Nasdaq:TOMZ
TOMI Environmental Solutions, Inc.
A U.S.-based environmental solutions provider tackling soil, water, and air remediation challenges with advanced infrastructure technologies.
Key Metrics
Investment Thesis
Bull Case
TOMZ offers exposure to the growing environmental remediation sector which benefits from increasing regulatory pressure and aging infrastructure requiring modernization. The company's diverse service portfolio allows it to pivot between high-margin consulting projects and lower-margin execution work to stabilize cash flows. Early-stage investors may benefit from potential turnaround success if management can reduce the $54.3M retained earnings deficit through operational efficiency gains.
Bear Case
Deepening losses and negative operating cash flow indicate a fundamental inability to generate value from current operations without external financing or asset sales. The balance sheet shows total liabilities of $5.6M against only $9.7M in assets, leaving little room for error given the volatile nature of environmental contracting work. With revenue declining over two years before stabilizing, the company lacks consistent growth momentum necessary to justify its Nasdaq listing and attract institutional capital.
About TOMI Environmental Solutions, Inc.
TOMI Environmental Solutions, Inc. is a leading provider of environmental remediation and infrastructure solutions operating primarily in the United States. The company focuses on delivering innovative technologies for soil, water, and air cleanup projects while offering engineering and consulting services to government and private sector clients. With revenue reaching $7.7M in 2024, TOMZ balances significant capital expenditures against a current asset base of $6.5M.
Analysis
Management Discussion
The company reported a 3.8% revenue increase year-over-year from $7.4M in 2023 to $7.7M in 2024, yet profitability deteriorated with net profit dropping to $-4.5M. Operating expenses surged to $7.7M while cost of revenue remained steady at $4.2M, indicating rising inefficiencies or increased R&D spending of $290k. Capital expenditures reached $107k against minimal cash reserves of $665k, signaling aggressive expansion that is currently burning through the $4.1M equity base.
Industry Overview
The environmental remediation industry is experiencing robust growth driven by stricter EPA regulations and increasing corporate ESG mandates requiring specialized cleanup capabilities. Companies in this space often operate on project-based contracts with cyclical demand tied to economic conditions and infrastructure spending bills. Success requires significant technical expertise and regulatory knowledge, creating high barriers to entry that favor established players like TOMZ over generic construction firms.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $8.3M | $7.4M | $7.7M |
| Cost of Revenue | $3.3M | $3.1M | $4.2M |
| Gross Profit | $5.1M | $4.3M | $3.6M |
| Operating Expenses | $7.9M | $7.6M | $7.7M |
| Operating Income | $-2.9M | $-3.3M | $-4.1M |
| R&D | $352.2K | $491.8K | $290.7K |
| G&A | — | — | $5.1M |
| Stock-Based Comp | $356.0K | $163.3K | $144.3K |
| D&A | $329.2K | $366.7K | $296.5K |
| Depreciation | $314.7K | $345.6K | $270.2K |
| Amortization | $14.5K | $21.1K | $26.3K |
| Other OpEx | $7.6M | $7.1M | $2.2M |
| Non-Operating Income | $1.9K | $-53.3K | $-372.0K |
| Interest Expense | $0 | $63.3K | — |
| Interest Income | $1.9K | $12.0K | $17.5K |
| Pre-Tax Income | $-2.9M | $-3.4M | $-4.5M |
| Income Tax | $0 | $0 | $0 |
| Continuing Ops | $-2.9M | $-3.4M | $-4.5M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-2.9M | $-3.4M | $-4.5M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-2.9M | $-3.4M | $-4.5M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $12.1M | $10.0M | $6.5M |
| Cash & Equivalents | — | — | $665.0K |
| Accounts Receivable | $2.8M | $2.4M | $1.9M |
| Inventory | $4.5M | $4.6M | $3.6M |
| Other Current Assets | $4.9M | $2.9M | $369.0K |
| Long-Term Assets | $3.4M | $3.4M | $3.2M |
| PP&E (Net) | $1.3M | $1.0M | $875.4K |
| Intangibles | $1.0M | $1.1M | $1.3M |
| Operating Leases | $529.0K | $467.9K | $399.3K |
| Other LT Assets | $475.1K | $756.9K | $675.3K |
| Total Assets | $15.5M | $13.4M | $9.7M |
| Current Liabilities | $3.3M | $2.1M | $2.7M |
| Accounts Payable | $1.8M | $1.3M | $1.9M |
| Current Leases | $100.3K | $115.7K | $129.1K |
| Other Current Liab | $1.4M | $675.5K | $667.4K |
| Long-Term Liabilities | $761.1K | $2.9M | $2.9M |
| LT Operating Leases | $761.1K | $642.5K | $513.4K |
| Other LT Liab | $0 | $2.3M | $2.4M |
| Total Liabilities | $4.1M | $5.0M | $5.6M |
| Shareholders' Equity | $11.4M | $8.4M | $4.1M |
| Paid-In Capital | $57.7M | $199.2K | $58.2M |
| Retained Earnings | $-46.4M | $-49.8M | $-54.3M |
| Total L&E | $15.5M | $13.4M | $9.7M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-2.9M | $-3.4M | $-4.5M |
| Non-Cash Adjustments | $1.1M | $431.0K | $2.2M |
| Working Capital Changes | $501.3K | $-627.0K | $815.9K |
| Cash from Operations | $-1.2M | $-3.6M | $-1.4M |
| Capital Expenditures | — | $98.1K | $107.9K |
| Cash from Investing | $-241.4K | $-216.7K | $-261.5K |
| Cash from Financing | $25.0K | $2.3M | $27.5K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-1.5M | $-1.5M | $-1.7M |
| Beginning Cash | $5.3M | $3.9M | $2.3M |
| Ending Cash | $3.9M | $2.3M | $664.9K |
Frequently Asked Questions
How does TOMI Environmental Solutions, Inc. make money?
Environmental Remediation Services delivering soil and groundwater cleanup; Infrastructure Solutions providing engineered systems for waste management; Engineering & Consulting offering technical expertise for regulatory compliance projects.
What are the main risks for TOMZ?
Persistent net losses widening from $-2.9M in 2022 to $-4.5M in 2024 threaten capital runway and operational sustainability. Significant cash outflows with negative operating cash flow of $-1.4M and net change in cash of $-1.7M raise concerns about liquidity management. High accounts receivable relative to payables suggests potential collection delays or aggressive revenue recognition practices. Dependence on government contracts exposes the company to budget cuts and policy shifts that could abruptly reduce demand.
What is TOMZ's competitive advantage?
Specialized proprietary technologies for complex environmental cleanup scenarios create high switching costs for clients seeking regulatory compliance solutions. Strong presence in the U.S. market with established relationships with federal and state agencies ensures steady project pipelines. Scalable service model allows efficient deployment of resources across diverse geographic regions without heavy reliance on physical capital intensity beyond initial R&D.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.