TOMZ · TOMI Environmental Solutions, Inc.

TOMI Environmental Solutions delivered Q1 2026 results reflecting revenue growth of 5% year-over-year to $1.654 million, driven by a 31% increase in product revenue from equipment and Custom Engineered System sales, offsetting a 41% decline in service revenue due to project timing. Applicator sales surged 139% YoY, exceeding full-year 2025 totals, while BIT Solution sales tracked above 2025 levels, bolstering the recurring razor/blade model. Gross margin compressed to 50% from 60% due to strategic equipment price discounts and product mix shift, viewed by management as temporary with consumables expected to drive recovery. Operating expenses fell 15% to $1.458 million through cuts in G&A, selling, professional, and consulting costs, narrowing operating loss to $626,000 from $754,000. Net loss widened to $811,000 or ($0.04) per share from $256,000 or ($0.01), but excluding Q1 2025's $535,000 Employee Retention Credit and $83,000 interest, prior-year adjusted loss was ~$874,000, indicating operational progress. Cash from operations improved sharply to $296,000 provided, aided by working capital and deferred revenue growth. Backlog stood at $1.7 million with a $4.3 million integration pipeline across 13 customers. The standout development is the April 30 non-binding LOI to merge with Carbonium Core, a U.S. nuclear-grade graphite producer, at $120 million enterprise value. TOMI shareholders would issue 19.99% common stock plus convertible preferred in exchange for all Carbonium Core shares, creating a subsidiary. This diversifies into advanced nuclear and AI data center materials, leveraging U.S. production and Oak Ridge technology amid demand for non-Chinese graphite in a $13-15 billion market. Definitive agreements target May 30, 2026, post-due diligence and exclusivity, pending approvals. CEO Halden Shane highlighted the merger's transformative potential alongside SteraMist growth, with international expansions in UK/EU, Canada, and new sectors like food safety. No formal guidance issued, but focus remains on pipeline conversion, recurring revenue, and transaction close.