for the EPA label. So we're now in correspondence with those with the new FDA petition and reaching out how to create protocols under that guideline. So we did start with individuals that we were already talking with.

Mhmm. Okay. Good. And then, one more that I just thought about is any progress or developments in the use of SteraMist for replacing ethylene oxide in the medical instrument sterilization market?

Yeah. I mean, those kind of go hand in hand. With under both accounts, in food and in medical device treatment. The other partnerships that we're starting to build in device manufacturing will also lead to that replacement being able to have IHP streamlined into different enclosures to decontaminate these devices. And another large machinery that's used in both industries. So it's definitely all being high prioritized and discussed.

Okay. Thank you very much.

Of course. Thanks, John, for the questions.

You're welcome. Thank you. Ladies and gentlemen, this does conclude our question and answer session. So I would like to turn the call back over to Dr. Shane for any closing remarks.

I just wanna thank everybody for joining us today and for the continued support. And we will be speaking at our next earnings call. Many thanks. Have a wonderful day or evening, wherever you might be.

Thank you, operator. Thank you, and thank you, ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.